MKT/441 Week 4 Team Assignment

Market Research Implementation Plan
MKT/441
May 30, 2016
Dr. Timothy Kelly


Market Research Implementation Plan
The purpose of this report is to inform management at Southwest Airlines the intent and resources the research team intends to use while examining a ticket price increase. Discussed within are the types of secondary resources the team will utilize, and how these resources will help to implement the plan. Examples of survey instruments the team plans to use, and a sample of the proposed survey to be utilized are included as well. After reading this report, management will have a comprehensive view of how the research team will answer all pertinent questions regarding the price increase, and the possible repercussions from the consumers.
Secondary Market Research Resources
As the research team begins the process of investigating the increase in pricing, and the effects it will have on the customers, we can find many useful reviews on the internet based on traveler's personal experiences. One such site that can provide travelers a voice to share their thoughts is Yelp. Yelp has many pleasant reviews of Southwest for their current pricing structure and baggage fees. The biggest complaint that appeared most often was that travelers often had delays on their flights either not leaving on time or arriving late to their destinations (Yelp, n.d.). Many factors can come into play with delays. Weather changes in the departing or arriving cities being one that Southwest cannot control.
One consideration to look at when considering a price increase would be to improve the on-time percentage to provide the customers more value for their money. Of the 1,264,636 flights that Southwest Airlines conducted from January 1, 2015, to January 1, 2016, they had an average of about 19% of their flights arriving late, according to flight data provided by the Bureau of Transportation Statistics (n.d).
When looking at another online travel site Tripadvisor.com, we can find many reviews for Southwest Airlines as well. Many of the reviewers on this site have mostly positive reviews of the pricing that Southwest Airlines currently offers. A few of the negative comments are that there is a small fee extra if you want the ability to pick your seat since they do not have assigned seating. Other negative factors mentioned are related to staffing and roominess of the seats (Trip Advisor, n.d.). As Southwest Airlines decides on moving forward with a possible increase in fares, the biggest consideration to take from travelers is to provide more value for the flight rather than charge more and give less.
Secondary Research Data Source
J.D. Power is well known as a globally active market research company who "has been capturing and analyzing the voice of the customer across more than a dozen industries globally for nearly 50 years" (J.D. Power, 2016a). Their team of more than 750 professional analysts, statisticians, economists, consultants, and experts in demographics and consumer behavior identify the many drivers of customer experience, accurately measure and link their impact to business results, and uncover insights to drive results (J.D. Power, 2016a). Utilizing information gathered by J.D. Power, Southwest can improve customer service and satisfaction resulting in increased customer loyalty.
A study conducted by J.D. Power (2016b) reveals that the airline industry has reached a ten-year high in customer satisfaction overall. In particular, "satisfaction in the cost & fees factor continues to improve significantly, increasing by 12 points (on a 1000-point scale) to 658 from 2015. While lower fares contribute to this improvement, passengers are also more tolerant of paying ancillary fees such as baggage fees or fees for extra legroom" (J.D. Power, 2016b). ). While Southwest ranks second in the low-cost carrier segment, the difference is only a single point (J.D. Power, 2016b). This secondary data shows that although customers seek low fares, they have come to expect to pay fees for baggage or seat upgrades. When considering a fare increase, Southwest should use this to their advantage. In a document released by Southwest (2015), a 2015 focus group "showed that 95% of current and 94% of infrequent customers interviewed say that Southwest is a low-fare brand based on our inclusive approach." Southwest offers the lowest total average fare about 61 percent of the time, all while offering two bags that fly free, no change fees, and free in-flight entertainment (Southwest, 2015). With that, the team should consider a slight increase in the lowest tiered fares while remaining competitive with average industry prices.
Survey Instruments
As the research team explores the potential move to increase Southwest ticket prices, it will invariably affect all of their customers. The research team needs to examine how the customer base will react to the change in prices. Because of this, the research team needs to ask questions to find the consumer's loyalty level versus their desire to save money. For example, the team knows that all customers, regardless of their tax bracket, will be unhappy with a price increase. But, the consumers know that inflation will drive prices up eventually, so the question becomes where is the line that will take the price from payable to over-priced? This line will be one focus of the market research; will a hike in ticket prices drive away potential customers? The other focus is the customer experience; will the consumer choose Southwest because of their comparatively better service? In this vein, there may be a point at which the consumer would be willing to pay for a Southwest ticket at a higher price, because of other factors such as customer service or location of business. Overall, the purpose of the research team's questionnaires is to find the good and bad of customer relations, and the consumer's willingness to pay more money for tickets.
To find a specific scale of opinion, the two survey instruments the research team will use are a graphic rating scale and open-ended questions. The team will also include a multiple choice question that allows researchers to separate the data based on the reason for flying. A graphic rating scale will allow respondents the chance to give Southwest a one to 100 rating regarding how satisfied or unsatisfied they are with certain aspects of the business. The open-ended questions will give customers the opportunity to tell Southwest how they feel in their words. In this case, the research team will be asking questions about the respondent's overall experience, the acceptability of the ticket prices, and how they would view a change in the company. For this questionnaire, we would hand them out to current customers; those who are at the airport waiting for their flight and those who are in-flight.
The research team could also expand their data set by emailing this questionnaire out to those customers who provided them with an email address. Using both of these methods will give the research team current, real-time data on customer's overall experiences. The research team would be able to ask a question about the current state of the business, and then ask follow-up questions that attempt to understand the reason behind the customer's action. The following is an example of a 5 question set for the in-building and in-flight questionnaire; (the team would slightly adjust the questions emailed to customers, asking questions about their "last flight" because their "flight today" may not be relevant).
Example Survey
Q1: Graphic Rating Scale.
How satisfied are you with the following aspects of Southwest on a scale of 1-100?
Ticket counter personnel:
Boarding gate personnel:
Punctual flight departure and arrival time:
In-flight personnel:
In-flight experience:
Ticket prices:
Baggage handling:

