BMTC as an organization

The Bangalore Metropolitan Transport Corporation came into existence in 1997 with the sole aim of providing public transportation to the city and sub-urban areas of Bangalore. The mission of the organization is to provide safe, reliable, clean and affordable travel to everyone. BMTC leads by example in being the only Bus Corporation within the city of Bangalore to ferry more than 4.2 million commuters. The organization comprises a fleet of over 6092 buses covering an area encompassed with a radius of 36 kilometers from the city centre. In a day BMTC operates on 583 city and 1785 sub urban routes, running 13 lakhs kilometers and making 79445 trips. BMTC has a 32000 strong labour force to carry out different aspects of BMTC bus operations. BMTC services the transport needs of the urban and sub-urban population in and around Bangalore. And, despite the differentiated base of the commuting population, BMTC reaches far and wide, in every nook and corner of the city making public transport an attractive travel choice for everyone. BMTC's strong hold in the area of public transportation in Bangalore is a testimony to its adoption of sound Management, HR, Quality and Environmental policies. The corporation also strives to bring about increased passenger comfort by integrating Intelligent Transport Systems (ITS) and Passenger Information system (PIS) in its daily operations. This helps to monitor its services better and provide quality services. Public feedback is also an important input in BMTC operations; a state of the art control centre is envisioned for the near future which will be a one point contact for addressing customer queries and feedback. Mission: To provide safe, affordable, eco friendly efficient bus services through: Benchmarking & improving management efficiency Enhancing its Technical & Operational efficiency Developing, testing and adopting new processes to achieve efficiency in bus services Fostering skill development and attitudinal changes among its employees Valuing public feedback as an important input in improving operations to serve the commuters better Discharging it social responsibilities by: Connecting all villages around the City with red board buses Plying services to the city core to ease congestion with black board buses Running limited stop buses to save time of the commuters Providing comfortable & fast moving 'Pushpak' buses Chartering services to various industries, schools and colleges Offering subsidised travel to the deserving sections of the society Issuing passes to various segments of the society Providing Eco-friendly Parisara Vahini buses Running Vestibule buses to carry more passengers Plying Mini buses to provide transport to remote sub urban areas Upgrading Transport services by operating High End Volvo buses in the city Operating Vayu Vajra services to BIAL for airport commuting Providing City sight seeing Curitiba buses Special services to cater to the needs of ladies, and sick people

BMTC at a Glance as on 02-01-2012

Every Day Traffic Revenue Rs. No of Schedules No of Vehicles Daily Service kms No of trips No of buses under PPP Buses Infrastructure established Depots Bus stations Staff Employed No of passengers Bus Staff Ratio Bus Day 4th of Every Month 37 48 32771 4.5 million 5.4 3.74 Crores 5896 6125 12.96 Lakhs 78715 18

BMTC Volvo division As part of this project, we will be analyzing the retail profiling and cost of stockout for the BMTC Volvo services in Bangalore. We have taken into consideration the software industry areas of Bangalore as these areas are the main routes in which the Volvos ply and make the most revenues for the BMTC Volvo division. The main areas in which the IT/software industries are located are Electronic City, Whitefield ITPL, Manyata Tech park, Old Airport Road Diamond district and Global Village. The main bus terminus at the city centre is the Kempegowda Bus station popularly known as Majestic. There are Volvo Vajra services that connect all the above mentioned IT parks with Majestic. Also, many commuters are picked up enroute the journey from Majestic to their workplaces for example, the route from Majestic to Whitefield covers Marathalli, a major residential area of the IT sector. We will be analyzing the BMTC Volvo as a brand in the following sections:-

BMTC Volvo as a brand

Fig1 A Volvo bus of BMTC. Picture of a Volvo Vajra service bus that operates from Majestic to Kadugodi - This route starts from the city centre and covers all the pickup points that lead to the International Tech Park Ltd (ITPL), one of the major IT hubs in Bangalore. You cannot miss these buses on the roads of Bangalore today, and in IT hubs, these buses ply much more than the normal BMTC buses.

Volvos were introduced in the year 2006 as part of the BMTC drive for better quality of transport.. This was during the peak IT boom and the settling of people all over India in various posh/urbane areas of Bangalore was the norm. Today, the Volvo buses are broadly classified as Vajra and Vayu Vajra services. The Vayu Vajra services enable connectivity from different suburbs to the Bangalore International Airport, while the Vajra services operate between suburbs in Bangalore. Volvos are a huge hit with commuters in Bangalore because of the experience that they offer to commuters.

