A business case for investing in rail
A Railtrack case study

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Page 4: Attracting customers

Railtrack 4 Image 5Railtrack’s income comes principally from access charges for using its network and facilities, such as stations, depots and other properties, from the 25 new train operating companies, as well as the freight operators who have leases for the occupation and use of freight terminals, sidings and yards. Railtrack has recently invested in track, stations and facilities in order to attract new customers and develop the rail services further.

One example of the way in which Railtrack has encouraged new customers is its investment in the West Coast Main Line. This is Great Britain’s busiest mixed-traffic railway corridor, running from London Euston through Birmingham, Manchester and Liverpool to Glasgow as well as connecting with Edinburgh. Railtrack is spending £2.2 billion on modernising this line to accommodate high speed tilting trains.

Railtrack’s investment in the line has meant that the Virgin Rail Group (the company with the franchise to run trains on the line) has been willing to invest in tilting train technology allowing trains to run at 140mph. The project will reduce journey time and provide increased performance and reliability, and improved customer satisfaction.

Marketing

It makes sound business sense to try to capture a large proportion of the available market. Railtrack’s market consists of the train operating companies and freight companies. In the case of the train operating companies, Railtrack also needs to consider their customers’ needs (i.e. rail passengers’ needs). Marketing involves identifying and anticipating customer requirements and then formulating the right marketing mix (product, price, promotion and place) to satisfy these needs.

Since privatisation, Railtrack has carried out extensive marketing activities and has engaged in communications activities (e.g. advertising, publicity and public relations) to ensure that the messages about rail improvements were reaching the target audience.

Rail investment, therefore, needs to be built on extensive market research and detailed analysis of this research. It is important to devise a marketing mix which supports product improvement.

Railtrack | A business case for investing in rail
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