Category: Marketing Strategy

In 1937, Toyota Motor Corporation was found internationally. The Japanese origin, global firm, is world’s major automobile maker in bulk. Toyota was originally known as ‘Toyoda’. This name came from the founder’ s name and he was an automatic loon manufacturer. They sell around 7.5 million models in a year, all over the world. Toyota’s values and principles have shaped the firm today (https://articles.marketrealist.com/, 2016).

Toyota Motor Corporation in 2008 was known for being the largest automobile manufacturer in the world. They have 600 subsidiary firms that operate in automobile manufacturing, spare parts and commercial and heavy vehicles. The Toyota city in East of Nagoya, Japan is Toyota’s headquarters. The current president is Akio Toyoda. Toyota has always contributed towards the society through their sustainability practises that have been incorporated by them in their business practices. They have worked towards improving the environment and protecting Earth. Toyota introduced their first car in 1957, in the USA. Toyota Motor Sales, USA and Inc., was born and their first headquarter was established. The Toyopet Crown sedans also known as Toyota Corona (redesigned version for Americans) and Land Cruiser were the vehicles that were sold in the USA in the beginning. Then they listed their company on various stock exchanges. Few competitors of Toyota in automobile industry are Honda Motor, General Motors and Ford motors. The brand Lexus are owned by Toyota and was used to give competition to luxury cars segments like BMW, Jaguar and Mercedes Benz (Brian Duignan, 2019).

Marketing mix and strategies of Toyota

Product/Position

Toyota has wide range of products. They earned their reputation in the market because of the automobile manufacturing. Besides, the automobiles that is Toyota and Lexus it also deals in automobile spare parts and accessories, automatic looms, Marine products, rubber manufacturing, steel, real estate and housing units, engines and motor sports. They also import and export raw materials across the globe. They also deal in WELCABS which are taxis designed for people who are older or are disable. The firm has their assembling plants and distributors across different countries. Toyota expanded in the automobile segment by targeting the luxury segment by introducing Lexus cars and sold first hybrid (fuel efficient car or green car). It is less harmful the environment Lexus car which gave competition to BMW, Jaguar and Mercedes Benz. Toyota using the product innovation as their product strategy where they work on new cars which are zero emission cars which are electrical cars and are charged using renewable energy sources, hybrid cars which have engines designed in a way which reduce CO2 and petrol costs, fuel efficiency of the current cars, automated mobility where they introduce concept cars and theses machines understand the driver’s emotion to function in partnership, build cooperative intelligent transport systems that are build to take care of the road safety and are currently working on fuel cell vehicles, that are the cars that will use hydrogen as fuel and will be emission free (Toyota Australia, 2019). Toyota keeps its customers interest on top due to which they have research centres to know what kind of products and quality is expected by people from Toyota. They have invested millions in in research development. Hence, they have worked on innovative range of cars.

Pricing

Toyota deals in a wide product line and has all cars in different pricing category from budget friendly cars to luxury cars. They follow market-oriented pricing strategy that means that prices are decided based on the price of the competitors and the market conditions. Most of the products like sedans come under this strategy. It also uses value-based pricing which implies deciding the prices based on profit value and cost value of the cars. This strategy is used for expensive or high-end cars like Lexus. The selling price is determined by the customers. Also, the government policies like tax and duties impact the price. Their price range starts from AUD 15,390 approximately and goes till more than AUD 53,000 and for Lexus cars the prices are even higher. They use the TPS due to which they can provide their customers with best quality, low cost and shortest lead time by removing the waste at the same time. This is their competitive advantage as they invested in this long time ago (Toyota, 2019).

Place/Distribution

The customers have the tendency to impact the business if they don’t the reach to the products. Therefore, it is necessary for the firm to have their products ready at the right time and at the right place (Barcik and Jakubiec 2013). Toyota reaches its customers through their retail stores and dealerships. People can buy their cars at these stores or dealerships. The spare parts and accessories are sold at the retail stores as well. They rely on these two ways to reach their target market. Their teams is trained well to inform the customer about their products as well as finance insurance and any customer demands in any case. They reduce the supply chain costs and provide reasonable customer service to their customers with high quality products. They work in a systematic manner in their assembling plants they have different suppliers in first level where the product development is done then the second level or tier has different supplier who work on individual parts of the product and their staff helps the supplier in-case of over work load. They use B2C distribution strategy that is business to consumer for selling the products.

Promotion

Toyota not only sells using dealership and retail stores but have their staff trained where one on one sales takes the sales person speaks to its customers. In Japan they use to provide door to door service. They promote their sales using social media, advertising in news-papers, on you-tube, radio, TV commercials, bill-boards, collaborations with TV shows and sponsoring events as well as movies or TV series. They sometimes use celebrities to promote their cars. Also, the cash back offer or short-term sales promotional schemes that firm uses to sell their products. Toyota also promotes its products by using their Toyota Together Green program which is an initiative towards protecting the environment and other programme which is Meal Per Hour program where food is donated by their Food Banks. This results in creating a positive brand reputation in the market. They have wide range of promotional strategies. For their corporate clients they sell directly. They use above the line strategy as they are selling through their retail stores and have huge campaigns to promote their sale. They are also using below the line promoting strategy as they have a segment for car racing and are sponsoring a player and associate themselves to other programs.

Summing up, it should be said that Toyota has performed well in the past 25 years in terms of high sales and giving out market share. This resulted in a valuable and strong reputation of Toyota in the market.

