Ryanair Marketing Mix Analysis Case Study Example | Topics and Well Written Essays - 2750 words

Ryanair Marketing Mix Analysis - Case Study Example Rather than assume that its role was to 'steal' customers from other airlines, it determined that the customer base should be defined in a different way: those who were price-sensitive, but were looking for a scheduled airline approach (rather than charter airlines, which had no fixed schedule). Ryanair also defined the real 'competitors' included alternative modes of travel (bus, train, and car) and fairly inflexible 'budget' scheduled airline seats. Airlines have pioneered in the use of yield management software to increase their average revenue per seat-mile, starting with American Airlines in the early 1980's. New, low-cost airlines started with few of these yield management techniques, calculating that the leisure traveler was put off by the plethora of fares for the same trajectory. Ryanair assumed that passengers placed different values on their travel. The vacationer and displaced worker could count on long-term travel planning. They are price-conscious. For those willing to plan ahead, Ryanair could price significantly below scheduled airlines. As capacity filled and the date for flight departure approached, Ryanair could adjust its pricing online in a flash, helping to assure that most planes fly full. Whereas legacy carriers layered time constraints (greater than 21, 14 or 7 days, for example), Ryanair might price in the opposite direction, giving last-minute flyers a discount for booking. Again, Ryanair defined their customers differently than at the legacy carriers. Their last-minute flyers needed three key attributes: flexible in their flight schedule, price-sensitive and impulsive. Here are the thoughts of potential customers in this last-minute category: "Sure, I'd fly to Dublin to catch a play and quaff a Guinness, if the price were less than 20 return." This is an impulse customer. "I need to get back to Warsaw to handle some immigration papers." This customer is price-sensitive and flexible in his/her schedule. Distribution Channels and Their Importance to Ryanair's Marketing Mix Ryanair could not exist without the Internet. The key benefits and tools for Ryanair are all internet-based: 1. Ryanair's cost per transaction must remain low in order to keep down fares. By bypassing the travel agent (once novel, now commonplace), Ryanair reduced its transaction costs per passenger by 5-10% of airfare. 2. Related to the above, Ryanair was able to reduce labor costs by having the passenger perform much of the administrative work online (and obviating the need at the airport or on the phone). 3. In order to fill planes, Ryanair must have to-the-minute pricing flexibility. Empty seats make no money; the ability to fill the 137th seat in a 737, even if it only provides 20, is an extra 20 falling to the bottom line for that flight. 4. Internet booking allows Ryanair to control all aspects of the customer relationship. This information is invaluable for future promotions. If Ryanair knows, for example, that it has a London-based passenger who travels often to Warsaw, they can focus on that customer for future