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Marketing Strategy of Ryanair

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Christian Holve

on 10 January 2014

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Transcript of Marketing Strategy of Ryanair

Analysis of the Situation
Diagnosis of the Situation: SWOT Analysis
Suggestions for Improvements
improve Human Resource strategy (satisfaction of employees needs to get improved)
enhance marketing plan (focus only on low price can be easy for competitors to imitate)
outsource more of their services to focus more on their strenghts
shift for a certain number of routes to main airports
introduce a proactive social media site to enhance customer brand loyalty
Marketing Mix - 4 P's
Ryanair - Fly Cheaper
Irish airline company
Low cost strategy
298 aircrafts and a network of 28 countries
over 8,500 employees including over 1,200 pilots
Revenue in 2012: 4,325 million Euro
European's most punctual airline
Marketing Strategy of Ryanair
Porter's 5 Forces
Framework to identify the attractiveness of a market
1) Bargaining Power of Suppliers
2) Bargaining Power of Customers
3) Threat of New Entrants
4) Threat of Substitutes
5) Competitive Rivalry
Important to determine the Strenghts and Weaknesses of an organization
Bargaining Power of Suppliers
only aircrafts of Boeing-> high power for Boeing
high switching costs
dependent on oil suppliers
airport charges
Bargaining Power of Customers
no customers = no profit
easy for customers to find another cheap fare (e.g.comparison websites)
low price important for loyalty
Threat of New Entrants
high barriers of entry (market is saturated)
requires high investments
already existing contracts with airports for slots etc.
not easy to get flight routes
Threat of Substitutes
Recession -> People take care of their money
people will always choose the best and cheapest option possible
Alternatives: trains, ferries,cars
Competitive Rivalry
lots of rivals in the budget airline market (Easyjet, Wizzair, etc.)
do not compete directly on the same routes
strategic alliances to combine resources and "fight" against Ryanair
PESTEL Analysis
analyses the Political and Legal, Economic, Socio-Cultural and Technological forces that affect the strategic mngmnt of an organization
helps to assess the potential of a market, exploit opportunities and defend against threats
Political and Legal Environment
some European governments favour airlines from their country
Green Tax to combat carbon emissions
need for extra security through threat of terrorist attacks
Economic Environment
fluctuating fuel prices
Exchange rate: Euro - British Pound
Socio-Cultural Environment
large number of customers from Europe -> difficult to segment
Technological Environment
new innovations that are more fuel efficient, less noise productive, less polluting the environment
cut costs by e-ticketing, online check-in, promote products online
Environmental Factors
Ryanair has to take care of carbon reduction
EU made it mandatory to reduce carbon footprints
low cost of operations
impressive fleet
huge network of routes
Oil Prices
Price War
lower profits and Cash flow
criticisms in public
EU expansion
Opportunity to gain more customers
low cost, no frills air travel to European destinations (and Morocco)
no food and drinks for free onboard
commissions on Hertz car rental and a number of hotel businesses,bus tickets, etc. (16% of revenue)
low fares
70% of seats at lowest two fares, 30% charged at higher fares
no use of travel agents -> they use direct marketing techniques
book online
secondary airports like Stansted (London) and Weeze (Düsseldorf)
keep an aircraft as long in the air as possible
spend as little as possible on advertising
all advertising is done in-house
employs controversy to promote its business (e.g. charge for toilet use)
Christian Holve & Franjo Limbrock
Full transcript