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

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 YouTube and Ryanair How can Ryanair remain innovative and

maintain competitive advantage?

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

Ryanair 2007 Report

Traffic Grew by 22% Cash held-E2.2 Billion 153 new routes

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

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”

Pre-1990 Airline Industry

Dominated by big national airlines

Cartels

Route Monopoly

1990s-change in the environment

Privatisation Deregulation

Relatively free market

More choice for the consumer!!

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

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

Understanding the environment

Very important because it is changing all the time!!!

Customers

Competitors

Government

Economic factors

Social factors

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

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

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?

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?

Ryanair’s Competitive Advantage

Low Cost• Aircraft at a discount• Low cost airports• Fast turnarounds• No travel agents• Short routes

Ryanair’s Competitive advantage

Focus

• Infrequent flyers/holidaymakers• Specific cities in Europe• Consumers only• Small destination and departure airports

Ryanair’s Competitive advantage

Differentiation

• On line booking• Easy boarding• Cheap prices• Access to other services-Hire cars• Aggressive advertising and promotion

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”

Michael O’Leary-CEO

A Maverick. Is Ryanair a maverick player?

Does not conform Unpredictable Mean Tough Ruthless

Michael O’Leary-Ryanair Chief Executive

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

Ryanair- using social sites to promote themselves as a young, fun airline

http://www.youtube.com/watch?v=A8d2fmkQDXU&feature=related

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?!!!

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?

Thank you

Thank you very much for your attention

Mike [email protected]