Chapter 6 Transport Marketing –Roadways - BEST –Railways –Airlines.

Chapter 6

Transport Marketing

–Roadways - BEST–Railways–Airlines

Overview• Introduction to each Industry• Marketing Mix (8 P’s) of each mode

1. Product (Product levels & Service Flower)2. Price3. Place (Channels of Distribution)4. Promotion5. People (Employees & Customers i.e. market

segmentation)6. Physical Evidence7. Process (Service Blueprint)8. Productivity & Quality (Service Quality

Dimensions / RATER Analysis)

Overview

• For every Mode of Transport:– SWOT Analysis

– PEST Analysis

– Recent Developments

• University Questions

Introduction to Transport• Importance of (Road) Transport [Univ Q – May

05 & Nov 07 (5 marks)]– Employment generation– Growth of industries– Aids production– Boosts consumption– Helps in distribution– Regional specialization– Promotes agriculture– Utilization of land

THE ROADWAYS

Introduction to Roadways• India has more than 3 million km of road network, making

it one of the largest in the world.

• However, the quality of the roads is inadequate and cannot meet the needs of efficient and fast moving transportation.

• National Highways which are the prime arterial routes span about 58,112 km throughout the country and cater to about 45 per cent of the total road transport demand.

• Mumbai BEST Service is the oldest bus transportation corporation in India. Established in 1873, the enterprise is a public undertaking operating under Brihan Mumbai Municipal Corporation.

Marketing Mix of Roadways

Product

1. Compressed Natural Gas Bus

2. Single Deck Bus (Vestibule Bus): introduced for economical bus operation and to carry more passengers particularly in peak hours.

3. A/C Luxury Bus

4. Low Floor Buses: for the welfare of physically handicapped

5. Automatic Transmission Buses: introduced to reduce the driver’s fatigue.

• Product Mix

Product• Product Levels

Levels Examples

Basic Transportation of people

Expected Timeliness, Cleanliness, Safety, structure of bus

Augmented Air-conditioned Buses, Day Pass and Smart cards, Cellphone bill deposit boxes

Potential CCTV’s, Implementation of GPS, 24 hour service

SUPPLEMENTARY SERVICES

Product• Service Flower

CORE: Transport

Consultancy

Hospitality

Safety Elements

Human Elements

Information

Payment

Safe- Keeping

Infrastructure Elements

Price• BEST follows the cost based pricing model Direct Costs + Indirect Charges + Profit = Price

• Concessions to:– Freedom Fighters– Military Men– Students– Handicapped– Blind Travellers

PriceTHE BRIHANMUMBAI ELECTRIC SUPPLY AND TRANSPORT UNDERTAKING

FARE STRUCTURE W.E.FROM : 25/01/2005

KMS ORDINARY LIMITED AIR

CONDITIONED

  ADULT FARE CONCESSIONA

L FARE (RS)

ADULT FARE CONCESSIONAL

FARE (RS)

ADULT FARE

(RS) (RS) (RS)

3 4 1 4.5 1 13

5 4.5 2 5 3 17

7 5 3 6 3 19

10 7 3 8 4 25

15 9 4 10 5 29

20 11 5 12 6 33

25 13 6 15 7 37

30 14 7 16 8 41

35 15 7 18 9 45

Above 35

Kms

Rs.2 for every

addl. 5 Kms or

part thereof

(Maximum) Rs.2 for every

addl. 5 Kms or

part thereof

(Maximum) Rs.5 for every

addl. 5 Kms or

part thereof

• Price List

Place - Channels of distribution

• BEST Bus

• Bus Depots

• Ticket issuing offices

• Bus Stops all over the city (every 500 –900 m)

Promotion• No Structured Marketing Campaign• Includes the following:– Smart card– Vodafone drop boxes– Vodafone PCOs– LCD screens– Advertising on Handles– Advertising on BEST buses– Bus Stops, Shelter, Poles– Service Promotion through

www.bestundertaking.com

People

• BEST bus comprises of a conductor, Driver and inspector.

• Bus conductor– A bus conductor works in the passenger section of a bus or tram - single or

double-decker - collecting fares, issuing tickets and answering queries about routes, fares and timetables.

– Helps passengers on and off buses and ensures that everyone remains seated safely

– Checks season tickets and concessionary passes, ensuring they are valid – On request, warns passengers when their stop comes up – Answers queries about routes, timetables and fares

• Bus ticket checker– A bus ticket checker is usually a promoted post within the company, adjusting

timetables, dealing with complaints and perhaps checking tickets.– Plans and adjusts routes and timetables

People

Market Segmentation(External Customers)

Physical Evidence

• The Bus Stop

• Bus Depot

• Bus Stop

• Uniforms of conductors, drivers and TTE

Process (Service Blueprint)

Arrive at Bus Stop

Get into the Bus

Have a Seat

Pay for the Tickets

Remove Tickets

Punch the Tickets

Receive Tickets

Record it in a Record Sheet

Give the Tickets

Collect the Tickets from the Depot

Receive the Payment

Get Down at Destination

Report it at the Depot

Line of interaction

Line of visibility

Line of internal interaction

RELIABILITY

EMPATHY RESPONSIVENESS

TANGIBILITYASSURANCE

Customer satisfaction, time & safety

Timely services & security

Seats, windows, lights etc….

