Critical Analysis On Ryanair Marketing Strategy

Question

Task: A European company wants to change its current strategies that are being implemented and used in their marketing department. They want to expand outside of the European Union. As part of their marketing team, you are uniquely placed to collect,compare and analyze information for the most suitable marketing strategy that fits the company. You are required to submit a marketing strategy in form of a writen report.

In your PowerPoint and your essay, you must describe, discuss, compare and explore the following:

1. Introduce the company, based on its mission and vision, aims and objectives, describe their current strategic marketing approach.
2. Describe the competitive advantage of the company, and analyze the importance of competitive success.
3. Chose and discuss the steps you can take for the social media strategy to promote the business brand of the company. How would you approach a social media strategy to lead the business to competitive success?
4. Analyze in detail all the key elements of your marketing approach: (Brand, value proposition, objective, target audience, channel and content mix, business position in the market and parameters for measurement).
5. Compare and justify the model or framework chosen. Which marketing model is the most suitable tool to be used from the company to provide a solution for marketing problems?
6. What is the target group of the company? Describe the customer(s) and analyze their profile. Discuss what kind of strategic development the company use for customer satisfaction.
7. Explore how social media can be leveraged for the development and implementation of a firm’s marketing strategy and provide with recommendations on how to interpret and use the social media market data.

Answer

1. Introduction
The study deals with changing of current Ryanair marketing strategy which is a European Company and they are planning to expand outside the EU. Ryanair has been chosen as they are trying to implement their new strategies for outreaching the Nigerian Aviation Market. The details have been analyzed below:

Company profile: Ryanair was founded in 1985 by the Ryan family to provide safe and scheduled passenger service between Ireland and the UK and served as a monopoly of Aer Lingus (corporate.ryanair.com, 2020). The company is the first and largest budget airline in Europe and has been working on the rigorously low-cost business model. 

Vision: In the long term, the company wants to be on good terms with customers and serve better for their customers. This can happen through low-cost fare provision.

Mission: The Company has the mission to generate profit and this is why they provide no free meals. Customers have to pay for meals and this generates revenue for the company.

Aims and objectives: The main aim of the company is to change current Ryanair marketing strategy and implement new ones to outreach the Nigerian Aviation Market.

The objectives of the company are to provide low fares, provide excellent customer service, frequent point to point flight and short hauls. They try to use technology at its best. They commit to enhance operations management and focus on criteria growth.

Current Strategic marketing Approach: The current Ryanair marketing strategy is to let all customers know they provide low-cost fares (ryanair.com, 2020). They are Europe’s first No Frills Aviation company and that strategizes their company.

2. Competitive Advantage of the company and the importance of competitive success
The number of low-cost carriers has been increasing in the aviation industry and this has posed a huge competition for Ryanair marketing strategy. The main competitors of Ryanair are Easy Jet, BMIbaby, Fly Be and they are emphasizing the low-cost tickets and this has been influential to attract customers (Sundarakani et al. 2018). This has made the competition high and Ryanair is thus approaching to extend out of the EU and expand itself in the Nigerian Aviation Market. To analyse the competitive advantage of the company, Porter’s Generic Competitive Strategies can be discussed. 

The company's relative position within the industry determines whether the firm is profitable or below the industry average. The fundamental basis of profitability that is above average, in the long run, helps to maintain sustainability in the competitive advantage (Ouma and Oloko, 2017).

Figure 1: Porter’s Generic Competitive Strategy on Ryanair
(Source: Ouma and Oloko, 2017)

Cost Leadership: The firm becomes the low-cost producer in the industry. Ryanair marketing strategy has cost leadership and it operates a policy where it can offer price to its customers at low possible fares that is available from any carrier. In case any competitor tries to undercut the prices, Ryanair, with their low-cost production would meet the pricing strategy. This cost leadership is used by Ryanair for profit maximization and strengthen the strategic position. The company, while opening its outlet in Nigeria would face no problem with competition.

Differentiation: In this Ryanair marketing strategy, Ryanair seeks to be unique in the industry, which it is already through its low price policy and No Frills Strategy. There are a few dimensions that are widely valued by buyers. In Nigeria, buyers are also attracted by low price and unique strategies. Price has become the biggest differentiator of the company among its competitors. The unique feature of the company is that they compensate for flying from secondary airports that are slightly away from main airports. Most importantly, they give 100 % service to consumers with fewer cancellations, fewer complaints and low operational price (Omsa et al. 2017).

Focus: a). In Cost Focus, The company seeks cost advantage and this is operable through low pricing and low production cost.

b). In Differentiation focus, there is a different policy for target segments. The Ryanair marketing strategy lies in the focus of the target segment and other segments of the industry.

Importance of competitive success is that it helps to understand their position and draw more customers since they provide a low cost. Implementation of competitive success is important since the success of the company lies in competition. More success is presumable when the company can expand itself outreaching the international market. The success shows that Ryanair marketing strategy has been dominant in own area and have the plan to emerge in Nigeria Aviation as it is confident of its power to submerge any competitor. This has come from the success of competitiveness.

