Service Marketing: Public Transport Edition

For this week's blog post, I would like to examine service marketing and how it applies to one of the most popular services in the world, public transport.  The Marketing Principles book explains that the "Gap Theory" is how consumers measure a service.  The gap is between the expectations and the actual evaluations of the service.  The factors involved are the tangibles, reliability, responsiveness, empathy, and assurance.    The forms of public transportation that remain popular in Viña are micro, metro, and collectivo.  To be honest, when I ride the micro, I am not that satisfied with the tangibles.  I am used to a little more personal space in the United States buses and when the micro is crowded it becomes pretty unpleasant.  I began to question some of the marketing decisions that the city's department of transportation made when they designed the micro.  The current system features a small bus but it comes very frequently, as opposed to the general United States choice of larger buses, but they do not arrive quite as often.  This debate raises the issue of which do consumers prefer: Speed or comfort?  The fact that these two aspects are attributed more to a bus in each country may even tap into cultural differences between the United States and Chile.  I also noticed that many of the micros during busy hours have an employee who just stands by the door, runs out when the bus stops, and tries to convince people to get on.  I have never seen this direct selling method applied to public transportation in the United States and I wonder if an increase in popularity can be attributed to this extra worker on board.  The collectivo also exemplifies cultural differences between the United States and Chile.  I have never once before seen a taxi where the riders share the toll with strangers.  The U.S. is yet to implement a system like this if they ever do.  I believe that this form of cab has not caught on in the states because, even at a higher cost, Americans enjoy the experience of having a personal driver and being taken exactly to your destination.  Many taxi drivers in the United States carry your bags and hold the door for you and I think that Americans cherish this brief moment of power rather than saving a few bucks.  I would be curious to see how Americans would respond if a collectivo company started in our cities.      

Entering Chile's Mobile Phone Market

In marketing class, we have often discussed entering the Latin American market as a foreign company. We have addressed what tactics to take and which countries might be more successful for doing business with.  This week, I decided to investigate further and examine what the thought process was for Virgin Mobile who recently joined the Chilean market, as their first South American investment.

In this insightful interview: http://www.youtube.com/watch?v=F0PcAoMq4NQ

Famous CEO, Richard Branson, discusses why he and his associates chose to bring his company, Virgin Mobile, to Chile.  Branson explains that the main reason Virgin decides to join a market is when the existing companies are not doing a good job and they see that there are areas that can be improved upon.  He mentions a more specific group within the Chilean market that he chose to focus on was the youth of the nation.  Virgin Mobile noticed that many young Chileans were not happy with their current cell phone and the company aimed to provide a better service and product.  The specific point that Branson notes is that young people were being penalized by their cell phone carriers for using social media (i.e. Facebook, twitter).  Thus, it is evident that Virgin Mobile has used this knowledge when making marketing decisions in Chile.  In the International Marketing book, the many ways to enter a foreign market are identified and discussed.  Virgin Mobile chose to create a strategic alliance with an existing phone company and serve as a mobile virtual network operator with an agreement with Movistar.  It is seems to have been the right decision to enter Chile as the first country in South America, as expansion has already begun within the continent.  Virgin Mobile Colombia was started the year after Chile and Virgin Mobile Mexico and Virgin Mobile Brazil are up next.  Richard Branson is often seen as an innovative businessman and thus it is interesting to see what marketing decisions he and his company would make when entering a Latino market for the first time.