Pricing strategy decision plays one of the most crucial roles for media transmission. Before rolling out an improvement on valuing they need to consider how and where they are going to situating the business. They have to contemplate obvious objective clients.

Pricing strategy decision is also affected by market segmentation. Demographic segmentation, geographic, psychographic and behavioural segmentation plays a vital role for taking pricing strategy decisions. The primary target market of Telstra is the working class and the youth and secondary target market is the low-income group which also impact on pricing decisions.

Telstra implements the tactic of economical evaluating in its promoting strategy and label its merchandise very smartly. Telstra has special pricing for all its products and packages like broadband, tv, movies and home phone. It implements its strategy of minimum cost to maximum cost per year that customers will accept under their policy and contracts.

Some factors that plays vital roles while taking decision for pricing their products and services as follows: 1) primary target market (major cities); 2) secondary target market (lower income group); 3) services like 3G, 4G, and 5G; 4) new technology lovers; 5) big and low data usage customers; 6) lifestyle and personality of customers; 7) simple mobile phone plans and sim only plans that attracts customers towards their products; 8) promotions and offers.

Telstra mainly focus on 4P’s while taking pricing strategy decisions: product, price, place and promotion.

Innovation has changed retail forever. Telstra encourages motivation buys, backing to upsell and strategically pitch and lift efficiency from head office to the shop floor. Telstra associate’s organization crosswise over Australia with new advances and tools. Telstra has structured an associated retail vision outline to furnish its clients with the most noteworthy worth and a guide to what’s to come in future. Telstra holds and controls many retail locations known as Telstra stores which are legitimately had and worked by the Telstra firm and some are worked by licensees. On May 2016, Telstra claimed around 360 retail locations crosswise over Australia and this incorporates disclosure stores which incorporates new shows, computerized passes, accessory shops, and a lot more capacities (Anon, 2019). 109 Telstra’s stores are worked by Vita group which is an open organization with a market capitalization of around $600 million by the date of 2016 (Web.archive.org, 2019).

Telstra wholesale is more than Australia’s leading distributor of innovation and system administrations. Telstra wholesale gives a wide scope of innovation items and administrations conveyed over Telstra systems and related emotionally supportive networks to media communications and innovation suppliers, who in turn boost all degrees of the business and purchaser commercial centre. Telstra wholesale additionally gives operational help to its clients and offices for global clients, for example, worldwide information and IP transport. Telstra wholesale is the occupant and prime retailer of ADSL administrations to other Internet Service Providers. Telstra introduced the first DSLAMs in quite a while before 2000 and started wholesaling access in late 2000. Telstra wholesale has a far-reaching system of ADSL DSLAMs and permits contenders to access to each Telstra DSLAM at up to ADSL2+ speeds if accessible, and at ADSL1 velocities ought to 2+ be inaccessible (Anon, 2019).

It’s significant that stock chain partners are interlinked to one another, their exertion and their customers. Telstra is committed to structuring innovation that does in addition to presents cost-diminishing mechanization and method improvements. By coordinating accomplice frameworks in the cloud, for instance, we help organizations to gather constant information. It would then be able to be consequently figured into factors – from evaluating to conveyance dates, supply volumes, and stock accessibility – without manual information. Telstra is carrying new efficiencies to move armadas with dispatches that disclose to us where they are, activating pickup or move arrangements naturally (Telstra.com.au, 2019).

References

1. Anon, (2019). [online] Available at: https://web.archive.org/web/20090327022021/http://www.telstra.com.au/abouttelstra/investor/docs/tls542_fyr2007.pdf [Accessed 16 Sep. 2019].
2. Anon, (2019). [online] Available at: https://whirlpool.net.au/news/?id=118 [Accessed 16 Sep. 2019].
3. Telstra.com.au. (2019). Increased Productivity, Minimum Risk – Transport & Logistics. [online] Available at: https://www.telstra.com.au/business-enterprise/industries/transport-and-logistics [Accessed 16 Sep. 2019].
4. Web.archive.org. (2019). Retail – Telstra Careers. [online] Available at: https://web.archive.org/web/20160531224554/https://careers.telstra.com/Career-Paths/Retail [Accessed 16 Sep. 2019].

An example of a product that for example, Oceanic Co. can produce is Ocean Bracelets that are made from unrecyclable products removed from the ocean. The money used to buy the bracelet can help in removing more unrecyclable products affecting our ocean.

Old Gen Zers represented 20% of the U.S population in 2018 (Hoefel, 2018). They are more aware of the environmental, political and socially economic problems occurring in the world. Thus, they would buy products that would reflect certain factors affecting their buying process. For example, Gen Zers are motivated to buy from firms that are eco-friendly and sustainably responsible. Their lifestyle consists of spending time and resources to contribute towards a positive purpose. Gen Zers want to represent their values and their expectations of themselves and their peers i.e. they are motivated by self-esteem (Jorgensen, 2017).

Gen Zers consider the relationship with their peers and people they interact with every day more important compared to celebrities. They are more likely to buy a product recommended by their peers rather than on the television or celebrities (Jorgensen, 2017). They are less likely to be influenced by repetitive advertising or linking a brand to the idea of making ocean bracelets. Old Gen Zers document their life on social media and always try to find means to be unique and save money at the same time. Thus, ocean bracelets can help them to create a more meaningful picture of the world.

