MARKETING MANAGEMENT

Marketing management

Marketing management

Strategy of Ryanair

Question 1) The main marketing problems

From the perspective of Ryanair, the main problem facing the company is its value in the long run, known as economic value. Although the company maintains an optimistic outlook, there is convergence of views on the valuation of the company among investors.

Company valuations vary widely, with estimates of stock prices ranging from D, 3.05 D, 7.57. This range reflects differences over whether Ryanair has solid business model and fundamentals as well as many issues that affect not only Ryanair, but the airline industry as a whole. These issues are:

Competition

Regulation allows the entry of start-up companies, which, when combined with excess capacity and high yield potential, has led to greater competition. Increased competition has been and will continue to force Ryanair to reduce fare prices.

Costs

Regulations, while beneficial in some aspects (refer to reduced price), has also been costly for Ryanair. An unfavorable ruling by the EU in February 2004 the pressure on to Ryanair's stock price and increased uncertainty among investors. Of greater concern are the increased costs associated with labor and fuel, which could raise rates and reduce margins and overall profitability.

Macroeconomic

The airline industry has proven to be particularly sensitive to events such as terrorist attacks, wars, epidemics (SARS), the sharp fluctuations in currency, etc. These phenomena tend to have a significant impact on fuel costs, global demand for air transport, tourism, etc.

To determine the economic value of Ryanair, these issues must be evaluated with an appropriate period of time, passenger capacity, and the discount rate.

Rating

To calculate the value of Ryanair, the company's future revenues and costs, and the value of the current accounting firm must be calculated. To take into account a range of possibilities, three different values are calculated through 2012. These are called Annual Report, an assessment and evaluation. Descriptions of each of these assessments will be developed as revenue and cost models are discussed. A description of the assessments will conclude the analysis part of this document.

Future of revenue

Income on a per passenger: For reasons of simplicity and clarity, all models were generated by the use of revenue passenger information. Using this estimate marginal revenue compared with a revenue model that marginal and total breakdown has the advantage of compensation data that was not contained entirely within the box. This allows the assumptions made about the continuous and linear marginal revenue curve. In addition, it is assumed that revenues per passenger cited in the case ($ 49 / D, 42.61 per passenger) are the basis of this model of marginal revenue.

Currency Conversion

One complication is the nominal value in U.S. dollars per passenger, and the rest of the financial statements are in Euros. It is assumed that the exchange rate on March 31, 2004, when calculated in U.S. dollars only provided was $ 1/.85Ð. This was the conversion and therefore only need to simplify the ratings.

Passenger traffic and capacity

The other variable on one side of the passenger revenue is the number of ...