Effective marketing is much more than advertising and salesmanship. It includes designing and delivering a product that is attractive to potential users, informing them of the advantages of the product, and making the product accessible to them in physical and economic terms.
Expansion of the capacity of the system is of course a market-related aspect. Users will be in part attracted by a greater range of possible destinations and a wider choice of departure and arrival times. Trains must go where people want to go-and when they want to go. The demographics of the travel market also indicate a wide range of trip purposes-business, leisure, social reasons, medical, etc. Travelers also come from a variety of income levels and have different life styles. They have different perceptions of what they are willing to pay and what they expect in the way of comfort and other amenities while traveling. Cadillacs and Volkswagens illustrate the automotive industries' response to these different tastes and incomes. Airlines have long recognized the diversity of the travel market by offering two or three different levels of fares and service. Almost all railway systems in other parts of the world, including those in Communist block countries, provide travelers with a choice of first and second, or "hard" and "soft" accommodations.
Two-Class Service
Amtrak should provide a two-class service in order to better accommodate a wider range of client preferences. This will allow for greater market penetration. The features of this two-class service would include:
- A basic standard coach class service on all trains with two-abreast seating on either side of the aisle, differing only in spacing of seats and provision of leg rests on trains used on longer runs.
- A premium fare club class service during daylight hours on trains in corridor operations, with fares about 30 percent above standard coach service. Seating would be two seats on one side of the aisle and a single seat on the other side. While Amtrak currently operates such a service in the Northeast Corridor and on a few trains elsewhere, Amtrak 90 expands this systemwide. Food and beverage service would be available at the passenger's seat.
- A standard economy sleeping car service using the general plan contained in Superliner economy and family bedrooms. Rooms would contain between two and five beds, accommodating single travelers and all the way up to families of five. Drinking water and washbasins would be provided in the room, but toilet facilities would be separate, elsewhere in the car.
- Deluxe sleeping accommodations with larger rooms, wider beds, and complete bath facilities-toilet, washbasin, and shower-in double and master rooms accommodating between two and five persons. Singles (roomettes) would have toilet and washbasin facilities only, with separate showers elsewhere in the car. Charges for these accommodations would be 30 percent above those of economy sleeping car fares. All trains operating in overnight service would offer both economy and deluxe sleeping accommodations.
Fares
A basic fare structure would be established on a per mile rate for coach and first-class fares and for economy and deluxe sleeping accommodations. First-class fares would provide the traveler with club seating for daytime travel and access to deluxe sleeping car service upon payment of the appropriate accommodation charges.
Round trip discounts of up to 30 percent would be offered for both coach and first-class rail travel. Sleeping accommodation charges would not be discounted for round trips. Amtrak's existing family plan discounts would be maintained. Round trip and family plan travel discounts encourage travelers to use the train for return journeys and are an incentive to family users. Both help to maintain travel volumes.
Beyond the basic fare structure and round trip and family discounts, there need to be further incentives for both repeat riders and for group travelers. To attract the repeat riders, a series of discount passes would be offered by both coach and first-class service. The following types of passes would be instituted.
- Route-specific monthly, quarterly, and annual passes. These would be designed to encourage travelers making frequent trips on the same route.
- Regional passes good for unlimited travel within a particular area of the country for 15-day, 21-day, 30-day, 60-day, and 90-day duration.
- A national pass good for unlimited travel systemwide on a 15-day, 21-day, 30-day, 60-day, and 90-day basis.
The basic fare structure and its application to sample trips in the 500-mi 1 e (e. g. , New York-Raleigh) and l, 000 mile (e. g. , Chicago-Denver) range plus family plan discount benefits are outlined in Figure 9.
Group travel must be encouraged by a strong incentive program that offers users considerable savings. A 10-20-30-Carload Plan would offer groups of 10 or more a 10 percent discount; 20 percent for 20 or more; 30 percent for 30 or more in a group, and for groups of carload size, basic rail fare discounts of 40 percent. Pass fares and group fares would average out to offer users an approximate rate of 8.5¢ per mile coach and 12.0¢ per mile first class. The growth in these two categories would account for more than half the total revenue increase by 1990.
Reservation Access
Although Amtrak has made major strides in developing a reliable nationwide reservation system through its ARTS and ARROW programs, further refinements are possible to increase revenue. A major step should be the introduction of computer terminals and ticket printers in travel agent offices and development of low-cost hardware and software for placing similar but less complex equipment in stations of low-traffic volume. An additional improvement would be a tie-in with phone access and printers controlled from a central agency that would allow reservations and ticket delivery at unmanned stations and during hours stations are closed. Credit-card-activated machines with charge capabilities could expand potential customer access.
