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Markets And Marketing Module The Case Of Ryanair Business Essay

Introduction

Ryanair is anA IrishA low-cost airlineA -the largest in Europe- which founded in 1985. Its caput office is based atA Dublin Airport. Ryanair operates 1400 flights per twenty-four hours with 254A Boeing 737-800A aircraft ( the air hose has a quickly expand and by 2012 will run a fleet of 292 aircraft ) and on over 1,100 paths across Europe andA MoroccoA from over 43 bases and linking 160 finishs. In footings of rider Numberss is the 2nd-largest air hose in EuropeA and in footings of international rider Numberss the largest in the universe. Ryanair has more than 1700 employees and in 2011 is expected to transport 73,5 million riders about. Furthermore, the fact that in the center of recession Ryanair ‘s net incomes increased by 204 % , indicates how profitable is. ( hypertext transfer protocol: //www.ryanair.com ; Slack, et.al. 2004 )

STRATEGY AND COMPETITIVE ADVANTAGE

Ryanair follows a cost leading scheme, which means that the company attempts to cut down its cost construction in order to hold cheaper monetary values than its rivals and thereby a competitory advantage and above-average profitableness. The major purpose is a lessening of the operating costs therefore prosecuting a lower place at the experience curve. Ryanair proclaims a policy of supplying merely the necessary service needed. Hence the merchandising of tickets is managed straight with the client through the cyberspace. There are no free repasts, covers and pillows on board. Furthermore, Ryanair uses merely one aeroplane theoretical account ( Boeing 737 ) to cut down care costs. Therefore by cut downing costs, Ryanair has been able to sell an mean ticket for $ 48, whereas British Airways demands $ 330 and accordingly to go the European cost leader.

Ryanair, besides follows the focussed cost leading scheme that enables the company to vie entirely in one or few market sections. Thereby the company concentrates on sections where it can work cost advantages and vie against the cost leader. Companies with that initial place have enlargement chances. Ryanair in her first stairss focused merely on flights between Dublin and London. Due to the deficiency of any European cost leader at that clip, Ryanair was capable to spread out to its current stance as European cost leader, compared to British air passages that follows a distinction scheme, by bring forthing goods and services that are considered, by their clients, as alone and hence to raise the cost of the ticket.

Ryanair manage to win in what other air hoses like British Air did non and this gives to Ryanair its competitory advantage: the low-budget which passes its costs to its clients direct in order to maximise the net income. The factors which help Ryanair to be a cheap-flight air hose are the assortment of paths and finishs, the rapid sum of flight and the sufficient capacity. Ryanair in comparing to BA does non hold long holds in cheques ( Hill and Jones, 2009 )

ELASTICITY OF DEMAND FOR THE AIR-TRANSPORT SERVICES

The Elasticity of demand ( ED ) shows how sensitive the measure of a good or service is in alterations in its price/income, in other words the ED measures the manner in which the quantitative demand reacts when the monetary value of the merchandise or service additions or lessenings. ( Jones, 2004 ; Campbell, et.al. 2002 ; Siegel, et. al.A 1997 )

Ryanair ‘s snap of demand for the air-transport services is elastic. Ryanair succeeded to offer services in low cost [ for illustration: tickets booking through cyberspace, the usage of secondary airdromes set downing ( less revenue enhancement ) , the cost of selling its services is reduced, no repasts etc. ] and these low monetary values help Ryanair to increase the market portion in comparing to other established and good known companies, like British Airways. Consequently, Ryanair with the alteration of one variable ( monetary value ) has succeeded to increase in the figure of riders.

EXPERIENCE ( LEARNING ) CURVE

Harmonizing to the larning curve consequence the more clip a undertaking is needed to be performed the more efficient is it, because less clip is required for each subsequent repeat. The experience curve consequence is broader than the learning curve consequence and does non include the labour clip merely, but harmonizing to it, the more frequently a undertaking ( good or service ) is executed the lower will be the cost of making it. Every clip that the volume doubles, value added costs autumn by uninterrupted and expected per centum. ( RyanairA?s costs have declined at approximately 20 % when the production is doubled ) .

Ryanair ‘s net incomes from larning curve effects respected on costs are in the undermentioned countries: the same features of fleets, the staff costs and productiveness, the undertaking out of services, the selling costs and the airdrome and handling charges. ( Mayer, 2007 ) The net income from the experience curve is that Ryanair can salvage cost through the continual betterments of its procedures. ( Edith, et. Al. 2007 )

