Bus service had a stodgy, old-fashioned image when Bonus began developing a new marketing plan in 2007. Co-owned by Greyhound Lines and Peter Pan Bus Lines, Bolt Bus noticed that traditional full-fare bus companies were losing market share, and bus travel was on the decline. Time-pressured, price-conscious consumers simply didn't want to sit on a bus for hours or even days as it rattled from stop to stop along a lengthy route. Some of these consumers switched to discount airlines, searching hard for bargain fares to their destination. Others chose to hop on buses operated by a new breed of low-fare, city-to-city bus companies. Instead of operating from existing bus terminals, these bus companies kept costs low by picking up and dropping off passengers at designated street corners in each city.
The marketers at Bolt Bus recognized a market opportunity in the making. They planned to shake off the out-dated image of intercity bus service and create a new premium express bus system for 21st-century travelers on a budget. The brand they chose. Bolt Bus, conveyed the key benefit of point-to-point speed, contrasted with the old strategy of long routes connecting multiple cities and towns.
Looking at the market, they recognized that college students, young professionals, and young families were interested in comfortable, affordable alternatives to long car trips or pricier air, rail and bus transportation. These tech-savvy consumers were accustomed to using computers and smart phones for all kinds of daily tasks, including price comparisons. So Bolt Bus decided to sell tickets through a dedicated web-site, bypassing the more costly method of selling tickets at bus stations. And, like competitors. Bolt Bus planned to
avoid city bus stations in favor of curbside service, both to keep costs down and to make travel more convenient for customers.
One of the most important decisions Bolt Bus's marketers made was to keep fares low. During promotions, a limited number of tickets are priced as low as SI for a one-way trip, an eye-catching figure for travelers on budget; Bolt Bus adjusts its prices depending on demand and other factors. In general, the earlier customers buy their tickets, the lower the bus fare. Taking into account low promotional fares, the average Bolt Bus fare is about $20, quite affordable compared with typical intercity rail and air fares.
The marketers also decided to differentiate Bolt Bus by upgrading the experience to counter the perception that using intercity bus service means riding dingy, noisy old vehicles. Bolt Bus's gleaming red deluxe buses feature generous leg room, electric plugs at every scat for powering laptops and phones, and Wi-Fi service to keep passengers connected throughout the trip. Bolt Bus driver's arc professional and friendly, adding to the sociable atmosphere once the bus gets rolling, Bolt Bus also offers a rewards program to reinforce customer loyalty.
Originally, Bolt Bus targeted consumers traveling between major East Coast cities, routing buses through a few suburban areas at the suggestion of customers. After establishing a reputation for affordable, comfortable, and speedy bus service, Bolt Bus expanded to the West Coast, scheduling service to Los Angeles. San Francisco. Portland Seattle and other cities, it also began offering limited 4 service the long-range plan to add revise to Las Vegas, pan of real 3 routes to interior cities.
Meanwhile, Bolt Bus's competitors weren't standing still. Megabus, founded a year o earlier than Bolt Bus, operates luxury double-decker express buses equipped with Wi-Fi and power plugs at every scat. Year after year, Megabus has added intercity routes. Today, it serves more than 120 U.S. cities, coast to coast. Other competitors focus on specific city pairs, such as New York and Boston or Philadelphia and New York.
Greyhound, one of Bolt Bus's owners, has started a premium discount service called Greyhound Express, featuring free Wi-Fi and power plugs on deluxe buses traveling point-to-point between more than a dozen U.S. cities. In addition, Greyhound operates Cruccro Direct, a bus service targeting Hispanic American consumers who travel between
Los Angeles. San Ysidro, and San Diego. It also operates special bus service from major cities to casinos in New Jersey, Connecticut, and Las Vegas. Baffles and its competitors have attracted so many customers that the bus ridership is no longer in decline. In fact, bus transportation is now the fastest-growing method of travel between U.S. cities. Watch for more growth as Bo lifts drives ahead with future marketing plans."
Questions
a. How would you describe Bolt Bus's strengths, weak-nesses, opportunities, and threats?
b. Where does Bolt Bus fit within Greyhound's levels of strategic planning? What challenges does this pose for Greyhound?
c. Why was Bolt Bus's selection of a target market so vital to the success of its marketing strategy?