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4 customers and how they use the transit system. Generally, ITS able for exploring topics that customers may be unfamiliar data can serve market research objectives in two ways. First, with; evaluating existing services; exploring creative ideas; the data can be used to monitor service delivery and con- and narrowing options for subsequent analysis through sumption, as an ongoing activity or in a more targeted fash- traditional surveys. ion (for example following changes in service and fares or Customer surveys provide the principal means of recover- after a marketing campaign). In these applications, ITS data ing systematic information from transit users and the general substitute for data that have been traditionally collected by population. Surveys take a variety of forms, including on- manual means. Second, ITS data can be used to enable tradi- board rider surveys, on-street intercepts, mail and telephone tional market research practices, and in these applications surveys, online surveys, and household travel diaries. On- they complement rather that replace traditional data. The board surveys are used for recovering information about the research team refers to the complementary role of ITS data as users of the system and their trip information; mail and tele- "leveraging," in that it extends or adds value to information phone surveys are best suited for regional assessment and recovered by traditional practices. tracking of attitudes and behaviors associated with both rid- ers and non-riders; on-street intercepts are good for short surveys, especially those that require presentation materials; Definition and Benefits of Market online surveys are useful for recovering specific information Research in an ITS Environment from customers with Internet access. Market research is the systematic gathering, recording, and The staff and resources required to maintain a compre- analyzing of data with respect to a particular market, where hensive market research program are not inconsequential. market refers to a specific customer group in a specific geo- Market research is costly, and this function competes with graphic area (American Marketing Association 2007). In the others for scarce resources. In the transit industry it has thus transit industry, this definition encompasses analysis of cus- been necessary to regularly demonstrate the value that mar- tomer satisfaction, public opinions, market characteristics ket research adds to the organization (Elmore-Yalch 1998a, and trends; identification of potential markets; demand esti- 1998b; Fielding 1987; Kittelson & Associates 2003; Morpace mation; market segmentation; new product testing and International 1999; Potts 2002). The increasing availability of development; advertising and promotions; and fares and ITS data in the transit industry can contribute to the business pricing policies (Elmore-Yalch 1998a). Market research case for market research by enabling a more comprehensive activities are often closely aligned with service planning in integration of market research with other functions that con- transit agencies, fare and service changes, and service per- tribute to the industry's customer service mission. formance monitoring linked to market research findings. Effective transit market research does not take place in iso- The most common traditional techniques for addressing lation. The design and execution of a comprehensive market market research questions in the transit industry draw on research program depend on effective interaction with transit analysis of data and information from surveys, field observa- operations, planning, finance, human resources, and senior tions, focus groups, and secondary data sources. Market management. Any market research endeavor must anticipate research techniques used in the transit industry have been how the research output will combine with the agency's func- documented by Hatfield and Guseman (1978) and Retzlaff, tions, strategies, and goals to form an integrated marketing Soucie and Biemborn (1985). The use of market research for plan. Finally, monitoring and evaluation of implemented transportation systems management has been addressed by marketing plans provide important feedback information Apogee Research (1990). for current and future market research. Successful market Personal observation is a market research practice that is research is aware of its important position within a larger predominately used to monitor service delivery. Observation agencywide marketing framework. data are collected by dedicated data collection staff or con- Fielding (1987) emphasizes that market research should be tractors, who sometimes pose as "mystery riders." Personal performed as an integrated function within a larger transit observation techniques include manual collection of service marketing system. Ideally, market research should inform the delivery data, such as schedule adherence, boardings, alight- development of marketing plans, and the monitored effects of ings, and passenger loads. implemented marketing plans should feed back into the sys- Focus group techniques are used to gather information tem and inform the next round of research. Despite the prom- about customers' opinions, viewpoints, and perceptions on ise of an integrated marketing system, Fielding concludes that specific topics. Structured discussions allow market re- the critical monitoring function rarely happens, breaking searchers to explore issues within a controlled setting, with down the cycle and isolating market research from service the goal of gaining a deeper understanding of customers' delivery. He points to the difficulty and cost of collecting reli- attitudes and preferences. Focus group techniques are valu- able data as the key impediment to the monitoring function.

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5 Figure 1-1 updates Fielding's integrated framework and contribute to evaluating reliability. APC data can document locates market research within the larger marketing system how many riders are using the system. Farebox and card sys- when ITS data are available. By providing continuous, low-cost tem data can document methods of payment and begin to data, ITS fills the service monitoring gap identified by Fielding identify customer segments. Event data can document phe- and completes the integrated marketing cycle. In the updated nomena that affect the quality of riders' experiences on the framework, ITS data both inform the market research program system. Data from the Web and automated phone systems and monitor the consequences of implemented marketing can document how customers are obtaining information and plans. what they are communicating back to the agency about Market research benefits from service delivery data as an their experiences on the system. Generally, because ITS input in the design and analysis of market research projects. data are collected continuously and comprehensively, quasi- The arrow from ITS data to market research in Figure 1-1 experimental before and after studies can be done to evaluate represents ITS data that have direct applications in facilitat- the effectiveness of a marketing program. In this context ITS ing, or leveraging, traditional market research techniques. In data validate traditional market research practices by assess- this context, ITS data can provide information to market ing the impact of marketing action plans and informing the researchers that helps to identify (or locate) the customer next cycle of market research studies. populations who are to be studied. ITS data can also con- Before the emergence ITS data, the monitoring and eval- tribute information needed for sampling customer popula- uation function of the integrated marketing system, as prac- tions and inferring findings from a sample to the general ticed at many transit agencies, was often resource-starved population. In some applications, ITS data can serve to main- and haphazardly undertaken. In this more constrained con- tain the currency of the knowledge about customers gained text, marketing was often equated with promotion and cus- through traditional practices. Lastly, it can make information tomer service. Important as these functions are, they do not and insights gained from traditional practices more robust by represent marketing as it is practiced in other industries connecting the dimensions of customer satisfaction explored (Cronin and Hightower 2004). Being "customer-oriented" through traditional practices to parallel service delivery meas- certainly means listening when customers lodge complaints. ures documented by ITS data. It also means providing information that customers want Marketing action plans typically include elements of ser- and need to use the system, as well as promoting the benefits vice development and delivery (coordinated within opera- of transit as a travel option and providing products and tions and planning), promotion, and customer service. Each services to facilitate choices. Fundamentally, however, a component benefits from the continuous monitoring func- customer-oriented marketing program has to be capable of tion of ITS technologies, represented in Figure 1-1 by the po- understanding customer behavior. Understanding customer sition of ITS data as the intermediary between marketing ac- behavior begins with an ability to monitor the consumption tion plan components and the monitoring and evaluation of products and determine how consumption is related to function. Within service delivery, for instance, AVL data can product attributes. The understanding becomes deeper MANAGEMENT GOALS & OBJECTIVES MARKET RESEARCH FOR MARKETING Area analysis; attitudes; market segmentation; customer satisfaction; origins-destinations; fare policy MARKETING ACTION PLANS SERVICE DELIVERY PROMOTING TRANSIT CUSTOMER SERVICE Analysis; planning; Advertising; Information; special sales; scheduling; operations; revenue public relations customer relations ITS DATA MONITORING AND EVALUATION Figure 1-1. Market research in an integrated marketing system with ITS data.