Harmonizing to the above it can be assumed that Ryanair ‘s attainment of its profitableness aims should be attributed to an Experience ( larning ) Curve consequence. It can accomplish both the experience and acquisition advantages, ( although there are some other factors which affect Ryanair in its low- charge politic, like cyberspace, deficiency of nutrient and drinks etc. ) ( hypertext transfer protocol: //www.ryanair.com/doc/investor/2010/q4_2010_doc.pdf ; HYPERLINK “ hypertext transfer protocol: //www.google.gr/search? hl=el & A ; biw=1366 & A ; bih=653 & A ; tbs=bks:1 & A ; q=inauthor: ” Harold+Kerzner ” & amp ; sa=X & A ; ei=8T47Ta_gNMmQswaDufDzBg & A ; ved=0CDIQ9Ag ” Kerzner, 2009 ; Baily, A et. al. , 2005 ; Monczka et. al.A 2009 ; Kay,1995 ; Mayer, 2007 )

Efficiency – Effectiveness – Adaptiveness

Ryanair, harmonizing to its fiscal public presentation aims manages to be effectual and efficient. Furthermore, the company ‘s Full Year of 2010Results showed how adaptative Ryanair is in hard state of affairss such as Ireland ‘s touristry prostration ( 2009 ) , or in the instance of cancellations due to the Icelandic volcanic ash.

Sing the non-financial public presentation aims, Ryanair seems to be besides efficient, effectual and adaptative sing the fact that is one of the biggest universe ‘s air hoses, though some people may non happen it so attractive due to the fact that its low-priced scheme offers them less installations. ( hypertext transfer protocol: //www.ryanair.com/doc/investor/2010/q4_2010_doc.pdf )

Critical FACTORS IN TERMS OF POTENTIAL THREATS

The possible menaces to the company ‘s success peculiarly in an economic recession period such as the one we are traveling through are:

New entrants: because of the high costs that are needed in order to come in the market, the menace of new entrants is low.

Substitution menace: short distance flights, can be replaced by other agencies of conveyance such as train, auto, boat and other airlines.A

Menace to Ryanair ‘s laterality: if Lufthansa manage to integrateA with Austrian Airlines, A Brussels AirlinesA andA bmicould assert Ryanair ‘s market portion.

Fuel ‘s monetary value menace: presents fuel monetary values are lifting increasing the company ‘s disbursals, As a effect at that place will beeitheran addition in ticketspriceor a lessening in the company ‘s net income ( Tiernan, et. al. , 2008 )

Terrorism ‘s menace and insecurity: particularly after September 11th, owed to the unreal temper of fright and based on incorrect information.

Environmental menaces: that ca n’t be predicted, but it can do many jobs, such as in the instance of the Icelandic volcanic ash which led to closings and cancellations.

EU 261 Legislation ‘s menace: can impact the company ‘s growing, as there is no cap on either the period or quantum that air riders can claim for. ( hypertext transfer protocol: //www.ryanair.com/doc/investor/2010/q4_2010_doc.pdf )

Economic clime menace: the unsure economic state of affairs owed to the planetary economical crisis. ( Tiernan, et.al. , 2008 )

Epidemic menaces: like in 2003 with the SARS epidemic where people were afraid of going abroad. ( Chau and Kao, 2009 )

ADVANTAGES OF NEW CONDITIONS IN THE BROADER MARKET

Harmonizing to the Full Year ‘s of 2010 Result Statement, Ryanair managed to take the advantage in the instance of the falling touristry demand in Ireland, by foretelling it. The low-priced scheme of the company combined with its enlargement in other states and the addition of finishs along with the anticipations, helped the company to be prepared and effectual in order to confront hard state of affairss. Furthermore, the alteration in bing ordinances in the UK helped Ryanair to be relieved from the hard and deprived state of affairs in which it was involved and forced to pay reimbursement of disbursals of disrupted riders. These alterations lead Ryanair to seek to accomplish a force majeure clause like other viing transport suppliers such as managers and ferries, in order to be relieved of the “ responsibility to care ” duties.

Many air hoses, because of the economic crisis, seek to cut down costs by cut downing flights and finishs, giving Ryanair the chance to take advantage of this state of affairs by increasing its flights and finishs and be more flexible than others. Additionally, Ryanair can take a hazard to purchase at low cost air hoses which are about to ruin and seek to take advantage of them taking her to a market leader. ( hypertext transfer protocol: //www.ryanair.com/en/about )

Selling Mix

Marketing mixA is the combination of elements which are necessary for the planning of the selling operation and is known as the 7 P ‘s. Ryanair ‘s selling mix is the followers:

PRODUCT OR SERVICE: Ryanair provides low cost no frills air travel to European finishs without many installations such as nutrient or drinks in order to be more competitory. Furthermore, attempts to increase its net income due to the on-line cooperation with rental autos companies, hotels, etc.

Monetary value: Ryanair has low menus. The bulk of the seats are sold at low monetary values and the monetary value is normally associated with the clip engagement ( the Oklahoman, the cheaper ) .

Topographic point: Ryanair does n’t utilize travel bureaus, but online booking so through this manner saves money on bureau fees. Besides uses secondary airdromes which have less traffic and they are cheaper.

Promotion: Ryainair ‘s purpose is non to pass much money on advertisement. For this ground does n’t collaborate with advertisement bureaus and makes simple advertizements which merely inform the riders for the low monetary values.

