Chapter 6
Transport Marketing
– Roadways - BEST
– Railways
– Airlines
Overview
• Introduction to each Industry
• Marketing Mix (8 P’s) of each mode
1.
2.
3.
4.
5.
Product (Product levels & Service Flower)
Price
Place (Channels of Distribution)
Promotion
People (Employees & Customers i.e. market
segmentation)
6. Physical Evidence
7. 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
•
Product Mix
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
•
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
Product
• Service
Flower
SafeKeeping
Consultancy
Payment
CORE:
Transport
Hospitality
Information
Safety Elements
Infrastructure
Elements
Human
Elements
SUPPLEMENTARY
SERVICES
Price
• BEST follows the cost based pricing model
Direct Costs + Indirect Charges + Profit = Price
• Concessions to:
–
–
–
–
–
Freedom Fighters
Military Men
Students
Handicapped
Blind Travellers
•
Price
Price List
THE BRIHANMUMBAI ELECTRIC SUPPLY AND TRANSPORT UNDERTAKING
FARE STRUCTURE W.E.FROM : 25/01/2005
KMS
ORDINARY
LIMITED
AIR
CONDITIONED
ADULT FARE CONCESSIONA ADULT FARE CONCESSIONAL ADULT FARE
(RS)
L FARE (RS)
(RS)
FARE (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
Rs.2 for every
(Maximum)
Rs.2 for every
(Maximum)
Rs.5 for every
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
People
External
Internal
Travelers
i.e.
Customers
Employees
Bus Driver
Bus
Conductor
Back - end
employees
etc
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
Market Segmentation
(External Customers)
Feeder Routes
These
routes
which feed
the railway
stations
either from
the
residential
complexes
or Business
Districts.
East-West
Connectors
These
routes
which feed
the railway
stations
either from
the
residential
complexes
or Business
Districts.
Trunk Routes
Run SouthNorth
through the
city and are
almost
parallel to
the
railways.
Ladies Special &
Ladies First
Services
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
Receive
Get Down at
Tickets
Destination
Line of interaction
Receive the
Payment
Remove
Tickets
Punch the
Tickets
Give the
Tickets
Line of visibility
Record it in a
Record Sheet
Line of internal interaction
Collect the Tickets
from the Depot
Report it at the
Depot
Productivity & Quality
(Service Quality Dimensions/RATER Analysis)
RELIABILITY
Customer
satisfaction,
time & safety
ASSURANCE
TANGIBILITY
Timely services &
security
Seats, windows,
lights etc….
EMPATHY
Rail & bus spacing,
conductors etc…
RESPONSIVENESS
Providing help
during calamities or
breakdown
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
•
Product Mix
– 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
•
Product Mix
– 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
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 - EXAMPLES
Basic
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
Cafeteria
Waiting area
Coupon
Booklets
CORE:
Metal
Detectors
TRANSPORTATION
Online
Booking
Teleservices
Vendor
Machines
CCTV’S
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.
Place - Channels of distribution
• 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
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
External
Customers
Internal i.e. Employees
Driver, motorman, guard, ticket
checker, employee at
reservation counter, employee
at station, catering people,
RAILWAY engineer, station
manager
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
Segments
Class 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
Railway
stations
Reservation
centres
Trains and
tracks
Tickets,
passes,
others…
Process (Service Blueprint)
• Suburban Railways
Buy
ticket/pass
Travel
• Long Distance Travelling
Fill The
Reservation
Form
Get The
Reserved
Ticket
Show The Ticket
To The Travelling
Ticket Examiner
Travel &
Experience
the services
Productivity & Quality
(Service Quality Dimensions/RATER Analysis)
RELIABILITY
Customer
satisfaction,
time & safety
ASSURANCE
TANGIBILITY
Timely services &
security
Seats, windows,
lights etc….
EMPATHY
Rail & bus spacing,
conductors etc…
RESPONSIVENESS
Providing help
during calamities or
breakdown
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 Airlines
Industry
Air Services Mix
Passenger
serviceNational
International
Air Service
Mix
Goods service
National
international
Mail service
National
International
Social service
National
International
Product
Mix
Product
PRODUCT MIX
On Ground Services
• Check-in Options
• Baggage
Information
• Coach Services
In-Flight services
• Class of Service
• Convenience &
Safety
• Magazines
Special Services
• Infant and Child Care
• Wheel Chair
Assistance
• Expectant Mothers
Product
• Product
Levels
Core
Expected
Augmented
Potential
Transport
Safety, Lounge, hygiene food,
Emergency Exit.
Sahara airlines offer its passengers six
different types of cuisine like vegetarian,
fat free, diabetic etc.
Air Emirates provide cab services where
they have customized pick and drop
service.
Product
• Service
Flower
Game
Palour
Multi – cuisine
Gifts
CORE:
TRANSPORT
In-flight
Entertainment
In-flight
Shopping
Medical
Infant &
Childcare
Lounge
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
Consolidation
Tour Operator/ Travel Agent
The direct sale of tickets from airport to the
passenger on the airline desk.
