Here’s an interesting quote buried far within one of the Competition Commission’s working papers relating to its market analysis of the bus industry. Whereas most other operators considered the fares of its competitors,
"Wellglade told us that it did not look at competing bus operators’ fares as it sought instead to compete on the entire offering, including frequency, service, hours of operation, etc."Wellglade, owners of Trent Barton, seems to have changed its mind. From 11th October, its Midland General operation will be charging a flat fare of 99p on its new service 99P (Cotgrave to Nottingham). This, perhaps or no doubt, is in response to competition from August 2010 from Premiere’s Red2.
Those expecting Wellglade's Midland Genral to be turned out in the blue of old may be disappointed...
Here’s two changes in culture, then. Not only is Wellglade now a little more inclined to consider competitive fares, it seems to be ready to consider a 20th century response to competition—by offering a low cost option that threatens a competitor and cannibalises its own established Cotgrave Connection. And to think that, to date, Wellglade wasn’t at all well known for its direct retaliatory actions.So, what’s changed? One thing that *hasn’t* is Wellglade’s desire to maintain its quality, high end Trent Barton offering. That appears to be why the 99P is distanced from and nothing whatever to do with Trent Barton. Wellglade must conclude that there’s a market for both high and lower end operations. It’s an interesting proposition. How much will customers be prepared to pay for a quality offering that’s almost second to none alongside a less frequent and more bread-and-butter service. Surely this is worth a try. It happens in other retail sectors. It has even happened in the bus industry, before. If successful at either thwarting competition or growing the market then who’s to say whether this approach might be tried elsewhere in England where there’s already an established value-added service. It would be the opposite response to a partnership agreement.
That this coincides with the appointment of former Go South Coast’s Bluestar’s commercially savvy Alex Hornby could be a coincidence. Either Hornby has brought his commercial instincts with him or was specifically hired because of them. If I were a betting man, I’d say the latter.
i Trentside Traveller covers Nottinghamshire in detail
30 comments:
Hmm ... laying aside cannibalisation and the pros and cons of 'segmentation', a practical point - I guess most passengers will pay with a £1 coin. I hope the 99p drivers start the day with a big float of pennies ...
Son of Magic Bus?
If they were to start any other low cost routes, presumably these would have to charge slightly different fares otherwise there'll be a confusion of service "99P"s serving different locations. Bagsy the "98P"...
Sounds like Beep Bus all over again. Hasn't Alex learnt from that debacle at Bluestar?
In response to whats changed, for the first time in a long time, TrentBarton are facing direct competition on a number of key corridors. Premiere are not just serving Cotgrave, but also Bingham/Radcliffe, and in a few weeks Stapleford/Long Eaton. They are also on the Calverton corridor. I can't recall such sustained competition against TrentBarton in recent years.
They've not reacted in Calverton or Bingham, but all that seems to have done is given Premiere the confidence to expand elsewhere. Do nothing, and rely on an upper-end product isn't an option anymore.
In theory Trent Barton ought to be more vulnerable to competition simply because it doesn't have the resources of a major group to call upon. No shipping in buses and drivers from across the country to assist... and shallower pockets no doubt too.
Of course, the same applies to Premiere, though as well AFAIK.
That poster - in colour, style and everything else - has pretty much been created from a Beep Bus poster template just with the actual words changed.
To hypothesise about how "Wellglade must conclude that there’s a market for both high and lower end operations", and to describe it as "an intersting proposition" and "worth a try" is to fail to recognise it as the targetted, market-flooding, destroyer-priced spoiler service that it is. Magic Bus it ain't. Prediction: it will last as long as Premiere's stay on the route, and scarcely a day longer.
Mr Hornby seems to be on a one-man mission to provide the CC with all the evidence it requires to recommend drastic measures...
They might be the 'really good bus company', but their grammar leaves a lot to be desired:-
Under 16's ?
OAP's ?
Someone seems to be addicted to the apostrophe...
The Trentraveller... link doesn't work - take out an 'S' and put a 'P' in the link address!
Thanks.
"Magic Bus it ain't. Prediction: it will last as long as Premiere's stay on the route, and scarcely a day longer."
Magic Bus was AIUI originally intended for that purpose. Then Stagecoach found that the concept was highly profitable in its own right, so it stayed.
One always thought that people would learn from their mistakes?
TB surely have a market leading level of service without having to brand differentiate beep bus style. Why are TB suddenly worth competing against after so long? Are they not as wonderful as the popular theory haves us believe?
I see Premiere are advertising this story on their facebook site. I wonder how much Wellglade must be paying Premiere for this advert for the Wellglade's new service.
Do our eyes deceive us? Trent Barton using the 24-hour clock?
Humber Transport said "In response to whats changed, for the first time in a long time, TrentBarton are facing direct competition on a number of key corridors. Premiere are not just serving Cotgrave, but also Bingham/Radcliffe, and in a few weeks Stapleford/Long Eaton. They are also on the Calverton corridor. I can't recall such sustained competition against TrentBarton in recent years.
They've not reacted in Calverton or Bingham, but all that seems to have done is given Premiere the confidence to expand elsewhere. Do nothing, and rely on an upper-end product isn't an option anymore. "
And that is the difference between 99p bus and Beep! Bus. In this case trentbarton is the incumbant operator facing copycat competition which has arrived precisely because the high quality service provided by trentbarton has grown the market to the point where a competitor sees a large enough customer base for two operators.
