With so much happening at The Trent & Barton Motor Traction Co, I’ve thought about renaming this blog http://trentbarton.blogspot.com/. Forgive me for a third post on matters from Heanor but things are developing quickly. And, as befits industry watchers, opinions are split.
From this...
On Saturday, Premiere Travel announced via Facebook direct debit customers could have 28 days worth of travel for £30. Said Premiere, “Now that’s cheaper than any imitation cheap bus”.
... to this. Spot the difference
On Monday, Wellglade countered by morphing its 99P bus into “Bargain Bus”, halving fares from 99p to 50p. Out went 99pbus.co.uk in favour of hastily registered bargainbus.co.uk.
Now, I’m prepared to consider that Midland General’s 99P was aimed at “market segmentation” but with this latest development, that prospect looks increasingly less likely. Does such a move confirm the true intention behind Wellglade’s registration: old fashioned competition?Opinions, via Friday’s post’s comments box, certainly varied. On the one hand, there are those who suggest that Trent Barton is facing its first major across the board attack since the area first saw Gilbert Kinch, more than a decade ago. Wellglade had thus far not reacted, but in the face of increasing competition must now do so. To do nothing would be a sign of weakness to be exploited.
On the other hand, there are those who felt that Wellglade was effectively setting a Competition Commission trap into which the entire industry would fall. “Bargain Bus” was nothing short of predition. Predictions were that “Bargain Bus” will last just as long as it needs to. It was a very 20th century response, even down to a week’s free service beginning this week, ahead of the main launch.
Where, then, does the modern industry draw the line? Venturer made the point that competition has arrived “precisely because the high quality service provided by Trent Barton has grown the market to the point where a competitor sees a large enough customer base for two operators”.
How will the Competition Commission view this and the response?
One commenter hoped that in the process Wellglade wouldn’t destroy its reputation. Welglade is at pains to distance its cheaper competition from the work it’s done at Trent Barton. Interestingly, 99pbus.co.uk and bargainbus.co.uk domains websites were registered by the Trent Motor Traction Co Ltd.
As if to emphasise the difference, “Bargain Bus” uses the 24 hour clock on its printed publicity. Yet, this is not a novelty for Wellglade. So, your starter for ten is, what other pure-Trent Barton product uses a 24-hour format timetable? Round the clock Kinchbus’ Skylink doesn’t count.
27 comments:
Can't answer the 24hr clock question, but the absence of both websites this morning suggests second thoughts ... a compromise perhaps ..
I know trentbarton aren't all that into route numbers, but presumably it's not service 99P any longer...
As you point out Trent has to do something in light of the increasing competition but if their reaction is derided as "a very 20th century response", what exactly do you suggest they do instead?
Continue to compete on quality and service rather than running a loss-leader to take a competitor off the road, perhaps?
It does seem a little immoral, and more a case of using size as an advantage rather than true competition.
It's interesting to note that the 99p website is still active, and the Facebook page is still being updated as the 99p bus service.
I believe Wellglade tried the "continuity" approach, but this failed to put Premiere off. Although they are the larger operator, Wellglade have to defend their market as it comes under increasing attack. Premiere are the ones being predatory, and Wellglade have chosen to launch a response. It's the relaity of a de-regulated, commercial industry.
And it's not just Premiere that they have to contend with, presumably Your Bus is having an impact too.
Yourbus are involved in a slightly different market. Although Wellglade have a presence on the Nottingham-Beeston corridor (the Indigo and 18) the Yourbus Y36 is actually a carbon copy of the NCT service 36. The Y81 is a duplication of much of the NET tram route.
"The Y81 is a duplication of much of the NET tram route."
Which in a sensible world wouldn't happen. Buses should feed the rapid transit rail system (tram in this case). *Not* compete with it.
In my view, public transport will continue to offer a poorer option to the car until it and legislation surrounding it realise that it as a whole has to compete with the car and stop the petty, childish infighting like this.
