ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

Company's Use of Information Sources

Southwest Airlines
Ferdinand (JR) Karbowski Jr
Capella University
March 19, 2016

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

Introduction
It has been said that knowledge is power and that shared knowledge is power
multiplied. This is particularly relevant as it applies to a companys marketing operations. The
decisions that an organization makes is largely dependent on having the right type of information
available. The right information means having: the right quality; the right quantity; and the right
timing. Of course, this means having the ability to collect, analyze, interpret, and store the
information. The final step in a companys successful marketing strategy is to be able to
effectively disseminate the information to the leaders and decision-makers in an organization.
For Southwest Airlines this means developing a competitive advantage through the use of
effective Management Information Systems from all available information sources.
In this document, we will discuss how Southwest Airlines uses marketing information
resources. Specifically how Southwest Airlines uses information resources to build its marketing
decision support systems and customer relationship management (CRM) environment.
Furthermore, we will assess how technology adds value to the marketing process as it applies to
Southwest Airlines, including understanding market decision support systems and customer
relationship management (CRM) strategies.
It is important to note that there is a subtle, yet distinct difference between a management
information system and a marketing information system both with the same abbreviation
(MIS). Whereas a management information system looks at the company as a whole, a marketing
information system is solely dedicated for specifically managing the marketing aspects of the
business. We will focus our attention on the marketing information system.

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

How Southwest Airlines Uses Marketing Information Resources

In todays rapidly changing environment, a company in the airline industry needs
information on a near real-time basis to keep appraised of marketing developments taking place.
Some aspects that are important to Southwest Airlines are: learning about the changing needs of
customers; identifying and studying new initiatives by its competitors; identifying any changes in
in its product distribution practices; detecting regulatory changes that will impact the industry;
and recognizing new technology platforms and trends that support the marketing effort. A
Marketing Information System (MIS) brings together a variety of data from multiple sources,
people, equipment and procedures to help an organization make better decisions. In many cases,
a marketing information system is a subset of a companys overall management information
system.
At Southwest Airlines, they use a comprehensive set of information systems to collect
data necessary for their Marketing Information Resources. They specifically target the following
areas:

Customer Relationship Management that is the way in which they track:

transactions with customers; frequent flyers; and customer behavior patterns using a

web-based structure.
Supply Chain Management that is the way that they perform: electronic data
interchange; forecasting and positioning; and focus on customer service using

internet-enabled supply chain management.

Management Support Systems which comprises of two (2) components:
o Geographic Information Systems that is the mechanism by which they analyze
data through modeling for use in marketing focusing on matters like travel
distances and target markets in various locations.

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

o Decision Support Systems that is the mechanism by which they perform what
if analysis using internal and external data which is then summarized into an
Executive Information System that displays trends in the form of a digital

dashboard.
Global Information Systems that is the information they use for expanding
internationally (both in terms of passenger flights, but also cargo), and structuring
their information in an internationally accepted format to facilitate a free flow of
information in a complex data network environment.

How Southwest Airlines built their Marketing Decision Support Systems

Southwest Airlines has long been a leader in developing a Marketing Decision Support
System. The systems that they had in place from the beginning worked well for them in the
context of being arguably the United States first low-cost carrier operating domestically as a
completely independent airline. However, things changed dramatically upon their acquisition of
AirTran Airways in late 2010. Since fully integrating their operations, Southwest significantly
expanded their low-fare service and now proudly operates a network of 97 destinations across
the United States and seven additional countries. (Aerospace and defense companies, 2013, para
1).
At Southwest Airlines, they have developed what they describe as a Management Support
System which comprises of two (2) components. The Decision Support Systems and the Global
Information Systems. The Decision Support Systems provides executive management with a
digital dashboard of sorts that displays trends using internal and external information that has
been collected allowing for a what-if analysis to take place. The Geographic Information
Systems is used to analyze data through modeling for use in marketing. Specifically looking at
items such as travel distances and travel markets in various locations.

