34 Part One | Defining Marketing and the Marketing Process

VIDEO Case
Stew Leonard’s tronics farm animals, associates in costume, petting zoos, and free
Stew Leonard’s is a little-known grocery store chain based in Con- food and drink samples, this chain serves as many as 300,000 cus-
necticut. It has only four stores. But its small number of locations tomers per store every week and has achieved the highest sales
doesn’t begin to illustrate what customers experience when they per square foot of any single store in the United States. After view-
visit what has been called the “Disneyland of dairy stores.” Since ing the video, answer the following questions about the company.
opening its first dairy store in 1969, the company has been known 1. What is Stew Leonard’s value proposition?
for its customer-centric way of doing business. In fact, founder
Stew Leonard’s obsession with the concept of customer lifetime 2. How does Stew Leonard’s build long-term customer
value made him determined to keep every customer who entered relationships?
his store. 3. How has Stew Leonard’s applied the concepts of customer
The video featuring Stew Leonard’s shows how the retailer has equity and customer lifetime value?
delighted customers for more than 40 years. With singing anima-

COMPANY Case
JetBlue: Delighting Customers From the beginning, JetBlue set out to provide features that
would delight customers. For example, most air travelers expect
Through Happy Jetting to be squashed when flying coach. But JetBlue has configured
its seats with three more inches of legroom than the average air-
In 2007, JetBlue was a thriving young airline with a strong reputa- line seat. That may not sound like much. But those three inches
tion for outstanding service. In fact, the low-fare airline referred to allow six-foot three-inch Arianne Cohen, author of The Tall
itself as a customer service company that just happened to fly Book: A Celebration of Life from on High, to stretch out and
planes. But on Valentine’s Day 2007, JetBlue was hit by the per- even cross her legs. If that’s not enough, for as little as $10 per
fect storm—literally—of events that led to an operational melt- flight, travelers can reserve one of JetBlue’s “Even More
down. One of the most severe storms of the decade covered Legroom” seats, which offer even more space and a flatter re-
JetBlue’s main hub at New York’s John F. Kennedy International cline position. Add the fact that every JetBlue seat is well padded
Airport with a thick layer of snow and ice. Small JetBlue did not and covered in leather, and you already have an air travel expe-
have the infrastructure to deal with such a crisis. The severity of rience that rivals first-class accommodations (something JetBlue
the storm, coupled with a series of poor management decisions, doesn’t offer).
left JetBlue passengers stranded in planes on the runway for up to Food and beverage is another perk that JetBlue customers en-
11 hours. Worse still, the ripple effect of the storm created major joy. The airline doesn’t serve meals, but it offers the best selection
JetBlue flight disruptions for six more days. of free beverages and snacks to be found at 30,000 feet. In addi-
Understandably, customers were livid. JetBlue’s efforts to clean tion to the standard soft drinks, juices, and salty snacks, JetBlue
up the mess following the six-day Valentine’s Day nightmare cost flyers enjoy Terra Blues chips, Immaculate Baking’s Chocobillys
over $30 million dollars in overtime, flight refunds, vouchers for cookies, and Dunkin’ Donuts coffee. But it isn’t just the selection;
future travel, and other expenses. But the blow to the company’s it’s the fact that customers don’t feel like they have to beg for a
previously stellar customer-service reputation stung far more than nibble. One customer describes snacking on JetBlue as an “open
the financial fallout. JetBlue became the butt of jokes by late night bar for snacks. They are constantly walking around offering it. I
talk show hosts. Some industry observers even predicted that this never feel thirsty. I never feel hungry. It’s not ‘Here, have a little
would be the end of the seven-year-old airline. sip,’ and ‘Good-bye, that’s all you get.’”