Q2: Open-ended Question.
What was the cost of your ticket to fly today?

Q3: Open-ended Question.
Based on your experience with Southwest, do you believe you are getting a good value for your ticket price? Why or why not?

Q4: Open-ended Question.
Would you be willing to buy a Southwest ticket if it were 5% more expensive? Why or why not?

Q5: Multiple Choice Question:
What was the purpose of your flight today?
Business
Pleasure
Strictly travel; getting from Point A to Point B

Taking a step back from looking at the entire population of airline customers, the post-survey sample that the research team should focus on are those who are flying coach as well as those who are not traveling for business. There is a higher chance that business related ticket purchases are a required flight, meaning that they would have to buy the ticket and fly at a given time regardless of how much the ticket costs. Those flying Business Select, which is Southwest's form of first class, would most likely not be as adverse to purchasing tickets at an increased price. Especially since leg room and boarding the aircraft first is a priority for many, and is already set at a premium price in comparison to coach (Southwest, 2016).
If the research team can focus on the data from the general public that purchase non-business related tickets, they can learn about how an increase in ticket prices will affect the everyday consumer. The research team does not want to discriminate against any of the customers flying with Southwest, so in this respect, a physical survey will be offered to all current Southwest customers. The surveys will be made available at the ticket counter, the boarding counter, or on the aircraft. As a follow-up, an electronic survey will be emailed to the customer after their travels.
Summary
Utilization of the proposed secondary resources will place the research right where it belongs by gleaning the information straight from the source; the Southwest consumer base. Two of the listed secondary resources come straight from the consumers in the form of reviews that are easily accessed online. The survey is designed to delve into what the customer base wants, needs, and expects from Southwest Airlines. The survey also asks the respondents directly how they would be affected by an increase, and in which realm of travel the increase would best be tolerated. In summation, the research team is confident in its decisions regarding the study and the impending results.






References
Aaker, D. A., Kumar, V., & Day, G. S. (2007). Marketing Research (9th ed.). Hoboken, NJ: John Wiley & Sons, Inc. Retrieved from the University of Phoenix, MKT/441 - Marketing Research course website.
Bureau of Transportation Statistics. (n.d.). Retrieved from http://transborder.bts.gov/xml/ontimesummarystatistics/src/ddisp/OntimeSummaryDataDisp.xml
J.D. Power. (2016a). About us. Retrieved from http://www.jdpower.com/about-us/overview
J.D. Power. (2016b). 2016 North America Airline Satisfaction Study. Retrieved from http://www.jdpower.com/press-releases/2016-north-america-airline-satisfaction-study
Korostoff, K. (2010, November). Market Segmentation, Southwest Airlines Style. Research Rockstar. Retrieved from http://www.researchrockstar.com/market-segmentation-southwest-airlines-style/
Southwest. (2016). Retreived from https://www.southwest.com/businessselect/
Trip Advisor. (n.d.). Retrieved from https://www.tripadvisor.com/Airline_Review-d8729156-Reviews-Cheap-Flights-Southwest-Airlines
Yelp. (n.d.). Retrieved from http://www.yelp.com/biz/southwest-airlines-tampa-3











MARKET RESEARCH IMPLEMENTATION PLAN
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