Customers book tickets through travel agents or
tour operators
Airlines gets affiliated with companies who carry
Affiliated with companies
all its trips with a same airline who in turn
gives special discounts or offers in return.
Direct through home leased system Phone, fax, email and also online e-booking.
Promotion
• Advertising
• Publicity
• Sales promotion
• Brand Mascot
– Eg. Air India
People
People
External
Internal
Customers
Employees
Internal
Customers
External
Customers
Travel
agents
Travelers
i.e.
Customers
Ground
Staff i.e.
Front end
staff
Cabin
Crew
Back - end
employees
etc
People
[Nov 07 (10 marks)]
• 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
Type of contact
Person
High contact
Airhostess
Medium contact
Cock pit crew
Low contact
Travel agent
Market Segmentation
(External Customers)
Business
passengers
Customers with less
spare time and more
cash in their pockets,
who agree to pay a
premium price
The premium prices
they pay provide better
services.
Economy
Travelers
The most important
consideration for
most of them is the
price.
The lower the airfare,
the more people will
fly the respective
airline.
Other than wealthy
travelers, this
segment will not pay
extra for premium
services
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
Reservation &
Receipt of Tickets
Baggage Retrieval
Arrival at Airport
Check – in & Relax in
Lounge
Alighting the Aircraft
Boarding the flight;
Interaction with Crew
& Experiencing the
ambience
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.
ASSURANCE
Their flight will be on time and their journey will be
safe
TANGIBLES
Surrounding area, car parking, baggage counter,
reservation counter
EMPATHY
Airhostesses are trained to provide polite, warm and
courteous service
RESPONSIVENESS
Helping customers to know details about flights
timings
SWOT Analysis
• Door to Door
Service
• Quick Transport
Railways
Roadways
• Flexibility
• Economic fares
suiting needs of
all classes
• Improved
performance of
the Indian
Railways since
the past few
years
• Additional
services
provided
Airlines
Strengths:
• Passengers will
continue to need
connecting/network
services
• Ensures a leisure
travel, like airport
lounges
• Enhanced in-flight
service and more
comfortable seating
• In long-haul markets,
where premium
service is essential
SWOT Analysis
• Limited concern
for consumer
satisfaction
• second
largest
consumer of
energy
Airlines
• Expensive mode of
transport for long
distances
• Not very
environmental
friendly. Emits
considerable amount
of pollution
• Bad state of Indian
Roads
• More no. of accidents
Railways
Roadways
• Weaknesses
• Excess capacity
• Complicated flight
operations.
• Mounting debt –
Enormous debt to
investment ratio
• Cost-to-revenues
ratio per seat mile is
very high
SWOT Analysis
• Decentralisation
• Transport sector
in GDP
• Road & Rail
Development in
India
Airlines
• Construction of
Highways
• Construction of
Sea links,
Expressways
• Introduction of
Environmental
friendly Vehicles
Railways
Roadways
• Opportunities:
• Maintain short-haul
flights only to
extent needed to
feed the network
SWOT Analysis
• Share of public
modes is
declining
• Other modes of
transport
• Penetration of
railwaysdeclining
Airlines
• Rising Oil prices
globally leads to
expensive transport
• Competition from
Railways in long
distance travel
• Increasing no. of
vehicles leading to
decreasing driving &
parking space
Railways
Roadways
• Threats:
• Labour problems as
“legacies” try to
streamline in order
to compete
• More competition
PEST Analysis
• Political
Roadways
Railways
Airlines
• Depreciation
policy
• Infrastructure
development
• All the vehicles
have to pay a fixed
tax known as ‘toll
tax’.
• Railways owned by
the Government
of India
• It is meant to
serve the
economically and
social backward
class
• Privatization
• Continued tension
with Pakistan
• Political event
September 11
• Trade relation
• Corruption levels
like in India bribe
have to be paid for
every permit and
licence required
PEST Analysis
• Economic
Roadways
• Revenue
• Trade cycles
• Pricing
• This has a
direct impact
on the price
mix of
transport
Railways
• Cannot
balance
demand &
supply
• Growing
economic
burden
• Contribution to
GNP
Airlines
• Global
recession
PEST Analysis
• Social
Roadways
Railways
Airlines
• Free travel facility
• Reservation of
seats
• Front door entry
• Disaster
management
• Festival action
plans
• Curb air pollution
• Serves all sections
of the society.
• Social revolution
• Environment
friendly
• Social status
• Food based on
client needs e.g.
jain food
• Different lounges
for different
customers
PEST Analysis
• Technological
Roadways
• Information
technology
• (CNG) buses
• Online ticket
accounting
system
• Integrated
network system
• New technologies
introduced
Railways
• Computerized
• Reservation
facility
• Improved
signaling & other
systems
• Construction of
bridges
• Modern
Technology
Airlines
• Auctioning seats
online
• e-check in
• Modernization of
airports
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)]