To develop ocean bracelets for the old Gen Zers, Oceanic co. must conduct a market research on ocean bracelets. First of all, Oceanic Co. needs to define the problem i.e. to make the old Gen Zers aware that the company is helping in preserving our oceans through money collected through sale of bracelets. It must also establish its measure of success i.e. making sales of ocean bracelets and making people aware of environmental issues. Oceanic Co. needs to design a research plan and specify its probability sample i.e. ocean bracelets. For example, the sample can be a shopping sample i.e. consumers must make efforts planning and making consumer decisions. The oceanic bracelets must have a desirable attribute, be unique and represent the old Gen Zers market. The product idea can be presented to a sample of the 15-20-year-old segment with a description to gain attitudes and buying intentions. Oceanic Co. can use these attributes to produce bracelets.

The company must also collect relevant information online since the segment market is socially active. They can evaluate the responses of old Gen zers to non-conscious stimuli in a way that they respond without recognizing it. Data can also be collected through individual interviews and depth interviews. Old Gen zers care about our planet and they care about talking of awareness and what people are doing for the environment. Thus, interviews are a good way of communicating with them. Syndicated panels, and universities can be a good way of collecting data. The company must also be careful about its financing of collection of data and use both reliable and low-cost ways. Oceanic Co. can obtain information from reviews of what Old Gen Zers think of their product. For example, data may suggest that consumers love eco-friendly packaging. Survey questions can be “how would you describe the bracelet you will buy?” or “where do you want to buy the ocean bracelet?”.

The company can also test its product and modify it based on how consumers react to it. This can lessen the risk of failure and help the company to understand its weaknesses and adjust. However, it might be expensive, and competitors might interfere. Oceanic Co. can also make use of social media to be aware of how much of the market share its competitors own and how positively or negatively old Gen Zers are reacting to eco-friendly bracelets.

However, data cannot be collected through census data because there are few companies that have been eco-friendly in the past and information may be unreliable due to companies experiencing trial and error. Once data is collected, it can be analyzed through presentations of charts or graphs showing how are sales of competitors and which specific factors affect sales. Whether the product fits into the segment market, the environmental and competitive changes taken into account.

After analyzing data and presenting its findings, Oceanic Co. must undertake marketing decisions i.e. target households with teens and young adults ages 15-20 and gain strength in this segment. Oceanic co. can finally develop action recommendations such as developing a program targeting 15-20 age group and providing services to this segment market during global events such as climate change walks or environmental walks, or during festivals, natural sites clean ups and so on. Oceanic Co. can also develop special events on social media such as beach clean ups and invite old Gen Zers to contribute through buying ocean bracelets. It can also undertake advertising research on 15-20-year-olds and their families.

Oceanic Co. can also implement a sales forecasting measure to show the total sales Oceanic. Co expects for a certain period, if there are no changes in consumer preferences and competitors’ prices. The company must also consider changes in the economy or regulations. For example, if regulations state that companies producing recyclable products must have a patent right in doing so, the company must make sure to be legally producing the bracelets and make sure that its competitors are not illegally stealing its customers. As Oceanic Co. uses the money obtained to help clean the environment, sales need to be forecasted. If, Oceanic Co. understands how the consumer works and how market research can be done, it can develop its oceanic bracelets and sell them to help increase its profits and help to clean the environment thus, maximizing its objectives.

About the industry

The automobile industry has developed substantially over the previous decade. Computerized innovation, change in client notion and financial well-being have assumed a fundamental role in this advancement. OEMs and other key industry players are observing this development and investing vigorously in non-commercial strategic approaches of assembling vehicles.

Substitute income sources are quickly assuming control over the market. Transport organizations, for example, Uber have grown exponentially in the course of the most recent couple of years and established innovation organizations like Amazon and Microsoft are crunching back-end car information. Associated innovation has turned out to be much increasingly significant and essential to the progression of vehicles, acquiring a large group of new features and contributions.

Like earlier years, patterns like declining car deals, expanding elective fuel powertrains, particularly electric vehicles, and more value-added services in advanced retail will keep on prevailing in the car business. New and alternative types of vehicle proprietorship are winding up increasingly prevalent, particularly membership services and e-powered ride-hailing administrations.

Market Leader:

As per Statista, the market leader in the automotive industry is Toyota with a market share of about 9.46%

The company was founded by Kiichiro Toyoda in 1937, as a spinoff from his father’s company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and its first passenger car in 1936, the Toyota AA. Toyota Motor Corporation produces vehicles under five brands, including the Toyota brand, Hino, Lexus, Ranz, and Daihatsu. It also holds a 16.66% stake in Subaru Corporation, a 5.9% stake in Isuzu, a 5.5% stake in Mazda, as well as joint-ventures with two in China (GAC Toyota and Sichuan FAW Toyota Motor), one in India (Toyota Kirloskar), one in the Czech Republic (TPCA), along with several nonautomotive companies.

Toyota is the world’s market leader in sales of hybrid electric vehicles, and one of the largest companies to encourage the mass-market adoption of hybrid vehicles across the globe. Toyota is also a market leader in hydrogen fuel-cell vehicles. Cumulative global sales of Toyota and Lexus hybrid passenger car models achieved the 10 million milestones in January 2017. Its Prius family is the world’s top-selling hybrid nameplate with over 6 million units sold worldwide as of January 2017.