Fig 2 Interiors of a volvo bus

Micro and Local environment for BMTC Volvo Product specifications The BMTC Volvo buses have the following features:-

Volvo B7R lightweight engines and uncomplicated chassis Euro III emission confirming With kneeling mechanism Collapsible exit floor Fully air conditioned Safety ensuring brakes and suspension system, gives minimal jerks Coolant level, oil level, brake and engine monitoring system Electronic information panel and fault alert system for drivers Highly luxurious interior ambience with very comfortable seats, adequate space for placing luggage, sufficient grips for passengers, FM radio and speakers and stops display board in the bus

Price specifications The BMTC Volvo pricing is done based on stages between the start and the end points. A stage is completed a logical point on the journey is reached, such as a major terminus. The fares of each stage are given as below:Revised w.e.f Stag Stage 25/26.06.20 e 10 Fares of No No Vajra Volvo 1 10 9 2 10 10 3 15 11 4 25 12 5 30 13 6 30 14 7 35 15 8 40 16 Fig 3 Stage by stage fares of a Revised w.e.f Stag 25/26.06.20 e 10 Fares of No Vajra Volvo 40 17 45 18 45 19 50 20 50 21 55 22 55 23 60 24 Volvo Vajra service Revised w.e.f 25/26.06.20 10 Fares of Vajra Volvo 60 65 65 70 70 75 75 80

Even though the fares may be 2-2.5 times that of an ordinary BMTC bus, the Volvo buses are filled to capacity on weekdays in the IT routes. The bus seating capacity is 41 seats, but the count of passengers goes up to as much as 101 in the peak hours. The collections per day in the bus route 335E ranges from Rs 8000-Rs 12000. The below graph shows the growth in the earnings of the BMTC Volvo services per kilometer:-

Fig 4 Fare realization of Volvos per km till Aug 2011

The operational costs incurred are a fixed diesel cost and variable cost of running, the figures being Rs 21 and Rs 26(as of August 2011). Thus, the profits per km are Rs 52 Rs 47 = Rs 5 per Km. The below chart shows a comparison of fares between Autos and Volvos from Krishnarajapuram (located close IT suburbs such as Whitefield and Marathalli) to Hebbal (A point enroute the city centre and also on the way to the Bangalore International Airport):-

Fig 5 Comparison of fares of an Auto and a BMTC Volvo from Krishnarajapuram to Hebbal

The comparison of price between Volvos and other modes of transport such as taxis or hired cabs also follows a similar pattern. This shows that the Volvos clearly enjoy a price advantage in the minds of the commuters. The below is a survey response taken by 100 software engineers regarding their preferences of travel from a start point to an end point given Volvo coverage between these points.

Fig 6 Travel preferences of 100 software engineers interviewed

The above response shows the kind of hit that BMTC Volvos have become, especially in the IT sector. Place availability/utility The BMTC website gives the below schedules of operations for the various routes of Volvo connectivity in Bangalore. If a user googles out BMTC Volvo routes or directly navigates to the BMTC website http://bmtcinfo.com/site/BSBusServicesRouteDetails.jsp? bsserviceid=2, he is given the detailed routes of operation of the Volvos. A sample of the list is shown below:Route Origin Destination Via places

No. 333P 333R 333T 333W 333Z 335E 335EA Majestic (KBS) Majestic (KBS) Nagarabhavi BDA Complex Majestic (KBS) Mahalakshmi Layout Majestic (KBS) Yeshwantpura Bus Station ITPL Marathalli Bridge Kadugodi Bus Station Dodda kanneli wipro ITPL Kadugodi Bus Station ITPL Corporation, Military Accounts, HAL Main Gate, Marathalli, Kundalahalli Gate, White Field Post Office, Sri Satya Sai Hospital, ITPL Maharani's College, Corporation, Mayo hall, Domlur, HAL Main Gate, Marathalli, Marathalli bridge. Nagabhavi BD Complex, Chandra Layout,Sujatha Talkies, KBS, Corporation, Mayo hall, Domlur, HAL, Kundalahalli Gate, Satya sai Hospital, Hopefarm, Kadugodi Bus Station KBS, Mayohall, Marathahalli Bridge, Kadabisanhalli, Jn of Sarjapura Road, Dodda Kannelli Rajajinagar 1st Block, Sujatha Talkies, Coporation, Mayo hall, Domlur, Manipal Hospital, HAL Main Gate, Marathalli Bridge, Kundalahalli gate, Graphite India, Sathya Sai Hospital, ITPL Mayo Hall, Manipal Hospital, HAL,AECS Layout, ITPL Malleshwaram 11th cross,Anand Rao Circle, Mayo hall, Domlur, Mayo Hall,HAL Main Gate, Marathalli, Kundalahalli gate, AECS layout, Graphite India, ITPL

