To browse Academia. Price is the one element of the marketing mix that produces revenue; the other elements produce costs. Price also communicates the company's intended value positioning of its product or brand. A well-designed and marketed product can still command a price premium and reap big profits.
But new economic realities have caused many consumers to reevaluate what they are willing to pay for products and services, and companies have had to carefully review their pricing strategies as a result. One that has caught the attention of consumers and businesses is Ryanair, with an unusual pricing strategy.
The secret? Founder Michael O'Leary thinks like a retailer, charging passengers for almost everything-except their seat. A quarter of Ryanair's seats are free, and O'Leary wants to double that within five years, with the ultimate goal of making all seats free.
Onboard gambling and cell phone service are projected new revenue sources. Other strategies cut costs or generate outside revenue. Seats don't recline, window shades and seat-back pockets have been removed, and there is no entertainment. Seat-back trays carry ads, and the exteriors of the planes are giant revenue-producing billboards for Vodafone Group, Jaguar, Hertz, and others. More than 99 percent of tickets are sold online. The Web site also offers travel insurance, hotels, ski packages, and car rentals.
Only Boeing jets are flown to reduce maintenance costs, and flight crews buy their own uniforms. O'Leary has even discussed the possibility of pay toilets and 10 rows of standing room with handrails like a New York City subway car to squeeze 30 more passengers aboard , though both suggestions drew much public concern and skepticism.