Marketing Strategy of Toyota:

Toyota’s marketing strategy is a mix of penetration pricing marketing strategy and guerilla marketing strategy.

The purpose of the penetration pricing marketing strategy is to maximize sales nand to attain widespread market share within the market a company is competing in. The penetration pricing marketing strategy has the objective of capturing a large market share rapidly by setting low prices for products that a company sells. Penetration pricing is best executed when consumers are sensitive towards the price of the product.Toyota’s usage of the penetration pricing marketing strategy which states that Toyota sell their cars in the low end of the price spectrum. This strategy caters to price-sensitive consumers.

Toyota’s incorporation of the guerrilla marketing strategy which outlines that Toyota’s main reason for using the guerrilla marketing strategy is to attract the younger crowd i.e. young adults. We notice out that companies such as Toyota conduct this strategy by placing advertisements on objects that are used every day e.g. food or drink packaging. Toyota also uses alternative methods for the guerrilla marketing strategy such as placing advertisements in locations where people commute frequently.

Market Challenger:

Volkswagen

As per Statista, the market challenger in this particular industry is Volkswagen with a market share of about 7.38%.

Volkswagen, otherwise called VW, is a German automobile manufacturer established on 28th of May, 1937 by the German Labor Front under the aegis of Adolf Hitler, headquartered in Wolfsburg. In the event that deciphered, ‘Volkswagen’ is German for ‘individuals’ vehicle.’ notwithstanding Hitler’s aspiring effort to manufacture a system of autobahns and restricted access roadways crosswise over Germany, Fuhrer’s pet undertaking was the improvement and large-scale manufacturing of a quick yet reasonable vehicle that could be sold for less than 1,000 Reich marks. In request to guarantee that he got what he has imagined, he called Austrian car engineer Ferdinand Porsche. At first, the organization had confronted a lot of obstacles (World War II and the vehicles memorable Nazi association) which came about in ended creation. In 1959, a promoting organization by the name of Doyle Dane Bernbach propelled a milestone crusade, naming KdF-Wagen as ‘Creepy crawly’ and displayed its small size as an unmistakable preferred position to customers. Today, Volkswagen is a name to figure with eating income of 230,682 million Euros. The Wolfsburg-based organization has 12 marks under its which incorporates Audi, Porsche, Lamborghini among numerous others and unquestionably Volkswagen Business Vehicles. It has likewise ventured into different business fields which incorporate huge bore diesel motors, turnkey power plants, and turbochargers among numerous others.

Marketing Strategy:

Volkswagen has always been forceful with its ad campaigns. As a part of its marketing strategy, Volkswagen has used 360 branding to promote not only the parent company, but all its cars individually. With higher grade of tensile strength used in its steel, greater depth and shine of paint, higher craftsmanship of its cabins and better equipment levels has helped Volkswagen drive ‘higher quality’ as a trait of all of its car and most of its promotions in developing countries advertised the same. Abuse friendly build and solid construction along with longevity was advertised in India and helped it gain important sale numbers. Aggressive promotional activities using social media networks and online platforms including Twitter, Facebook, You Tube and Instagram help Volkswagen remain at the top of the promotional game as competitors are increasingly heading into online space. Product differentiation is one marketing tactic used in the creatives for promotional activities of Volkswagen and safety and German build quality are two traits used most often in campaigns of its vehicles.

Market Followers:

1. With economic backlashes being already felt by the company, FORD has failed to innovate and differentiate itself in their product categories as well, ending up as a follower to the market leader.

Ford is the second-largest U.S.-based automaker and the fifth-largest in the world based on 2015 vehicle production. The company was established in 1903 by Henry Ford. At the end of 2010, Ford was the fifth largest automaker in Europe.Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines; by 1914, these methods were known around the world as Fordism. Ford owned the Swedish automaker Volvo from 1999 to 2010. In 2011, Ford discontinued the Mercury brand, under which it had marketed entry-level luxury cars in the United States, Canada, Mexico, and the Middle East since 1938.

With economic backlashes being already felt by the company, the company has failed to innovate and differentiate itself in their product categories as well, ending up as a follower to the market leader.

The company went public in 1956 but the Ford family, through special Class B shares, still retain 40 percent voting rights.During the financial crisis at the beginning of the 21st century, it was close to bankruptcy, but it has since returned to profitability.Ford was the eleventh-ranked overall American-based company in the 2018 Fortune 500 list, based on global revenues in 2017 of $156.7 billion.

Marketing Strategy:

Ford tries to create an emotional bond with the customer. The company does not have a lot of innovation and differentiation to offer and hence it uses this tactic. However, the latest marketing strategy if far bolder. They say that with their new strategy they are trying to target those who do not like or consider Ford while making purchase decisions.

2. Hyundai has allowed more dominant firms to lead the way in the automotive industry. It has kept a close watch on market leaders like Volkswagen, Toyota and the likes to be able to guage their strategy and play safe in the market.

The Hyundai Motor Company, commonly known as Hyundai Motors, is a South Korean multinational automotive manufacturer headquartered in Seoul. The company was founded in 1967 and, along with its 32.8% owned subsidiary, Kia Motors, and its 100% owned luxury subsidiary Genesis Motor, altogether comprise the Hyundai Motor Group. It is the third-largest vehicle manufacturer in the world.

