A Study of Indian Railways

- In the context of Marketing of Services

Introduction
The 4th largest railway network in the world. Carries over 30 million passengers and 2.8 million tons of freight daily. The 2nd largest commercial or utility employer in the world with more than 1.36 million employees. Owns 240000 (freight)wagons,60000 coaches and 9000 locomotives.

Products offered
Passenger services: - Generates 30% of the revenue. - Sikkim and Meghalaya are the only 2 states that are not connected by rail. - Consists of various classes of travel with different prices according to various amenities. Freight services: - Backbone of railway revenues (contributes 70% of the revenue). - Average annual growth of 8.1% in freight loading corresponds to average annual growth of 8-9% of growth in GDP.

Consumer purchase decision process

Pre Purchase Stage Service Encounter Stage Post Encounter Stage

Change in Scenario
Then Now

IR was the only mode of cheap transport Functioning was according to the Supply concept

Availability of cheap, alternate sources. Increase in the purchasing power Reduced time of travel guaranteed by air travel

Target Market Analysis

Who are the customers? - Based on Usage

The customers can be segmented into broad market or business groups such as,
Commuters Medium- Long Distance Passengers Freight Customers Parcels and Express Freight Customers Commercial Property Lessors Others(e.g Advertisers using railway property)

Marketing Strategies
Focus on the consumer segment that spends 12-18 hours in travel. Price points should be lesser than the low cost airlines. Recover market share through a combination of tariff rebalancing and quality enhancement measures.

Who are the customers?

The Lower Income group (LIG) (< Rs. 3 lakh p.a) - Based on Income The Middle Income Group (MIG) (Rs. 3-10 lakh p.a) The High Income Group (HIG) (> 10 lakh p.a)

LIG Travel Tourism Yes No

MIG Yes (Intermediate Distances) Yes

HIG No Yes

Marketing Strategies
Lower Income Group
Increase in the no. of unreserved compartments in newer trains Increase in the no. of existing trains Replacing the wooden seats with cushioned ones. Garib Raths

Middle Income Group

Super Fast trains. Dynamic Pricing Decreasing the fare in AC 3/2 tier Cyber cafs and ATM in most Stations E tickets made cheaper

Share of Different Modes of Transport

6% 6% 17%
Railways Roadways Water Transport Air Transport

71%

Year Railways

2001-02 5093

2002-03 4971

2003-04 5112

2004-05 5475

Airways

1281

1332

1454

1817

No of Passengers (in Millions)

Competition Analysis

Aviation

Roadways

Carry 90% of the countrys passenger traffic and 65% freight. Road network of over 4.42 mn kms. Quality and maintenance of the roads are subjected to locations.

Limited to Metro cities 125 airports including 11 international airports

Ports

12 major and 187 minor and intermediate ports along 7500 km coastline . Largely Underdeveloped.

THE 4Ps

Product
Train Duronto Express Rajdhani Express Shatabdi Express and Jan Shatabdi Express Garib Rath Description Non-stop point to point trains connecting metros and major state capitals. Air-conditioned trains linking major cities to New Delhi. There are only a few stops on a Rajdhani route. These are air-conditioned and non-airconditioned respectively intercity trains for day travel. They have only seats and not berths.

These trains contain AC three-tier and AC chair car coaches with fares less than the fares for the
same classes in other trains.

Superfast Express

Average speed greater than 55 km (34 mi) per hour. The tickets for these trains have an additional superfast surcharge.

Express and Mail trains

Most common kind of trains in India. Stops at relatively important intermediate stations.

Passenger and Fast Passenger

Slow trains that stop at most stations along the route. The trains generally have unreserved seating accommodation but some night trains have sleeper and 3A coaches. These trains operate in urban and suburban areas, usually stop at all stations and have unreserved

Suburban trains

seating accommodation. Monthly and quarterly tickets for suburban trains are subsidized.

Price
Consumer groups
First class, second class, sleeper, AC Tatkal Reservation

Age Based Pricing

Concession for senior citizen Half ticket for children below 7 years

Quantity Based Pricing

Prices for single ticket Prices for monthly/quarterly pass Bulk booking discount for seasonal trains

Place
SR. No 1 Name Central Route KMs 3905 Divisions Mumbai, Bhusawal, Pune, Solapur, Nagpur

2
3 4 5 6 7 8 9 10

East Central
East Coast Eastern North Central North Eastern North Western Northeast Frontier Northern South Central

3628
2572 2414 3151 3667 5459 3907 6968 5803

Danapur, Dhanbad, Mughalsarai, Samastipur, Sonpur

Khurda Road, Sambalpur, Visakhapatnam Howrah, Sealdah, Asansol, Malda Allahabad, Agra, Jhansi Izzatnagar, Lucknow, Varanasi Jaipur, Ajmer, Bikaner, Jodhpur Alipurduar, Katihar, Rangia, Lumding, Tinsukia Delhi, Ambala, Firozpur, Lucknow, Moradabad Secunderabad, Hyderabad, Guntakal, Guntur,

