Market Analysis Summary
PATS will be focusing on families as well as business travelers. Both groups will likely demand PATS services. The families will utilize our service because it is convenient and less expensive than if they drove themselves and paid for long-term parking of their car. Business travelers will use our service because it offers a limousine-like service (other than the fact that PATS does not use limousines) where the traveler has a ride waiting for them when their planes comes in, but the service is less expensive than normal limousine services. Since the service is fairly comparable to a louisine service, companies will encourage their workers to utilize PATS as a cost saving measure, particularly in this economic downturn. Currently there are four limousine services in Cleveland and four taxi-type service providers.
4.1 Market Segmentation
Our customers can be divided into two groups: families/individuals on pleasure trips, and business travelers.
The first group is taking a trip for pleasure and will either be an individual or a family. Their choices are to either drive and park in long term parking, take a taxi, or use a limousine service. This group does not typically mind paying a bit more for a solution that takes care of their transportation to and from the airport. Since they are are on vacation, they appreciate having a service that gets them to the airport in a seamless way so they do not have to worry about anything. All they have to do is make the reservation and show up at the arranged pickup point.
The second group is the business traveler. In the past a company would typically hire a limousine service to pick up their worker. The company would always pay for the service. With PATS as an alternative, there is a transportation service that functions like a limousine (you can preschedule pickup dates and be taken directly home or to the airport) but without the overly fancy car and the associated high price. As companies are always looking at ways to cut costs, PATS offers a very reasonable solution in terms of comfort and cost. The business traveler will not notice anything different with PATS versus a limo service other than the vehicle they are traveling won't be a limo, but will still be a sufficiently large and comfortable car.
4.2 Target Market Segment Strategy
PATS will be targeting these two groups because they consistently travel, and PATS solution makes traveling easy for them. While a slow economy has some effect on travel. In general Americans tend to travel more each year, this trend beginning in the early 1980s. These groups are particularly attractive to PATS because they will always need to get to the airport and they are willing to pay a bit extra for the luxury of having someone take them there instead of being required to get themselves there. Please note, however, PATS is only slightly more expensive for trips under four days; over four days it is more cost effective to use PATS. Compared to driving a personal vehicle and paying for long-term parking.
In regard to the business customers, it is generally accepted practice for the company to provide the transportation for their employees. For trips over four days, there is no question that PATS is more cost effective. Under four days PATS service is slightly more expensive than driving oneself and parking, however, companies are more than willing to pay a bit extra as their employee is giving up a decent amount of their free time to go on the trip for work and the business recognizes and appreciates this. Of course for the companies already willing to pay limousine prices, PATS will appear as a way of reducing travel costs with no appreciable loss in service quality.
4.3 Competition and Buying Patterns
Currently in Cleveland there are several competing airport transportation systems:
- Public transportation: RTA provides rapid transit service to the airport. While this is an inexpensive alternative there are several disadvantages. The service does not run all hours of the night. RTA also forces travelers to change trains downtown to pick up the airport line. The rapid transit also requires travelers to manage all of their luggage which can be quite chore from some that are not skilled in the art of packing or are traveling for a real long time.
- Taxi service: Taxis do provide service to and from the airport, however, travelers cannot book the trip in advance, forcing them to call right before they want to travel. The level of service is inconsistent from taxi service to taxi service as well as from occasion to occasion. Taxis can also be quite expensive if city dwellers are going out to the suburbs.
- Airport parking: Airport parking can be cost effective if it is for fewer than four days. Driving oneself has the advantage of not having to deal with anyone else, the flip side to this however is they must do everything for themselves. Lastly, there is always the risk of damage to their car when it is parked and all airport parking facilities have drivers sign a waiver absolving the lot from responsibility if anything happens to the car.
- Shuttle service: This option packs a few different people into a van and takes them to the airport. This is a less expensive option, however, it takes longer to make the commute due to the other customers that are traveling Additionally, travelers lose out on the personalized service relative to PATS or a limousine service.
The buying patterns of these services vary based on the length of the trip, who is paying for it, and if it is a last minute or planned in advance trip. The longer the trip, the more economical a transportation option is relative to airport parking. A large percentage of business travelers use an upscale airport transportation solution like PATS or a limousine service for their employees. People who are just scraping by to go on vacation are likely to choose the least costly option, public transportation. Lastly, if the trip is planned at the last minute, taxi service might be the only option however, PATS will offer last minute rides if cars are available.