Cooperative Marketing
Amtrak should coordinate marketing efforts with other intercity carriers, particularly bus operators, to make intermodal trips easier for the traveler. Through-ticketing, baggage handling, use of common terminals, coordinated scheduling, joint sales, and advertising efforts will pay dividends for collaborating carriers by attracting more riders. These marketing efforts should also aim at integration of intercity travel with urban systems that make journey completion easier. Information on public transportation in the local community should be available at the train station for the arriving passenger. Improved intermodal connections would open rail travel up to a much larger market through the use of a bus to get to places not on the rail network. The potential user pool could be expanded by upwards of 30 million through these types of improvements.
Food and Beverage Services
One of the toughest problems facing rail passenger management is on-board food and beverage service. High labor costs associated with traditional dining car operations prompted Congress in 1981 to mandate a break-even point for Amtrak food services. To trim costs, Amtrak cut dining car manning levels by some 50 percent and substituted a limited menu of frozen, microwave-heated food for on-board preparation items. The result has been a significant drop in dining car patronage. Railroad dining car food had previously been a major attraction; the recent changes have brought a new low to train meals. And while Amtrak has reduced its food and beverage losses by 50 percent, they still remain high.
The idea that food and beverage services must always lose, like the concept that passenger trains themselves are chronic deficit producers, does not hold up under investigation. Examination of European train catering facilities indicates that quality can be high and costs greatly reduced. With a four-man crew, many European dining cars can serve a multicourse meal cooked on board to 56 passengers-while Amtrak uses a three-man crew to serve 48 people prepackaged microwave food. Borrowing from European experiences, the following kinds of on-board food and beverage services should be instituted.
- Full dining service with dining cars on long-distance trains. A four- or five-man crew can prepare meats and salads. Prepackaged and fresh foods would be combined to keep costs and losses down yet offer meals equivalent to or better than on first-class air flights. Reservations would be taken for particular sittings and entree choices would be expanded.
- Cafeteria-grill cars offering a la carte service from counters where passengers make a choice from hot and cold items. Items would range from snacks to complete meals similar to the offerings t of the French Grill-Express, German Quick-Pick, or Swiss SelfService dining cars. A three-man crew would be adequate and some foods would be cooked on board.
- At-seat meal service on first-class day accommodations in corridor operations. The car attendant would serve meals in the same manner as an airline flight attendant. Passengers would request meals at the time of making reservations and choose entrees.
- Dinette services with a carry-out counter and seats would be offered on corridor trains. One or two attendants would handle the food service: snacks, hot and cold sandwiches, and tray meals for consumption either in the dinette car or at the passenger's seat.
- Cafe service of limited food offerings, snacks, sandwiches, and beverages, from a carry-out bar in coaches or lounge cars. A single attendant would be adequate.
Trains offering full-dining cars would also have cafeteria-grill cars or cafe cars to provide a full range of items from carry-out beverages and snacks to full meals. Just as passengers would find seating or sleeping accommodations to fit a range of preferences and budgets, they would also be able to find food and beverage items to suit various tastes and pocketbooks.
As the system grows, standardization of levels of service will become more cost-effective and will be possible because greater traffic volumes will support a more extensive infrastructure of commissaries. Where economies of pre-prepared foods can be realized and re-provisioning of trains will be more frequent to ensure better qualities of fresh food. Although equipment would be standardized, food offerings would be diversified with regional specialties and daily and seasonal menu changes to avoid limited choice for repeat riders.
A quality food and beverage service is a major asset that will encourage repeat riders and attract new ones. There is no reason that such a service cannot be achieved, and every attempt should be made to reach a financial break-even point.
Other Amenities
Amtrak 90 points out certain other amenities that should be available to train travelers. Although it is difficult to measure their exact impact, the fact that they make the journey more pleasant can only have a positive impact upon ridership.
Information dissemination is very important. "What is available" and "how to use it" can take some of the frustration away from the first-time rail traveler and make the trip more enjoyable for the repeat user. Signage, print material, and public address announcements should inform the passenger of locations of restrooms, drinking water, food and beverage services, and of smoking policies, station arrival and departure times, what train staff can and cannot do for them.