Have you ran your own business or been caught in a situation yourself like this, Neil? Sounds to me like full of commentary and of little substance.
Except for the saturated Beeston - QMC - Nottingham Market, there is no direct competition with yourbus and Wellglade.
"Have you ran your own business or been caught in a situation yourself like this, Neil? Sounds to me like full of commentary and of little substance."
OK, maybe I should clarify further. I can understand why in the context of the current framework of the industry, Wellglade have to respond, though I could be tempted to support legislation banning loss-leaders to make such competition further.
However, I think Government and the industry should look more closely at co-operation rather than petty in-fighting. The industry needs to work together, with service groupings, PTEs and similar, in order to win against the real competition.
Neil said...
"... I could be tempted to support legislation banning loss-leaders to make such competition further."
I trust you never take advantage of the short-term special offers in supermarkets? I understand that most of them are loss-leaders. Any such legislation would, of course, become unpopular, as well as unworkable and unenforceable!
It should also be noted that 99p / bargain bus chose to paint / operate their vehicles in the distinct red of Premiere, rather than their own identity. They also have decided on no frontal branding so people waiting at a stop just see a red bus (as opposed to the Cotgrave connection maroon colour) and be led into thinking "this is the Premiere Red bus" At least Premiere went in with their own brand which clearly offered "another choice"
It seems that price is the key factor for passengers in this battle. As I have no first hand knowledge of the standards of the operators involved, I gather one trades on a high-quality product, and perhaps the others trade more on price alone.
Why are TB so concerned about a lesser offering being popular...are their passengers so fickle,and if so, perhaps TB need to be aware of market segments in the way Waitrose now have an Essentials range in addition to their regular 'posh-nosh' items.
Simply going head to head with a new low-cost rival makes them look very fragile and insecure. Not very dignified either.
Anonymous said...
"Simply going head to head with a new low-cost rival makes them look very fragile and insecure. Not very dignified either."
Well, what would you suggest they (Trent Barton) do? It's easy to criticise, but your own example of Waitrose would appear to be an example of competition on price. You say that TB need to be aware of market segments - but it appears quite clear to me that they already are aware of that, and believe that at least a part of their market is 'price-sensitive'; and they wish to cater for them, and retain them as customers.
Can you think of another way of doing that, other than running some buses at lower fares? Should they perhaps introduce first and second class compartments on their buses, similar to trains?
Anonymous said...
It seems that price is the key factor for passengers in this battle. As I have no first hand knowledge of the standards of the operators involved, I gather one trades on a high-quality product, and perhaps the others trade more on price alone.
One (TB) has offered a high quality (and high price) brand in a large area, with no competition. The other (Premiere) have come along with the "Aldi" style approach and its proved in several areas of Nottingham that people do want a choice. Premiere have a current fleet of over 70 vehicles, so are no fly by night company, they are just offering an alternative. In the current climate price is sure to be a winner, but in certain areas comfort and style have proved more popular as TB have always based their business profile on. I think it will be long battle, but all this will only benfit the travelling public who have had choice of product increased and cost of travel slashed overnight. What will happen in the end? Who knows, One thing is for sure if Premiere move on from Cotgrave they will only deploy their rescources elsewhere and how long would the "bargain bus" hang around in the area afterwards? I am certain if Premiere pulled out of the area, then bargain bus would follow!
I suspect Bargain Bus would go as well. Yet in other places (Manchester and Liverpool are the ones I'm familiar with), Magic Bus is proving very profitable for Stagecoach and it is showing no sign of going away.
"Classes" on buses do exist, by the way - parts of Germany have "Schnellbusse", express buses that run into the city centres on the UK model at a premium fare. These tend to be coach-seated and charged at a first class fare.
Premier is, like so many of its kind, catching the concessionary fares gravy train. It must be working to enable them to have been able to invest in newer vehicles and to sufficiently annoy Trent into retaliating in this rather haphazard, disjointed, uncertain manner.