Peoples: Ryanair invest in the preparation of its employees. The pilots are recruited when they are immature and they get early publicity. The cabin crew in responsible for everything and of class for the riders ‘ safety.

PHISICAL EVIDANCE: Ryanair tries to happen chances -such as after 9/11 or the invasion in Iraq and Afghanistan- and purchase aircrafts cheaper, when other companies do non.

Procedure: Ryanair does n’t hold a long cheque in. The FIFO method ( first semen, foremost served ) is used and hence there is no place choice. Air Bridgess are n’t available and eventually, the luggage is delivered in terminus and there is n’t a particular intervention in instance of an accident such as a bag ‘s harm. ( Gronroos, 1997 ; Nargundkar, 2006 ; Slack, et.al. , 2004 )

Research Proposal

RESEARCH OBJECTIVES: collect informations for a new publicity ( advertisement ) run based on clients from all walks of life ( including concern travellers ) desires and demands in order to garner information about travellers behavior ( happen ways to pull new clients and better company ‘s services ) which could be translated into selling chances.

If the riders are satisfied with the bing monetary values

If they consider that the paths are plenty.

Which are Ryanair ‘s advantages and disadvantages.

If in order to pull concern category riders should supply superior services and how much should the charges for excess services be.

METHOLOGY ‘S PROPOSE/ TARGET MARKET: The conclusive descriptive research design will be used, because the research aims are clear, the research being performed is quantitative and the sample being used is rather large. The conclusive research relies on both primary and secondary informations and provides information which is utile for decisions-making or decisions. The mark market will be travellers from all walks of life, all ages and gender: people that interested in monetary value, people that are independent and form their travel entirely, concern travellers who are interested in the handiness of the finishs, people who travel in Europe.

Sampling: The sample of the consumers should be representative and randomly chosen. Travelers have different features, demands and wants, which representA ( every bit accurately as possible ) the full group of travellers. Furthermore they should be indiscriminately chosen, because each traveller of the population has an equal opportunity of being chosen. The trying method is probabilistic, because all the travellers have equal opportunities to be selected.

CONTACT METHOD: The personal interview will be used as contact method, because it can gives a bigger rate of response than the other methods and in our instance it will non be excessively expensive, as the air hostess could portion the questionnaires to the travellers during the flight. The online method could besides be used, by posting a questionnaire in R yanair ‘s site where clients could make full the questionnaire from their places.

PERSONAL INTERVIEW vs OTHERS CONTACT METHODS

Method

Advantage

Disadvantage

Mail

More personal, cheap, fast

Low response rate

Online

Inexpensive,

fast,

honestness

Low

response

rate

Telephone

Higher response rate

More expensive, no personal observation

Personal interview

High response rate, most personal

Most expensive

( but non in our instance )

Disadvantages

Question:

1 ) Male Female

How old are you?

18-25

25-40

40-60

60 and more

How frequently do you go?

Once a twelvemonth

Twice a twelvemonth

Every three months

Every month

Every hebdomad

More than one time a hebdomad

Otheraˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..

4 ) How satisfied are you with the bing monetary values?

Very About Neither Almost Very

Unsatisfied Unsatisfied satisfied nor Satisfied Satisfied

unsated

5 ) Do you believe that the bing paths are plenty?

Yes No

Are you satisfied with the online engagement?

Not satisfied 1 2 3 4 5 6 7 Satisfied

Should Ryanair supply superior services in order to pull concern travellers?

Yes No

How much should be the advanced services charged?

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9 ) When you are believing about the grounds which make you to make up one’s mind between different air companies, what is more of import for you? ( delight rate the undermentioned grounds harmonizing to their comparative importance ) .

Air-craft ‘s theoretical account:

Delaies:

Free repasts:

Low cost:

Secondary airdromes:

Sum: 100 points

10 ) For which grounds do you prefer to wing with Ryanair?

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aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦

aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦

aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦

aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦

The proposed methodological analysis is rationale, because it can easy be implied in world, as the questionnaire can be given from the crew to the travellers of each flight and the inquiries can give some information for the demands and desires of the travellers. The findings from the research above, could be generalized from the sample to the population as a probabilistic sampling method as the random sample is used. Furthermore, the findings can be besides valid, as a sufficient sample can be taken all yearss of the hebdomad, for all the flights and finishs. So in this manner, we can hold valid information about our mark market and we can utilize them in order to win our intent.

Decision

Ryanair is a low- cost, no frills air hose company, which played a really of import function in the revolution of the air hose industry and managed to do non merely the European but besides the worldwide travel, accessible and low-cost for people of all economical categories. Furthermore, this new ”player ” forced the established companies to reorganise their operations and its new character ( inexpensive tickets etc ) had a great response to the clients and contributed to the large success of the company. Additionally, Ryanair has emerged as the market leader with the highest net incomes in Europe.

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