Marketing

Strategy and
Value Innovation
Summer 2020

Karachi Circular
Railway

Submitted By:
1. Bilal Saeed 20181– 23595

Submitted To:
Dr. Amir Saeed
TABLE OF CONTENTS
Executive Summary..................................................................................................................................... 2

History of KCR.......................................................................................................................................... 3

Drawbacks in Operations of KCR............................................................................................................. 3

Evolution and Trends of Public Transport in Karachi.................................................................................. 6

Pioneers, Migrators and Settlers Map.................................................................................................... 8

AS IS strategy Canvas.............................................................................................................................. 9

The Value Innovation of KCR................................................................................................................. 10

Looking Across Substitute Industries................................................................................................ 10

Looking Across Strategic Groups Within Industries..........................................................................10

Looking Across the Chain of Buyers.................................................................................................. 10

Looking Across Complementary Product and Service Offerings.......................................................11

Looking Across Functional or Emotional Appeal to Buyers...............................................................11

Looking Across Time.......................................................................................................................... 11

Buyers Utility Map................................................................................................................................. 12

The Three Tiers of Non-Customers........................................................................................................ 13

TO BE Strategy Canvas........................................................................................................................... 14

Conclusion................................................................................................................................................. 16

1|Page
 KARACHI CIRCULAR
RAILWAY
Executive Summary
There are few cities in the world of the size of Karachi without major urban rail networks.
For Karachi to function effectively its transport systems must also function effectively. At
the present time neither the transport systems nor the city performs at their optimum
levels.
The past failures to plan and develop mass public transit systems in line with the city's
urban development is now compounded by the significant growth in the levels of car
ownership and usage.
The congestion and gridlocks observed on the roads of Karachi indicate that the city is now
facing a major hurdle to its economic performance. Traffic congestion causes direct
economic losses through time value, traffic accidents and environmental amenity. The
increasing frequency of these major gridlocks that can last for significantly long periods
will adversely affect the economic competitiveness of the city vis-à-vis other cities in the
region.
Of the efforts that are currently being made to resolve the problems, the city authorities
had put in some bus lanes on several major corridors. However, these solutions are
unlikely to stem the growth of motorized forms of personal transport.
Karachi Circular Railway has a vital role to play in the Karachi urban transportation plan,
however it should be recognized at the outset that its impact will be of a limited nature
due to the current scale of the transportation problems that exist in Karachi.

2|Page
History of KCR
Karachi Circular Railway operations in timeline of history
Date Event
1964 KCR opens from Drigh Road to Wazir Mansion
1970 Railway is extended from Wazir Mansion to Karachi City.
Operation begins for the circle section (30 km of single-track with
1970's double-track right of way) and the main line section (14 km of
double track).
KCR operates 24 trains per day and the main line operates 80 trains
1980's per day, providing transportation to more than 6 million passengers
per year.

December 1999 Operation stops.

March 2005 Operation is restored using a main line to Karachi City.

May 2005 Operation is restored to Wazir Mansion on KCR.

Drawbacks in Operations of KCR

In a report titled "Report of the Task Force on Revival of Karachi Circular Railway, published in
November 2004" identified the following reasons for the cessation of operations of KCR which
were:
i) Longer running time
ii) Less frequency of trains
iii) Lack of punctuality
iv) Inadequate rail-road integration
v) Short of investment in rail infrastructure and rolling stock
vi) Unjustified priority to develop road network by concerned development agencies due to
urban sprawl
There have been many attempts executed by the authority to restart this mass transit
system in Karachi but unfortunately people of the largest city of Pakistan still suffering. This
report is based to understand the evolution of Karachi transport industry and to analyze the
industry trends. In this report, the value innovation framework has been discussed in which
the possible opportunities of competitive advantages are explored and in the end a to be
strategy is proposed through which a competitive edge over the market will be achieved.