3. Steps for a social media strategy to promote the business brand. How can social media strategy help to business competitive success?
The setting of goals: It is very important to understand that exactly the company wants out of social media marketing. As opined by Ahmad et al. (2016) there can be "n" number of plans and this does not mean they all would be applicable. It is very important to know who would be the target audience and who need to follow social media posts. Ryanair marketing strategy needs to set realistic goals to reach Nigerian aviation Market. They need to put a translation option so that Nigerian people can understand their posts in their language. This would scale the quality and efforts for posts. It is very important to understand data from Sprout Social Index as these are top priorities from marketing strategies.

Increase brand awareness: One of the aspects of Ryanair marketing strategy is to create brand awareness it is very important to create authenticity and long-lasting impact on customers. This is possible through publishing promotional messages, important information with proper pictures that would attract eyes and emphasize on personality and values.

Generating leads and sales: Followers are not going to appreciate posts and social media reviews by accident. People would understand their need and analyse whether these posts satisfy their targets and then only they would give importance to (Agius, 2016). Ryanair needs to understand they have to generate leads and post accordingly for the purpose. They need to segments the need for the customers, whether Nigerians are interested in No Frills and thus they can alert them about their products before launching there fully. There must be proper research before launching of any product or service in social media.

Social media can help in gaining competitive success since the internet plays a broad field for business analysis and customer understanding. This helps in competition and they help in planning, bring business in the market and bring customers together in an innovative manner. Since social media is a powerful tool savvy business owner and customers approach them for proper review and knowledge about products and service. Ryanair marketing strategy can do proper research about whether other airlines in Nigeria do use social media as marketing and then they can regularly interact with consumers (Lin et al. 2017). This would help to create a sense of community and development. The target audience can be attracted with regular posts and enticing customers with proper discounts and facilities would help to win over the competition. People use the internet at a first and immediate glance of any discount would be availed first, thus winning over other companies.

4. What are the key elements for Ryanair marketing strategy?
Brand: Brand is very important since it helps to determine the company's vision, target audience, communication and creation of consistency. Ryanair needs to establish a brand name through labelling their products and development of a strategy that would be available through all marketing channels. Visual aesthetics and the brand tone is the crucial cornerstone of effective branding where interaction with customers is vital.

Value proposition: This is adding value to the promises of a company that delivers to customers uninterruptedly that choose to buy their products. This stands as a marketing statement that helps to summarize the reason for buying by a customer (Baldassarre et al. 2017). Ryanair marketing strategy installed focuses and disciplined value architecture to deliver a value proposition. They generated revenue to create values and serve customers with proper sustainability.

 Objective: The main objective of Ryanair marketing strategy is to increase profits and marketing objective includes increment of market share through an extensive marketing campaign. They use tactics of No Frills and low-cost tickets and own competition to different carriers and these are the techniques to achieve objectives of Ryanair through their chosen strategy. The main objective is to make advertisements to directly compare with competitors and attack them.

 Target audience: The target audience of Ryanair is mainly older people who travel for visiting their relatives. They are old and they cannot invest a huge amount of travelling. This is why they prefer Ryanair since the cost of travelling is low in this Aviation organization. Moreover, they target business persons since they are more experienced about different airlines and they can have a better judgment on their system. The airlines also target army personnel who would visit home long after and they give them special facilities.

Channel and content mix: Channel mix is used for Ryanair marketing strategy since these plans for social and behaviour change in communication. As suggested by Chaffey and Ellis-Chadwick, (2019) this helps to identify types of communication channels that can best reach to customers and prioritize audiences to deliver the message. Ryanair uses this to maximize the reach and effectiveness of the different information they spread.

Ryanair has always prepared research-based persona and audience thus they can message them according to their need and specify their priority content. The company lays out content every time there is a journey so that everyone can have a better experience and the content mix is all about proportions (Shaw, 2016).

Figure 2: Channel mix for feedback
(Source: Shaw, 2016)

 Business position in the market: The company has been able to outperform many aviation companies and stand as the leading Irish company with the introduction of "Always getting better" plan (ryanair.com, 2020). It has been able to illustrate and deploy internal resources to perceive the value of customers and has delivered sustainable strategic advantage. Moreover, its" Double the Difference" fare Guarantee has ensured its superposition of business among competitors (corporate.ryanair.com, 2020).

Parameters for measurement: The main parameters to measure the success of the company are Return on Investment (5.70 % for Ryanair), cost per win, cost per lead and most importantly customer lifetime value (corporate.ryanair.com, 2020).

5. Marketing Model
Marketing can be a problem for many companies, and it had to be equally vigilant about risks to sustain an exemplary record. Ryanair has faced few problems with fuel costs, risks of euros and adaptation of seasonality. Fluctuations in fuel price had been a concern and the factors went out of Ryanair's control. However, Ryanair marketing strategy has been strong always and 4 P's of marketing has helped to streamline other incomes called ancillary revenue.

Price: Low price and Price with different arrangements are the main pricing strategies of Ryanair. To market to the Nigerian market the company has focused on the competition, company objectives, costs, defined target groups and perceived value. 70% of the seats are sold at the lowest price, 30% is sold at medium to high price and 6 % is sold at the highest price (ryanair.com, 2020). There are 4 Euro airport fees that is not planned and the best way of Ryanair marketing strategy is that the lowest price fare strategy is passed as a chain from passengers to others. Marketing is to benefit customers and the way Ryanair practice low price fare is highly re-evaluated.

