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Press review: pricing

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Summary
• SUMMARY OF ARTICLES • QUESTIONS: 1. To what extent is the low cost policy successful?
1. Success of the low cost policy

2.

Risks of the low cost policy

2. How does Ryanair’s pricing strategy attract their customers? 3. Can premium brands respond to cut-price rivals?
1. Why are premium brands in danger?

2.

Should premium brands confront low cost competitors in the price value segment of the market?

• What we’ve learnt…

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Summary of articles
Do budget airlines still offer the cheapest fares?
The Times, May 16th 2009
• • • • Hidden charges: Ryanair £5 to book online Booking Fees: Easyjet 2.5% transaction fee Extra charges: Aerlingus £15/bag (if booked at airport) Distance to destination: Ryanair, Glasgow Prestwick 32miles from city centre

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Two-week family holiday to Málaga, Spain 3 bags, set of golf clubs, Sat Aug1st – Sat 15th Aug • British Airways (from Gatwick)
MOST EXPENSIVE

• EasyJet (from Gatwick)

▫ Cost with debit card: £1,166 ▫ Cost with credit card: £1,171

• Ryanair (from Stansted)

▫ Cost with debit card: £1,073 ▫ Cost with credit card: £1,098 ▫ Cost with debit card: £1,265 ▫ Cost with credit card: £1,265

CHEAPEST

Premium lines offer quality at a lower price. www.marketingweek.co.uk*, 16th Dec 2010 • 49% of consumers buy premium own-brand • Price Vs. Packaging
▫ Price = influential, packaging = lack “cool factor”

• 53% ready meals, 50% meat, 49% cakes & biscuits • Tesco Finest – 65% • Sainsbury Taste the difference – 51% • Asda Extra Special Fastest growing –
*By Michael Barnett

Market Leader

£1bn brand

17%

Why is the low cost policy successful?
• Lost price: Companies cut prices companies. E.g: Ryanair • High number of sales. • It is a strategy based on:
▫ Acceptable quality ▫ Functional stores

cheaper than other

Customers expectations

• Proof of its success: (in France)

▫ First hard discount store only in 1988 ▫ There are