Text3. Marketing in Railway Systems

Marketing is in many ways the central activity in business management.Marketing in a railway environment is a method and process for planning, mobilising and applying the resources to satisfy customer demands and to get profits. Marketing Mix includes Product, Price, Promotion, Place, People, Processes and Physical Evidence.

The core products of railway organisations are transportation services. For a railway passenger service, the main characteristics of the product are the transit time, cleanliness and the riding comfort of the rolling stock. For a railway freight service, the characteristics of the product are the operational reliability of the service; the security for consignments and the availability of door-to-door delivery.

As to the price for a railway passenger service, the fare is usually graduated by distance. In addition, fare rates vary with the standard of service. Different discounts may be provided as well. In a railway freight service, the tariff is usually expressed as a rate per tonne-km.

Promotion of railway services and sales representation are becoming important tools in the railway business.

“Place” in the case of railways includes not only passenger stations and freight terminals, but corporate headquarters and centralised railway reservations offices as well.

People are the most important resources of the railway enterprise. Railway management systems can’t be successful if the customers do not feel that the railway staff eagerly responds to their needs.

Railway processes and operations must be compatible with the needs of the railway customers. If a customer requires regular loading on fast freight trains, then a railway’s policy of operating slower trains will be incompatible with these needs. That’s why the railway must be prepared to change its process accordingly.

Physical Evidence refers to the layout and presentation of the railway facilities. For example, the design of passenger stations must be comfortable for all categories of travellers.

A Marketing Plan is one of the most significant outputs of the marketing process. It should identify marketing objectives and strategies, specify sales, pricing and promotional strategies, review past sales and profit performance.

Marketing Strategies include actions taken to modify the elements of the marketing mix in order to achieve marketing objectives. Marketing Objectives as well as Marketing Strategies must be market segment related, practical, realistic, and responsive to the actual needs of customers.

Answer the questions:

1. What is railway marketing?

2. How many components does the marketing mix comprise?

3. What are the main railway products?

4. How is the price for a railway passenger service calculated?

5. Why are people the most important resources of the railway enterprise?

6. Why must railway processes be flexible?

7. What does physical evidence refer to?

8. What does a marketing plan identify?

9. What do marketing strategies include?

10. What are the main demands to the marketing objectives?