Fig 7 Volvo routes of operation (sample)

The schedules help commuters to help get buses from nearest boarding points with ease. Also, the site gives the timings of the routes under the Timings section, a sample of which is given below:Route No. Origin Destinatio n Departure From Origin 0700 0720 0740 0800 0815 0830 0845 0900 0930 0940 1000 1020 1050 1055 1110 1125 1145 1305 1325 1400 1430 1445 1500 1525 1610 1630 1700 1705 1750 1830 2135 0800 0830 0930 1000 1030 1155 1210 1225 1255 1355 1410 1430 1455 15000 1620 1715 1720 1820 1825 2015 0530 0545 0610 0620 0630 0640 0650 0655 0700 0720 0725 0730 0740 0750 0800 0805 0810 0820 0825 0835 0845 0850 0855 0900 09000 0905 0915 0925 0925 0945 10005 1010 1015 1015 1025 1035 1045 1050 1055 Departure From Destination 0545 0740 0810 0820 0840 0900 N 0920 0935 0950 1020 1100 1115 1145 1205 1235 1240 1255 1310 1450 1425 1540 1545 1600 1615 1620 1630 1710 1730 1750 1825 1840 1855 1900 1910 1950 0700 0730 0830 0900 0930 1030 1045 1100 1135 1255 1310 1325 1355 1400 1455 1510 1530 1620 1720 1825 1915 0530 0600 0710 0735 0740 0750 0800 0800 0820 0840 0845 0850 0850 0900 0910 0925 0925 0930 0940 0945 0950 0955 1000 1005 1010 1015 1025 1030 1050 1055 1100 1105 1115 1125 1135 1145 1155 1205 1215 1225

333P

KBS

ITPL

333R 335E

KBS KBS

Marathalli Kadugodi

1105 1135 1220 1320 1405 1430 1450 1525 1615 1635 1725 1740 1755 1850 2130
Fig 8 Volvo timings of operation (sample)

1115 1120 1130 1140 1145 1210 1230 1250 1310 1330 1340 1350 1410 1415 1420 1435 1445 1450 1455 1500 1510 1545 1600 1605 1620 0625 0630 1645 1655 1715 1725 1730 1735 1740 1745 1755 1805 1835 1840 1920 2100 2115 2135 2140 2200

1240 1300 1330 1420 1455 1530 1555 1615 1635 1700 1730 1800 1840 1900 1930 2030

1245 1250 1255 1305 1310 1320 1345 1400 1410 1430 1440 1450 1500 1510 1520 1540 1545 1550 1600 1605 1610 1620 1625 1630 1640 1645 1650 1710 1720 1725 1740 1750 1755 1805 1810 1820 1845 1850 1855 1905 1910 1920 1950 2000 2005 2100 2245 2305

The coverage of the Volvo schedules ensures that major residential areas are connected to the IT suburbs throughout the day. Commuters need to just reach the nearest point of connectivity to board the buses. The Volvos that link major areas such as Majestic (Designated as KBS or Kempegowda Bus Station in the lists above) and ITPL run even into late nights to ensure connectivity. The scheduling is done in such a way that all major residential areas in the city are connected to the suburbs by at least one bus route. Promotions The promotions that are offered by the BMTC include:1. 2. Concessions for regular commuters in the form of daily and monthly bus passes The passes are economically more viable as compared to repeat ticket purchases, hence it works out for commuters who use Volvos on a regular basis. Bus Day initiatives This is a public initiative taken by the BMTC to encourage the public to take the bus instead of personal modes of transport. Advertisements in newspapers and the FM radio help spread awareness about this. Typically, Bus Day is observed on the 4th of every month. ORRCA initiatives There are a number of software companies/IT parks located along the Outer Ring Road of Bangalore city. Thus, these companies have formed a tie up with the BMTC Volvos by forming the Outer Ring Road Companies Association (ORRCA). The BMTC releases Volvos which companies that belong to the ORRCA can use to commute to work and back home. The Volvos are run exclusively for these employees without allowance for the general public.

