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Ryanair - Brand Audit

This document provides an overview and analysis of the Ryanair airline brand. It discusses Ryanair's brand history, values of clarity, transparency and efficiency. Key metrics on Ryanair's growth and financial performance in 2015 are presented. The document also includes a PEST analysis, Porter's Five Forces analysis, and competitor analysis. Recommendations provided include improving Ryanair's digital presence and social media in the short term, improving employee relations in the medium term, and expanding routes and destinations in the long term to maintain brand equity.

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RYANAIR BRAND ADUIT
Agenda Brand Overview Brand Value Proposition Current Brand Communications Audit Summary & Conclusions 1 4 2 Recommendations Brand Overview 3 Brand Value Proposition 4 Current Brand Communications Audit 5 Product Category Analysis 6 Conclusion & SWOT
Recommendations Short Term Improve digital footprint to get the brand message out there Medium Term Improve employee relations to become brand ambassadors Long Term Increase fleet size and destinations to maintain low cost brand equity
#1 Ranked Airline for growth in Europe (2015) About us OUR DESTINATIONS 74 +5% (2014) Bases in Europe 100M +11% (2014) Passengers in 2015 1,600 +11% (2014) Daily Routes 31 +2% (2014) Connected Countries 315 +21% (2014) New Boeing aircrafts 185 +4% (2014) Airport Destinations 10,500 +3% (2014) Skilled Professionals
Our Brand Owning Organisation Ryanair’s owning culture is based on a highly centralised power base – centralising around O'Leary as he drives the organisation from a top down structure (Creaton, 2004). Decision making is very specific and controlled as one particular function at the centre of Ryanair (Creaton, 2004). Board may not be able to challenge the CEO, and CEO’s methods may be involved in group think (Janis, 1982). Figure 1. Power Culture (Harrison, 1993).
2015 Net Sales By Business Segment By Geographic Region By Market Maturity Car rentals Tickets Ancillary Tax Hotel Spain Belgium Germany UK/Ireland Iceland Primary Airports Secondary Airports NET SALES (£ millions) OPERATING CASH FLOW (£ millions) • As you can see, Ryanair has had a 66% increase in profit after tax to £411,110 million in 2015. This strong performance was driven by an 11% increase in customers, a 5% increase in load factor which rose by 88%, and a decrease in costs. Our operating profits reached into 1,208 million which was an 33% increase in previous years.
Our Brand History
Our New Branding PushFigure2Ryanair’sbrandlogohistory(2016). Figure 3. Old Ryanair logo, 2001 - 2012 Figure 4. New Ryanair logo, 2013 - current
“Successful brands develop a very clear sense of who they are and what they stand for – and then project that identity so intensely… to the point where, like a lighthouse, consumers notice you (and know where you stand) even if they’re not looking for you” (Morgan, 2004).
Company Market … What are Ryanair doing to build brand equity? How is that identity then seen in the eyes of the consumer? …
SEGMENTATION TARGETING • Distance: Short Haul vs. Long Haul flights. • Psychographics: Lifestyles (Leisure/family vs. Business). • Intentions: Private purpose, small or starting business. • Income: Social class and Middle class. • Age: 15 – 64. • Leisure: Price sensitive, seat only product; point-to-point, secondary airports, punctuality and reliability. • Business: Efficient and more options, e.g. seat allocations, bigger room space, primary airports as well as secondary. Segmentation, Targeting, Positioning
Positioning using Marketing Mix LEISURE PASSENGERS • Product: Ordering new Boeing 747s and being innovative in space • Process: 91% arrival rate on time, better punctuality and fewer lost bags. • Price: Constantly lowering ticket prices • Place: Hotel & Leisure agreements, contracts with cheaper airports to keep slots locked up for good price/term • People: using social media to deal with customer service, complaints • Promotion: online booking and mobile app • Physical evidence: covers all EU market, fly an branched out to capture customers by opening on more secondary airports