Hyundai operates the world’s largest integrated automobile manufacturing facility in Ulsan, South Korea which has an annual production capacity of 1.6 million units. The company employs about 75,000 people worldwide. Hyundai vehicles are sold in 193 countries through some 5,000 dealerships and showrooms.

Marketing Strategy:

Hyundai’s marketing strategy is differentiated marketing. The primary consumer target is middle to upper-income professionals, who need value for their money and a comfortable ride in city conditions. The primary business target is mid-sized to large-sized corporates that want to help their managers and employees by providing them a car with ease of transport.

Market Niche:

All the market trends today, point towards sustainability. This is true for any given sector. In the automotive industry, there is no bigger and better name than Tesla to be considered a market niche. With a mission to accelerate the world’s transition to sustainable energy, Tesla was founded in 2003 by a group of engineers who wanted to prove to the world that they were not compromising on the quality of a car when they are deciding to buy electric vehicles. They wanted the world to show that electric vehicles can be a viable and better option than gasoline cars and definitely more fun to drive. Tesla has been a game-changer in an industry that has always been criticised for causing most harm to the environment and hence has always been shackled by its regulations of it.

Marketing Strategy:

The automotive industry is starting to experience the kind of disruption that is altering the status quo. BMW, Ford, Mercedes, Volkswagen, Toyota, and other big names are facing challenges from a new generation of electric and autonomous vehicles. The most fascinating is the incredible strength of Tesla from a social media marketing perspective. It’s a brand founded just 15 years ago, makes less money compared to auto giants, yet on social media, it’s in the top 3 – outperforming Volkswagen, Ford and Toyota.

References:

1. https://www.statista.com/statistics/316786/global-market-share-of-the-leading-automakers/
2. file:///C:/Users/senso/Desktop/SIMC/Semester%203/Marketing%20Strategy/GLOBALAUTOINDUSTR Y2018ATACROSSROAD.PDF.PDF
3. https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Automotive%20and%20Asse mbly/PDFs/McK_The_road_to_2020_and_beyond.ashx
4. https://www.statista.com/topics/1487/automotive-industry/
5. https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2017/01/global-automotive-executive-survey- 2017.pdf
6. https://www.statista.com/statistics/275520/ranking-of-car-manufacturers-based-on-global-sales/
7. https://www.history.com/this-day-in-history/volkswagen-is-founded
8. https://en.wikipedia.org/wiki/Renault%E2%80%93Nissan%E2%80%93Mitsubishi_Alliance
9. https://focus2move.com/ford-global-performance/
10. https://www.marketing91.com/marketing-strategy-volkswagen/
11. https://www.talkwalker.com/blog/tesla-marketing-strategy-social-ceo

Early-on, as a teenager, I would read through the profiles of leading marketing executives and successful entrepreneurs. It became increasingly clear that a strong majority of them started early in their marketing careers. I therefore decided to “get my feet wet” after pursing my B.B.A from the CV Raman University. After extensive efforts and networking, I found my first job with chattarpur farms, a nationally reputed Event Management company. The exciting role involved direct reporting to Managing Director and Heading the marketing sales department.

At Chattarpur Farms, I realized that it does take a trained eye to identify marketing opportunities. The company turned out to a world in itself! By now, I have developed a keen sense of detail for marketing and sales strategies. As the Head of the department, I have been supervising more than 300 highly-skilled event managers. The role has brought in immense management skills through the supervision of personnel far more senior to me, age and experience- wise. On a daily basis, I make complex marketing strategy calculations and decisions – I also took on the challenge of instituting the usage of the technology based marketing analytics. The results have been more than satisfying – it boosted our company bookings by 120% in period of 6 months. The bookings cascade across the entire set of operations with an amazing impact on the revenues of the company.

My near-term plan is to work in the sales and marketing function of a leading, multinational companies. This enable me to identify and assess new market opportunities, effectively promote and launch new products and grow to senior leadership positions in the business. It will help me towards building competencies in sales and marketing and achieving my long-term goal of being a successful marketing entrepreneur. Work experience in a multi-national corporation would also bring in environments to team up with individuals from a range of backgrounds and to learn from their perspectives and experiences. I believe that academic credentials accompanied with social and leadership qualities, gives a complete edge to one’s persona. I had the privilege to work with Rotary International and impart training and guidance to underprivileged students in an event – RYLA, India.

A global Master’s program thus becomes essential towards achieving critical at this juncture of my career. While my Bachelor’s degree did equip me well for the objectives at that stage, a International Business program from your university will help me learn a range of new techniques for the product positioning, new product development, media planning and marketing communications. I also hope to equip myself with advanced analytical tools and techniques that will foster marketing efficiency. Graduate education in management at Hult Business School will thus help me train my instincts through the case study method of teaching and develop a structured approach towards refining ideas and developing fail-proof implementation plans.

The culture of teamwork during the Master’s program will definitely help me strengthen my team skills in a cross-national environment. A “global” Masters from Hult Business School will provide significant opportunities for professional and personal development – to learn from “The Best of The Best” and set new benchmark for growth.

Executive Summary

This paper is to analyze the factors that lead Ryanair Holdings to success and understand and evaluating the marketing strategy that Ryanair implement in order to be one most successful and well-known operating company in the aviation industry. This study looks at external and internal key influences of the environment of the Ryanair Company. Also assess the impact of business macro and micro environmental factors, with the use of market analysis and relevant theories, and examines and evaluate how the marketing management functions actually are being applied in Ryanair Company.