3.

Macro Environment for Bangalore Transport services Technological revolution seen towards the dawn of last century has changed the fundamental way of life for many of us, starting from where we work, how we live and what we need. The new economies created in developing countries like India brought in rapid urbanization resulting in unprecedented growth leading to urban sprawl, traffic congestion, etc, with increased demand to services and a higher quality of life. The story of Bangalore is a classic anecdote of how this revolution has rapidly changed the demographic environment of the city brought in a demand for better standard of living. Indication for 2011 census show, Bangalore, as the third largest city of the country with its population doubling over last decade, is at 10 Million and growing. Comparative trends with regard to employment, income & literacy indicate higher rates compared to other cities. The huge ingress of crowd from various parts of the country is attributed to its unprecedented growth of software and service industry making it one of the fastest growing cities of the world. This city is no more a state capital but an international metropolis. All these have brought a tremendous stress on the state of infrastructure in the city. Rising traffic congestion is one of the major problems. This is due abnormal increase (>200%) of vehicles registered in Bangalore over last decade which is more than two times of the growth of its population. 41% of the people use public transportation, while 35% prefer private motorized transport. The private vehicles occupy 87% of the traffic on the roads as against 2% of public transport. This steep increase has been attributed to Bangalores increasing incomes, preferences of transport of the 20-30 year old and the need for adequate public transport system matching to social preference. The changing needs of the city very well addressed by introduction of the ultra-posh Volvo services by BMTC service. The ambience, comfortable seating, low ground clearing and fully air conditioned offers a much greater experience than many private motorized transport, since one need not take the stress of driving . Regular cleaning and maintenance ensures that the needs for more hygiene conscious crowds is met and ensures that the buses were not tampered or littered. Bangalores economy of 52,346 crore makes it one of the major economic centers in India, with the cities exports totaling to about 80% of the economy. With the per capita income of

about 74,709 it is the third largest hub for highest net worth individuals. There are about 10000 dollar millionaires, 60000 super rich people. Last decade saw about 200% growths in employment bringing in about 300% growth in incomes. Citys economic development was seen due to the growth over several manufacturing and service industries over last decade. With increased incomes the focus started to shift towards better quality of life needing. The spending patterns indicate that the growing affluent middle class of the city now need better quality of transport for their daily commutation. The better quality includes access, hygiene, comfort, status orientation, social preference, English language usage etc have become a mandatory need for transport. Majority of the commuters in BMTCs Volvo service are from IT or ITES middle and the upper middle class crowd, who are willing to pay a premium for the better quality of transport. With English more commonly used, along with local language, the language barrier felt by the migrating crowd from other parts of the country was reduced. The Volvos now equipped with LED display boards, which are clearly visible at all the times of the day(refer to Fig1). The bus number, the start point, the end point and the route via the bus commutes is clearly in English on the bus display board. While the city saw great growth in population, employment, incomes one area which cannot be grown in that fold are the natural resources. The outer suburbs of Bangalore have turned into densely populated hubs, needing a close connectivity to inner parts of the city. The growth of vehicular population has not only created traffic congestion problems, but also has increased pollution levels for both noise and air. The huge real estate turnout over suburbs has curbed the greenery converting the garden city into a complex concrete hub, while there is an increasing social awareness of the problem, people are weighing it against the comfortable transport that personalized vehicles provide. With the recent triumphs in technology the environment around us is drastically changing. We are now able communicate with great ease with people thousands of miles away and so is the access to information across the world, it now takes few seconds over the internet to find answer to almost any question one has and all this within the mini mobile device in your palm. The growing educated upper/middle classes of the city is the first recipients of this advancement and are looking upto the transport system to catchup, the gap between the need for more information on transport facilities in the city and available information started widening and the authorities started getting sensible around this. Today you could find the schedule of the BMTC Volvo buses on internet, find the closest stop and board in a fully air conditioned ambience, almost noiseless, negligibly bumpy riding experience. Its not uncommon to find many working with their laptops and wireless internet/3G connectivity.

