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Developing a Marketing Strategy

The next phase in the strategic market planning is the development of a marketing strategy. A marketing strategy for a public transit organization is typically designed around two components: (1) the selection of a target market and (2) the creation of a marketing mix that will satisfy the needs of the selected target market. A marketing strategy is a detailed explanation of how the public transit organization will achieve its marketing objectives. A thorough understanding of the consumers and their needs is the first step in developing a proper marketing strategy. After that, the organization can use its own strengths or distinctive competencies to fill those needs better than the competitors.

A target market is an aggregate of people who have needs for a specific public transit offering and who have the ability, willingness, and authority to purchase such offerings. Selecting the appropriate target market may be the most important decision a public transit organization has to make in the planning process. For example, being in a large city such as New York may result in the main target market being middle to upper class income people working in the down town area. On the other hand, in Tallahassee, Florida, a much smaller town with less traffic than New York, the primary target market may be lower to middle income people travelling throughout the city. While these brief examples do not necessarily reflect actual target markets, the illustrations highlight the necessity of establishing the appropriate target market based on the specific public transit setting.

The selection of a target market serves as the basis for the creation of the marketing mix to satisfy the needs of that market. The elements of the marketing mix - product, distribution, promotion, and price - are referred to as the marketing mix variables because each can be varied or changed to accommodate the needs of the target market. An important point here is that the term mix describes the decisions that must be made because each element of the marketing mix must be precisely matched not only to each other, but also to the needs of the target market as perceived by the public transit organization. The four marketing mix variables are defined in the following paragraphs.

* A product is a good, service or idea. In the case of the public transit system, the product is a combination of all three in that the “public transit offering” received by the customers includes (1) the physical element of the bus (product), (2) the application of human efforts that provide intangible benefits to the customers (service), and (3) the image of the public transit offering received by the customers (idea).

* The distribution component of the marketing mix refers to the availability of the public transit system when the customers need it and in the form they want it. In other words, the customers do not want to wait to long for the bus to show up at their stop. In addition, they want to feel safe on the bus (i.e., driving safety and general safety relating to serving areas).

* Promotion refers to communication between the public transit organization and its customers that facilitate satisfying exchange relationships. Oftentimes, this means that customers must be convinced that public transit is a good alternative to driving their own car or commuting with a friend or colleague.

* The price refers to the value (usually monetary) exchanged for the products in a marketing exchange. Obviously, the most common form of value for a public transit system is money, and the product received is the use of the public transit system to get to a specific location. More importantly, however, is the way in which price is used in the marketing mix (i.e., a high price leads to the expectation of a higher quality public transit system while a more modest price may simply place the focus on getting from point A to point B).