The Branding and Positioning Strategies of United and Southwest Airlines

The Branding and Positioning Strategies of United and Southwest Airlines

Strategic Marketing - MKT 501

Dr. Qin Sun

The Branding and Positioning Strategies of United and Southwest Airlines

     In today’s highly “competitive marketing environment”, segmentation, targeting, and “positioning” concepts are very important to the successful marketing of companies and their products (Gursoy, Chen, & Kim, 2003).  In order to market a product or service, a marketing manager would first “segment the market”, then identify or "target a segment or series of segments” likely to buy the product or service, and “position within the segment(s)” by optimizing their product or service for that segment (Marketing Teacher, n.d.).  Once a company takes a position they must brand their product or service to their market to elicit a “positive emotional response from the market” (Truex, 2013).

     This paper will explain how United and Southwest Airlines apply the marketing concepts of segmentation, targeting, and positioning and how the two airlines brand and position themselves; their brand personalities and the similarities and differences in their branding efforts. Additionally, I will compare the two cases to explain how this information is important to a marketing brand manager.

Segmentation, Targeting, and Positioning

     The marketing concept philosophy is that firms should analyze their customers’ needs and then make changes to satisfy those needs better than their competition (NetMBA, n.d.).  The airline industry uses the concentrated and differentiated approaches to marketing when determining particular groups to segment.  For example, Southwest Airlines concentrates on customers that are price sensitive who will overlook assigned seating and meals for the benefit of a low price (Perner, n.d.).  They are known for their low prices and have an advantage over United Airlines because of their “low fares and consumer service” (Bedol, Cobb, Conley, Farmer, & Schmidt, n.d.).  In contrast, United focuses on the “differentiated approach” offering “high priced tickets” to customers who are inflexible like business travelers that do not have the luxury of planning trips in advance. Some of the remaining seats are sold to the price sensitive customer segment (Perner, n.d.).   In recent years, both airlines have had to reevaluate the highly competitive environment and behavioral changes in their segments.  Business travelers and companies are choosing tickets based on lower prices (Teichert, T., Shehu, E., & Wartburg, I, 2008); thus prompting United Airlines to offer lower airfares to remain competitive but adding more premium flying choices to appeal to a higher paying customer.  

     According to U.S. Travel Association, air travel remains a form of transportation consistently used by both leisure and business travelers in the U.S., with approximately 1.7 billion leisure trips and 452 million business trips recorded for 2014 (U.S. Travel Association, 2015).  With that in mind, United Airlines’ target audience is mostly made up of Caucasian adults 35-54 years of age who has graduated college and has a “household income of $200,000 +” (United Media, n.d.).  They are employed full time professionals that “mainly live in urban or suburban areas with their spouse and/or family” and have discretionary spending (Bedol, L., Cobb, M., Conley, A., Farmer, K., & Schmidt, S. n.d.).  In 2013 United Airlines launched its “Premium Service” on coast to coast flights to target corporate and high end customers who regularly fly across the country and want comfort in a lay flat seat.  They did this in order to sell a higher percentage of the “higher fare premium seats” versus filling seats with “frequent fliers upgrading to business class” (LeBeau, 2013).