Case Study On Eurail Group GIE : Marketing Rail Travel In Europe <br />
“There are no such thing as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.” <br /> -Theodore Levitt<br />
What is service?<br />A service is economic activity that creates value and provides benefits for customers at specific times and place.<br />It is a part of the product or full product for which the customer is willing to see value and pay for it.<br />
It does not result in ownership.<br />It may or may not be attached with a physical product.<br />
Most Products Have Service Component<br />It could be:<br /><ul><li>Equipment based
People based</li></li></ul><li>Characteristics Of Services<br />Intangibility<br />Perishability<br />Simultaneity<br />Inseparability<br />Heterogeneity<br />
Type of services<br />Depending upon the need of customer services can vary.<br />It could be<br />Personal services- massage parlor, beauty parlor and grooming centers, etc.<br />Business services- courier services, etc.<br />Professional services<br />Health services<br />
Managing Service Quality<br />Gap between management perception and consumer expectation<br />Gap between management perception and service quality specification<br />Gap between service quality specification and service delivery<br />Gap between service delivery and external communication<br />Gap between expected service and perceived service<br />
Related to Case<br /> Customers (Travellers): The customers are the reasons that the travel company exists and for whom the company has designed the travelling and touring package as well as set up the infrastructural facilities and spent money on employee development programmes. Here the providers are the only ones who interact with the customers, like the travel agents interact with the customers and not the company. The agents perform interactive marketing which is on-time, all-time, every-time. This is the most crucial aspect of service marketing in the travel and tourism sector. Those agents have the responsibility of ‘keeping promises’ made and enabled by the company. The providers (agents) are responsible for the perceived quality level of the service transaction. This underlines the uniqueness of service marketing.<br />
Introduction<br /><ul><li>Railways were introduced in Europe in the 19th Century.
In 1959, 13 European countries came together & formed an association called Eurail Community
The purpose of which was to encourage tourism .
Eurail was famous for its uniqueness and convenience. </li></li></ul><li>Background<br />In late 1950s the beginning of competition from airlines led to cost cutting and encourage rail travel.<br />In 1959 ,a loose association of National Railway companies from 13 countries inEurope came into existence to cater tothe increasing number of tourists from North America , especially USA.<br />Eurail Pass− Connected several rail systems of Europe. <br />It was not available to the residents of Europe.<br />In 1972, the Inter Rail pass was introduced for residents of Europe and North Africa.<br />
Cont...<br />In 1960s rail passengers generally comprise of young Americans, keen on visiting Europe.<br />In 1970s a Youth version of Eurail Pass was introduced as young graduates comprised larger proportion of rail travelers.<br />Introduction of Eurail Youth Pass for passengers under age 26 years – “Backpackers”.<br />In late 1970s and Early 1980s a slight drop in number of American tourists because of rise in US employment rate.<br />
Cont...<br />In Early 1990s low tourist arrivals to Europe because of political instability in Eastern Europe.<br />In mid to late – 1990s revival of travel to Europe- “Backpacking” again gained popularity. American students visited on Exchange program which connected far flung villages.<br />In 2001,Eurail community became a “Company” , legal entity registered in Luxembourg and Head Office in Utrecht , The Netherlands.<br />More than 400,000 people used Eurail passes which generated revenue of approximately US$ 169 million. <br />
The Eurail Experience<br /><ul><li>Stretched over 1,74,000 miles.
Trains made use of ferry crossings</li></li></ul><li> CONT…<br />Superior dining facilities<br /> ( snack carts, buffer cars)<br />Range of sleeping accommodations such as SLEEPERS, COUCHETTES AND <br />SLEEPERETTES.<br />Fees based on train line and category<br />Special arrangements for disabled people.<br />
Space and comfort on<br /> board the trains...<br />
Eurail Passes: Catering to Diverse Needs<br />Introduction of new passes based on changing travelling habits of tourists.<br />Select pass ( 2001).<br />Eurail regional pass (2004).<br />National passes(2006) for nine participating countries <br />(Finland, Greece, Holland, Hungary,Norway,Poland, Romania, Spain and Sweden).<br />
Eurail passes were also levied on some ferries</li></li></ul><li>Distribution<br />Sold through Travel Agents and ASA<br />In 2004 it introduced Online purchasing facility<br />Available through Europe at Eurail aid Offices<br />
Beside free shipping,eurail online customers received a eurailtimetable,eurail traveler’s guide and a eurail network map with every order.<br />Optional FedEx express delivery was also provided.<br />Eurail used a secure technology called “Railkey” to facilitate online purchase. <br />
Promoting The Eurail<br />Advertised through authorized sales agencies. <br />Advertised as – “ All of Europe is at your fingertips when you’re a Eurailpass ticket holder”.<br />Rides were stylish ,comfortable, spacious (Take a walk) and efficient.<br />Train meant avoiding the check-in queues and long waits and this allows time for sightseeing. <br />It passed through every corner of Europe including forest, fields, and mountains. <br />Relative Safety of rail travel in comparison to road travel.<br />
Cont…<br />Several books were written which helped to promote rail travel some of these were “Eurail Guide , The Eurail by Eurail series”.<br />Promotion of its product offering early bird promotions prizes and prizes for special festivals.<br />The period saw large number of tourist arriving in Europe which resulted in 24% increase in Eurail passengers numbers in 2005.<br />Eurail Selectpass ,allowed unlimited rail travel in 3,4or 5 country combinations, most popular rail pass in 2005.<br />
Challenges for Eurail <br />It was believed that Eurail Passes were a better option only on railway lines in Western Europe.<br />Railway network in Eastern Europe had the following disadvantages:-<br /><ul><li>Old, hence unsafe.
Food available on trains was expensive.</li></li></ul><li>Cont…<br /><ul><li>Eurail competed with low-cost airlines on some of its busy routes which offered services at a lower cost.
Threat from terrorist attacks which saw a drastic fall in tourist arrivals. </li></li></ul><li>How To Serve Better?<br />Extending the railway network in Eastern Europe<br />Being punctual / following strict timing schedule<br />Avoiding Bumpy rides, better air conditioning facilities.<br />Planning fixed, scheduled itineraries, avoiding last minute changes <br />
Cont…<br /><ul><li>Provision of subsidized reservation charges, reducing cost of food
Increasing security and making travelling safe
Making railway system accessible for residents of Europe
By increasing frequency of trains.</li></li></ul><li>Achivements<br />On may 22, 2006, Eurail reported a 9% growth in sales for the first quarter of 2006 over the corresponding quarter of the previous year.<br />Strong growth in tourist arrivals from Australia and Korea.<br />World Cup Football tournament hosted in Germany in 2006, attracted over 10 million football fans several of whom used Eurail passes.<br />With new products and promotions from 2006 Eurail is looking forward to greater success.<br />
Questions<br />How does promoting travel on a railway network that spans several countries differ from promoting a product ?<br />Does the fact that the Eurail passes are targeted at tourists affect the approach to the market ? What could be the objectives of Eurail’s marketing efforts ?<br />What are the challenges facing Eurail ? In light of the falling cost of air travel in Europe with the advent and growth of low cost airlines, and the impact of increasing fuel prices on the cost of travel by road, does Eurail need to rethink its target markets, and its marketing approach ?<br />