3|Page
Lines of KCR
Main line Loop line Malir line
Karachi City Depot Hill Malir Colony
Karachi Cantonment Karachi University Malir Cantonment
Chanesar Urdu College  
Karsaz Gilani  
Drigh Road > Loop line Liaquatabad  
Drigh Colony Nazimambad  
Jinnah International
North Nazimabad  
Airport
Malir > Malir line Orangi  
Landhi Junction Manghopir  
Jummah Goth Site  
Bin Qasim Port Shah Abdul Latif  
Gaddar Baldia  
Dabheji Lyari  
  Wazir Mansion  
  Karachi Port Trust Halt  

Route Map of KCR

Evolution and Trends of Public Transport in Karachi

4|Page
Karachi is the only mega city in the world without a rail based mass transit system. The KCR,
which acted as a suburban railway system and started its operation in 1964, used to serve
as a cheap, reliable alternative mode of public transport for the urban poor. The KCR was
very useful and common transport for middle and lower-middle class citizen of Karachi. Due
lack of management and corruption, this useful transport was finally closed in 1999. Along
all this, by 1984 mini-buses became the preferred way of traveling in the city. With the
growing population, the flow of traffic increased on Karachi’s roads and the traffic situation
worsened. Today, the road-based public transport system in Karachi is mostly in the hands
of the private sector with very little public sector involvement. The most common mode of
transport is private vehicles (Cars and Bikes). As per Urban Resource Center Karachi, out of
registered vehicles 49.56% were motor bikes and 38.21% we private cars in 2011 and as per
a report of a newspaper, approx. 6,000 cars and 22,000 motor bikes are registered every
month in the city.

Types of vehicle Number Percentage

Mini-buses 15,807 (8,773 in 1998) 0.60%
Buses 6,506 (14,854 in 1998) 0.25%
Taxi 47,165 (13,613 in 1998) 1.80%
105,684 (23,337 in
Rickshaw 4.04%
1998)
Motorcycles 1,296,481 49.59%
Cars 998,920 38.21%
Others 144,017 5.51%
Total* 2,614,580 100.00%
*source (http://www.urckarachi.org/downloads/Registered%20vehicle%202002%20-
%202011.pdf)

The public bus transport system constitutes only 0.25% of the total vehicle fleet and serves
more than half of the passenger demand. The cost of public bus transport is lowest from all
the available transports but They are usually overcrowded and are often operated by
reckless drivers who do not follow the traffic rules due to which people who can afford
better transport avoids travelling through buses.

On the other side, Bus Rapid Transport (BRT) projects has been initiated in the city which
will improve the public transport system in Karachi through efficient and safe connectivity
and reduced journey times, and provide high-quality, accessible and affordable mass
transport. Private ride hailing services such Uber, Careem, Bykea etc., also have large
number of market share in the transport industry of Karachi. The most recent player in this
industry is Airlift and SWVL which provide public transport with the facility of online seat
booking.

5|Page
As per the recent trend of transportation, the mostly used transportation mechanism is
private vehicles. As there is no rail based mass transit system available in the city, the traffic
jams and road accidents are very common in the city.

6|Page
Pioneers, Migrators and Settlers Map
The PMS map is a very useful tool to analyze the industry players based on their position in
the industry. The PMS map has three categories to classify the industry players

Pioneers: This is the category for those players who explored new opportunities in the
industry and have competitive edge over the market.

Migrators: This is the category for those players who are migrating from conventional
business to the new industry opportunities by adopting the recent trends of the industry

Settlers: This is the category for those players who continues their legacy business and don’t
want to follow the recent industry trends.

Following is the PMS map of Karachi transport industry

Pioneers Uber, Careem, Airlift, SWVL, Bykea Karachi Circular Railway

Radio cabs (such as: metrocab, Uber, Careem, Airlift, SWVL,

Migrators
whitecab) Bykea, Radio cabs
Conventional transport
Conventional transport services (such
services (such as: minibuses,
Settlers as: buses, yellow cabs, rickshaw and
yellow cabs, rickshaw and
private conveyance)
private conveyance)

Today Tomorrow

Pioneers: Today, the pioneers of Karachi public transport industry are Uber, Careem, Bykea,
Airlift and SWVL as they introduced online ride hailing service in Karachi. The pioneers of
tomorrow will be KCR as it will be fastest, safest and cheapest mode of transport with online
seat booking facility for its customers
Migrators: Today, the migrators are radio cabs. The provide you the facility on online
booking of the ride but they have their own fleet due to which their operations are limited.
Tomorrow, the ride hailing services and radio cabs will be migrator as they will be not the
fastest, safest and cheapest public transport for Karachiites.
Settlers: Today, the settlers are conventional public transport buses. Rickshaws and yellow
cabs as they are still working on their legacy rickshaw/taxi/bus stand mechanism and if they
continue their operation in the same way, they will stay in settlers’ category in future.

