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5/27/2018 amtrak presentation ds;kdjkndfopgjsdo psep[gt p[sbodjvgjop ajeop jzopjopzdnfklgbnmxfcklbxcjfopj ghodjrophjdoph - sl...

Service Marketing Project

Josh Haber, Michael Piscadlo, Brittany Tomkiewicz


Rail Industry Overview

Once the primary form of transportation 1950s-70s

Shift to personal transportation/air travel

1970

U.S. Government creates Amtrak

Present Day

No other major rail passenger line competitors

Tracks mainly owned/used by freight transporters


Amtrak Overview

Also known as the National Railroad PassengerPassenger Corporation

Created by Congress in 1970 Began Operations in 1971

19,000 Employees

Own 469 Locomotives/1,519 Passenger Cars Run Over 300 trains a day

Over 500 stations

21, 000 train route miles in 46 states

Owns 80% of the Northeast Corridor (BostonDC)

Over 26 Million Passengers a Year Mainly in the Northeast Corridor/West Coast Lines


Services Offered

Variety of Routes Long Distance, Commuter Routes, Regional Routes, High

Speed Rail.

High Speed Rail

Acela Express on Northeast Corridor Only Variety of Seating Options

First Class, Business Class, Sleeper Service, and Coach

Operates 14 long distance routes across the country

Service 23 States


Strategic Elements

Positioning Reputation Issues

Solid market share from the start

Able to obtain a consistent ridership

Only major provider of passenger rail Never had to put effort into positioning themselves in the

consumer mind

Changing times, changing economic situation, changingconsumer

Position themselves as the safer, greener, healthier long

distance travel option


Strategic Elements

Image Series of ups and downs

More negative in past several years

Slacking timeliness, inflated prices, declining customer

service = bad company image New approach

Connecting America in a safer, healthier, greener way


Strategic Elements

Tangible Aspects Tracks and trains

Train stations

Presentation of employees

Webpage Ticket


Strategic Elements

Target Markets Serves three specific markets:

Business, leisure, and student travelers

Issue:

Amtrak never attempted or have been able to clearly definetheir target market(s) and their attributes and needs

Certain aspects of their service targeted towards marketsegments

Acela Express = business class

Student Advantage Card = college students

Amtraks service can be used by anyone

Allowed ability to market to specific niche go to waste


Strategic Elements

Differential Advantage Compared to Cars

No stress, can have a leisurely journey

Time, can get from Point A to Point B quicker

Risk, car accidents less prevalent than train accidents

Compared to Airlines

Accessibility, more locations to board an Amtrak train

Time, can buy a ticket and board a train within minutes of eachother

Location, trains bring you closer to your ultimate destination Reliability, can run under more severe weather conditions


Strategic Elements

Promotional/Advertising Strategy No promotional mix because of no target market

Promotions offered

Student Advantage Discount Card

Veterans Advantage Discount Card

International Student Identity Card

AAA Membership Card

Large market share from the start, no need for effectiveadvertising

Minimal advertising attempts, advertise at people not to

them(Direct Magazine)

Recently with new image (safer, greener, healthier) creatingmore effective advertisements to showcase their newpositioning strategy


Prospects for Profitability

Efficiency of Services (short term profitability) Timeliness

Sharing of tracks with freights

Infrastructure

High speed rail market

Customer Relationship Management

Clearly define target market, better able to tailor services

Direct messaging system

Updated technologies in train stations for retrieval of passenger

information


Prospects for Profitability

Employees/Employee Communication

Largest expense is employee salaries, wages, benefits

Long Term Profitability

Public Trading

Revenue generated from stock used for funding capitalimprovements

Hold Amtrak accountable to shareholders

Advertising Strategy

New campaigns highlighting their differential advantages to

draw in new customers New strategy would be expensive, but profitable in long run

because it would increase their customer base


Competitors

Speed overdistance

EnvironmentallySound

Price

Convenience


Competitors

Speed overdistance

Price

Comfort

Safe


Pricing Strategy

Non Existent Attempts to extract as much from passengers as the city-

pairs, time of year, and accommodations selected willallow Variety of Seating Options

Tier Pricing Limited Promotions

No Direct Rail Competitor=No Price Wars

Pressure from non-rail competitors


Customer Blueprint


SWOT

Strengths Dominance in the marketplace

Unique service offering

Convenience in locations, local stops

Flexibility in scheduling, numerous trains on the same day

Pricing Weaknesses

Pricing Strategy

Product Offering

Financial Limitations

Target Market Segmenting

Infrastructure

Bad Image


SWOT

Opportunities USP-Unique Selling Proposition-more destinations, more

frequently, more affordable etc. Pricing Strategy-steep discounts targeted at niche markets Ridership increases Federal Funding

Privatization Threats

Discount Airlines Discount Busses Automobile Travel Private Train Firms Economic Condition Federal Funding Loss


What do they do well?

Alternative option instead of flying Eliminate airline taxes, delays, cancellations

Low costs traveling across country

$200 for one way

Improving their services Wi-Fi, Free Drinks

Making travel easy for short regional distances

Security

Photo ID, Low Profile Target


Long Range Outlook

Positive Federal Funding

Stimulus Package

Improving/New Technology

New Services Convenience


Wise Investment?

Not Publically Traded Only Major Passenger Rail Service

Federally Backed

New Technologies

Possible Going Public Option? Increase in Capital

Accountability

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