RYANAIR- Management Of Service Innovation

INDEX

INTRODUCTION …………………………………………………………………………………………………… 3

GLOBAL CONTEXT ………………………………………………………………………………………………… 4

CONSUMER’S BEHAVIOR ……………………………………………………………………………………….. 5

SERVICE CHARACTERISTICS ……………………………………………………………………………………… 8

INTRODUCTION

Ryanair is an Irish low budget company that operates, with more than 1100 routes and 8000 employees, in 160 destinations in Europe and Morocco.

The company was founded by the Ryan family in 1985 with just £1 and 25 emoloyees launched their first trip from Waterford in the southeast of Ireland to London Gatwick. Next year it amplifies with one more journey: Dublin to London Luton, competing thus British Airways and Aer Lingus. Throughout all the years of history, Ryanair could amplify its area of destination to almost every country in Europe.

“Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies”

GLOBAL CONTEXT

Ryanair is one of the most famous low-cost airlines. It follows the steps of the American airline Southwest, which started operating in the early 1970`s as the first budget airline. This type of companies propose a totally new idea of flying: the ticket just includes the seat. In this way it is possible to offer lower prices and for every additional service the customer needs to pay an extra. By a series of measures that allow them save money these airlines can offer cheaper flights (but yet safe) to clients that are not so much concerned about comfort. One of the first measures is to stop offering free food during the flights, using the same type of airplanes to minimize maintenance, training and repair costs, and flying to airports with cheaper landing fees. Besides passengers are supposed to print their own boarding pass, and by selling tickets online or by telephone the firm saves lots of marketing costs.

In this way the firm demonstrates its understanding of the different needs of different customers. Previously, in the airlines sector, the companies worked as if every passenger was the same. They supposed that everyone needed and was willing to pay for similar services, but nowadays the traditional way of working has evolved to cut many of the non-essential services:

CUSTOMER’S BEHAVIOR

Maslow’s Pyramid

Maslow hierarchy explains human needs as a pyramid in which the upper levels can only be reached once the lower stages were fulfilled. It goes from the most basic and physiological needs necessary to maintain the corporal health, such as needs for oxygen, food, water, and a relatively constant body temperature, to the upper level of self-actualization. As it was describes by Maslow these needs consist of a person's need to be and do that which the person was "born to do."

Rayanair’s activity is related to the tourist sector, as most of its clients use the service for this purpose. According to this, it could be placed in any of the two levels:

• Belonging/Love: as someone can travel to visit friends or family or to extend social activities.

• Esteem: when travelling to a certain place is related to a certain social position and on how he is seen by the others. The traveler is interested on feeling respected and more prestigious.

Stheth, Newman & Gross

According to this model, consumers can choose a determinate product/service due to certain values that influence on the election:

- Functional values: the utility perceived from a performance that comes from its physical characteristics or attributes.

- Social values: it refers to the associations with certain demographic, socioeconomic, political, ideological or cultural groups that might make the customer feel part of one of them.

- Emotional values: is the capacity to relate an alternative to a determinate emotion.

- Epistemic values: is the utility that proceeds from the capacity of satisfying curiosity, provide novelty, and/or satisfy a desire for knowledge.

- Conditional value: is the result of the specific situation and circumstance in which the decision maker is.

When

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