What Can Be Learned? 227 INFORMATION BOX 2 KEY TO CUSTOMER SATISFACTION: MEETING

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What Can Be Learned? 227 INFORMATION BOX 2 KEY TO CUSTOMER SATISFACTION: MEETING STOMER EXPECTATIONS consistently earns high ratings for its customer satisfaction, higher than its gant r airlines all offered more food service than Southrwest's peanuts Southwestro Yet the majo ldaks. They also provided such additional amenities as advance dht entertainment on longer flights, the opportunity to upgrade, and a compre in-men-yer program. Yet Southwest gets the highest points for customer satisfaction. fred Could something else be involved here? L et's call it expectations. If a customer has high expectations, perhaps because of h price and/or the advertising promising high-quality, luxury accommodations ndable service, or whatever, then if the product or service does not live ions, customer satisfaction dives. Turning to the airlines, customers are not dis- inted in Southwest's service because they don't expect luxury; Southwest does not depen luxury. Its customers don't expect frills, but they receive pleasant, courteous prices. On the other hand, ise treatment by employees, dependable, safe lights, and low expectations are higher for the bigger carriers with their higher prices. This is well and good for the first- or business-class service. But for the many who fly coach-pl Do you think there is a point where a low-price/no frills strategy would be detrimental to customer satisfaction? What might this depend on? the most efficient and economical way possible. for a discussion of the criteria needed for a successful niche or segmentation strateg See the following information Box Southwest has been undeviating in its pursuit of its niche. For years, while others tried to copy, none were able to fully duplicate it. For years, Southwest was short-distance, low-fare airline. As an example of y unassailable position, Southwest accounted for more than two-thirds of tie passengers flying within Texas, and Texas was the second-largest market outside est Coast. When Southwest invaded Califomia, some San Jose residents drove an hour north to board Southwest's Oakland flights, skipping the local airport where had a hub. And in Georgia, so many people were bypassing Delta's huge in Atlanta and driving 150 miles to Birmingham, Alabama, to fly Southwest that the nation's only high-frequency, Anerican nlike many firms, Southwest did not permit success to dilute its niche strategy empted to fly to Europe or South America, or to match the big carriers preneur started a van service between the two airports. affertine customer satisfaction was suggested by Ed Perkins for " Gleveland Plain

Explanation / Answer

A low price/no-frills strategy can be detrimental to consumer’s satisfaction if the basic needs of travelling comfortably are not being met by the airlines. The basic needs can be:

For sustenance of niche strategy, it must be supported by the culture and value system of the organization. In case of southwest airlines, the low-cost, no-frills niche strategy is supported by the culture of putting employees first, which in turn prioritizes the needs of the consumers. The niche strategy has been woven in the purpose as well, that drives the organization i.e. to connect people with their loved ones through Friendly, low-cost, reliable air travel. Also, the southwest airlines has always been very flexible and adaptable. They mould their operations based on the market trends, keeping their vision and purpose in focus of all operations.

Other airlines have not been that successful with the niche strategy because their culture is not aligned with the business strategy. It is well said that a business strategy can be easily copied, but the culture of an organization can never be copied. A business strategy woven around the dimensions of organization culture is the most successful strategy. Southwest Airlines has imbibed this doctrine in their foundation and that’s the reason why they are so successful.

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