Introduction

Ryanair Holdings plc (Ryanair or ‘the company’) operates low fare scheduled passenger airline serving short haul, point to point routes between the UK, Ireland, and Continental Europe, as well as Morocco. The company offers various ancillary services, scheduled services, and has hotel, travel insurance and internet services and the in-flight sale of beverages, food, and merchandise. Ryanair operational bases include Alicante, Athens, Budapest, Frankfurt main, Hamburg, Ibiza, Lisbon, Liverpool, Santiago, Stockholm and Valencia. The company markets accommodation services, holidays, car hire and travel insurance services. It also sells rail and bus tickets. The company is headquartered in Dublin, Ireland. Ryanair is undoubtedly one of the most remarkable entrepreneurial stories of the past 10 years in Europe. Furthermore that Ryanair has developed a very outspoken communication style, using advertising and media to a great deal to publicize its ‘revolution’ in air travel.

Mission and Vision of the Company

Ryanair’s mission is “to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost containment and efficiency operation.” “Ryanair’s objective is to firmly establish itself as Europe’s leading low-fare scheduled passenger airline through continued improvements and expanded offerings of its low-fare service.” Ryanair has been extremely successful gaining customers and growing rapidly since its inception in 1985. The airline industry is competitive, but because of Ryanair’s ability to keep fare prices extremely low, it has survived the turbulent times that many airlines have not.

Ryanair’s outlined strategy focuses on eight different strategies, as found on their website:

• Maintain low fares
• Deliver best customer service performance
• Provide frequent point-to-point service on short haul routes
• Achieve lowest operating costs in the industry
• Take advantage of the Internet
• Commit to safety and quality maintenance
• Enhance operating results through ancillary services
• Focus on growth in targeted specific markets

These strategies focus on the core competency of Ryanair to ensure that it offers exceptional value in the saturated airline market. By continuously providing the best value, growth is expected to continue for years to come.

History

“With a staff of just 25 people, the Ryan family started Ryanair in 1985 in Dublin, Ireland, with the sole purpose of creating an airline with the lowest fares in all of Europe. Ryanair has climbed to the top since its establishment in 1985. It went from flying a short hop from Waterford to London into one of Europe’s largest carriers. They acquired their first jet in 1987, two years after starting Ryanair. After the airline was taken public in 1997, the money raised was used to expand the airline into a pan-European carrier. The airline began to grow rapidly, revenues have risen from 231 million Euros in 1998, to some 1843 million Euros in 2003 and net profits have increased from 48 million Euros to 239 million Euros over the same time period. Ryanair during the 90’s decided to model themselves after Southwest Airlines, in the United States. Southwest is an airline that is known for their low-fares and Ryanair’s motto was low fares, no frills. Ryanair continues to grow.” (Ryanair, 2019)

External-Internal environment analysis

External Environment analysis is conducted to analyze the nature of the environment the firm is operating and identifies the forces that affect the company either positively or negatively and the possible opportunities, or threats Ryanair faces. The analysis will happen in two phases. First on a macro-environment level to analyze the general business environment factors and then on a micro-environment level to analyze the competitive situation in the industry that Ryanair operates.

Macro environment-PESTEL Analysis

PESTEL is an acronym for the six key strategic areas of change: Political, Economic, Social, Technological, Ecological and Legal and a technique for understanding the various external influences on a business. The Pestel analysis report is a framework used to understand the impact of external factors on the macro environment that influences the business of Ryanair Company.

· Political

• Uncertainty that Brexit caused: UK’s departure from European Union in March 2019 brings in significant uncertainty with regards to the aviation business environment. If UK remains in open skies agreement with EU, thinks shall be status quo for the Ryanair and the UK aviation industry. However there is a high possibility that UK will not remain in open skies and until the final terms are decided uncertainty shall prevail. Thus Ryanair will have to focus on growth away from UK until Brexit is completed.
• Terrorism: Recently there has been an increase of terrorist attacks in Europe with targeted countries like UK, France Germany or Belgium. Governments have stepped up efforts to combat this situation. These attacks gave already affected tourism. However if these attacks continue the tourism industry will get affected and consequently the demand for air travel will go down impacting Ryanair. Also an improved security system is costly and requires regular monitoring and maintenance.

· Economical

• Oil prices: oil prices around 60$ a barrel
• Weaker GBP after Brexit The economic state of a county has a great impact on the airline industry.UK economic problems might influence Europe’s economic performance witch creates uncertainty to Ryanair and put pressure on fare prices.

· Social

• Ryanair should be aware of demographic changes because the large numbers of customers from Europe is difficult to segment
• Consumer willing to spend more on ancillaries if ticket cost is less

·Technological

• Changes on technology affect the airlines industry to a very high level. The quick adaptation to the technological change can overcome competition and increase market share. Enhancements in digital platforms, to improve customer experience. Also innovations, such as fuel efficiency, less polluting and noisy production.

· Legal

• Because of Brexit Ryanair has to comply with both UK and EU regulations
• Ryanair is being investigated by European Commission for receiving an illegal state aid to promote Montpellier as a tourist destination.