But just three years later, the company is not only still flying, it is Airlines often can’t control flight delays, especially at busy air-
growing, profitable, and hotter than ever. During the recent economic ports like JFK. So JetBlue wants to be sure that customers will be
downturn, even as most competing airlines were cutting routes, retir- entertained even in the event of a delay. That’s why every seat has
ing aircraft, laying off employees, and losing money, JetBlue was its own LCD entertainment system. Customers can watch any of
adding planes, expanding into new cities, hiring thousands of new 36 channels on DirectTV or listen to 100 channels on Sirius XM
employees, and turning profits. Even more, JetBlue’s customers adore Radio, free of charge. If that isn’t enough, six bucks will buy a
the airline. For the fifth consecutive year (even including 2007), JetBlue movie or your favorite television show. JetBlue rounds out the
has had the highest J.D. Power and Associates customer satisfaction amenities with free Wi-Fi in terminals and free sending and receiv-
score for the entire airline industry. Not only did JetBlue recover quickly ing of e-mails and instant messages in the air.
from the Valentine’s Day hiccup, it’s now stronger than ever. Even JetBlue’s main terminal, the new state-of-the-art T-5 terminal
at JFK, is not the usual airline experience. With more security lanes
TRULY CUSTOMER FOCUSED than any terminal in the country, travelers scurry right through. High
What’s the secret to JetBlue’s success? Quite simply, it’s an obses- end dining (tapas, lobster tempura, and Kobe sliders, just to name a
sion with making sure that every customer experience lives up to few options) can be found among the terminal’s 22 restaurants. And
the company slogan, “Happy Jetting.” Lots of companies say they its 25 retail stores are characteristic of the latest mall offerings. A chil-
focus on customers. But at JetBlue, customer well-being is in- dren’s play zone, comfortable lounge areas, work spaces, and piped
grained in the culture. in music from Sirius XM Radio make travelers hesitant to leave.
 Chapter 1 | Marketing: Creating and Capturing Customer Value 35

MORE THAN AMENITIES keep in touch with the brand even when they aren’t flying. JetBlue
Although the tangible amenities that JetBlue offers are likely to de- has 1.1 million followers on Twitter, more than any other company
light most travelers, CEO David Barger recognizes that these things except Whole Foods Market and Zappos.com, two other customer
are not nearly enough to provide a sustainable competitive advan- service legends. Twitter even features JetBlue as a case study on smart
tage. “The hard product—airplanes, leather seats, satellite TVs, corporate twittering. More broadly, by the metric of social currency (a
bricks and mortar—as long as you have a checkbook, they can be fancy term for networks of customers spreading by word of mouth),
replicated,” Barger tells a group of new hires in training. “It’s the JetBlue is the strongest U.S. brand, outperforming even Apple.
culture that can’t be replicated. It’s how we treat each other. Do we JetBlue’s strong word of mouth has been fueled by the com-
trust each other? Can we push back on each other? The human side pany’s ability to delight customers.
of the equation is the most important part of what we’re doing.” People love to talk about JetBlue because the experience is
It’s that culture that gives JetBlue customer service unlike that of so unexpected. Most airline travel has a particular pattern:
any other airline. Taking care of customers starts as early as a cus- small seats, bad entertainment, and little (if any) food. Jet-
tomer’s first encounter with a JetBlue call center. Many callers feel Blue breaks this pattern. Leather seats, your own entertain-
like they are talking to the lady next door. That’s because, in all like- ment system with dozens of channels, and at least some
lihood, they are. JetBlue’s founder pioneered a reservation system choice of food. People can’t stop talking about the experi-
that employs part-time reps working from home. Mary Driffill is one ence because they have to express their surprise, especially
of 700 at-home reservations agents in Salt Lake City alone. She logs given the “value” price. They are so used to airline travel be-
on to her computer and receives calls in her four-year-old daughter’s ing poor, late, or uncomfortable these days that cases
bedroom, under the watchful eye of Raggedy Ann, Potbelly Bear, where a company seems to care and provide good service
and Chewy, the family Pomeranian-Chihuahua mix. “It’s the best seems noteworthy. Satisfaction itself is unexpected.
