Sunday, 18 January 2009 22:25
Are Coach Companies Working For The Sake Of Society?
Management of coach company used to be a business transferred from father to son. Nevertheless, it shall not like be in this way anymore under those circumstances. If no professional approached are applied, it will be more and more difficult to survive for coach companies day by day. The coach companies in Turkey shall institutionalize and make an actual calculation whether they get their money’s worth or not. Yet, companies which are not able to get their money’s worth , are kind of living in a dream and it is usually too late for them when they wake up due to a quake.
When rate of inflation was around 80-85%, coach purcase decision was deemed as an investment. Coach was purchased, the payment was completed within 2-3 years by standing the gaff and pending all money for payment. As soon as payment was completed, the coach was sold and second hand value was recorded as a profit. Then, this amount was used for downpayment of a new coach and the circle was initiated again. The starring actors of this game were individual coach owners. However, many individual coach owners had to confront the danger of being wiped off from the market. The main reason of this jeopardy is to forget the reality of “making profit” while trying to cover all expenses including fuel costs and also coach price payments. They have worked not for theirselves but for others and have not found any oppurtunity to develop theirselves either.
Legendary CEO of General Electric, Jack Welch, said “If the world around you is rotating faster than you, you are just about to the end of the road.” Coach owner could not play the game according to the rules and confront to be wiped off from the market.
Well, is the photo that much dark indeed? Is there an exit from the darkness?
Of course each equation has a solution as well. So do this problem.
Lately, coach transportation sector has been in a ardous competition with airline companies. Airline companies can establish long-term strategies through their experience and make every step in accordance with their strategies. As a result of this, seating capacity of airline sector has increased 60% and passenger volume has increases 340% within last 5 years period.
The figures prove the level of competition between coach transportation and airline sector. The only way to be prospective within this competition is to control the costs, find the balance between revenues and expenses and organize cash flow.
Occupany rate shall be 100% in order to increase the revenues. Many actors within the sector make their calculations according to 35% occupancy rate. It is just a dream to find an exit within the sector unless this occupancy rate is not increased.
The first step of 100% occupancy rate is to believe this target. Mankind is not able to perform anything without full faith. The second step is to develop an stragety based on faith. The most important point while developing a strategy is not to give promises for services over the expectations of passengers and not to avoid from fulfilling this promise. In case promises are fulfilled, customer satisfaction shall be easily obtained. First of all costs and breakeven point shall be calculated very carefully. After that, discounted ticket pre-sales is fulfilled and then expenses are deducted from pre-sales ticket revenue. Then higher price is applied for the passenger who wants to buy tickets close to departure time and profit is created. First come, cheap ticket, last come expensive ticket.
However the implementation of this system depends on the comprehensive analysis of expenses. The lion’s share within the expenses is the coach itself. This vehicles, which cost almost as much as a small factory, are bought and sold without any detailed income and expenditure calculations. There is an idiom of “Platform Coach” within the market. “Platform Coach” shall raise the expectations of passengers who are not ready to pay high ticket fee. When this expectation is not covered, they try to find an opportunity with low ticket fee. That is why the effect of coach purchase price on ticket fee shall be calculated very carefully. The coaches with high price shall not bring so much profit to you since it shall raise the expectations of the passengers.
Coach-company owners should determine their promises clearly and not make investments just for fame and good reputation. Also, I think it is just time to delete the “Platform Coach” concept from the literature. As the essence of marketing is based on “define and fulfil your promise”, coach company owners should make their steps without forgetting to make profit, make their own ways and purchase appropriate coaches. We should not forget that proverb “Cut your coat accoding to your cloth”. The coach company owners who did not cut their coat according to their clotes are sick nowadays.
After all; coach-company owners shall make a situation assessment initially, determine their promises to passengers and an appropriate strategy for the next term. Otherwise, the companies being transferred from fathers to sons shall be replaced by more rational companies. Since doing business without profit is pertained to charity foundations, company owners, who want to transfer the companies to the next generation, shall not make investments just for fame and good reputation and find the ways of obtaining maximum income with minimum investment level. The companies within the sector shall not be only actors only but also scenarists and directors, which shall be able to write and direct their own scenarios, in other words, they should be able to corporate substructure as soon as possible. In addition, they should understand that knowledge of institutionalisation is not enough for a cure, but also implemantation of knowledge of institutionalisation shall be essential.
