PROCEED

Guidelines on

Methods for Market analysis
Network and Infrastructure
Financing
Management
Marketing
	Knowledge base about your (potential) customers
	Customer feedback
	Board of customers
	Travel Guarantees
	Customer information centre
	Measures to attract new users
	Co-operation with Park & Ride
	Co-operation with Car Sharing (Car Clubs)
	Branding policy
	Corporate design
	Political marketing
	Product regeneration / review
	Information before and after the journey
	Information during the journey
	Ticketing strategy

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Knowledge base about your (potential) customers

Develop marketing strategies based on your knowledge about the needs, expectations and perceptions of your current and future regular customers.

Explanation:

Marketing requires a shift from supply-oriented to customer-oriented management. In-depth knowledge of the 'customer' is a necessity for this. It is not a fixed, isolated task, but marketing is part of a constant cycle in which there are 4 central elements as described below:

1. Analysing basic external data of trends and clients: Marketing ideally starts with a solid analysis of the situation of the market and the organisation. One of the most critical elements of the external (market) analysis is detailed information about (potential) customers. In other sectors � for example the car manufacturing industry � in-depth market research is a common feature. Suppliers in that industry use this market information in their whole PPPP (product, price, place, promotion) cycle. In public transport marketing is less common. For service marketing such as PT 3 extra Ps can be used (process, personnel, politics). See the following table: The 7 �P�s in PROCEED�s case study cities

The 7 "P"s	Summary of PROCEED�s case study results
Product:	Most case study cities put a high emphasis on the quality of the public transport product: safe, quick, reliable, comfortable etc. Many case study cities offer special services for specially identified target groups: facilities for disabled people, school buses, Park & Ride buses, complementary services with other modes, etc.
Price:	All case study cities offer special discounts, and special tariffs focussing on special target groups.
Place:	Number and location of bus stops, main interchange points, ticket sale points, the public transport network itself. All these �place� aspects are carefully planned in most case study cities, on the basis of available knowledge of the local public transport market.
Promotion:	All case study cities have an information strategy regarding �before ...�, �during ...� and �after the journey� information, advertising, etc. and accompanying material.
Process:	In Public Transport production and consumption of the service takes place at almost the same time. This means that much emphasis has to placed on the process: the processes regarding ticket sales, information provision, handling of complaints, etc. have to be optimized.
Personnel:	Personnel comprise a very important element of the PT service. Pleasant personnel with an eye for customer wishes, a driver who drives smoothly and safely, and accurate information, are all aspects which contribute to a positive image of the PT system.
Politics	Although one can discuss whether 'Politics' should the one of the 7Ps it is obvious that politics has a substantial impact on PT: pedestrian areas in inner cities, traffic management, planning of new business in residential areas , etc. are the result of political decisions.

2. Analysing the internal performance of the company: Regularly measuring customer satisfaction and the development of the number of passengers is important, but is only part of the information needed to know your customer and to identify their future needs and expectations. Other information needed is:

Where do they live?
What are their socio-economic characteristics (students, young families, elderly)?
Where and how do they travel and for what purposes, what is their lifestyle and what are their values and attitudes?

There are many methods and sources that can be used to answer these questions and these are described in more detail in guidelines Basic analysis, User needs and expectations, Market analysis / Monitoring of demand.

3. Segmentation, targeting, making choices: The �public transport customer� does not exist; neither does the �car user�: Some car users are more likely to become frequent public transport users than are others. Given the different characteristics, needs and demands of the heterogeneous group of current and potential customers the market should be divided into segments. This enables a rational decision about the composition of the marketing mix and allows for a focussing of marketing efforts and campaigns on the most promising groups.

Many campaigns focus on price and the relative speed of public transport compared to the car (in peak hours). Of course these are important aspects, but real insight into the attitudes and values of the most promising current car users might show that other aspects such as reliability, ease and comfort (with no need to waste valuable free time waiting in a garage) are important aspects as well.

One should determine the segments based on different expected responses to changes in the marketing mix. For example, passengers in one segment might demonstrate a very strong response to a lower price whereas passengers in another segment are more sensitive to changes in quality of the buses. One can define the segments as follows:

Define the main segments or target groups: e.g. students, commuters, business travellers, shopping trips, recreational trips
Specify sub-segments: e.g. incoming and outgoing commuters, �recreational� shopping trips to the city centre and daily shopping trips etc.
Criteria for defining the sub segments are:
The different sub segments should have clearly distinct characteristics.
The size and the characteristics of the segment have to be measurable.
The size of the segments has to be large enough to justify a specific marketing approach.
It must be possible to tailor a specific marketing strategy to the segments.
Select the most promising target groups: Because not every segment offers the same potential and because financial resources are not unlimited, the organisation should then choose those segments which offer most potential: the target groups. Before this selection can be made information about the different sub-segments has to be assembled and analysed (either using existing information, or by conducting new market research).

