Contemporary Marketing 16th Edition by Louis Boone,David Kurtz

Exercise 19

You see them rocketing down the interstate: black-and-orange buses slashed by a gray lightning bolt. This is not old-style bus travel where you bought your ticket at a seedy terminal counter and then squeezed into a sweltering or freezing seat and wished your journey would end before it began. This is BoltBus, a division of Greyhound Lines and part of a new generation of bus companies that offer a surprising combination of cheap rates and upscale amenities.
BoltBus is a bundle of goods and services designed to meet the needs of travelers along the Northeastern corridor and recently in the Pacific Northwest. "BoltBus is a bus company that meets the needs of the urban, educated, and adventurous type of customer," says Nicole Recker, senior marketing manager for the company. "We target college students, young professionals, and young families." The goods are the updated buses themselves-comfortable seating with extra legroom, along with power outlets and free Wi-Fi. The services include online ticket purchasing, confirmed reservations, express routes, and real-time status updates on Twitter. "It's more like an airline than it is like a traditional bus," observes David Hall, the company's general manager. "It's a reservation service, so when you buy a ticket you have a reservation on that bus."
Bus travel has been around for a long time. In fact, for a number of years, ridership experienced a steady decline. Customers were fed up with high prices (compared with train or air travel), inconvenient schedules, uncomfortable seating, and poor safety records. But in recent years the industry has changed dramatically. During the late 1990s, a different business model emerged: Companies began selling tickets on the Internet instead of at ticket counters in terminals. Hall and his team observed that there might be an opportunity to jump start bus travel from a declining phase in the product lifecycle. Roughly 15 competitors already shared the Northeast market, many of whom had introduced online ticket sales. So BoltBus had to find ways to distinguish its brand from rivals. The average ticket price for a BoltBus trip is $20, which is a bargain in the Northeast. The combination of low prices and higher-end amenities has been a hit with travelers. In fact, BoltBus seats sell out so quickly that regular passengers know to book well in advance or they'll be riding another bus line. Travelers clearly appreciate the easily accessible power outlets and free Wi-Fi, in addition to the express-type service, which means the buses don't make many stops. Hall likes to compare BoltBus to Southwest Airlines. "We wanted a brand that was affordable... a fun, easy-to-use brand. We don't have a lot of rules and regulations."
BoltBus was launched in 2008 from its primary hub of New York City, running buses from there to Washington, DC, Philadelphia, and Boston. Other cities-including Baltimore and Newark-were added later. BoltBus hit the Pacific Northwest in 2012 and Southern California in 2013. Today, the company employs about 200 workers and operates 92 buses that carry more than 2 million passengers a year. "We try to stay lean and keep our costs down, which keeps ticket prices down," says Hall.
The marketing budget for BoltBus is lean, too. The company relies heavily on word-of-mouth and social media. "We pride ourselves on offering customers the best possible rate they can get, which means we operate on a fixed budget when it comes to marketing," explains Nicole Recker, the company's senior marketing manager. "We don't take part in traditional marketing initiatives. We focus on local grassroots efforts." Because many of the bus line's passengers are young and tech-savvy, Recker says that Twitter has given the company its biggest marketing boost. "The customers enjoy that real-time feedback. They can engage with us as a business." Passengers might tweet about a delay while en route, receiving immediate responses and real-time updates from BoltBus about the status of the situation. BoltBus may tweet to passengers about weather or road conditions that could affect the schedule. "This has proved to be extremely beneficial," says Recker. The company has found customer interactions via Twitter to be so effective that it has hired staff to monitor its Twitter account. Bus travel has taken to the highways again, and BoltBus is driving in the express lane.
Questions for Critical Thinking
1. Where does BoltBus fall on the goods-services continuum? With this in mind, what strategies might BoltBus use to gain a competitive advantage over rival bus companies?
2. What steps could BoltBus marketers take to extend its product lifecycle?