Establishing customer need in Virgin Trains

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E2 – Establishing customer need

A consumer requires goods and services of all types for personal as well as household usage. Sometimes referred to as customers, each consumer is something of an enigma to marketers. How does he or she perceive products, brands, stores or even entire organisations? How are individuals product choice made? Is customer loyalty attainable? A trend of consumer behaviour has emerged in recent years to help Virgin Trains better understand critically important issues such as these.

Targeting

Virgin Train 1st Class traveller can be divided into two different segments. These segments are made up of business clients and consumers from social classes A, B and C1. Keynotes (2002), state that the average number of trips per week on national rail for social class A-C1 is considerably higher than that of social classes D & E. Also, the age groups that use the national rail most frequently are 20-34, which are those from an employed status.

However, Virgin Trains have decided to target the first class business traveller. Tapp (2000, p16) states that most airlines are driven by the 80/20 rule which could also be applied to the rail sector. The rule is that twenty percent of customers are from the business sector contributing to eighty percent of its profits. This suggests that it may be more profitable for Virgin Trains to target the business traveller.

An existing database holds information about companies who have previously booked first class seats on Virgin Trains. This will be used as a way of targeting existing customers and further lists will be bought from another source.

Segmentation

In order to maximise the effectiveness of the marketing strategy it is essential to segment, especially in terms of geographic location. It is important that the companies and business people targeted are geographically located along Virgin Train routes, as there is no point in communicating to companies who do not have easy access to Virgin Trains.

Market research

Before any service can be properly marketed Virgin Trains must know a great deal about:

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  • The market it is to be operated in
  • The demand for the service itself
  • The needs of the users for design, quality, colour, etc.
  • The best media to advertise the service in
  • The price which people are prepared to pay for the service.

Most of this information is obtained by specialist marketing people who arrange for two types of research to be carried out:

  1. Secondary Research – which involves finding out what has been written already about the service and the market for it.
  2. Primary Research – which is the ...

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