Possible selection criteria are favourable demand characteristics (for example off-peak travellers), needs and wants that are not being satisfied, or the opportunity to compete effectively and profitably.

Further insights are given in ► Background information: Market segmentation.

4. Implementing Strategies: The last step is dedicated to the implementation of the strategies which result from step 1 to 3, and - if necessary - these steps can be returned to as part of the circle.

Critical issues:

Good practice examples:

Luzern (Switzerland): The transport operator and the municipality conduct a market study on different transport related topics, such as �options for a change in travel behaviour�, �potential for public transport� and �mobility behaviour�. This survey includes users of all transport modes. To gain an insight on customer needs and opinions the transport operator investigates customer satisfaction every second year.
Stagecoach (UK): Stagecoach is a multimodal transport group that operates buses in various UK locations. Its Customer Insight unit has stratified the market for bus travel according to socio-economic categories and pioneered the use of direct mail and telemarketing to sell bus travel in the UK, based on identifying socio-economic target groups that are judged as willing to consider switching to the bus mode. The small team of 20 people claims to have generated 4.2 million additional trips a year on Stagecoach�s buses across the parts of the UK where it operates. Importantly, it is estimated that more than half of these trips would have otherwise been made by car. With careful selection of target groups, the team has found that people are often keen to hear from their local bus company, and claims to have a one in three chance of converting a fresh contact into a bus user. By telling people about the service, where it knows that the product is already good, Stagecoach finds that it is removing the major hurdle to using the bus - the fear of being embarrassed.
Sweden: All public transport authorities participate in the national barometer scheme called �Kundbarometern�. A number of inhabitants in each public transport region are asked monthly questions about the services, the information etc. As many public transport authorities have been members in the scheme for several years, it is possible to see the development throughout the years. Many public transport authorities perform customer surveys (customer satisfaction, counting etc.) in the buses / at bus stops once a year. There is also an ongoing planning of the transport system with the help of traffic survey data (daily trips) from the ticket machines (electronic cards). On some occasions the region or public transport authority performs a regional travel survey by using postal questionnaires for a selection of inhabitants.
Vilnius (Lithuania): Public transport operators interview passengers about their age, origin destination points of the trip, and about their needs for the trip by public transport.

References and background reading:

Related guidelines:

Background information:

A basic strategy in marketing is to carry out a segmentation of the market. No single customer is alike, but some have related wishes and can be treated as such. Normally, when a market is segmented, each will have to be provided for by its �own� service (aimed principally at that market segment but not necessarily restricted to use only by that group) and sometimes its own brand. Market segmentation is ideally related to individuals that have certain values in common.

In a segmentation of the market a company singles out target groups that can easily be defined in quantities and qualities. Data, client monitoring and strategic choices on a company level are logical counterparts of a strict segmentation of the market.

Running public transport based on a segmentation of the market is not easy. Public transport is based on a compromise: a service based on the most common denominator that is just acceptable by most customers. A common market segmentation in public transport is between commuters, elderly, shoppers, etc. This segmentation is not related to common values but to common characteristics (at that moment of the day). An elderly person can commute, do shopping. This segmentation is, above all, practical.

Looking at segmentation in public transport it is necessary to distinguish between the bus lines and the other services:

Bus lines should be seen as a standardised service, without too much differentiation between persons, only differentiation in areas and places. Exceptions to this general practice are the special transport for elderly and disabled that is a common feature in many European cites. Some major cities have special public transport lines for regional schools that only run during school times. Bus lines that serve business areas are normally treated as standardised public transport. Dordrecht (120,000 inhabitants) is an example of a Dutch city that � some years ago � tried to base its whole public transport strategy on market segmentation. Besides regular bus lines, an express- and service network were introduced. This experiment failed: the reduction in travel time on the express network was limited, the small streets in the old residential neighbourhoods were often problematic for the service buses and the system was hard to comprehend. Probably the city was too small for this segmentation.
Market segmentation in public transport is useful when it comes to ticket arrangements or special means of communication. The operator can co-operate with attraction centres, local business or major schools to offer them special sales arrangements, and special incentives for annual pass holders (Spain, customers clubs in Sweden).