US Airways has reversed its decision to charge for in-flight beverages because the extra revenue has not been worth the negative passenger reaction. In a February 23, 2009 story by Dawn Gilbertson in The Arizona Republic (http://www.azcentral.com/business/articles/2009/02/22/20090222biz-usairwaysdrinks0223.html), Andrew Nocella, US Airways’ senior vice president of marketing and planning, said, “It’s such a minor issue in the grand scheme of things but was having a large impact on the perception of our brand. We just came to the conclusion that it was distracting our passengers from all the other things we were accomplishing, in particular our great on-time performance.”
It surprised me when US Airways made the decision to charge for beverages because it did seem so at-odds with its brand. If US Airways had a clear positioning strategy based on how it is differentiated in the marketplace, the decision to charge for beverages would have seemed at-odds to Nocella, too.
You see, a company’s overall positioning strategy is called its brand’s value proposition. Value propositions answer the question: “Why should I buy your brand instead of your competitor’s?” Winning value propositions answer that question in one of five ways:
1) Because buying my brand gives you more for less.
2) Because buying my brand gives you more for the same.
3) Because buying my brand gives you more for more.
4) Because buying my brand gives you the same for less.
5) Because buying my brand gives you less for much less.
So, how US Airways differentiates and positions its brand in the marketplace dictates the US Airways value proposition—fly with us because we give you more than the competition (which includes Southwest Airlines) for less; or, fly with us because we give you more than the competition (which includes Southwest Airlines) for the same; or, fly with us because we give you more than the competition (which includes Southwest Airlines) for more; or, fly with us because we give you the same as the competition (which includes Southwest Airlines) for less; or, fly with us because we give you less than the competition (which includes Southwest Airlines), but for much less. And, everything US Airways does should resonate with—not contradict or conflict with—its value proposition.
Southwest Airlines differentiates itself in the marketplace along the lines of product, services, people, and image—by being more efficient, more fun, and cheaper than its competition (which includes US Airways). Differentiating itself thusly, Southwest has positioned itself as the no-frills, low-price airline. So, Southwest Airlines has chosen and operates on a “less for much less” value proposition—that reflects the full mix of benefits upon which the Southwest brand is differentiated and positioned. And, everything Southwest Airlines does resonates with—does not contradict and does not conflict with—its value proposition.
Southwest Airlines is very clear on its value proposition; apparently, not so US Airways. By charging for in-flight beverages when competitors like Southwest do not, US Airways was not giving its passengers more—not for more, not for the same, and not for less. By charging for in-flight beverages when competitors like Southwest do not, US Airways was not giving its passengers the same. By charging for in-flight beverages when competitors like Southwest do not, US Airways certainly was not giving its passengers less for much less. By charging for in-flight beverages when competitors like Southwest do not, US Airways was giving its passengers less for the same or more. That’s a value proposition at odds with any airline’s brand and that’s a value proposition that won’t fly!
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