7|Page
AS IS strategy Canvas
The “As is strategy canvas” compares the current situation of the company with market
completion bases on the value factors of that industry. It helps the company to identify their
week points so that company could work over them. It also helps to identify the new value
factors that a company must adopt in order to compete with market.

Karachi transport sector

Buses Private Conveyance
Careem/Uber/Bikea Airlift/SWVL
12
8
Customer experience

4
0
s ce e ce cy ty y
m i m e ed n n li on c it
ja Pr l ti Sp ie ue bi a ti pa
c e e n q l ai ti
z
ca
a ffi av nv Fr
e
Re ig
i
Tr tr Co D
i ce
rv
Se

Value factors

Since KCR is currently not operational so we have compare the competition so that the new
value could be identifies that are needed to be incorporated in KCR revival project .

If we would compare the old KCR with the latest competition, it will be scoring lowest in
terms of travel time, speed, convenience, frequency, service and digitization since the old
KCR didn’t had good features as compare to current competition. KCR would have more
capacity as compared to other transport commute but there is no use if the KCR is not
functional.

Reference: Exploring Karachi’s transport system problems. A diversity of stakeholder perspectives

(Mansoor Raza) http://pubs.iied.org/10773IIED

Towards An Inclusive Public Transport System In Pakistan (Muhammad Adeel, Anthony G.O Yeh and
Zhang Feng)( 2014 (ICTPUM14),)

8|Page
The Value Innovation of KCR
Following are the six pathways through which KCR can innovate value in its services and
can have competitive edge over market competition.

Looking Across Substitute Industries

The substitute of KCR are all the current public transportation mechanism. The value
innovation can be achieved if we eliminate all those factors that are not in favor of KCR
operation and adopt those values factors that are best part of the substitute industries.

If we compare KCR with Airlift and SWVL, then KCR must eliminate its legacy ticket
booths and shall adopt the state of the art online seat booking system just like Airlift and
SWVL so that customer could book its seat online without any hassle.

If we compare KCR with IT industry, then KCR must provide free Wi-Fi hotspot services in
its train so that passenger can utilize their time during traveling.

Looking Across Strategic Groups Within Industries

In the transport industry, the strategic groups are all the current public transportation
mechanisms. In order to innovate value, we must observe the strategic groups and adopt their
best part which can suit KCR.

If we compare KCR with private ride hailing services such as Careem, Uber, Bykea etc.,
KCR must collaborate with ride hailing services to provide pick and drop service from the
KCR station till customer destination.

If we compare KCR with conventional public transport buses, then the fares of KCR should
be comparatively low or equal to those public transport buses. This can be achieved by
introducing loyalty programs to the customer so that customer will get benefit if he travels
more with KCR

Looking Across the Chain of Buyers

The chain of buyers consists of following:

 The purchasers
 The users
 The influencers

The purchaser and user in KCR might be the same but there can be multiple of influencer
which includes the user itself as he will motivate other people in his circle if he is satisfied
with KCR services. The other influencer can government as this is a government project. The
celebrities who will use this mass transit system can also motivate people to use this public
transport.

9|Page
Looking Across Complementary Product and Service Offerings
The frequency of KCR would be very high as train will come to the station in every sixth
minute. KCR will provide an international standard train station for its customer so that its
customer could relax on the station till the train arrives. Furthermore, there would be
mobile charger counter available at station as well as on the train so that travelers could
recharge their mobile phones while they are traveling on the train or waiting on the station.

Looking Across Functional or Emotional Appeal to Buyers

There should be an emotional factor in KCR services that should appeal the customer to use
the KCE services.

In KCR trains, there would be separate traveling arrangements for old age and disable
people so that old age and disable people could travel safely. Also there would be separate
department of lost and found items at every station so that people can inquire for their
belongings that were lost in the train or at station.

The biggest emotional appeal will be the patriotism as KCR is a government project that will
be revived after a very long time. So in order to make it successful, people will prefer to
travel through KCR.

Looking Across Time

As discussed in above section of industry evolution and trends, Karachi have a very limited
public transport mechanism and people are using their private vehicles for transportation.
Since the population of Karachi is more than twenty million and around 24.2 million trips
generated each day so there is a massive need to public transport service that can provide
safe and cheap transportation to the people. So, KCR will be the biggest mass transport
media for the people of Karachi.