Positioning using Marketing Mix BUSINESS PASSENGERS • Product: Ordering new bigger Boeing 747s • Process: 91% arrival rate on time, better punctuality and fewer lost bags. • Price: change in pricing model – lower longer dated prices and higher short term (1-2 months ahead) of pricing • Place: Agreements with American Express to facilitate business travellers, agents and corporate travel departments. • People: more cabin space, seat allocations, ticketing flexibility, group services online • Promotion: pre-online reservation, business class website improved. • Physical evidence: opening at more primary airports (Rome, Lisbon and Athens)
Market Perspective Kapferer’s CBBE Model
Summary • Functional Benefits: Less expensive than its competitors. Better punctuality and fewer lost bags. • Emotional benefits: brand is committed to its target and authenticity, expect to receive the same clarity and transparency • Brand differentiation/positioning: customers know exactly where Ryanair stands, quick and simple service due to its no frills experience. • Brand Values: clarity, transparency, efficiency and innovation. • Brand Essence/Aura: no frills. Low fares made simple. Safe and reliable. • Brand Promise: “We are an low fare airline, good on time record, few cancellations and few lost bags. If you want anything more, go away”
Communication Tools Advertising Campaign TV Commercial Billboard Sales Promotion Ryanair Business Plus Family Plus Internet Marketing Corporate Website Direct Marketing Ryanair App
• TV commercial • Allocated seating • Change in baggage rule • Redesign of Ryanair.com • Billboard Advertising Campaign Figure 6. Ryanair’s Billboard advertising (2015).Figure 7. Ryanair’s Billboard advertising (2015).Figure 8. Ryanair’s Billboard advertising (2013).
• Corporate Website • Search and book flights • Online check-in • Information on hotels and car hires Internet Marketing Figure 9. Ryanair’s website in 2011Figure 10. Ryanair’s website in 2013
• Ryanair Business Plus • Priority boarding, fast track • Family Extra • Discount for children Sales Promotion Figure 11. Ryanair’s business sales promotion (2014). Figure 12. Ryanair’s business sales promotion (2014).
THE FUTURE EXCITINGAND DEMANDING. We are constantly improving services
A NEW PARTNERSHIP “Success lies in the combination of both talent and business savvy, the magic comes through partnership between both.” - Kenny Jacobs, Chief Marketing Officer at Ryanair BUSINESSCLASS
Direct Marketing • Ryanair Mobile App • Allows user to store electronic boarding pass Figure 13. Ryanair’s newly promoted mobile app (2015).
Pull Marketing … Lowest fare Always changing for the better No hassle … Word of Mouth Mass media promotions Sales promotions Communications Strategy Above the line Brand Message … Mobile App Corporate Website TV & Commercials
PEST Analysis Significance to Industry Impact on Ryanair Short Term Long Term Short Term Long Term POLITICAL ECONOMICAL SOCIAL TECHNOLOGY
PEST Analysis Political • European Commission airline regulation on foreign investment (Davies, 2015) • Boost in European/Asian flight industry (Mangla, 2015) Economical • UK Travel industry shows promising growth (Thomas, 2014) • More job creation for this industry (Thomas, 2014) Social • Increase in consumers wanting to spend more time travelling (ABTA, 2015). • Increasing trend for travelling cheaper (Tobin, 2016) Technological • Technology and social media advancements (Leight, 2014) • More people book flights, arrange holidays through online (Israle, 2015)
Porters’ Five Forces
Product Category Analysis Operations costs are high, fuel accounts for 10-12% and labour accounts for 35% [Investopedia, 2014). In 2015, profit margins for airline industry was 4%, or £5.90 per customer (Adamcyzk, 2015). • Barriers to entrance • Operation Costs • Profit Margins • Low Success Rates
Product Category Analysis Figure 14. Price vs. Quality map of the Passenger Airline Industry (Ryanair and competitors). Important Mergers: • Lufthansa has merged with Swiss Airline (Done, 2008) • British Airways bought Iberia Airline (BBC, 2010)
Substitute Analysis and the Future Figure 15. Overview of airline traffic and commercial flights (Sarah, 2013). • Within the EU, high speed rail accounts for 10% of in-land travel (European Commission, 2014). • Airline passengers are set to increase to 7 billion by 2034 (IATA, 2016) • Chinese market set to increase to 1.2 billion airline passengers by 2034, overtaking the US (IATA, 2016)
…. expected turbulence
• Most competitive LCC in our market. • EasyJet flies around 20m passengers a year, less than Ryanair in 2015 (Thomas, 2014a). Competitor Analysis – Short Term • In 2010, EasyJet introduced flexi-fare (EasyJet, 2010).
