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Marketing in the Age of Technology: Ryanair

Marketing in the Age of Technology: Ryanair. Mike Ward Salford Business School University of Salford, Greater Manchester United Kingdom. Ryanair. http://www.ryanair.com/site/EN/. Lecture Outline. The Story of Ryanair The Marketing Strategy of Ryanair. The Leadership in Ryanair

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Marketing in the Age of Technology: Ryanair

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  1. Marketing in the Age of Technology:Ryanair Mike Ward Salford Business School University of Salford, Greater Manchester United Kingdom

  2. Ryanair • http://www.ryanair.com/site/EN/

  3. Lecture Outline • The Story of Ryanair • The Marketing Strategy of Ryanair. • The Leadership in Ryanair • YouTube and Ryanair • How can Ryanair remain innovative and maintain competitive advantage?

  4. Ryanair • Started in 1985 • Currently in 26 European countries, 694 routes • 133 aircraft • Employs 1400 people, flies 52 million passengers, 80% passenger loading on aircraft • 5 main bases-Stansted (London), Charleroi (Brussels), Marseilles, Madrid, Bremen

  5. Ryanair 2007 Report • Traffic Grew by 22% • Cash held-E2.2 Billion • 153 new routes

  6. Pre 1990 Airline Industry • Little chance of new entrants • High ticket prices • Limited availability of purchasing tickets-Travel Agents, Airports • Limited choice of departure airports • No choice of airline

  7. The Airline Environment-pre 1990 • No aggressive competition • Sharing Routes • Fixing Prices • Dominated by a few “global players” • Government intervention • Generally aimed at the “business flyer”

  8. Pre-1990 Airline Industry • Dominated by big national airlines • Cartels • Route Monopoly

  9. 1990s-change in the environment • Privatisation • Deregulation Relatively free market More choice for the consumer!!

  10. Birth of the “Low Cost” Airline On-Line Booking No Seat Reservation Pay for Seat only Led to: Entrance of new players-Go, Wizzair, Easyjet and Ryanair

  11. The “ No Frills” Industry-2009 • 60 across Europe • Easyjet, Ryanair, BMI Baby (U.K.) • Air Berlin, Germania Express (Germany) • Wizzair (Poland & Hungary) • Air One, Volare (Italy) 2007 22.7% growth in seats

  12. Understanding the environment • Very important because it is changing all the time!!! Customers Competitors Government Economic factors Social factors

  13. The airline environment now • More competitive • Lower Prices • Alliances between “big players” • Emphasis on short-haul due to decline on long-haul • Increase in low cost carriers • Many airlines copying “low cost model-e-booking

  14. What is strategy? • A means of achieving an objective • Aims to transform corporate objectives in to a competitive market position • Is about SEGMENTING markets and DIFFERENTIATING products from the competition

  15. Why is it difficult to develop a strategy? • Requires a good understanding of where you are now-your BUSINESS POSITION • Requires an ability to motivate the whole business-ability to CHANGE • There has to be a VISION-where do we want to be?

  16. Basic strategy options- Michael Porter • Cost Leadership- using strength to negotiate lower prices from suppliers • Focus- specialising in marketing to specific market niches/segments • Differentiation- being different to competitors, offering more value to customers How does Ryanair use these?

  17. Ryanair’s Competitive Advantage Low Cost • Aircraft at a discount • Low cost airports • Fast turnarounds • No travel agents • Short routes

  18. Ryanair’s Competitive advantage Focus • Infrequent flyers/holidaymakers • Specific cities in Europe • Consumers only • Small destination and departure airports

  19. Ryanair’s Competitive advantage Differentiation • On line booking • Easy boarding • Cheap prices • Access to other services-Hire cars • Aggressive advertising and promotion

  20. The Competitive Environment • More competition but can the big airlines –British Airways, Air France, really compete? • Impact of EU legislation against subsidies from airports (Charleroi) • Environmental Issues • Fuel prices and availability • “The Credit Crunch”

  21. Michael O’Leary-CEO

  22. A Maverick. Is Ryanair a maverick player? • Does not conform • Unpredictable • Mean • Tough • Ruthless Michael O’Leary-Ryanair Chief Executive

  23. Ryanair- Controversy, Publicity, No Compromise- The Price is the Cheapest!!! http://www.youtube.com/watch?v=9wGkbzOk3Jc&feature=related http://www.youtube.com/watch?v=CgA0DkuIACU&NR=1 http://news.bbc.co.uk/2/hi/business/7914542.stm

  24. Ryanair- using social sites to promote themselves as a young, fun airline • http://www.youtube.com/watch?v=A8d2fmkQDXU&feature=related

  25. The future for Ryanair • Merger with Aer Lingus?-might not be allowed as creating a monopoly • Transatlantic Flights?- 20 euros to U.S.A. • Purchase of U.K. Airport?- possibly Gatwick • Looking to maximise revenue-fat people pay more?!!!

  26. Conclusions • Ryanair has changed Air Travel for all of us • Are we prepared to accept extra charges as long as the price is low? • In a very important industry, can non-nationalist airlines survive?

  27. Thank you • Thank you very much for your attention Mike Ward-M.F.Ward@salford.ac.uk

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