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

In the case of Southwest Airlines, the backbone of the Decision Support System was an
old IT platform that was homegrown and over the course of two decades evolved through a
series of expansions and customizations. There were complex interfaces that connected things
like the rewards platform and other enterprise applications. Murugesan Paramasivam - senior
manager of technology at Southwest Airlines stated that, We have to interface with a large
number of systems, including financial accounting, customer service applications, reservations,
kiosks, Southwest.com, the voice response system, and the mobile devices that customers use.
(Joch, 2013, para. 12).
Drilling down to one of the aspects of the Decision Support System is the modeling and
what-if analysis that must be performed for a variety of operations at the airline. One of these
what-if scenarios involves agent-based modeling. Agent-based modeling can best be described
as a model that helps predict emergent phenomena that is a systematic approach to predicting
what was once thought to be unpredictable using traditional approaches like spreadsheet and
regression analyses. (Bonabeau, 2002, p. 110). Specifically, Southwest Airlines is using an
agent-based model to revamp its rules for handling cargo, reaping $2 million in annual labor
savings in the process. (Bonabeau, 2003, p. 120).
Southwest Airlines Overview of Customer Relationship Management (CRM) Environment
The purpose of CRM is to efficiently and effectively increase the acquisition and
retention of profitable customers by selectively initiating, building and maintaining appropriate
relationships with them. (Payne & Frow, 2006, p. 136). At Southwest Airlines, CRM is central
to how they track the interactions and transactions with customers (including their most valuable
customers their frequent flyers) especially in terms of customer behavior patterns. The
methodology is underscored by information technology systems (software) that forms the

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

backbone of the system which together with a supportive organizational structure and training
combines into a well-established and industry-benchmarked implementation of relationship
marketing principles.
Southwest Airlines depends heavily on repeat business from its loyal customers, so
maintaining a reputation for quality customer service is paramount. Fundamentally, for
Southwest Airlines it means providing a reliable travel customer service experience that is ontime flights and with baggage that makes it to the final destination intact. It also means operating
a contact center that can respond quickly to customer needs and concerns. In order for the airline
to respond effectively, companies must of course have a method for capturing the feedback. For
many industries that are as volatile and service-oriented such as the airline industry, it can be a
real challenge. Todays environment has evolved and continues to evolve at a rapid pace.
Currently, consumers have a variety of different social media CRM channels they use to
communicate. Customers that once were comfortable and satisfied with calling or emailing when
they needed help are now more comfortable posting their concerns on social media for all to see.
In order to stay on top of the situation, Southwest Airlines has developed a customer
support team of social media specialists for the most popular social media channels such as
Twitter, Facebook, and YouTube. In fact, recent research by business travel experts declares
Southwest Airlines the undisputed ruler of the social atmosphere for airlines when comparing the
two most prominent social media sites Twitter and Facebook. (Airlines, aviation, 2012, para.
1). While the social media team cannot reply to all posts (simply due to the overwhelming
volume), it tries to search for solvable problems and potentially inflammatory issues that require
rapid and timely responses. Because of this approach, Southwest Airlines boasts the fewest
customer complaints of any major airline for 18 years in a row, has been profitable 31

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

consecutive years, employee turnover averages less than 10%, and is consistently named one of
the best companies to work for. (D'Aurizio, 2008, p. 389).
Conclusion
Kent Greens a leading marketing consultant has emphasized that organizations must
learn and innovate at a rate equal to the speed of change in the marketplace This requires:
creating self-aware, adaptive leaders; unleashing knowledge workers for rapid innovation; and
leveraging global intellect through communities of passion." (Murray & Greenes, 2006, p.
120). In order to facilitate this transformation, companies must have access to data. The mindset
is that when data is presented in an organized fashion it becomes information. Moreover
information becomes knowledge when it is placed in actionable context. If there is no context to
the information and knowledge, the information is of little value. Information in the right context
is critical for a successful marketing approach and strategy.
Southwest Airlines has an enviable record when it comes to its marketing approach and
strategy. They use a comprehensive set of information systems to build among other things, its
marketing decision support systems and customer relationship management (CRM) environment.
They employ a variety of different technology software applications to add value to the
marketing process and pay particular attention to the social media aspect to sustain their
successful strategies and solidify their position of a differentiated low cost carrier. All of this is
driven toward their goal of focusing on consistent customer-focused travel services.

ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

References
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ASSESSMENT2-1 COMPANY'S USE OF INFORMATION SOURCES

Payne, A., & Frow, P. (2006). Customer relationship management: from strategy to
implementation. Journal of Marketing Management, 22(1/2), 135-168. Retrieved from
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