Service Marketing Project

Josh Haber, Michael Piscadlo, Brittany Tomkiewicz

Rail Industry Overview

Once the primary form of transportation 1950s-70s

Shift to personal transportation/air travel

U.S. Government creates Amtrak No other major rail passenger line competitors Tracks mainly owned/used by freight transporters

1970

Present Day

Amtrak Overview

Also known as the National Railroad Passenger Passenger Corporation Created by Congress in 1970

Began Operations in 1971

19,000 Employees Own 469 Locomotives/1,519 Passenger Cars Run Over 300 trains a day Over 500 stations 21, 000 train route miles in 46 states Owns 80% of the Northeast Corridor (BostonDC) Over 26 Million Passengers a Year

Mainly in the Northeast Corridor/West Coast Lines

Services Offered

Variety of Routes

Long Distance, Commuter Routes, Regional Routes, High Speed Rail. Acela Express on Northeast Corridor Only First Class, Business Class, Sleeper Service, and Coach Service 23 States

High Speed Rail

Variety of Seating Options

Operates 14 long distance routes across the country

Strategic Elements

Positioning

Reputation Issues Solid market share from the start

Able to obtain a consistent ridership Only major provider of passenger rail

Never had to put effort into positioning themselves in the consumer mind Changing times, changing economic situation, changing consumer

Position themselves as the safer, greener, healthier long distance travel option

Strategic Elements

Image

Series of ups and downs More negative in past several years Slacking timeliness, inflated prices, declining customer service = bad company image New approach

Connecting America in a safer, healthier, greener way

Strategic Elements

Tangible Aspects

Tracks and trains Train stations Presentation of employees Webpage Ticket

Strategic Elements

Target Markets

Serves three specific markets:

Business, leisure, and student travelers

Amtrak never attempted or have been able to clearly define their target market(s) and their attributes and needs

Issue:

Certain aspects of their service targeted towards market segments

Acela Express = business class Student Advantage Card = college students Allowed ability to market to specific niche go to waste

Amtraks service can be used by anyone

Strategic Elements

Differential Advantage

Compared to Cars

No stress, can have a leisurely journey Time, can get from Point A to Point B quicker Risk, car accidents less prevalent than train accidents
Accessibility, more locations to board an Amtrak train Time, can buy a ticket and board a train within minutes of each other Location, trains bring you closer to your ultimate destination Reliability, can run under more severe weather conditions

Compared to Airlines

Strategic Elements

Promotional/Advertising Strategy

No promotional mix because of no target market Promotions offered

Student Advantage Discount Card Veterans Advantage Discount Card International Student Identity Card AAA Membership Card

Large market share from the start, no need for effective advertising

Minimal advertising attempts, advertise at people not to them(Direct Magazine) Recently with new image (safer, greener, healthier) creating more effective advertisements to showcase their new positioning strategy

Prospects for Profitability

Efficiency of Services (short term profitability)

Timeliness

Sharing of tracks with freights Infrastructure High speed rail market

Clearly define target market, better able to tailor services Direct messaging system Updated technologies in train stations for retrieval of passenger information

Customer Relationship Management

Prospects for Profitability

Employees/Employee Communication

Largest expense is employee salaries, wages, benefits

Long Term Profitability

Public Trading

Revenue generated from stock used for funding capital improvements Hold Amtrak accountable to shareholders New campaigns highlighting their differential advantages to draw in new customers New strategy would be expensive, but profitable in long run because it would increase their customer base

Advertising Strategy

Competitors
Price

Speed over distance

Convenience

Environmentally Sound

Competitors
Safe

Speed over distance

Comfort

Price

Pricing Strategy

Non Existent

Attempts to extract as much from passengers as the citypairs, time of year, and accommodations selected will allow Variety of Seating Options

Tier Pricing Limited Promotions No Direct Rail Competitor=No Price Wars Pressure from non-rail competitors

Customer Blueprint

SWOT

Strengths

Dominance in the marketplace Unique service offering Convenience in locations, local stops Flexibility in scheduling, numerous trains on the same day Pricing Pricing Strategy Product Offering Financial Limitations Target Market Segmenting Infrastructure Bad Image

Weaknesses

SWOT

Opportunities

USP-Unique Selling Proposition-more destinations, more frequently, more affordable etc. Pricing Strategy-steep discounts targeted at niche markets Ridership increases Federal Funding Privatization Discount Airlines Discount Busses Automobile Travel Private Train Firms Economic Condition Federal Funding Loss

Threats

What do they do well?

Alternative option instead of flying

Eliminate airline taxes, delays, cancellations $200 for one way

Low costs traveling across country

Improving their services

Wi-Fi, Free Drinks

Making travel easy for short regional distances Security

Photo ID, Low Profile Target

Long Range Outlook

Positive Federal Funding

Stimulus Package

Improving/New Technology New Services Convenience

Wise Investment?

Not Publically Traded Only Major Passenger Rail Service Federally Backed New Technologies Possible Going Public Option?

Increase in Capital Accountability