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.

.1% in freight loading corresponds to average annual growth of 8-9% of growth in GDP.Average annual growth of 8.Backbone of railway revenues (contributes 70% of the revenue). .Consists of various classes of travel with different prices according to various amenities.Sikkim and Meghalaya are the only 2 states that are not connected by rail. .Generates 30% of the revenue.Products offered • Passenger services: . • Freight services: . .

Consumer purchase decision process Pre Purchase Stage Service Encounter Stage Post Encounter Stage .

alternate sources. • Increase in the purchasing power • Reduced time of travel guaranteed by air travel .Change in Scenario Then Now • IR was the only mode of cheap transport • Functioning was according to the Supply concept • Availability of cheap.

Target Market Analysis .

Based on Usage • The customers can be segmented into broad market or business groups such as.Long Distance Passengers – Freight Customers – Parcels and Express Freight Customers – Commercial Property Lessors – Others(e.Who are the customers? .g Advertisers using railway property) . – Commuters – Medium.

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

Who are the customers? • • • The Lower Income group (LIG) (< Rs. 3 lakh p.a) LIG Travel Tourism Yes No MIG Yes (Intermediate Distances) Yes HIG No Yes . 3-10 lakh p.a) The High Income Group (HIG) (> 10 lakh p.Based on Income The Middle Income Group (MIG) (Rs.a) .

Dynamic Pricing Decreasing the fare in AC 3/2 tier Cyber cafés and ATM in most Stations E tickets made cheaper . Garib Raths • Middle Income Group – – – – – Super Fast trains. of unreserved compartments in newer trains Increase in the no. of existing trains Replacing the wooden seats with cushioned ones.Marketing Strategies • Lower Income Group – – – – Increase in the no.

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) .

• Limited to Metro cities • 125 airports including 11 international airports Ports • 12 major and 187 minor and intermediate ports along 7500 km coastline .Competition Analysis Aviation Roadways • Carry 90% of the country’s passenger traffic and 65% freight. • Quality and maintenance of the roads are subjected to locations.42 mn kms. • Road network of over 4. . • Largely Underdeveloped.

THE 4P’s .

usually stop at all stations and have unreserved Suburban trains seating accommodation. Stops at relatively important intermediate stations. Superfast Express Average speed greater than 55 km (34 mi) per hour. These trains operate in urban and suburban areas. There are only a few stops on a Rajdhani route.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. Monthly and quarterly tickets for suburban trains are subsidized. . Express and Mail trains Most common kind of trains in India. Passenger and Fast Passenger Slow trains that stop at most stations along the route. The tickets for these trains have an additional superfast surcharge. They have only seats and not berths. Air-conditioned trains linking major cities to New Delhi. These trains contain AC three-tier and AC chair car coaches with fares less than the fares for the same classes in other trains. The trains generally have unreserved seating accommodation but some night trains have sleeper and 3A coaches. These are air-conditioned and non-airconditioned respectively intercity trains for day travel.

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 .Price • Consumer groups – First class. sleeper. second class.

Lucknow. Tinsukia Delhi. Bhopal. Asansol. Nagpur Adra. Ranchi Hubli. Lumding. Ahmedabad. Ambala. Varanasi Jaipur. Mysore Chennai. Salem.Place SR. Agra. Tiruchirappalli. Visakhapatnam Howrah. Solapur. Madurai. Pune. Rangia. Trivandrum(Thiruvananthapuram) Jabalpur. Katihar. Palakkad. Sealdah. Firozpur. Bhusawal. 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. Guntakal. Hyderabad. Sonpur Khurda Road. Jhansi Izzatnagar. Guntur. 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. Bhavna gar. Ratlam. No 1 Name Central Route KMs 3905 Divisions Mumbai. Vadodara . Bikaner. Kharagpur. Nanded. Bangalore. Moradabad Secunderabad. Raipur. Chakradharpur. Lucknow. Rajkot. Samastipur. Sambalpur. Ajmer. Kota Mumbai Central. Jodhpur Alipurduar. Dhanbad. Malda Allahabad. Mughalsarai.

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

price. Post Encounter Stage • Compare Experience with expectation – Satisfied / Dissatisfied • Affects the customers future decision • Shares experience and influences decision of potential customers . • Evaluating the mode of travel based on time of journey.Purchase Decision Process Pre-Purchase Stage • Recognise the need to travel and the destination. 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.

Railways performs Service Correctly. 3. Staffs of Railways are neat in Appearance. Display Boards etc are visually appealing. 4. 2.Service Quality Attributes (Valued on) TANGIBLES Railway has modern looking equipment & infrastructure at stations and trains. Time Tables. Railways adheres to punctuality of Trains. . seating and Toilets are OK. When you have problems Railways shows sincere interest in solving it. Railways are accurate in timing of Trains. RELIABILITY Railways are accurate in Record Keeping. Railways Physical Facilities like Lighting.

You feel safe in your travel. Railway employees are courteous with customers.Service Quality Attributes RESPONSIVENESS Railway staffs tell exactly when services will be performed. Railway employees have knowledge to answer customer questions. It is easy to plan a railway journey. Railway employees are always willing to help. Railway employees are never too busy to respond to customer requests. . ASSURANCE Indian Railways is trustworthy. EMPATHY Railways give individual attention. Railway employees give personnel attention. Railway employees give prompt service to customers. Railway operations are convenient to passengers.

05 -3.25 2 2.Service quality gap analysis Perception – Expectation = Difference 7 Perception Expectation Difference Dimension Avg.92 5.61 5. Avg.9 5. Reliability Responsive ness 2.87 -2.68 -2. 6 5 Tangibles 2.55 1 Assurance 3.8 6.76 4 Perception Avg.45 -2.54 .5 -2. 3 Expectation Avg.96 5.26 0 Empathy 2.

The most satisfying dimension is Assurance. . The least important dimension is Responsiveness.Service quality gap analysis Gap in the Reliability is higher which means. The most important dimension is Reliability. it is Railway’s weakest dimension. The least satisfying dimension is Reliability.

Demand for facilities may increase due to delay in arriving time of trains at station. frequent travelling etc.Managing Demand And Capacity Travelling in peak hours is especially high. For increasing infrastructure as well as maintaining the existing infrastructure. 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. 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 . labor is a must require input. Variables like weather conditions cannot be controlled. weather conditions. Labor supply is not same every time and is dependent on the business cycle.

Concession for students Cleanliness . Facilities Availability of monthly passes and quarterly passes.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.

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” .

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

. • They also need to work a lot to manage their demand and capacity by proper utilization of their resources.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.

Thank You By Group 10 .

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