10 | P a g e
 Buyers Utility Map

6 Stages of Buyer Experience Cycle

  Purchase Delivery Use Supplements Maintenance Disposal

Customer
       
Productivity  

Simplicity          

6
Utility Convenience          
Levers

Risk          

Fun and
         
Image

Environmental
         
Friendliness

Buyer Utility Map helps manager identifying the product from demand point of view. In
terms of KCR,
 Customer productivity is mentioned in maintenance cycle as it would be covering
day to day need for the customers, which can be effective it can cover up to 700000
customers/day.
 The ticket purchasing system would be simple and on demand basis.
 Convenience of service would be in use as it would be effective to reach from one
place to another in less time and no traffic. But compared to other provide ride
services, which at doorstep, this gives more convenience to consumer
 The infrastructure for shops can be used, providing more business opportunity at
stations.
 Environment can be friendly as roads would be clear, less cars/bikes would lead to
decrease in pollution.
 The red ocean in the market is the transport fare, where the competition is
decreasing their prices. But it cannot get as cheaper as a ticket for KCR. Another
factor is the increasing of substitute which is increasing in Pakistan like Careem,
Uber, Airlift, SWVL and a risk of service reliability can hurt KCR if not investigated.

11 | P a g e
The Three Tiers of Non-Customers

 Soon To Be:
 lower class/upper lower class travelers who want a cheaper alternate for
their day to day travel
 Refusing:
 middle class travelers who prefer Careem/Uber due to their privacy and
getting ride right at their doorstep
 Unexplored:
 Upper class travelers who have their own cars and do not prefer public
transport

Methodology:
5 interviews were conducted with a diverse range of relevant stakeholders. Their
perceptions about KCR and other transport system are documented here. The interviews
were conducted on phone and each interview was approx. 10 to 15 minutes long. Out of 4
interviews, four of them were soon to be customer of KCR while one was refusing.

Maaz – Ur –Rehman (Cell# 0301-8293818)

Maaz – Ur-Rehman is a 24 years old business graduate from IBA university and works in an
ISP (Cybernet). Maaz is a Karachiite and live in Gulistan-e-Johar. He goes to office through
carpooling with other colleges who live nearby his house. In his university life, his
conveyance was public buses and rickshaw. In Maaz’s point of view, the ride hailing services
has changed the way of traveling in recent years. He thinks that conventional public
transport buses shall be ban by government as they are not safe yet the drivers do not

12 | P a g e
follow any proper time table. For KCR, he thinks that if KCR be built as per the standard
announced by KUTC, it will be beneficial for the mass as it will provide good service to
people.

Talha Ahmed (Cell# 0301-8263272)

Talha Ahmed is 32 years old engineer and a business graduate. He works in an ISP
(Cybernet). His residence is at Gulshan-e-maymar. His conveyance to the office is his private
car. As per Talha, it almost takes 50 minutes to reach him home if there is no traffic on roads
but when there is any traffic, it could take more than 1.5 hour to reach home. He thinks that
Airlift and SWVL are the game changer in the transport industry of Karachi as they have
started longer routes. He has traveled in Airlift and SWVL before the COVID lockdown and
his experience was very good with it. For KCR, Talha thinks that the service would be a good
favor for lower and lower middle class.

Syed Junaid Ali (Cell# 0301-8443628)

Syed Junaid Ali is a 34 year old engineer and a business graduate. He works in a Telecom
company (Pak Datacom). His residence is at Federal B. area and his conveyance to his office
is his private bike. His traveling time from home to office is approx. 30 to 40 minutes based
on the traffic. He thinks that public bus transport is very useful for the lower class as
majority of lower class travels through it. He thinks that government should have strict
compliance against the driving license of the bus drivers. For ride hailing services, Junaid
thinks that Uber and Careem has not only offered a good transport services but it has also
created job opportunities in the market. For SWVL and Airlift, he thinks that it’s a very useful
service for students and office going people as it’s a punctual service and safe specially for
females. For KCR, he thinks that KCR will act as backbone for transportation and people will
definitely use this service as it will decrease the traffic on the roads.
Umair Saeed (Cell# 0334-3999208)
Umair Saeed is a 35 years businessman. He lives in PECHS and his office is at Saddar. His
conveyance to his office is his private car. He thinks that existing mini buses are not safe to
travel since they are most of the time over crowded. He said that travelling through Uber
and Careem is easy as you can get the car or bike available right next to your door. He thinks
that Airlift and SWVL are also good services. For KCR, he thinks that its good for those
people who limited travelling. For his needs, he thinks that private car is better option as
gives him ability to move any time at any where he wants.