Rail & bus spacing, conductors etc…

Providing help during calamities or breakdown

Productivity & Quality(Service Quality Dimensions/RATER Analysis)

THE INDIAN RAILWAYS

Introduction to the Indian Railways• The largest railway in Asia

• The fourth most heavily used system in the world

• Carries 14 million passengers a day

• Track route length more than 65,000 kilometers

• 2,07,719 units of freight cars• 45,350 passenger cars• 6909 stations• 14,06,400 staff.

• It operates 8984 passenger trains everyday

Marketing Mix of Railways

Product

– Passenger Traffic:

Coaches (Seating, berths, leg room, elbow room, double decks)

Reservation Lighting Catering Water Sanitation Bed rolls Medical aid Services at the railway stations

• Product Mix

Product

– Freight Traffic: (agricultural and industrial activities)• Types of wagons- BOX, BOY, BCA, TANK, BCX• Domestic Container Service• Freight Forwarder scheme• Quick Transit Scheme• Speed Link Express Trains

– Mail Traffic (Railway Mail Services)On time services, quicker delivery, professionalism in

management, wider coverage in remote areas

• Product Mix

Price• Concessions – Orthopedically Handicapped– War Widows. - Travelling for any purpose

– Students – Senior citizens

• However in case of special and luxury trains, the charges are very high.

Product• Product Levels

LEVELS RAILWAYS - EXAMPLESBasic Transportation of people and equipment

Expected Timeliness, Cleanliness, Safety, Proper ticket dispensation

Augmented Pay Phone, Trolleys, ATM Machine, Seating Area

Potential Coaches with New Layouts, Call centre facilities, SMS alerts, tickets at petrol pumps

Product• Service Flower

CORE: TRANSPORTATION

Waiting area

Online Booking

Teleservices

CCTV’SVendor Machines

Metal Detectors

Coupon Booklets

Cafeteria

SUPPLEMENTARY SERVICES

Price• 5 principles of pricing– Cost of service principle: charges based on the actual costs

incurred on the services – Value of service principle: fixation of rates on the value of

service– Principle of differential charging: Allow different charges

on different commodities for same distance– Equal mileage rate principle: flat rate principle in which

the rate per km. Decreases as kilometre increases– Zonal charging: Division of area into several zones and

discourages short hauls and encourages longer ones• The suitability of a particular principle depends upon

the prevailing conditions vis-à-vis emerging trends.

• Distribution of services to many remote areas

• Online Facilities:– Passenger’s Current Status Enquiry– Fare Enquiry– Reservations– Train Between Important Stations– Upgraded Passenger Scheme/Chart – Weekly Availability at Stations

• Tatkal Scheme

Place - Channels of distribution

• 62,000 kilometres of track length • 6896 Passenger Stations

• Freight Terminals

• Corporate/Regional/Divisional Headquarters

• Centralized Railway Reservations Offices

• Travel Agents

• Freight Forwarders’ Offices And Terminals

Place - Channels of distribution

Promotion• Does Not Undertake Aggressive Promotion• Promotion Of Its Luxury Trains• Advertising New Services Through Internet,

their Website – www.indianrailways.gov.in• Advertising Holiday Special Trains• Promotion Strategies– Proliferation Of Ticketing Facility – Up gradation Scheme – Scheme of frequent travellers (SOFT)– Tourists Tickets

People

People• Driver, motorman, guard, RAILWAY engineer,

stationmaster, RAILWAY police should be efficient and accurate as safety of passenger depend upon them.

• Employee at reservation counter, employee at station, and ticket checker should talk politely and with empathy

• Catering people should also prepare healthy and tasty food.

Market Segmentation(External Customers)

Basis of Segmentation SegmentsClass Wise / Income wise 1st class ac sleeper class,

Ac 2 tier class car,Ac 3 tier sleeper class,Ac chair car,First class ordinary,Sleeper class ordinary,

Sex Wise Ladies Special Trains

Speed Wise Mail, Express, Ordinary fast, Super fast, Luxury, Special.

Distance Wise Long distance.Medium distance.Short distance.

Physical Evidence

Process (Service Blueprint)• Suburban Railways

• Long Distance Travelling

RELIABILITY

EMPATHY RESPONSIVENESS

TANGIBILITYASSURANCE

Customer satisfaction, time & safety

Timely services & security

Seats, windows, lights etc….

Rail & bus spacing, conductors etc…

Providing help during calamities or breakdown

Productivity & Quality(Service Quality Dimensions/RATER Analysis)

THE AIRLINES INDUSTRY

Introduction to the Airline Industry• Indian Aviation Industry - is one of the fastest growing aviation

industries in the world.

