November 24, 2009

B.E.S.T Vs N.M.M.T - A case of niche marketing & appropriate positioning

Every weekday that the clock strikes 7:30AM, the picture unfolds with a shrill ring of the alarm. It is time out, dreams over. A quick shave and a bath: dressed in formals, I'am off to work. I live in Seawoods the peninsular part of Navi Mumbai. My eyes open up to the Arabian sea on all three sides. A romantic evening spent with a loved one with the sun setting in the distant horizon can inspire a donkey to bray poetry. This was the view that compelled me to take up residence at this corner of the world. The flip side is that the connectivity is really bad.

So I revv up my cruiser and take a long drive on the palm beach highway, arguably the most beautiful stretch of road in Mumbai. At speeds of more than 100 kmph it takes me 8 mins to cover a distance of 10.5 kms. So, here I'am at Vashi by 8:30 AM. Driving in Mumbai can be a real pain and so I avoid driving all the way to my office in Chembur which is 11 kms from Vashi. What are the options I have to travel?

Local Train: Not an option, If Shashi Tharoor could call the economy flight, cattle class. I wonder what we can say about the Mumbai local. I have seen people travel on the roof tops and some die travelling, by just falling off the moving train, as simple as that. You cannot move a finger without touching someone & therefore the local train just gets shelved.

Taxi Cab: Bad Option, A cab charges 300/- from Seawoods to Chembur. So the total travelling expenses would come to 12000/- per month, This without the climate control. With so many other options would I want to travel in a taxi everyday?

Local Buses: Decent Option, Local buses are run by two corporations B.E.S.T & N.M.M.T (BrihanMumbai Electricity & State Transport) & (Navi Mumbai Mahanagar Transport) A local bus charges me 10/- from Vashi to Chembur. The frequency is good, the flip side? Crowded and it stops every 0.5 - 1 km. Also as the fleet is pretty old it really takes a long time to travel from Vashi to Chembur close to maybe 45 mins to 1 hr.

Local Cabs: Not a very good option, Individuals moving in & out of Mumbai generally provide lift for a nominal charge. While this is attractive, the problem is that you never know whose car you are entering into. The other day my friend prodded me to get into an Indica and as we were travelling the two guys were talking in Hyderabadi Urdu. One of them then pulled out a pistol and showed it to the driver and said "Today I'm gonna kill that SOB", to which the driver replied "Calm down dude, we will decide after we reach Raghu's place". That day I decided that this is not really a very good option.

State Transport: The best option under the circumstances, The State transport is run by the M.E.S.T (Maharashtra Electricity & State Transport). It charges me 12/- and takes me to Chembur in about 30 mins. So even if I catch hold of a bus by 8:40 AM, I'am in office by 9:10 AM, the official start time being 9:15 AM. This is my preferred mode of travel.

It was one of the mornings, as usual I had a shave and a bath and revved up my engine and I was at Vashi at 8:25 AM. Smiled at the pretty girl who also gets down at Chembur and waited for MEST to arrive, the clock struck 8:30 AM and whoosh!!! what was that? A Volvo arrived and the doors opened under pneumatic pressure. I checked the signage and it was going to Bandra, I asked the conductor if the bus stops at Chembur ? He nodded in the affirmative and I hopped in. Air conditioned with the FM radio and the bus was empty. I plonked on the seat and looked around feeling good. I was ready to pay 50/- and the conductor handed me a 20/- ticket to Chembur. This was value for money I felt. N.M.M.T had caught onto my pulse and come up with a product offering that just suited my needs. As a week passed I could see that the bus was getting a bit crowded, this was not what I expected. I could see myself travelling in a Volvo and standing at times !!!

One more morning and whoosh!!! the Volvo comes and opens its doors in perfect unision. I decided to give it a pass, MEST was better, if not air conditioned, if not music, atleast I got to sit in a corner and travel the distance. As I let the Volvo pass by another vehicle arrived. This was not a Volvo, it was from B.E.S.T, It was air conditioned and it looked empty. I gave a peek in and asked the conductor, does it go to Chembur? An affirmative and I hop in, hmmm the accelaration is not as good as a Volvo. The design also looks tacky, but it is air conditioned and has music playing at a very low volume. The conductor comes up and I hand him over 20/- for Chembur and he says, Sir 30/- for Chembur. I felt that he was ripping me. I protested, the Volvo charges me 20/-. The conductor replied back saying that the Volvo is run by the N.M.M.T while B.E.S.T runs these chinese make buses and B.E.S.T charges 30/-. I shelled out the money and continued the journey.

Later on I realised that I was travelling more frequently by chinese make BEST buses than Volvo make NMMT buses. This was because:

Both offered Airconditioning,
Both offered music, but BEST put on a very low volume while NMMT had blaring music
The low accelaration of BEST ensured that when I opened a book to read there was no strain in the eyes due to jerks.
The differential in pricing ensured that people who really wanted to travel in peace actually travelled in peace.
I was able to complete Outliers by Malcom Gladwell and Kane & Abel by Jeffrey Archer travelling in BEST.

When you look at the bus it may appear that the revenues of NMMT maybe higher than BEST and also the profits of NMMT would therefore be higher than BEST.

However, while an NMMT Volvo maybe taking 30% - 40% more passengers than BEST, BEST has priced it's tickets higher by 50%. Also the Chinese make vehicles must definitely be cheaper than a Volvo leading to lower capital costs. I may not be able to comment on the maintenance but looking at the fact that 40% more passengers board the NMMT, I belive that the maintenance cost of NMMT would be higher than BEST. All of this leads me to only one answer.

BEST is defintely the best and a clear winner.

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