Bushra Aziz (Cell# she asked not share mobile number)

Bushra Aziz is a 22 years recently graduated engineer. She lives near Shah Faisal colony. Her
conveyance to her university was private van or via public bus. She thinks that private
conveyance is better than public buses as they are usually crowded and also very slow. She
thinks that public buses should be revamped. She thinks that Uber and Careem are best
option for travelling as it allows your loved ones to track your car till you reach your

13 | P a g e
destination. For KCR, she didn’t know much but she thinks that Karachi needs a local railway
system for urban transportation. She said that if the KCR features mentioned by KUTC are
true then this kind of transportation system will truly change the traveling way of
karachiiets. On the other hand, she showed her doubt that this project will not come live as
Government is already investing on another project of BRT in Karachi so why would
Government introduce another project for the same purpose.

14 | P a g e
TO BE Strategy Canvas

KARACHI TRANSPORT SYSTEM

12
10
8
Customer Experience

6
4
2
0
s
ice e d e cy ty n ity rt
am Pr m ee e nc en bi
li tio ac po
cj l ti Sp ni qu ai tiz
a p ns
ve ve re l i ca tra
affi rt a n F Re Di
g
al
Tr Co i ce
rv ntu
Se Pu

Value Factor

Buses Private Conveyance Careem/Uber/Bikea

Airlift/SWVL KCR

Comparing KCR with other means of transport in TO-BE strategy, the speed of KCR would be
less compared to vehicle on roads. Convenience is also better than the bus but there would
be many obstacles for reaching to the nearest station. Frequency of KCR would be every
train coming after few minutes. The reliability is good as compared to other private vehicles.
In this world of digitalization, a train with up to date ticketing system would be beneficial for
lower class customers. Price would be economical as compared to competitors, where
travel time will decrease as It takes around 65 minutes by bus to reach II Chundrigar Road
from Drigh Road. Through the KCR, the journey would be completed in 19 minutes. Capacity
would be 170000 customers per day, which will also replace 1750 cars on road.
Furthermore, as KCR would follow a definite time table so it would be a punctual transport
system.

15 | P a g e
Eliminate Reduce Raise Create (ERRC)

E
REDUC
Cost of travelling
ELIMINATE

Cars & Traffic on

roads Time to reach from
one place to other

Mass transit public A punctual

CREAT
transport E
transportation for
RAISE

A proper middle and lower

infrastructure for middle class
transport

16 | P a g e
CONCLUSION

As the customer demand i.e. commuting, is stable and it would be gradually increasing with
time due to the increase in population and vehicles on road people would prefer more quick
and accessible ways of commuting. So, at present the Position strategy would work but with
time we must change our strategy according the market demand and as per the
technological changes.
We would have to integrate KCR project with the CPEC to make it more efficient and
operational on time without any delays and political pressures. The project would need to
remove the illegal encroachments and relocated the people at suitable locations within city.
The project will offer low cost commuting service to 700,000 people on daily basis. The KCR
will be digitalized having online web portal and digital app to book the seats and online
payments. Equipped with all technological needs during a travel to facilitate passengers
during their travels to make their journey pleasant and hassle free.

17 | P a g e
References

1) Exploring Karachi’s transport system problems. A diversity of stakeholder

perspectives (Mansoor Raza) http://pubs.iied.org/10773IIED
2) http://www.kutckcr.com/silentfeature.html
3) Urban Transport and Sustainable Transport Strategies: A Case Study of Karachi,
Pakistan (Intikhab Ahmed Qureshi, LU Huapu) (2007)
http://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.529.8532&rep=rep1&type=pdf#:~:text=Karachi%20is%20the%20only
%20mega,transport%20for%20the%20urban%20poor.
4) Towards An Inclusive Public Transport System In Pakistan (Muhammad Adeel,
Anthony G.O Yeh and Zhang Feng)( 2014 (ICTPUM14),)

18 | P a g e