• With the liberalization of the Indian aviation sector, this industry has undergone a rapid transformation.

• From being primarily a government-owned industry, today it is dominated by privately owned full service airlines and low cost carriers.

• Some of the Major players are:– Indian Airlines & Air India– Jet Airways & JetLite– Kingfisher & Air Deccan– IndiGo– SpiceJet

Marketing Mix of AirlinesIndustry

Air Services MixPassenger

service-National

International

Passenger service-

National International

Goods serviceNational

international

Goods serviceNational

international

Mail serviceNational

International

Mail serviceNational

International

Social serviceNational

International

Social serviceNational

International

Air Service Mix

Product Mix

Product

PRODUCT MIX

Special ServicesSpecial ServicesIn-Flight servicesIn-Flight servicesOn Ground ServicesOn Ground Services

• Class of Service• Convenience &

Safety• Magazines

• Check-in Options• Baggage

Information• Coach Services

• Infant and Child Care • Wheel Chair

Assistance• Expectant Mothers

Product

Core Transport

ExpectedSafety, Lounge, hygiene food, Emergency Exit.

AugmentedSahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc.

PotentialAir Emirates provide cab services where they have customized pick and drop service.

• Product Levels

Product• Service Flower

CORE: TRANSPORT

Multi – cuisine

In-flight Shopping

Medical

LoungeInfant & Childcare

In-flight Entertainment

Gifts

Game Palour

SUPPLEMENTARY SERVICES

Price• Depends on the positioning of the airline i.e. a premiere

airways like Jet Airways or a low cost airways like SpiceJet

• Tariffs are decided on the type of the sector i.e. geographic location of destinations

• Even flight departure timings affect the pricing.– Flights at convenient timings are charged higher

• Lower prices for Apex i.e. advance bookings

• Average tickets range Rs 7000 for economy class and Rs 15000 for business class

Price• Pricing Strategies

– Premium Pricing: set prices above the market price either to reflect the image of quality or the unique status of the product.

– Value for Money Pricing: charge the average price for the product and emphasize that it represents excellent value for money at this price.

– Cheap Value Pricing: The objective here is to undercut the competition and price is used to trigger the purchase immediately.

– Differential pricing: The First Class, The Executive or Business Class and The Economy Class.• Fares & facilities differ with each class

– Seasonal fares are also fixed, fares rise during the peak holiday times.

– Low-cost Pricing: very low prices for the flight tickets

Place - Channels of distribution

Promotion

• Advertising

• Publicity

• Sales promotion

• Brand Mascot – Eg. Air India

People

• Airhostess in airline come in contact with the customers in the process of providing the service

• Cock-pit crew come in indirect contact with the customers

• Front-line personnel usually solves customer problems

People[Nov 07 (10 marks)]

Type of contact Person

High contact Airhostess

Medium contact Cock pit crew

Low contact Travel agent

Market Segmentation(External Customers)

Physical Evidence• Booking offices, ticket counters, etc.

• Tickets and stationery used

• Aircraft seating

• In-flight food

• Domestic lounges with good interiors and basic amenities

• Website & Logo

Process (Service Blueprint)

• Front Stage Process

Productivity & Quality(Service Quality Dimensions/RATER Analysis)

RELIABILITY

Airlines ensure that the service is delivered as promised and this is often totally with in the control of the front-line staff.

ASSURANCETheir flight will be on time and their journey will be safe

TANGIBLESSurrounding area, car parking, baggage counter, reservation counter

EMPATHYAirhostesses are trained to provide polite, warm and courteous service

RESPONSIVENESSHelping customers to know details about flights timings

SWOT AnalysisStrengths:

SWOT Analysis

• Weaknesses

SWOT Analysis

• Opportunities:

SWOT Analysis

• Threats:

PEST Analysis

• Political

PEST Analysis

• Economic

PEST Analysis

• Social

PEST Analysis

• Technological

Recent Developments

Rail – Road Co-ordination[Univ Q – Nov 01, 05 (5 marks); May 04 (10 marks)]

• Transport co-ordination: relationship between different modes of transport having unified to give better facilities to public– At the same time allowing each mode to work where it is best suited

• Road & Rail – offer stiff competition between them• However, are complimentary & mutually beneficial• Motor Vehicle Act, 1939 – regulates road transport through

compulsory licensing• Railways offer confessional season tickets• Railways governed by Central govt & Roadways by State• Roadways cater to short – medium distance & for perishable

commodities• Railways for heavy & long distance• Both are needed for a consumer & thus co-ordination is

essential

University Questions

• National & State Highways [Nov 04 (5 marks)]• Problems faced by the bus & trucking industry

[May 06 (10 marks)]• Role of IT in Railways [Nov 07 (2 marks)]• Service is a performance given by one human

being to another. Discuss this in detail with relevance to airlines industry and elaborate the people element in airlines. [Nov 07 (10 marks)]