· Environmental

• EU regulation of emissions for airlines may increase costs for Ryanair. EU has passed legislation which mandates airlines to operate under the EU emissions trading scheme. If Ryanair exceeds the granted CO2 allowances the deficit needs to be procured from the market or auctions held by government agencies. If the EU changes the co2 allowances grant, it will need to further improve it environmental efficiency to reduce emissions.
• Company has to focus on environmental initiatives

SWOT Analysis

The SWOT Analysis is conducted to review the Strengths, Weaknesses, Opportunities and Threats of Ryanair

· Strengths

• Ryanair is the first low-cost, no frills airline in the European market covering more than 200 destinations and 1800 routes. Ryanair’s name has become a synonym to low airfares.
• The largest airline in Europe, transporting more passengers than any other regional airline. As a result Ryanair has a strong presence in the European market, gaining an advantage against the competition (Reuters, 2017)
• Well integrated policy that can be a key to competitive advantage(Low cost strategy)
• Stable financial performance( Ryanair,2018)
• Ryanair website offers everything from cheap flights, car rentals or accommodation to travel insurance.
• Industry Position enhances brand image: Ryanair industry position enables to improve its customer loyalty and customer retention metrics as well as enhance the brand image at a global scale. (Ryanair,2018)

· Weaknesses

• Customers are charged for their baggage when competitors are providing it for free or less cost comparatively.
• There is a public perception for Ryanair to be an airline that is obsessed on the bottom line at any cost
• Poor customer service
• Legal proceedings: Ryanair is involved to several lawsuits as aforementioned on the PESTEL analysis. For instance European commission investigates Ryanair agreements with several airports. As a consequence, such legal proceedings would adversely impact the brand’s image and result in huge financial penalties.
• Brexit: Ryanair has a strong market presence and a base in the UK and that can result to several challenges for the company such as UK regulations or fare prices pressure.

· Opportunities

• Growth of global tourism industry: The international tourist arrivals grew by 7% to reach a total of 1,326 million in 2017 and the total international tourism receipts grew 5% to a total of US$1,340 billion in 2017. Europe accounted for 51% of the overall International Tourist arrivals followed by Asia and the Pacific (24%), Americas (16%), Africa (5%) and Middle East (4%) (UNWTO, 2018). This amount of growth enables the company to exploit it and significantly increase its margins and revenues.
• AGB program (Always Getting Better): AGB program, a Ryanair’s program that launched in 2014, provides a wide range of customer service and digital enhancements such as a new website and smartphone app, new uniforms and cabin interiors, allocated seating, leisure and family products. Through AGB Ryanair can focus on customer experience.
• Network and fleet expansion will help the company to expand its market reach and customer service, and as a result bring an increase to its customer base and financial performance.

· Threats

• External factors : external factors such as rising oil price, currency movements, terrorism or recession
• Brexit might reduce prices in the UK market
• The high competition of the airline industry
• Increase in Irish corporation tax rates(IDA Ireland,2018)

Microenvironment-Porter’s Five Forces Analysis

Porter’s Five Forces is an analytical tool assists in analyzing the competitive environment for Ryanair and examines 4 parts

· Bargaining power of suppliers

There are only two suppliers of aircrafts in the aviation industry, Boeing and Airbus. The main supplier of Ryanair is Boeing. The other suppliers are the jet fuel. The price of fuel though are governed by world trade, so the price is fixed. Therefore, the bargaining power of Ryanair suppliers is high.

· Bargaining power of customers

Customers nowadays have a lot of choices for low price airlines in the market. Switching to another airline is quite simple, as there is no loyalty in low fare airlines because the customer will simply chose the lowest price. Therefore, the bargaining power of Ryanair customers is high.

· Threat of substitute products and services

Ryanair mostly operates short-haul routes. There are several substitutes for traveling short distances such as train, bus, car or sea transport. However, factors such as time, and price affect customer decisions. At the moment for short-haul routes, low fare airlines are the most convenient option. Furthermore, Ryanair provides price and time comparisons in their website with the trains that grant the same routes. (Ryanair, 2019) Therefore, the threat of substitute products and services are low for Ryanair.

· Threat of new entrants

The entry barriers of the aviation industry are extremely high. It requires huge capital, deals with airports, it’s really difficult to get flight routes. In general the aviation industry can be characterized saturated as there is already a huge number of airlines operating and it’s a really difficult and expensive industry to enter. Therefore the threat of new entrants is low.

· Competitive Rivalry

There is a huge number of competitors within the aviation industry. It’s a very competitive industry, with each airline using a strategy to profit from the industry. As for the no frill policy that Ryanair follows, there is a number of low cost airlines that form the head competition for Ryanair, such as Easy Jet, Wizz Air, and British Airways. The number of choices of the buyer give them high bargaining power and increase the competition amongst airlines. All of the above, form a high competitive rivalry for Ryanair.

Marketing Segmentation, Targeting and Positioning (STP)

· Segmentation

Market segmentation is the process of dividing a market into segments, based on certain characteristics. The segments created symbolize the consumers who will be attracted by similar marketing strategies because of similar interests or needs. “The division of the marketplace into distinct subgroups or segments, each characterized by particular tastes and requiring a specific marketing mix.” (CIM, 2018) The major segmentations are geographic, demographic, psychographic and behavioristic.

· Geographic

Ryanair operates throughout the European region across 37countries, connecting to 226 destinations.

· Demographics (Age)

Age demographic of Ryanair passengers: Age demographic of Ryanair passengers:

• 9 % are between 18 to 24 years
• 31 % are between 25 to 34 years
• 23 % are between 35 to 44 years
• 20 % between 45 to 54 years
• 16 % are 55+ years (Ryanair customer service survey, 2016)

According to the table 83% of Ryanair’s passengers are between 18- 54 years old. This is an age group that usually intend to travel more often.

