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Marketing in the Age of Technology:Ryanair
Mike Ward
Salford Business School
University of Salford,
Greater Manchester
United Kingdom
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Ryanair
http://www.ryanair.com/site/EN/
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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?
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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
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Ryanair 2007 Report
Traffic Grew by 22% Cash held-E2.2 Billion 153 new routes
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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
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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”
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Pre-1990 Airline Industry
Dominated by big national airlines
Cartels
Route Monopoly
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1990s-change in the environment
Privatisation Deregulation
Relatively free market
More choice for the consumer!!
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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
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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
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Understanding the environment
Very important because it is changing all the time!!!
Customers
Competitors
Government
Economic factors
Social factors
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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
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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
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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?
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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?
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Ryanair’s Competitive Advantage
Low Cost• Aircraft at a discount• Low cost airports• Fast turnarounds• No travel agents• Short routes
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Ryanair’s Competitive advantage
Focus
• Infrequent flyers/holidaymakers• Specific cities in Europe• Consumers only• Small destination and departure airports
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Ryanair’s Competitive advantage
Differentiation
• On line booking• Easy boarding• Cheap prices• Access to other services-Hire cars• Aggressive advertising and promotion
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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”
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Michael O’Leary-CEO
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A Maverick. Is Ryanair a maverick player?
Does not conform Unpredictable Mean Tough Ruthless
Michael O’Leary-Ryanair Chief Executive
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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
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Ryanair- using social sites to promote themselves as a young, fun airline
http://www.youtube.com/watch?v=A8d2fmkQDXU&feature=related
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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?!!!
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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?