Competitor Analysis – Long Term Europe is estimated to have the slowest global passenger growth with only 2.7% every year until 2034 (IATA, 2016).
Conclusion and SWOT Analysis Main Strengths • Brand equity • Strong Asset base (money and fleet) • Operational Efficiency and Strategic Positioning Main Weaknesses • Destinations • Poor CRM, employee relations and public perception • Limited Partnerships Main Opportunities • Asian/Middle-Eastern and African markets are growing • People expecting more from airlines • Market fragmentation Main Threats • Insufficient differentiation • Threat of EU/Breakdown of EU relations and EU economics • Competitors
Recommendations SHORT TERM GOAL • Improve their digital footprint (website and app) and use social media to support the brand and get the brand message out there MEDIUM TERM GOAL • Improve relations with its staff to get them to become brand ambassadors by retraining employees and get the internal systems working correctly LONG TERM GOAL • Consider flying to new and central locations in Europe and also enter growing markets (long-haul flights) into Asia, the Middle East and Africa.
We flew 98 million passengers in 2014 UK market has approx. 178 million passengers in 2014 Total UK market was close to a total of 238 million customers in 2014 Larger EU market had approx. 880 million passengers in 2014 Further Penetration
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References O'Hallaron, B. (2015). Ryanair shelves plans for low-cost transatlantic flights. [online] The Irish Times. Available at: http://www.irishtimes.com/business/transport-and- tourism/ryanair-shelves-plans-for-low-cost-transatlantic-flights-1.2364628 (Accessed 3 Mar. 2016). Olmsted, L. (2016). Don't Fly - Why Trains Are the Best Way to Travel Overseas. [online]. Forbes.com. Available at: http://www.forbes.com/sites/larryolmsted/2011/10/31/dont-fly-why-trains-are-the- best-way-to-travel-overseas/#6695ce1f6bec (Accessed 2 Mar. 2016). Paris, N. (2014). Which airlines are the worst for legroom?. [online] The Telegraph. Available at: http://www.telegraph.co.uk/travel/news/Which-airlines-are-the-worst-for- legroom/ [Accessed 6 Mar. 2016]. Plunkettresearch.com, (2014). Travel Airline: Hotel & Tourism Industry Market Research – Instant access to trends, Statistics, Data, Analysis and Companies. Available at: https://www.plunkettresearch.com/industries/travel-tourism-market-research/ (Accessed on 6th March 2016).
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References Serusi, M. (2014). The Secret to Success of the Ryanair Brand. [online] SimpliFlying - The Leading Airline Marketing Consultancy. Available at: http://simpliflying.com/2014/ryanair-branding-success-customer-perception/ [Accessed 9 Mar. 2016]. Thomas, N. (2014a). EasyJet vs Ryanair: who is winning the battle for passengers?. [online]. Telegraph.co.uk. Available at: http://www.telegraph.co.uk/finance/newsbysector/transport/11015987/EasyJet-v- Ryanair-who-is-winning-the-battle-for-passengers.html [Accessed 6 Mar. 2016]. Thomas, N. (2014b). From budget to business: how the low cost airlines are winning us over. [online] Available at: http://www.telegraph.co.uk/finance/newsbysector/transport/11059009/From-budget- to-business-how-the-low-cost-airlines-are-winning-us-over.html (Accessed on 6th March 2016). Tobin, L. (2015). UK airlines in battle for routes as budget carriers and luxury flying "suites" take off. [online] Available at: http://www.standard.co.uk/business/business- news/uk-airlines-in-battle-for-routes-as-budget-carriers-and-luxury-flying-suites-take- off-9960200.html (Accessed on 6th March 2016).
Ryanair - Brand Audit