Nanded, Vijayawada
11 12 13 14 15 16 South East Central South Eastern South Western Southern West Central Western 2447 2631 3177 5098 2965 6182 Bilaspur, Raipur, Nagpur Adra, Chakradharpur, Kharagpur, Ranchi Hubli, Bangalore, Mysore Chennai, Tiruchirappalli, Madurai, Palakkad, Salem, Trivandrum(Thiruvananthapuram) Jabalpur, Bhopal, Kota Mumbai Central, Ratlam, Ahmedabad, Rajkot, Bhavna gar, Vadodara

Promotion
Monopoly No aggressive promotions. Promotion through different medium.
www.indianrail.gov.in Banners and Hoardings e Ticketing websites IRCTC branding on all allied services Promoting the Luxury class Palace on Wheels, Deccan Odyssey

Purchase Decision Process

Pre-Purchase Stage Recognise the need to travel and the destination. Evaluating the mode of travel based on time of journey, price, availability etc.

Service Encounter Stage

Point of purchase Online/Counter Decision made based on past encounter Customer experience starts at the entrance to the railway station. Post Encounter Stage Compare Experience with expectation Satisfied / Dissatisfied Affects the customers future decision Shares experience and influences decision of potential customers

Service Quality Attributes (Valued on)

TANGIBLES
Railway has modern looking equipment & infrastructure at stations and trains. 2. Railways Physical Facilities like Lighting, seating and Toilets are OK. 3. Staffs of Railways are neat in Appearance. 4. Time Tables, Display Boards etc are visually appealing.

RELIABILITY
Railways are accurate in Record Keeping. Railways are accurate in timing of Trains. Railways performs Service Correctly. When you have problems Railways shows sincere interest in solving it. Railways adheres to punctuality of Trains.

Service Quality Attributes

RESPONSIVENESS
Railway staffs tell exactly when services will be performed. Railway employees give prompt service to customers. Railway employees are always willing to help. Railway employees are never too busy to respond to customer requests.

ASSURANCE
Indian Railways is trustworthy. You feel safe in your travel. Railway employees are courteous with customers. Railway employees have knowledge to answer customer questions.

EMPATHY
Railways give individual attention. Railway operations are convenient to passengers. Railway employees give personnel attention. It is easy to plan a railway journey.

Service quality gap analysis

Perception Expectation = Difference
7

Perception Expectation Difference Dimension Avg. Avg.

Tangibles

2.92

5.68

-2.76

4 Perception Avg. 3 Expectation Avg.

Reliability Responsive ness

2.8

6.05

-3.25

2.9

5.45

-2.55

Assurance

3.61

5.87

-2.26

Empathy

2.96

5.5

-2.54

Service quality gap analysis

Gap in the Reliability is higher which means, it is Railways weakest dimension.

The most important dimension is Reliability.

The least important dimension is Responsiveness.

The most satisfying dimension is Assurance.

The least satisfying dimension is Reliability.

Managing Demand And Capacity

Travelling in peak hours is especially high. Non-frequent travelers also prefer to travel in nights to save the day time for work. Demand patterns can be analyzed using large available data with Indian railways.

For increasing infrastructure as well as maintaining the existing infrastructure, labor is a must require input. Labor supply is not same every time and is dependent on the business cycle.

Demand for facilities may increase due to delay in arriving time of trains at station, weather conditions, frequent travelling etc. Variables like weather conditions cannot be controlled, so we see a random demand fluctuation in use of facilities

Capacity Constraints Time Labor Facilities

Demand patterns Charting demand patterns Predictable cycles Random demand fluctuation

To manage Capacity:
Nature of Constraints
Time

How to overcome it?

Increasing the frequency of trains at peak times Enhancing speed and safety

Labor

Maintaining proper supply of labor Replacing machines with human labor.

Facilities

Availability of monthly passes and quarterly passes, Concession for students Cleanliness

Service Triangle
INDIAN RAILWAY
Training Inst & PREM Promotion: Palace on wheels

Employee Website
Welfare Plans & Perf Rewards

Internal Marketing

Service Triangle

External Marketing

Websites & SMS

Price based consumer

EMPLOYEE
Customer Care training Inst

Interactive Marketing

PASSENGERS May I help u

Promotion
http://www.youtube.com/watch?v=rSiTde5U MVI

Conclusion
SERVQUAL scale was developed to maesure the service quality in railway passenger service. The results showed that the railways have to improve their service quality in all the areas to meet the customers expectation. They also need to work a lot to manage their demand and capacity by proper utilization of their resources.

Thank You

By Group 10