· Psychographic

Psychographic segmentation is a method used to group prospective, current or previous customers by their shared personality traits, beliefs, values, attitudes, interests, and lifestyles and other factors (‘Psychographic Market Segmentation | Directive Group’, 2019)

1. Schedule optimizers: have to reach destination by a certain time and select their flights accordingly.
2. Corporate troopers: choose an airline and a class that has been selected for them by their company.
3. Mile accumulators: Consider flights as a way of building up their air miles entitlement.
4. Reluctant travelers: do not enjoy travelling and seek services that will make their experience bearable, such as special privileges and frequent flyer programs.
5. Tour takers: want everything to be arranged in advance.
6. Travel seekers: love travelling and are eager to have new experiences.
7. Frugal flyers: seek out the cheapest airlines, but still expect to enjoy their flight experience.

· Targeting

Ryan Air as a low cost carrier in the aviation industry, they provide some of the most competitive fares for consumers. According to the age group table, 83% of the passengers are between ages 18 to 54, with the largest percentage being the 25-34 age group, which demonstrates the target market of Ryanair is young and price sensitive. Examples of such, are young travelers who wish to save money, leisure travelers who are usually loyal, people visiting friends or relatives who usually look for the cheapest flight without need for amenities or low budget business travelers. Ryanair does not target travel agents because agents have a fixed commission and that would increase Ryanair’s costs and as a result reduce in their profits.

· Positioning

Ryanair as a low fare airline implements the ‘’less for much less’’ value proposition, as brilliantly described by Kotler and Armstrong in the 5 winning value propositions theory. This means that Ryanair meets their customer’s lower performance requirements for the less cost. Ryanair implements this strategic positioning because their operating costs are too low, being able to sell cheap tickets. Also, not many people actually need extra amenities during a flight or the best service available, that’s why their targeted audience is in the middle class.

· Marketing Mix

A marketing mix is a combination of seven variables (product, place, price, and promotion, physical evidence, people and process), which can be arranged in different ways to develop marketing strategies to meet organizational objectives. Let’s take a closer look to Ryanair’s marketing mix.

· Product or Service.

Ryanair is a Low cost, no-frills air travel company to European destinations Food and drink are income streams, so there are no free amenities on the plane. There are other ancillary revenue. Other examples include phone cards and bus tickets. About 16% of profit is made this way. This way the costs are decreased

Ryanair is a European low cost airline. Low cost or no frills marketing strategies are of great interest to marketers since the marketing mix employed tends to run in opposition to what makes a great brand – and Ryanair is a great brand and a very successful business. In a nutshell Ryanair sells the cheapest tickets that you can buy

· Price

• Ryanair has low fares.
• 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, 2018)

· Place

• Ryanair does not use travel agents so it does not have to pay the very high agency commissions. It uses direct marketing techniques like the disintermediation strategy to gain customers and to extend products and services to them. This reduces costs.
• Ryan Air implements its reservation system called Skylights which allowed the customers to book their flights directly through their website saving them 15% on agency fees.
• Many of Ryanair’s destination airports are secondary. Secondary airports are smaller regional airports. Costs are lower and aircraft can be turned around faster.

· Promotion

• They spend as little as possible on advertising.
• They do not employ an advertising agency. Instead all of the advertising is done by Ryanair. For example they advertise themselves on their planes. They use simple adverts highlighting the low prices of the airlines.
• Ryanair uses controversy to promote its business. Ryanair and especially their CEO try to give a ‘’bad boy’’ image to their company because bad publicity spreads faster and wider than good publicity. Extreme statements from executives are a common phenomenon. For example, CEO Michael O’Leary once stated that larger passengers should be charged more [image: ]

· People

• Ryanair prefer hiring pilots when they are young as pilot cadets.
• Cabin crew pay for their uniforms to be cleaned. They invest in their own training. They are mainly responsible for passenger safety as well as ancillary revenues onboard.

· Physical Evidence

They pay as little as possible for the airplanes. Ryanair tries to obtain planes in the right moment meaning that after certain facts like for instance the cancelation of an order then Ryanair make an offer to BOEING for example that is their primary producer and obtain aircraft with discount.

· Process

• There is no check in.
• You cannot select a preferred seat. It is first come, first served.
• There are no air bridges. You walk or are bused to the aircraft.
• Baggage is deposited directly onto the terminal which reduces waiting time but increases danger of loses in my opinion.

Ryanair’s Marketing Strategy

Ryanair highlights its widely available low fares, route choice and service which has been enhanced by Ryanair’s AGB customer experience program. Ryanair primarily advertises its services in national and regional media. Also with the use of social media, press conferences and publicity stunts and topical advertising. Other marketing activities include the distribution of advertising and promotional material and cooperative advertising campaigns with other travel-related entities, including local tourist boards. Ryanair also regularly contacts people registered in its database to inform them about promotions and special offers.

Ryanair’s Social media infographics

Mentions and Engagement over Time

Ryanair performances per dimension

Conclusion

After thorough research and analysis of Ryanair’s profile, it’s clear the interesting marketing mix of company. In my opinion, no other company advertise the way Ryanair does and get so much publicity. However, it is a smart way to market yourself and get publicity even if people do not always agree. The cut costs policy seems to be a success story.

References

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