Freight Marketing by Indian Railways
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Transcript of Freight Marketing by Indian Railways
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Freight Marketing by Indian Railways
Presented By :
Rajneesh Jain
Ritu Shukla
Smita Choudhary
Vinayalatha S.
S.Sagar
A.K.Mahtha
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Indian Railways A success story
Largest network in Asia and2nd largest in the world
Covers the length & Breadthof the country 63000 route
kms Everyday transports 1.8 m
people and handles 2.2mtons freight
Railways Turn around afavourite case study of B-schools across the world
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0
5000
10000
15000
20000
25000
R
C
o
2004-5 2005-6 2006-7 2007-8
Y
R u p u G n on
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Revenue share
Freight traffic
accounts for 65% of
total revenue
Passenger traffic
contributes 27% of
total revenue
Share of revenue on IR
Rs crores
Goods,
47743, 65%
Passenger,
20075, 27%
Misc, 5837,
8%
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Services offered by Railways
PassengerService
Mail/Express
Ordinary
Urban/Suburban
Local/ EMU, MEMU,
METRO
Passenger Earning Segmentation
Upper
Class, 3424,20%
2nd M/E,
9030, 53%
Ordinary,
3294, 19%
Suburban,
1427, 8%
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Services offered by Railways
Goods Service
Bulk Subsidized (Fertilizer,
food grains, coal, iron ore)
Other Bulk (POL, Cement,
Steel)
Piecemeal/Small -Value
added (Perishable,
Finished goods)
Other Bulk and High value
Freight services- Cash Cows
Passenger and Bulk subsidized Traffic are cross subsidized
by other Freight services
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Freight Segmentation
Freight Revenue segmentation
Coal, 15886,
39%
Foodgrain,fertilisers
etc, 5515,
13%
POL,Iron
Ore,Cement,
Steel,14587, 36%
Other, 4890,12%
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Traditional Approach -Production
Orientation Pricing :Objectives To Meet social obligations subsidies were resorted to
Single undifferentiated rate- w.r.t route, direction,volume, season
Ease of Administration No customer focus
Consequences
Overfull demand of subsidized segment
No surplus for capacity building Degeneration in quality of service
Non subsidized traffic diverted to Road/Air
Railways in Financial stress by late 1990s
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Emergence of New Thinking
Switch over to marketing orientation
Railways in Financial stress
Losing high value freight to Road
In 1951, Road carried 18% of freight Traffic andRailways 70%
Today, Road carries 65% and Railways carryonly 35%
High -end Passenger traffic being diverted toAirlines (LCC)
Opportunity with emergence of newbusiness partners (PPP)
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Segmenting, Targeting and positioning
Freight gives 2/3rd of revenueand uses only half theresources.
Freight Service is the key toviability of IR
Bulk Freight viz POL, Cement,Imported Iron Ore are mainprofit earners
Small and Piecemeal freightcan offer substantial business(Low Volume, high valueFreight)
Sunrise items like perishables-fruits, vegetable, fish, milk etcand finished goods likeFMCGs offer new dimension ofbusiness
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Who are Railways Prime Customers ?
POL to be lured back
Bulk Traffic from/to ports ( imported iron ore fromports to steel plants) emerging market
Small piecemeal Container traffic Perishable goods (fruits, vegetables, flowers fish)
High value FMCG products
Growing & Highly profitable
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Marketing Orientation-Customer is
the king What customers
demand ?
Low Tariff
Seamless and needtailored service
Reliable and timely
service
Information(traceability/tracking)
Door to Door Delivery
Courteous treatment
from service provider
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Marketing Oriented Approach
Capacity Building with partnership
Offering complete logistics for last mile servicethrough partnership
Competitive Pricing Strategy Powerful Information dissemination for traceability
Friendly Customer interface
Connecting with customer
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Capacity Building through
Partnership
PPP model
Dedicated Freight Corridor.- additional
tracks
Terminal Development Plan-more freightyards
Liberalised wagon Investment Scheme-
additional wagons owned by private co.
own your wagon scheme
Leased by freight forwarder or private bulk
transportes
Maintained and moved by railways
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Complete Logistic
Provisioning
Role of Freight ForwarderSource forpicemeal
Road
Privateyard1
Source2
Destinationfor piecemeal
Privateyard2
Source2
Railway Route Forrake movement
Road
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Logistic Provisioning
Door to door delivery and seamless
service
Appointment of freight forwarder
Running of express parcel train
freight trains run on a time table
Timely delivery
for perishables goods in refrigerated rakes for supply chain management
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Competitive Pricing strategy
Competitive tariffs for non subsidizedsegment rationalization and reduction of tariffs
for POL, ,imported iron ore, cement etc.
Utilization of empty rake movement forrevenue earning incentive scheme for traditional empty flow
direction( 30%discount)
incentive scheme for return booking (15%discount)
long term special incentive scheme (15%less)
Incentive scheme for incremental traffic
(volume discount) in lean season -20%
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Information For Traceability
Implementation of Freight OperatingInformation System (FOIS)
Rake Management system (for tracking
movement)
Terminal Management System (For Billing,
record keeping, claim processing etc)
Information Dissemination throughWeb
and call centre.
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We connect emotionally to the
We connect to people who feel
strongly about...
Speed and reliability of service
Power of Information Energy security
Rising Import Oil Bill of the country
Rising Pollution level
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