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The book Nuts! Southwest Airlines proposes a unique history of one of the most successful American airlines, Southwest Airlines. The book consists of four parts divided on separate chapters. Each chapter is devoted to a certain stage of economic and organizational development of the company. The aim of the book is to describe and analyze success factors and growth opportunities, unique culture and leadership of the companys management. Freiberg and Freiberg underline that innovation and entrepreneurship are the main success factors for Southwest Airlines.
The first part, A Legend Takes Off describes background and the first innovations applied by the company. The authors underline that marketing orientation was a crucial success factor: Southwest, through improvisation, had given birth to what would become one of the most widely emulated marketing innovations in airline history-systemwide peak and off-peak pricing (31). The objective of the company now shifts from physical production to the satisfying of actual and potential consumer needs, and marketing factors permeate the organization, affecting all activities. The orientation is an external one the firm turns outward and becomes sensitive to environments.
The company progresses from a company with marketing concepts to a marketing company: Marketing establishes company policies, influencing short- and long-range decisions, and is tied to top-management echelons that cross functional lines. This phase emphasizes the ability of a company to shape and influence its corporate destiny and market posture. Business functions refer to basic inherent activities. Our concern is with the activities inherent in managing marketing systems. To implement the marketing-management philosophy and to develop marketing systems that achieve a customer-oriented approach, four functions must be performed by marketing management:
The second part, Basics Gone Nuts portrays that concerned with clear and precise definitions of enterprise purpose and market segments, it is indispensable to the profitable functioning and growth of the firm. Its scope is broad, affecting all budgets, research and development, new products, investment in plant and equipment, and profit planning. By creatively and frequently disseminating information, Southwest is empowering its work force to pioneer innovation and willingly embrace change (118).
The authors underline that success is determined by corporate culture and special benefits for employees, profit-sharing and empowerment, celebrations and anniversaries appealing to both the staff and customers. Gaining acceptance of innovations can be a difficult task. The amount of difficulty is related to the degree of habit change required by buyers and consumers. As creatures of habit, purchasers resist change. The most difficult acceptance situation confronts fundamental innovations that require substantial habit change.
The third part, Nuts Gone Basic depicts unique relations between employees, corporate culture, morale and career development programs. When people go to work for Southwest, it often becomes their final career destination. Research shows that when we are having fun and laughing, we produce endorphins-our bodies natural life- giving, healing medicine (214). Again, the authors state that available opportunities must be related to the particular companys resources, including its personnel, financial, and physical resources. Profitable courses of action vary with individual corporate postures and goals.
The overwhelming majority of innovative opportunities will be rejected. But it is necessary to screen the many to find the few that do relate to the resources and the mission of the company. Competition occurs not only in markets of many small firms but also in markets of relatively few large ones. However, in markets with few large firms, competitive action can be countered, and price competition may not serve as an effective method of competition. Therefore, products and services also become competitive weapons, and nonprice competition assumes importance. This fact has not yet been sufficiently recognized and integrated into theoretical models.
The forth part The Legend Lives On is devoted to unique leadership and management styles followed by the company for three decades. The uniqueness of this strategy is that management usually does not know with certainty the likelihood of success of following any given strategy, nor the exact payoff. However, it should attempt to determine specific values for them. A value of this approach is that management is forced to place an expected dollar value on the outcome of each of the strategies.
If the objective is to maximize profits, then the decision choice for the innovation becomes one of choosing the strategy with the highest expected dollar value. If the expected dollar return of the best alternative does not meet the rate of return or profit expectations of a company, or if the risk of the alternatives is too high, the innovative opportunity may then be passed up by the company.
Similar real life examples can be traced to Microsoft and its founder Bill Gates, the Body Shop and its founder Anita Roddick. These examples show that the innovation process require people able to perceive areas of human dissatisfaction as market opportunities. One of the major problems confronting corporate management committed to the generation of innovation is to identify, stimulate, and encourage the people in the system. Perception of market needs does not mean that an opportunity exists for any particular company. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines (284).
Acceptance of an innovation is closely related to both managerial activities and acquisition of a hospitable attitude of mind on the part of management and customers. This is the crux of the problem. In helping the customer accept innovation, marketing managers should consider the following guides:
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the customer must be motivated to acquire new skills or patterns of thought necessary to accept and use new products and services in a favorable manner;
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the assistance required to help develop such an attitude must be furnished by members of the marketing system manufacturers, wholesalers, retailers, and facilitating institutions;
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attempts must be made to change the cues in the customers environments that elicit congruent types of consumption behavior;
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changes in customer-reward systems must be recognized so that the acceptance and purchase of products and services is encouraged;
In sum, Freiberg and Freiberg creates a unique history of Southwest Airlines and its success. This book will be interested to marketers and managers working in different service industries. An analysis of total company operations and methods in the light of market opportunities is helpful in sifting the opportunities to arrive at the few that are most relevant and profitable for the companys current situation.
The strategies and principles described in the book can be applied to different settings and organizations in order to ensure stable growth and development. Technological changes have had the greatest effect on our life styles. The complexity and multidimensional nature of the marketing process, coupled with its innovative base, indicates the likelihood of some uncertainty about legal issues in marketing.
Works Cited
Freiberg, K., Freiberg, J. Nuts! Southwest Airlines Crazy Recipe for Business and Personal Success. Broadway, 1998.
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