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Counter-example: Ryanair is a hugely successful airline business in Europe. Its advertising and marketing strategy is about low price above all else, and unas

by feral 16y ago

Counter-example: Ryanair is a hugely successful airline business in Europe. Its advertising and marketing strategy is about low price above all else, and unashamedly so. Look at their garish and ugly website: http://www.ryanair.com/en http://www.ryanair.com/en Count how many times they use the word 'cheap'. Read the wikipedia article, which mentions how badly they treat customers, and their rapid growth and financial success: http://en.wikipedia.org/wiki/Ryanair http://en.wikipedia.org/wiki/Ryanair Sometimes low-cost, sold as low-cost, works well.

ssp 16y ago
Ryanair has taken the low-price aspect to an extreme too. For the flights I care about, it's generally something like £5, but once in a while it's literally £0 plus airport fees. I have never been treated particularly badly by them. You don't get anything that might be included in a more expensive flight such as checked bags, a meal, assigned seating, etc., but I don't really care about those things anyway, certainly not for 1-3 hour flights within Europe.
- riffraff 16y ago
  Ryanair also mastered price making. Prices vary in a way that is almost scaring from day to day, if you try to get a last minute flight you may end up with a hundreds of euros or half penny depending on their expected load, while traditional companies are way more rigid.
cookiecaper 16y ago
See also WAL-MART. Wal-Mart doesn't purport to do anything better than its competitors really, and I don't know how they could; they all sell the same things, and so price is the only real competition (environment counts too, but it's a tertiary point). Wal-Mart is now one of the biggest companies in the whole wide world.
- nitrogen 16y ago
  AIUI Walmart is successful because they mastered logistics.
  - uxp 16y ago
    Which is a key point, and probably the one wensing was originally trying to make. If you can build a business with the intent of doing something like logistics extremely well (which lowers your costs) then you can pass that on to the consumer of your products. They don't give a rats ass about your logistics, but they do care that whatever the blackbox your warehouse does ends up shaving 20 cents off that bag of chips. WalMart still gets about the same percentage of profit, but the overall cost of the product is less. Lowering your price just to be cheaper than your competitors only cheapens the market and doesn't add anything of value to the product. You will quickly learn why everyone else keeps their margin up higher than yours when you can't expand due to lack of funds, or you have to cut something else out to keep in business.
  - Goladus 16y ago
    True, but the result is low prices and that's what they market. The other big advantage is that they are ubiquitous. Outside of major cities, Walmarts are everywhere.
- OstiaAntica 16y ago
  You should learn more about Wal-Mart. It is, profoundly, a technology company. Wal-Mart was one of the earliest adopters of satellite communications in the 1970s and are leading the RFID revolution today. They have used logistics technology to ramp up to heretofore unknown scale, and use that scale to batter their suppliers down on price.
  - cookiecaper 16y ago
    As uxp describes below, this may be the mechanism Wal-Mart uses to get a price advantage, but it's not why people shop there. People shop at Wal-Mart because it's cheap. I've never known a town to have only a Wal-Mart, there are always some regional or local grocers in the game too, but Wal-Mart wins because Wal-Mart has better prices. It's nice that they use technology to gain the price advantage, but ultimately consumers don't care or know that Wal-Mart uses satellites or RFID extensively; Wal-Mart markets price, not fancy back-end warehousing.

by feral 16y ago

ssp 16y ago

Ryanair has taken the low-price aspect to an extreme too. For the flights I care about, it's generally something like £5, but once in a while it's literally £0 plus airport fees. I have never been treated particularly badly by them. You don't get anything that might be included in a more expensive flight such as checked bags, a meal, assigned seating, etc., but I don't really care about those things anyway, certainly not for 1-3 hour flights within Europe.

riffraff 16y ago
Ryanair also mastered price making. Prices vary in a way that is almost scaring from day to day, if you try to get a last minute flight you may end up with a hundreds of euros or half penny depending on their expected load, while traditional companies are way more rigid.

cookiecaper 16y ago

See also WAL-MART. Wal-Mart doesn't purport to do anything better than its competitors really, and I don't know how they could; they all sell the same things, and so price is the only real competition (environment counts too, but it's a tertiary point). Wal-Mart is now one of the biggest companies in the whole wide world.

nitrogen 16y ago
AIUI Walmart is successful because they mastered logistics.
- uxp 16y ago
  Which is a key point, and probably the one wensing was originally trying to make. If you can build a business with the intent of doing something like logistics extremely well (which lowers your costs) then you can pass that on to the consumer of your products. They don't give a rats ass about your logistics, but they do care that whatever the blackbox your warehouse does ends up shaving 20 cents off that bag of chips. WalMart still gets about the same percentage of profit, but the overall cost of the product is less. Lowering your price just to be cheaper than your competitors only cheapens the market and doesn't add anything of value to the product. You will quickly learn why everyone else keeps their margin up higher than yours when you can't expand due to lack of funds, or you have to cut something else out to keep in business.
- Goladus 16y ago
  True, but the result is low prices and that's what they market. The other big advantage is that they are ubiquitous. Outside of major cities, Walmarts are everywhere.
OstiaAntica 16y ago
You should learn more about Wal-Mart. It is, profoundly, a technology company. Wal-Mart was one of the earliest adopters of satellite communications in the 1970s and are leading the RFID revolution today. They have used logistics technology to ramp up to heretofore unknown scale, and use that scale to batter their suppliers down on price.
- cookiecaper 16y ago
  As uxp describes below, this may be the mechanism Wal-Mart uses to get a price advantage, but it's not why people shop there. People shop at Wal-Mart because it's cheap. I've never known a town to have only a Wal-Mart, there are always some regional or local grocers in the game too, but Wal-Mart wins because Wal-Mart has better prices. It's nice that they use technology to gain the price advantage, but ultimately consumers don't care or know that Wal-Mart uses satellites or RFID extensively; Wal-Mart markets price, not fancy back-end warehousing.