Case study 24 tracking the railways

Since the British railway system was privatised in 1996, the new rail companies have been plagued with problems. Poor rolling stock, delayed trains, disaffected passengers, and poor coordination between the different companies regarding timetabling and through ticketing have all contributed to the feeling of malaise that plagues the industry.

Some of the directors of the companies have been less than sympathetic towards their customers - one director went so far as to suggest that the 40,000 complaints a year his company was getting were being written during people's working time and that he was considering writing to their bosses about it. Another director said that the non-functioning toilets on his trains were 'a detail' that would have to wait. The same director raised fares by 5%, justifying this on the grounds that he was acting within the terms of his operating contract - apparently ignoring the moral obligation he has to his customers. The reason for these attitudes could be that the rail companies have only been given a seven-year franchise - a period of time hardly conducive to making major long-term investments in capital goods such as rolling stock and locomotives. The temptation to take a short-term view is clearly a strong one.

Equally problematically, each company seems to be trying to establish its own brand, and even competing with other companies, at a time when the industry needs to present a united front in order to stave off competition from road transport.

One of the problems facing the train operating companies - or TOCs - is that branding may not be very effective when approaching customers who prefer to be called passengers and only want to get from A to B in the most efficient way possible. Design company Wolff Olins found that the most popular layout for the Heathrow Express was the most practical one rather than the most luxurious, and Virgin Trains reports that the poor image of its rail services has damaged the previously invulnerable Virgin brand.

Some commentators believe that the TOCs need to segment their market more clearly and respond better to customer needs. 'People must be very careful to

Há Chapter 2 • Planning the research project distinguish superficial marketing from true marketing,' says Fiona McAnena of the Added Value Company. Both Great North Eastern Railway and Great Western Trains have modelled themselves on British Airways; market research showed that people wanted a more personal approach and GNER has taken these findings on board to the extent of asking staff to seek out opportunities to add a personal touch.

Market research has not always worked for the railways, however. When the Gatwick Express was being redesigned, customers were asked how the service could be improved. They were unable to come up with anything beyond the obvious, whereas the researchers were hoping that they would be able to suggest radical changes to the service. The researchers responded by setting up a panel (a think tank) of advertisers, researchers and psychologists in the hope that they would be able to second-guess the consumers. So far the results of this panel have not been divulged.

In the longer term, the TOCs will need to work out the problem of short-termism. This will probably require a change of heart on the part of government, allowing longer franchises to be granted - the Catch-22 is that the government is unlikely to do so until standards improve. In the meantime, the TOCs and the passengers (or customers) will need to make the best of a difficult situation.

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