Format The Volvos being services offered by the BMTC operate as an Exclusive retail format (other types org, MBO are not applicable). Customer profile Volvos have customer profiles that consist of a large chunk of the industrial workforce that commutes from and to various suburbs in Bangalore. Customers are mainly from the middle class and upper middle class backgrounds and use the Volvos as their preferred mode of transport. A sample of the commuter demography observed in a Volvo in a one way journey from Majestic to Whitefield is as below:-

As seen by the above sampling charts, the customer profile of the Volvos is predominantly the IT/services executives belonging to the middle/upper middle class backgrounds. Others such as Government officials, college students and retired persons/homemakers also use the Volvos on a regular basis. One main point to note based on the samples is that a large chunk of the Volvo users use the buses to commute daily. This shows the kind of reach that the Volvos have with this class of people, and also the comfort with which commuters have accepted the Volvos. No other mode of transport can have the kind of reach that these Volvos have, as of today. SWOT analysis for Volvo

Strength Excellent public image, habit behaviour by commuters who travel to IT suburbs Tie ups with more company associations for employee commuting Opportunity
Consumer reaction to stockout

Weakness Reach not complete to all areas of Bangalore, though very good in IT suburbs The arrival of Bangalore Metro, car pooling and company cabs Threat

Brand switch to other modes of transport As highlighted by the above sections, the BMTC Volvo is a brand by itself. It is well accepted, has very high public reach and is affordable for the class of commuters who predominantly use it. If there is a stockout, then that cost of stockout is very high. Commuters were at the picking stage of behavior when the Volvos were first introduced, and have now come to a stage of habit. A brand switch to other modes can possibly include:1. i. ii. Ordinary BMTC buses Commuters can switch to these buses, but the likelihood is low. Autos/taxis Because of the steep prices that these modes charge, the switching to these options is also highly unlikely.

iii.

Bangalore Metro Though at its stage of infancy, the Bangalore Metro is likely to emerge as the biggest threat for the Volvos in the coming months. The Government has planned a stage by stage implementation of the Metro rail routes that covers majority of the areas in Bangalore city. Once this project completes, a Metro train can drastically help cut journey timings and also will provide point to point connectivity, thus acting as a major threat.

Cancellation Cancellation can be defined in terms of the non availability of the Volvos for a particular area in a day (and thus aggregating to all areas and to all the Volvos). If a commuter wants to travel from Majestic to Whitefield, in route 335E, at 10 A.M in the morning, and there are no Volvos in the bus stand, then he cancels that journey or may use other modes of transport to reach his destination. In any case, the cancellation has an economic impact for Volvo operations. The average revenue collections for the route 335E are around Rs 8000 Rs 12000 in a day (source Bus conductors of route 335E), and on average 4 schedules are operated. Let us assume a maximum collection of Rs 12000. Assuming that one schedule has half of the commuters cancelling the use of Volvo, then:Average revenue per schedule = Rs 12000/4= Rs 3000 Lost revenue for the schedule because of half of the commuters cancelling = Rs 3000/2= Rs 1500 The above example highlights the cancellation effects on the collections in a day. For one bus, four schedules generate a revenue of Rs 12000 in day. The lost revenue(or cost of stockout), as shown above for half of the commuters cancelling the journey in a schedule is Rs 1500, or 12.5%.

Cost of stockout analysis The cost of stockout analysis is done based on the statistics of the bus schedules as available with the Divisional Traffic Officer (DTO), BMTC. The stats are as of August 2011. The data available for the calculations are as follows:The total number of Volvos operated by BMTC (Vajra and Vayu Vajra airport services) The number of kilometers covered in a day by all Volvos The fare realization of the Volvos per kilometer(in Rs) The average revenue of all the Volvos in a day per bus(in Rs) Assuming that the Volvos do not operate on a day, then the loss of revenue (or cost of stockout) for the BMTC Volvo division (in Rs/day) = The average revenue of all the Volvos in a day per bus(in Rs) X The total number of Volvos operated by BMTC (Vajra and Vayu Vajra airport services) 471 92307 52 10191.0 2

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