28.11. 06 EasyJet & Ryanair: flying high with low prices 1 Success through low prices Advantages and Risks Conditions for Charging low prices easyCinema Case Study: easyJet & Ryanair Flying high with low prices Caglar Cintuglu Deniz Yarar Uli Breunig
30
Embed
Success through low prices Advantages and Risks Conditions for Charging low prices easyCinema 28.11.06EasyJet & Ryanair: flying high with low prices1 Case.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
28.11.06 EasyJet & Ryanair: flying high with low prices 1
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Case Study:easyJet & Ryanair
Flying high with low prices
Caglar CintugluDeniz YararUli Breunig
28.11.06 EasyJet & Ryanair: flying high with low prices 2
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Introduction
Source: Jobber, p410
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
28.11.06 EasyJet & Ryanair: flying high with low prices 3
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
First Question
How do EasyJet and Ryanair achieve success using low price strategies?
Source: Jobber, p410
28.11.06 EasyJet & Ryanair: flying high with low prices 4
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
EasyJet & Ryanair
The orange-liveried airline is one of the pioneers of low-cost travel in the UK
Established in 1991Europe’s largest
budget airline
28.11.06 EasyJet & Ryanair: flying high with low prices 5
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Short History: 1978Deregulation of American Skies
Southwest Airlines first „no-frills, low-fare“ business model
– No free meals or coffee, only peanuts
– Secondary Airports:– Faster turnaround times– Cabin crew does the cleaning– No waiting for incoming flights
28.11.06 EasyJet & Ryanair: flying high with low prices 6
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Only one type of aircraft
• i.e. Boeing 737– Keep costs down by
– Reducing pilot training costs– Reducing maintenance
costs
28.11.06 EasyJet & Ryanair: flying high with low prices 7
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Internet booking
• Cut paperwork and administrative costs
Source: www.easyjet.com; www.ryanair.com
28.11.06 EasyJet & Ryanair: flying high with low prices 8
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Product Strategy
EasyJet & Ryanair have successfully attacked British Airways with their rapid penetration strategy
(Price: low, Promotion: high)
28.11.06 EasyJet & Ryanair: flying high with low prices 9
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Target segment
• Independent customers (no need for bundled services) with high grade of self organized market overview/comparison
• Rather young and flexible (Generation @)
28.11.06 EasyJet & Ryanair: flying high with low prices 10
Success through low prices
Advantages andRisks
Conditions for Charging low prices
easyCinema
Customer Characteristics
• Independent, self organised• Desire of object: pure, cheap
transportation service• Familiar with new media and