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44 The potential markets for transit can be analyzed in terms of their demographic similarity (Chapter 2), their geographic similarity (Chapter 3), and their similarity in market preferences. Market segmentation is a key strategy in market research; it allows marketers to understand dif- ferent motivations for market behavior by different segments. Chapter 4 summarizes the market segmentation process, presents the four groups revealed in the process, and summarizes groupsâ characteristics. Market Segmentation for Transit To better understand the preferences and needs of different subgroups of the traveling popu- lation, the research team applied latent class cluster (LCC) analysis to the collected sample. This approach attempts to segment the population into a finite number of classes on the basis of a combination of characteristics observed in the dataâin this case, attitudinal statements. LCC allows subgroups of the transit market to be segmented on dimensions beyond basic demo- graphics. Respondents within each class share similar preferences, values, and characteristics that distinguish them from the respondents in other classes. Methodology The segmentation process began with more than 60 attitudinal statements ranging from environmental concerns to future transit use. Attitudinal statements with relatively minor variation between the classes were dropped, and iterations of the segmentation process con- tinued. Ultimately, 13 attitudinal statements segmented the collected sample into five distinct classes. These 13 statements, shown below, primarily revolve around preferences regarding transit, the environment, personal safety, the influence of friends and family, and driving and commuting: 1. I like the idea of doing something good for the environment by riding public transportation. 2. I think that environmental concerns are overblown. 3. Traveling by transit would be a more pleasant experience than driving. 4. I would definitely consider using public transportation more often. 5. In a world with driverless cars, I really would not see much role for buses and subways anymore. 6. My spouse/partner/family would approve of me taking public transportation. 7. In the future, people who are important to me will approve of me taking public transportation. 8. If they had to make a trip, most people who are important in my life would take public transportation. 9. My family and friends typically use public transportation. C H A P T E R 4 Market Segments for Transit Use
Market Segments for Transit Use 45 10. I enjoy meeting people on the bus or train. 11. Because of new services helping me make trips, I feel less need to own a car. 12. As I get older, I expect Iâll have to drive more than I do now. 13. I would be willing to commute an additional 45 minutes to live in a larger home. The Four Market Segments from the 2016 TCRP Survey Overview of Classes Five clusters emerged from the LCC segmentation; however, the research team determined that about 8% of the sample was responding in an inconsistent manner to the attitudinal ques- tions, possibly because of fatigue or simple misunderstanding the questions; this cluster did not add to the teamâs understanding of the issues at hand. Therefore, these respondents have been omitted from the charts and tables in this report. Their responses to other portions of the survey made sense, and so they were retained for those analyses. The remaining sample produced four interesting clusters helpful for understanding the attitudes, preferences, and mode and residen- tial location choices of the respondents. An analytic technique used in market research was used to identify four key groups on the basis of the similarity of their psychographic characteristics: urban commuters, single millennials, occasional users, and car lovers. Urban Commuters The urban commuter cluster (11% of the sample) comprises professionals who live and work in a big city. Nearly all urban commuters would consider using transit more often, and the majority believe that traveling by transit is a more pleasant experience than driving. Proximity to public transportation is important to these commuters and was often the primary selection criterion in the choice of their current home. They are the least likely cluster to cite that envi- ronmental concerns are overblown; the urban commuter believes that riding transit is a way to do something good for the environment. Friends and family approve of the urban commuterâs choice to ride transit but do not typically use transit themselves. The urban commuter is quick to adapt to rideshare services and thus feels less need to own a car. This class is the least likely to have typical access to a vehicle. Single Millennials Single millennials (8% of the sample) expressed an openness to all transportation options. Single millennials are willing to consider using public transportation more often but acknowledge that traveling by transit is not as pleasant as driving. Friends and family of these millennials approve of their transit use but are not likely to use transit themselves. Much of this group expects to drive more in the future and, despite the increasing availability of rideshare services, still feels owning a car is a necessity. In a world with autonomous cars, these millennials do not see much of a role for transit. This groupâs interest in owning and using cars aligns with their neutral stance toward the environment. Interestingly, this cluster would be willing to extend their commute by 45 minutes in exchange for a larger home. This may speak to the expectation of an increasing family size in the future. Occasional Transit Users Occasional transit users constituted 28% of the sample. These semiretired suburban envi- ronmentalists like the idea of doing something good for the environment by riding transit. This cluster is open to using transit more often but currently choose to ride transit only on occasion. The reluctance to use transit can be explained by the clusterâs disinterest in riding on transit with strangers and the belief that driving is more pleasant than traveling by transit. Nearly half
46 Understanding Changes in Demographics, Preferences, and Markets for Public Transportation of the cluster cited no transit use in the past month and, for those who do ride transit, it is often on an infrequent basis. Important people in their lives approve of their transit use but rarely use transit themselves. Interestingly, despite their occasional transit use, these drivers were the strongest advocates of the role of transit in an imagined autonomous car world. This cluster does not expect their driving habits to change in the future and are unaffected by the development of new services that help make trips. Car Lovers The least transit-friendly cluster, car lovers (45% of the sample), includes retired boomers and is the least likely of the four groups to express a willingness to change its traveling habits. Car lovers live in suburban and rural neighborhoods and prefer it that way. The cluster is most united by the belief that environmental concerns are overblown. This group does not currently use transit and is the least likely to consider using transit more often. This group is also the least likely to enjoy being with strangers on transit. Similarly, friends and family of this cluster do not use transit and do not approve of transit use. If these boomers were to use transit, it would not be motivated by environmental concerns. They do not like the idea of doing something good for the environment by riding transit. In the future, this cluster does not expect to drive more and will likely never adopt new rideshare services. Who Is in Each Segment? Table 7 presents a cross section of data on demographic and transportation use to help illu- minate the differences between the four market segments, as organized by the similarity of their attitudes. The immediate implications are as follows: First, slightly less than 20% of the surveyed popu- lation could be described as a âgoodâ market for public transportation; this group can readily be broken down into two separate positive market segments that have similar current transit-riding behavior but different views of the future. At present, the commuters make the work trip by transit at a higher rate than do the single millennials. The single millennials make the nonwork trip by transit at a higher rate than the commuters. Chapter 5 examines the extent to which each market segment perceives that it will change its lifestyle and lower its use of transit. One group has every intention to continue commuting, and the second group sees little future in continued dependence on transit for several supporting activities. Finally, the preferences of the occasional transit users may have implications for marketing strategies to those becoming empty-nesters. Table 7. Demographic characteristics of four market segments, 2016. Characteristic (%) Market Segment Used Transit Within Month Under Age 35 Single Has Had Children Student Employed Full Time Nonwhite Hispanic Urban commuter 79 44 41 35 9 61 23 6 Single millennial 73 68 46 40 11 73 33 10 Occasional transit user 52 28 28 49 5 54 13 4 Car lover 26 19 22 53 3 51 13 3