Relationship Marketing Ryanair
Ryanair was established in the year 1985 by the RYAN family and has grown from a small airline flying a short hop from Waterford to London, into one of the Europe’s largest carriers. The company expanded and within 4 years it had 350 employees, 14 aircraft, and carried 600,000 passengers a year. It is currently serving to 26 European Countries with 148 destinations. It operates on 794 different routes daily serving by more than 1050 flights in a day.
It has totally 169 aircrafts running for different routes with 5986number of employees working in it However, Ryanair’s costs rose drastically and it recorded losses of £20 Million sover four years despite its growth. Although consumers were continuing to fly Ryanair due to its low costs, some type of change was needed in order to revamp the company. Under a new management team, a major overhaul of the airline was undertaken in 1990/91 and it was relaunched as the first of the new breed of ‘Low Frees/no Frills’(Scribd.com(2009)) Company Perspectives:
Ryanair is Europe’s prominent Low Fares Airline: In 2011 we expect to carry over 6 million passengers across 34 routes. Ryanair have recently added 7 new European routes to our ever expanding network. It is market leader on every course where it competes with Air Lines. Ryanair is convinced that Europe’s high-cost and often state-subsidised airlines will be no match for its low cost, no frills formula. Ryanair set to grow by 25% each year, and a US $2 billion order for 45 new aircraft in place, millions of European air travellers will feel the `Ryanair effect’ in the years ahead.
Literature review: Methodology Validated the dynamic nature of the aviation sector and in particular the evolve nature of ( low cost carrier) LCCs and airport networks this paper can only provide a snap shot at a personal point in time. In their contact with airline operator, airports need transparency and stability involved Ryanair, in the face of severe rivalry from other airports in mainland Europe by submission them a financial package comprising summary landing and handling charge, marketing of the airlines services, office space, pilot place, in addition to payment for employment and education. The issue was therefore one of clearness with the financial incentive seen as a twist of the air transport market. It would come out to be that all “start-up” deals must be apparent and fair, it may be that in private owned airports maybe more signal to LCCs than those which are publicly own. Benefits to local economy
Some publicly own airports have selected to draw LCC with preferential deals in order to challenge to take benefits to the local economy. Whilst such profit may accrue, it can be complex to predict/quantify. For example, the owner of an airport in Southern Europe and the local tourist influence worked together in submission a package of concessions in order to draw a LCC to the airport with the intension of attract tourists to the local economy. As such, the airport paid aeronautical charges, provide a bus link to the town centre and made a financial involvement to advertising the service. It was establish that passengers were with the airport as a transit point on their outside access journey to their holiday objective, leaving only secondary benefit to the local economy and little or no advantage to the airport
The 7 P’s of Ryan air marketing:
Ryan air is the European low cost airline. Low cost or no frills marketing strategy are of great interest to marketers since the marketing mix employed tends to run in opposition to what makes a large brand – and Ryan air is a great brand and a very popular business. In 2009 the company solve for 30% of its local Irish rival Air Lings after a prolonged takeover bid. Difficult trading disorder meant that Ryanair made its first annual loss in 2008/9. O’Leary put this down secure to rising fuel costs (as did British Airways in the same year). The company also necessary to take into account the burden of purchase its stake in Air Lines. So in reality object are looking good for Ryanair and its budget operation – since the business aimed to fly double the amount of passengers. Ryan air’s marketing mix:-
Product or Service. Ryanair has low fares. Low cost, no frills air travel to European destinations. There is no free food or drink onboard. Food and drink are income streams. You buy them onboard, or you do not – take your own food and drink if you like. There are other income streams – or ancillary revenue. The company has bargain with Hertz car rental, and a number of hotel businesses. So Ryanair takes a commission on ‘up selling’ i.e. ancillary revenue. Other examples include phone cards and bus tickets. About 16% of profit is made this way. This keeps costs lower. Price
70% of seats are sold at the lowest two fares.30% of seats are charged at higher fares. The last 6% are sold at the highest fare Ryanair sometimes get in trouble with bodies such as the Advertising Standard Authority (ASA) in the UK over differences between advertised and actual price – in fairness to Ryanair these are rare mistakes. Place
Ryanair does not use travel agent so it does not pay agency commission. It uses directs marketing technique to recruit and retain customers, and to extend products and services to them (i.e. Customer Relationship Management). This reduces costs. You book online over the Internet. This saves them 15% on agency fees. They are base in Stan stead in Essex – which is known as a secondary airport. It is cheaper to fly from Stan stead than either Heathrow or Gatwick, and since it is less occupied Ryanair can turn aircraft around more alert. Many of Ryanair’s destination airports are secondary. For example if you fly to Copenhagen (Denmark) you begin in Malmo (Sweden) – although it is only a short coach trip over the border. Secondary airports .depend upon this single carrier – some (it is rumoured) paying up to £100, 000 for each extra new route. Costs are lower and aircraft can be turned around faster. Promotion