Product (Service): In 2007 the company has reported revenue from services like car hire commissions, baggage checking charges and priority boarding has increased 30% and surpassed 10% more than its target of 20%. Offering air transportation with no extra charges to keep prices low has been a good idea and even when there is an issue with seasonality adaptation, people avail the service. However, Ryanair could improve the value of their service through the practice of social responsibility, baggage handling, the flexibility of flight scheduling, efficiency in checking and work ethics of employees (ryanair.com, 2020).

Place: The Company does not use any travel agent and does direct Ryanair marketing strategy so that it can cut costs of operations, recruit more and retain customers. Booking online tickets save 15% agent fees and most importantly it is situated in Stanstead, a secondary airport, much cheaper than Heathrow or Gatwick. Moreover, it gives compensation to customers for travelling through the secondary airport. In Nigeria, if it can avail this facility it can prosper in bright colours. However, no customer can reach the company through emails or web and it has to access premium rate phone calls that provide revenue to the company.

Promotion: The Company mainly uses advertisement for directly attacking its competitors and promoting own connections. New reservation system called Skylight allows reservation payment through the internet. As a result, 96% reservation has increased.

6. Target group analysis and strategic development for customer satisfaction
It was rated as an incompetent brand due to short-haul airline and for that, it is targeting the Nigerian Aviation System. In the present days, the Aviation system carries 90 million passengers annually around 30 countries. It targets the business persons, old age people who travel to relatives in different corners of the world. It also targets leisure travellers who can travel with low fare costs. The main profile of the customers is that they want to travel at low cost, understand the value of money and still knows the core values of Ryanair marketing strategy.

The main strategies to satisfy the customers are to know them and their demand. Understanding which class customer demands what preference depends on huge research on them and only them personalized strategies can be offered (Kuhl and Krause, 2019). Customers prefer to contact and review through social media and thus it is very important to have an online platform of the company, mostly for payments as Ryanair has named Skylight. Additional benefits attract customers and Ryanair marketing strategy gives those facilities like compensation for travelling through the secondary airport and low-cost tickets. Finally, there must be feedback platforms so that the company can develop as per customer needs.

7. Leveraging of social media and recommendation
Social media can be leveraged for the development and promotion of the company. In that case of Ryanair marketing strategy, the company needs to choose the right platform and share the content that becomes crucial for the success of the company (Lim et al. 2017). It is very determining factor to choose, which channel to use and one must consider that social media helps to develop in interaction, through any channel. The accounts created target audiences and they connect easily and with proper research on customers, they can interact with them, promising to satisfy their needs. It is through social media that people come to know about the new launching of a product and direct interaction with the company.

It is recommended that to use market data analytics few points are to be remembered:

• Figure out the social media key performance indicators. These KPIs are to in line with overall business strategy. The right tool would help to collect data, analyze and have a user-friendly interface that is easy to manage.
• Brands can leverage information to identify top content, brand influencers and many more. Marketers need to track all charter that is associated with brand online, keywords, sentiments and measures actual perception versus the desired perception.

8. Conclusion
The study infers that strategic management is very important for Ryanair since it is now expanding itself in the Nigerian Aviation Industry and it needs to identify who are the target customers for its service. The company needs to follow an effective Ryanair marketing strategy and has the target to give the best service at the lowest price and this analyzes that customers have availed the service mostly and the company has won over the competitive advantage. The company uses marketing strategies and proper core social media KPIs that help it to analyze data and target unique metrics from individual social media platform. This is being performed by the company since it targets to expand globally and claims itself EU's first No Frills airline service.

Reference List
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Ahmad, N.S., Musa, R. and Harun, M.H.M., 2016. The impact of social media content marketing (SMCM) towards brand health. Ryanair marketing strategy Procedia Economics and Finance, 37(16), pp.331-336.

Baldassarre, B., Calabretta, G., Bocken, N.M.P. and Jaskiewicz, T., 2017. Bridging sustainable business model innovation and user-driven innovation: A process for sustainable value proposition design. Journal of Cleaner Production, 147, pp.175-186.

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Omsa, S., Abdullah, I.H. and Jamali, H., 2017. Five Competitive Forces Model and the Implementation of Porter’s Generic Strategies to Gain Firm Performances.

Ouma, G. and Oloko, M., 2017. THE RELATIONSHIP BETWEEN PORTER’S GENERIC STRATEGIES AND COMPETITIVE ADVANTAGE A CASE STUDY OF BUS COMPANIES PLYING THE KISUMU-NAIROBI ROUTE, KENYA.

ryanair.com (2020) RYANAIR Available at https://www.ryanair.com/gb/en [Accessed on 6 May 2020]

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Sundarakani, B., Abdul Razzak, H. and Manikandan, S., 2018. Creating a competitive advantage in the global flight catering supply chain: a case study using SCOR model. International Journal of Logistics Research and Applications, 21(5), pp.481-501.