Question One: Ryanair is an Irish low-cost airline, founded in 1984. Its route network serves more than 30 countries in Europe, Africa, and the Middle East. Define its value proposition, using the marketing mix. Discuss what makes their proposition unique: individual elements of the mix, or the uniqueness of combination
Ryanair DAC is the airline with its head offices in Dublin, Ireland. The firm was established in 1984. Currently, it is renowned for its cheaper business model, making it the biggest airline in Europe in terms of the number of customers it has handled. It principally operates in more than 30 countries in the Middle East, Africa and Europe (Creaton 2014, p.3).
More importantly, it values proposition focus on simplicity and low-cost services. In this regard, value proposition refers to the extra benefits the customer acquire from a service or product not provided by other business rivals. It describes a business or marketing statement describes why a customer must avail of their service or product over other offers in the market (Dziedzic and Warnock-Smith 2016, p.20). Additionally, the value proposition is a mixture of the service or product and the charged price. It is designed to attract to select their service or product for its better value and its better business option. Meanwhile, the fundamental value proposition of Ryanair is to be a low-priced airline (Dobruszkes 2013, p.75). Precisely, Ryanair is considered an inexpensive airline hence it uses a modest value proposition. Therefore, it deals with transportation of people and goods between different areas at a lower price as compared to the business rivals operating on the same routes (Creaton 2014, p.9).
To accomplish its strategy of a reduced price for its services, the budget of the airlines tends to eliminate some conventional frills. For instance, the company sell meals and snacks on board rather than providing free meals to its customers in the ticker price (Bilotkach, Gaggero and Piga 2015, p.152). Subsequently, it takes advantage of the minimal amount of time required to clean between flights contributing to higher turnaround time. Moreover, the company tends to utilize secondary airports which appear to be less hectic hence facilitating a faster turnaround time (Dziedzic and Warnock-Smith 2016, p.23). Similarly, Ryanair offers low-cost tickets as compared to other airlines operating on the same routes hence entice many customers to select their brand when reserving flights. A marketing mix is an integration of four variables, which include promotion, price, place, and product and are essential for the establishment of marketing strategies (Dobruszkes 2013, p.76).
Pricing in the marketing mix determines the profit levels of the company. It demonstrates essential issues such as the perceived value, target groups, company objectives and competition. Ryanair creates a cheaper service that helps to encourage higher demand and gain share market. In addition, the low prices are useful when consumers are sensitive to the prices or there is substantial possible volume. For this reason, low price strategy works well for the airline business (Creaton 2014, p.13).
In terms of product/services, it offers ancillary services aiming to increase its revenue. In the past decade, it indicated that revenues from its services such as priority boarding, checked-baggage charges, and car-hire commissions rose by 30 per cent. The firm acquires more than 20 per cent from these services (Bilotkach, Gaggero and Piga 2015, p.153). Producing significant levels of revenue from ancillary sources and delivering air transportation to customers without additional services is instrumental in maintaining a lower cost.
Ryanair operates in secondary airports as opposed to large airports aiming to reduce the cost of its services. For instance, most of its services are based in the smaller airport such as Stanstead. In this respect, the cost of flying from Stanstead is low as compared to either Gatwick or Heathrow. In addition, the majority of its terminus airfields are minor which seem to be smaller airports in the region. Subsequently, the cost of using such airports is lower as compared to international airports. It has also adopted the use of the Internet and online systems for booking (Dziedzic and Warnock-Smith 2016, p.25).
The company spends resources on advertisements. However, the strategy is to use the minimal amount on advertising. The firm does not lease the services of an advertising agency but all its promotional services are conducted in-house. It also leverages simple promotion methods such as posters, fliers, newsletters, and brochures to create awareness among passengers on their low fares (Bilotkach, Gaggero and Piga 2015, p.160).