Marketing in the Age of Technology: Ryanair

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Marketing in the Age of TechnologyRyanair

• 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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Ryanairs Competitive Advantage

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

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Ryanairs Competitive advantage

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

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Ryanairs 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 OLeary-CEO
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A Maverick. Is Ryanair a maverick player?

• Does not conform
• Unpredictable
• Mean
• Tough
• Ruthless
• Michael OLeary-Ryanair Chief Executive

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Ryanair- Controversy, Publicity, No Compromise-
The Price is the Cheapest!!!

• http//www.youtube.com/watch?v9wGkbzOk3Jcfeature
  related
• http//www.youtube.com/watch?vCgA0DkuIACUNR1
• 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?vA8d2fmkQDXUfeature
  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?

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Thank you

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