CASE ANALYSIS

MARKETING OF SERVICES

DELHI METRO RAIL CORPORATION: DELIVERING CUSTOMER

SATISFACTION

SUBMITTED BY: -
Situation Analysis Using 5C Analysis:
Company: -
DMRC was established to serve the urban mobility needs of Delhi. It had been rated 2nd among
18 international metro systems for customer service and among the best 3 performers in the
Net Promoter score category. It’s service philosophy of DLITE an acronym for the phrase “Do
Lasting Improvement in Travel Experience”.
Customer: -
Its customers are primarily office goers travelling to Gurgaon and Noida for work on one end
of the spectrum and huge floating population who are travelling for work at the other end of
the spectrum. However, with changing demographics of Delhi NCT demand of customers has
been changing with them demanding more amenities, services and value for money.
Competitor: -
Its competitors are the various modes of transportation that people use for meeting their daily
travel needs. These modes are bus, train, cabs and private transports.
Collaborators: -
Its collaborators are its owners both state and central government, suppliers, contractors.
DMRC culture helped it create better collaboration between its different stakeholders.
Context: -
During the odd-even phase DMRC is facing increased ridership and thus needs to manage its
services to provide its customers with exceptional service. Additionally, despite increasing
footfalls and customer expectations, revenues were still low due to low fares and costs of
The following SWOT analysis for DMRC will analyse the given situation in the case
STRENGTHS -
Vast network reaching more than 200 stations in National Capital Region
Punctual service and reduces travel time drastically
World class amenities
Uses ultramodern technology, dynamic and modern
Safe mode of transport

WEAKNESS
High infrastructure cost for new route development
Difficult in land acquisition for new routes
Tight schedules make maintenance activities difficult
Demand management is improper leading to uneven traffic
OPPORTUNITIES
More avenues of increasing revenue from advertisements and renting out commercial spaces
High potential of increasing ridership
Scope to increase to further routes

THREATS
Frequent breakdown and maintenance delays
Land acquisition for expanding routes as it leads to displacement
More security threats as millions of people travel every day

The problem definition

The major problem for Delhi metro was that although footfalls and customer expectations were
on the increase the ticket prices were still lagging in the bottom. The odd even restrictions had
proved to be testing for the DMRC as it exponentially increase the footfalls. The changing
demographics demanded more amenities whereas the maintenance and service costs were
increasing day by day. The increase of fare had not kept pace with the increasing cost and
inflation, the increased costs led to decreasing profits.

Financial year ending (31 March) 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
Average ridership per day (millions) 0.919 1.259 1.66 1.926 2.19 2.386
Revenue from fare box earnings ( US$ millions) 87.121 163.872 212.083 224.775 225.587 246.271
Average fare box revenue per rider in US$ 94.79978 130.1604 127.7608 116.7056 103.0078 103.215
YOY change in Average ridership per day 37% 32% 16% 14% 9%
YOY change in Revenue from fare box earnings 88% 29% 6% 0% 9%
YOY change in Average fare box revenue per rider 37% -2% -9% -12% 0%
Repair and maintenance cost per year ( US$ millions) 36.745 38.329 51.037
YOY change in Repair and maintenance cost per year 4% 33%

It can be inferred from the above table that Average revenue per rider has decreased with
increasing ridership and almost constant revenue in the last two years. The maintenance and
repair cost in turn has increased at a staggering rate of 33% over the last year. Thus DMRC has
to look for ways for increasing their revenue in order to sustain the increasing demand and
provide the world class service.
Potential Solutions and their evaluations: -
1. Load Forecasting:
DMRC should invest in forecasting tools to predict customer usage during peak and non-peak
hours. This will help it better plan its services by changing frequency and number of coaches
in trains to minimise operational costs. Thus, decreasing operational costs will have DMRC
improve its bottom line.
2. Increasing Fares:
DMRC needs to convince government for increasing fares citing operational and safety issues
being caused due to low revenues by highlighting potential accidents that can occur if
corrective actions are not taken. This can be done by employing its public relations team by
highlighting the issues it faces in front of the population of Delhi NCT. Increased revenues will
not only help DMRC improve its existing infrastructure but also allow it to carry out preventive
maintenance of its facilities to provide a safe and reliable service to its customers. The increase
in fare should be justified as per the increase
3. Increased Revenue from its Stations: -
DMRC can focus on converting its stations into central hubs for the section of area they lie in
by providing all amenities under a single roof to its customers. It can lease out more space in
not only stations and also look for ways to increase the available advertisement potential in not
only stations but also in the rakes. Delhi Metro provides huge mass of potential customer for
brands and with the ever increasing footfall ad space demands in the metro premises will
definitely be on the rise. Tapping this potential will help DMRC make up for the revenues that
it foregoes in order to keep Delhi metro as affordable as possible. Additionally, it can even
promote brands through its stations by changing the name of station to reflect name of the
brand. This will help DMRC earn revenue just by changing names of stations on its network.
All the above solutions need to be undertaken simultaneously by DMRC to shore up its
revenues and help it cope with increasing customer expectations. The increase in fare should
be done based on a cost analysis and after implementing the increase in revenues over the other
methods mentioned. The fare increase should be as nominal as possible in order to cover the
increasing maintenance and service cost. Only after DMRC has improved its bottom line can
it focus on investing in improving its services and expanding its facilities. As developing urban
mass transportation involve heavy investments its imperative that DMRC raise funds to expand
its service area and connect more areas of Delhi NCT.