OAPs do not have to be loyal to a bus company any more. They hate waiting in the cold so will jump on the first bus that arrives. They're all out there with their passes. Plenty of money to be made (and fought for) as this surely shows.
Bus travel is a natural monopoly. I ask,
How many people will let a Cotgrave Connection bus go past and wait for the Premiere one? (Unless they have a return ticket)
You can see exactly the same thing in Oxford with London buses - people catch the first one that comes along (admittedly at the same price here, although the Oxford Tube is more frequent and runs all night).
Customers may like cheaper buses because it increases their surplus, but does it actually make any difference to whether or not they travel?
If I was you Kingy I would be round premiere with your cheque book!
Hornby really does seem to be on his one man crusade to prove the Competition Commission right to investigate the industry. I trust Wellglade have consulted competition legal advisors at every turn in this saga.
Having worked for many years in bus management I cannot possibly see how a 50p fare can cover costs, even a full bus would result in little over £25 revenue, thats before the discount applied to any concessions trips are applied. I very much doubt every trip will be full therefore even a half load is unlikely to generate more than £10-£15 revenue, with that kind of revenue they'll be lucky to cover direct costs (drivers+fuel) therefore unless its a short term time limited promotion then it is more than likely to be anti-competitive and attract the CC's attentions sooner or later. Something will have to be covering Wellglade's legal fees and it certainly won't be revenue generated by this venture!
Its more likely to be a gut instinct approach. I learned once never to let it get personal. TB surely have enough market clout to offer a premium service and allow someone else to offer a cheaper type of service.
If Premiere are expanding at the 'expense' of TB then surely Premier have some sort of service they are offering that people find attractive that TB doesn't offer. Is it worth TB offering that type of service or sticking to the high quality service they are known for?
As Alex is on an equivalent MD's salary, with all the attendant expectations of coming up with the next new idea, perhaps its him who is the one running scared. He is after all the one who has to find new sources of money. Surely lowering the quality of the main business isn't the way to go about that? Is that source of money actually worth going for, in the short term?
How is the 'quality' of the main business disrupted at all? Isn't that the whole point of 99p bus? A different product serving a different market whilst tb carry on 'business as normal' I saw quoted in the press.
But TB's new approach will see them neglect their 'core' market surely? If they chase after competitors who are 'inferior' that will divert attention from what they should be doing that they do very well.
But clearly TBs new approach is to be obsessed with what lower quality competitors are up to, and that approach is one that will lead to them losing money. They should be stronger willed than that surely? Who appears to be running scared?
Unless the TB 'brand' is a load of hot air and they have the typical bus company failings and struggles - such as disaffected operations staff that irritate the customers then I don't get why they need to do this. They haven't responded strongly to anyone since 1995.
In fairness to TB, I've no experience of their operations so can't comment. But it is interesting how Premiere have managed to get a foothold.
Not wishing to spoil for a fight myself, but I disagree. tb have made very local efforts to truly personalise their customer service, with directors travelling on buses, serving breakfast as one example. We've seen new LED displays installed on xprss and radcliffe line which whilst not earth shattering is an investment. There's generally lots going on across their business - have you seen their recent news page and newsletters etc? I think one extra service with 2 PVR has not got the ability to divert attention - that's the beauty of their local management structure. What all this appears to show is that the tb quality is becoming more emphasised against other operators.
I too don't see why TB have struggled so badly to retain passengers on the Rushcliffe routes. I am though beginning to wonder if they have slowly been left with a primary terminus which no-one really wants to go to. Broadmarsh bus station is dated, the shopping centre itself has been in decline for some years, and the centre of gravity of the city has moved north - areas more directly served no by Premier.
This is a case of history repeating itself. Back in 1994 TB used "free" buses to see off competition on a number of routes with buses not branded as TB ones. TB feel they have a monopoly which was granted to them when they purchased the company from the government in 1986 for peanuts. However who is behind Premiere? It would not be the first time that a large group has backed a small operator to destable a company to bring them to the table for purchase.
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