job I’ve ever had,” says Driffill. “Every day I talk to people who love
the company as much as I do. That reminds me I’m part of this.” In ten short years, JetBlue has proven that an airline can deliver
JetBlue employees are well acquainted with the company’s core low fares, excellent service, and steady profits. It has shown that
values: safety, integrity, caring, passion, and fun. If that sounds like even in the airline business, a powerful brand can be built. Few
an awful lot of warm fuzzies, it’s intentional. But JetBlue hires the other airlines have been able to write this story. If you’re thinking
types of employees that fit these values. The values then provide the Southwest Airlines, you’d be on target. In fact, JetBlue’s founders
basis for what Robin Hayes, JetBlue’s chief commercial officer, calls modeled the airline after Southwest. JetBlue has often been called,
the company’s S.O.C.I.A.L. currency program. In JetBlue’s words: “the Southwest of the Northeast.” JetBlue’s onboard crews even
greet customers onboard with jokes, songs, and humorous versions
Standing for something. JetBlue was formed with the idea of of the safety routine, something Southwest has been known for
bringing humanity back to travel, and our engagement with our since the 1970s. But where Southwest has made customers happy
customers is central to that mission. with no frills, JetBlue is arguably doing it all, including the frills.
Operationalizing the brand. Whether it be in the airport, on the Until last year, Southwest and JetBlue steered clear of each other.
planes, on the phones, or online, the connection with our cus- But then both airlines added a Boston-Baltimore route. Boston is a
tomers is a key factor in how we do business. JetBlue stronghold; Baltimore is Southwest’s biggest market. But
with JetBlue’s younger workforce and newer, more fuel-efficient
Conversing with customers, broadly. To be properly in touch with
planes, its cost per available seat mile is 8.88 cents, whereas it’s
the community, it requires the ability to understand and react to
9.76 cents for Southwest. That has allowed JetBlue to do something
the collective conversation that occurs.
that no other airline has done to Southwest; undercut it on price with
Involving, immersing employees. Social media involvement re- $39 tickets that are $20 cheaper than Southwest’s lowest fare. It’s
quires understanding and involvement from all aspects and de- not clear yet how the battle of the low-fare, high-service airlines will
partments of the company. play out. But it may well turn out that as JetBlue and Southwest cross
Advocating the brand. For JetBlue, we understand the ability to paths on more routes, the losers will be the other airlines.
market to a social community is dependent on our customers’ will-
ingness to hear and spread those marketing messages. Questions for Discussion
Listening. Waiving the carry-on bike fee . . . shows we quickly 1. Give examples of needs, wants, and demands that JetBlue
identify and adapt new policies based on feedback we receive customers demonstrate, differentiating these three concepts.
through social media channels. It demonstrates our ability to lis- What are the implications of each for JetBlue’s practices?
ten and react holistically. 2. Describe in detail all the facets of JetBlue’s product. What is
being exchanged in a JetBlue transaction?
WHEN YOU LOVE YOUR CUSTOMERS, 3. Which of the five marketing management concepts best
THEY LOVE YOU BACK applies to JetBlue?
Customers who spread positive word-of-mouth are called many
names—true friends, angels, apostles, evangelists. The religious 4. What value does JetBlue create for its customers?
overtones of such labels come from the idea that loyal customers 5. Is JetBlue likely to continue being successful in building
are like true believers who share the good word like a missionary customer relationships? Why or why not?
would. JetBlue has an unusually high ratio of such customers.
Sources: Stuart Elliott, “JetBlue Asks Its Fliers to Keep Spreading the Word,”
Most airline customers are loyal because they have frequent flyer New York Times, May 10, 2010, p. B7; Marc Gunther, “Nothing Blue about
points. If not for those points, most couldn’t care less with whom JetBlue,” Fortune, September 14, 2009, p. 114; Chuck Salter, “Calling Jet-
they fly. For most, flying is a generally unpleasant experience re- Blue,” Fast Company, May 1, 2004, accessed at www.fastcompany.com/
gardless of who operates the plane. magazine/82/jetblue_agents.html; Kevin Randall, “Red, Hot, and Blue: The
However, JetBlue customers are so enthralled with what the air- Hottest American Brand Is Not Apple,” Fast Company, June 3, 2010, accessed
line has to offer that they look forward to flying. And they want to at www.fastcompany.com/1656066/apple-jetblue-social-currency-twitter.