In the case of beep!bus the Velvet service was a new start linking communities which previously had poor links to Southampton. It was never likely to make Velvet a fortune, and Go South Coast duly got a lot of bad press for returning to areas they had previously abandoned 3 minutes in front of Velvet.
My view is that Wellglade have to try and maintain market share to continue to be able to run their high quality service, and if they think that the best way to do so is to discourage 'creaming off' competition, then so be it.
What they must not do is to reduce their offer as soon as the competition has gone, which is what happened on the Fair Oak to Eastleigh corridor when Velvet withdrew the Fair Oak Flyer.
BlueStar are now back to providing the same dreadful service as pre 2009, trotting out all the same excuses as ever - just look at their Facebook page and you will see that BS2 dominates the moans.
PS: The service has started today (free for one week until the registration kicks in).
And I quote...
"To hypothesise about how "Wellglade must conclude that there’s a market for both high and lower end operations", and to describe it as "an intersting proposition" and "worth a try" is to fail to recognise it as the targetted, market-flooding, destroyer-priced spoiler service that it is. Magic Bus it ain't. Prediction: it will last as long as Premiere's stay on the route, and scarcely a day longer.
Mr Hornby seems to be on a one-man mission to provide the CC with all the evidence it requires to recommend drastic measures... "
As an industry insider, I fear that this post may very well turn out to be true.
This has all the hallmarks of what the CC have already considered is prime anti-competitive behaviour. Cardiff anyone? Mr Hornby is already making his mark. Or should that be mark's? I hope he has the sense to not destroy a good company's good reputation.
And advertising that
(sic)
"OAP's FREE after 9.30"
as though it's some kind of super offer, as opposed to being something they have to offer is a bit cheeky too.
mmm. Now being advertised as 'Bargain Bus' rather than '99p Bus' with all fares 50p (free for first week).
New website is www.bargainbus.co.uk
I think the realisation, that even at 99p, Premiere were still cheaper must have dawned, hence the new 50p fare! Theres foresight for you!
It appears to be an underhand way of removing competition.
Premiere obviously don't like a piece of their own medicine
We have been telling them for ages that operating in Cotgrave was going to be a waste of time
However it seems that this time Greaves, Swift and Till have called this wrong (and Greaves has thrown his toys out of the pram)
In future Mr Greaves when you ask your staff about operating routes in other areas, why not listen to us, instead of letting Jamie Swift dictate your company
Premiere have been rubbing peoples noses up for some time now, operating just in front of the other service, and claiming that competition is "good" however it seems that Mr Greaves doesn't like anyone to fight back, regardless of who or what the sister company is, could this be the final throw of the dice for Premiere?
Has Mr King decided that Mr Greaves has had his bit of fun?
Only one word to say to Mr Greaves "Deltabus"
Where has the idea "that operating in Cotgrave will be a waste of time Premier" arisen from? Doesn't look like a waste of time to me - I struggled to get a seat on the red two last night. Good luck Premier who ever you are. You could always call their bluff and walk away from Cotgrave they would end up looking pretty daft then.
Which Bus was you travelling on anonymous? i was bus spotting all day yesterday and there was plenty of seats available on the red 2!!
In fact it was more a case of everyone had there own individual seat, so lets not beat about the bush between the Cotgrave Connection, 99p Bus and red 2 there was more than enough seats
Mr Greaves has had his pants pulled down and has been given a smack on the arse, which is something that should have happened a long time ago
I think it is plain which camp 'Steveo' is in then. How can providing an alternative service to an area be 'rubbing peoples noses up'. The only ones upset is those with a monopoly that have run a poor service with high fares for far too long. Ask the people of Cotgrave if they want competition - after two fare rises in one year they will say yes please!
So lets say that 99p/bargain or whatever it is called today does make premiere quit Cotgrave. Do you think premiere will just sell the buses and sack the drivers? - dont think so! They will just 'move' them somewhere else that needs some competition to get the fares down and give the traveling public the choice they deserve.
? "bus spotting?" what does that involve then please enlighten me - do you monitor buses for the council or something? I am a bus user (and have been for 30 years) who is Mr Greaves? I followed the link to here from facebook. It's all very interesting. I did not see anyone with there pants down - but you bet I will be looking tonight!
The bargain bus web site seems to have been removed - have they gone already?
Premiere are always going on about competition, how its fair and good for the market, however when someone does it back to Premiere they spit their dummies out, as they have done this week
Premiere say that the fares are high on other routes, what Premiere seem to forget is that fares pay for your wages, fuel, N.I, wear and tear, tyres and more importantly new buses, and i don't mean buses from the rental dealer, which most of Premieres fleet are
I've lost the plot with this one now - when and where did premiere ever spit their dummy out? And rental buses - do the public care if a bus is rented, leased, paid for or stolen, just as long as it turns up on time and charges them a value for money fare to get them to where they want to go.
The fare of which was only 20p different to the Cotgrave Connection in the first place! This clearly reflected the "cheaper" buses premiere are operating. Of course 99p has evoked further competition and fare reductions. Almost all modern fleets are leased (long term rentals) I dont see any issue with that, its the norm. There are certainly no dummies either.
the reason the 99p bus could be seen as unfare is because it will not make a profit. Premieres Red 2 charges lower fares than trents cotgrave connection, but can still make a profit. The new 99p could not achieve this, especially when the same company is running a separate service (CC) on the same corridor.
99p exists simply to get rid of the competition (Red 2) so that the higher CC fares can be charged to all. Then although trent loose out short term, they make more long term.
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