Ryanair employ controversy to promote its business. For example in 2009, the company justification that passengers would be charged £1 to use the toilets on board. O’Leary reasoned that passengers could use the dying at either the destination or arrival airport. This would rapidity things up. Some of their aircraft are decorated in the uniform of advertisers e.g. News of the World, Jaguar and Kilkenny (beer). People
Pilots are recruiting when they are young as pilot cadets. They work hard and take early promotion and then move on after 10-years or so to further their careers. Cabin crew pay for their uniform to be clean. They invest in their own training. They are mainly important for passenger safety as well as ancillary revenue onboard. Physical Evidence
They pay as little as likely for their aircraft. Plane are the most expensive asset that an airline can make. They get big discount on aircraft because they buy them when other airlines don’t want them, for example after September 11th, or on the spoiling of Iraq and Afghanistan. Aircraft manufacturer cannot simply end a supply chain in minutes. If orders are being cancel or delayed, this is when to buy. It was rumoured within the industry that Ryanair was buying Boeing 737s – list price around £40,000,000 (forty million pounds) – with up to a 50% discount. Process
There is no check in. You easily show your passport and supply your reference number. Beyond any distrust, Ryanair is one of the strategic marketing successes of the last decade. Certainly synergized by Michael O’Leary – the low cost strategy that it employ is unusual and industry changing. In many ways the business has looked intimately at all appearance of it markets and operations to remould the industry and customer expectations in a unique way. The determination here in this post was to introduce a company and its assorted strategies for long run business success. Much of these marketing strategies illustrates are very much
Ryan air relationships with customers. Customer Affairs & Service Audit (CASA), are two teams that have been set up by the company to track customer satisfaction and complaints. which are recent additions to network of regional offices in UK/Europe. They have covered areas globally and in doing so they have already reviewed an improvement by 50 % when it comes to dealing with customer complaints as they are being dealt with quickly and in local areas to customers. The service audit team check products and services on regular basis for improvements and for assistance in ensuring success they also have a team of mystery shoppers who will report back any suggestions and changes from a customer point of view. Internal and external checks are carried out all departments from customer services to flight staff. All reports are then reviewed and changes are implemented to ensure customers are receiving a high standard of service and communication with the company.
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Ryanair has been successful in maintain its rapport and relations with customers and different areas of their services such in flight entertainment, food, tourism and overall services. It also been seen that Ryanair has had some problems in customer relations in reference to airport services as they have received complaints with the method airport staff have treat customers with complaints. Though this has been effectively dealt with by internal departments it still highlights problems that are having with external staff. Emirates can implement a training session that is more focused on them to certify that there processes are getting executed in accordance to what the customer first experiences whilst booking online or through an Ryanair Airline.
Ryanair Customer Loyalty “It offers a comprehensive range of CRM and loyalty solutions” It launched several programmes where they had different levels of rewards schemes for both business flyers and annually holiday flyers. The miles collected can be spent in hotels, high street shops, car rental etc .Schemes for those travelling on Ryanair flights were the miles can be used for in-flight services such as games, special meals were also been introduced. This form of loyalty scheme for existing customers can also be a very attractive way of new customer retention as in the long term they will have benefits firm that they spend today. Their loyalty scheme also targets customers from their other sister companies as it isn’t only exclusive to flyers but also to those that consume other services and products from Ryanair Group They offer competitive loyalty schemes for users and update their schemes as they view the changes in the market place.
Customer segmentation The evidence is irrefutable. With marketing budgets person squeezed, marketers see improved targeting as critical. That means improved customer segmentation bas on the ability to score customers’ tendency to buy, churn or default – and react accordingly, at speed. Armed with better customer perceptiveness (such as predictive analytics, uplift modelling and data visualization) you can start to engage customers based on deeper and more significant insights, creating system based dynamic customer segments – a segment of one. The latest customer segmentation solutions are intelligent. They are not finite. They are not static. They are based on sound data management values and fed by a faithful stream of information that reflects changes in customer aspirations and circumstances. It means that campaign can be managed dynamically, in real-time to communicate with customers at what we call ‘moments of truth’ – those seminal moments when people are most engaged with the brand.