Service Marketing Project

Josh Haber, Michael Piscadlo, Brittany Tomkiewicz

Rail Industry Overview

Once the primary form of transportation

1950’s-70’s

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 Passenger Passenger 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, changing

consumer

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 define their

target market(s) and their attributes and needs

Certain aspects of their service targeted towards market

segments

Acela Express = business class

Student Advantage Card = college students

Amtrak’s 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 each

other

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 effective

advertising

Minimal advertising attempts, “advertise at people not to

them”(Direct Magazine)

Recently with new image (safer, greener, healthier) creating

more effective advertisements to showcase their new

positioning 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 capital

improvements

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 over

distance

Environmentally

Sound

Price

Convenience

Competitors

Speed over

distance

Price

Comfort

Safe

Pricing Strategy

Non Existent

Attempts to extract as much from passengers as the city-

pairs, time of year, and accommodations selected will

allow 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