Updating the Value Proposition of Public Transportation: A Way to Re-Grab Millennial Customers (A Study Case of Angkot in Bandung City)

• Main Author: Kurniawan 29116098, Dedi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/26455
• Institution: Institut Teknologi Bandung

Angkot, the largest public transportation mode in Bandung City, still has an important role for the mobility of citizens in Bandung City. Lately, Angkot has experienced a drastic decrease in revenue primarily because Angkot is unable to compete with new entrants in the public transportation industry, i.e. application-based transportation service companies targeting millennial segment. Thus, the revenue of Angkot from the millennial segment decreased drastically. <br /> <br /> This research aims to help Angkot owners in Bandung City to find the right strategy to re-capture millennial market segment in Bandung City in order to increase their revenue. Porter's Five Forces and Competitive Grid analysis were used to perform industry analysis. SERQUAL model was used to measure consumer perception about service quality of Angkot in Bandung City to evaluate internal condition of Angkot’s service. Value Proposition Canvas was used to evaluate the fitness of the current value proposition of Angkot with the millennial customer profile to find the insight of why millennial consumers leave Angkot. All results of the analysis were used as references to find the root cause of the decrease in the revenue of Angkot in Bandung City by using Current Reality Tree. <br /> <br /> After conducting the analysis, the author found the root causes of the decreased revenue i.e. (1) the application of information technology by customers and competitors as the external root cause and (2) inappropriate current value propositions of Angkot with the millennial customer profile as the internal root cause. External factors cannot be controlled by Angkot. Thus, the author proposes to solve the internal factor by improving the quality of Angkot’s service especially by updating its value propositions and make them more fit the millennial customers. <br /> <br /> At the implementation level,there are several tactical strategies proposed to Angkot owners to increase revenue from the millennial segment. First, developing strong digital channels that fit the millennial customer i.e.primarily a mobile application that allows consumers to see the real-time position of fleets, the arrival time, the travel time and the service price to be paid by customers. Second, improving fleet features and service performance of drivers that fit the millennial customer i.e.service price information displayed on fleet’s interior, a car camera, a trash bin, an air freshener, well-functioning windows, seats that are not crowded, and friendly and careful drivers. Third, abetter approach in strengthening and reintroducing low-cost strategy that fit the millennial customer i.e. communicating a flat price system, a lowest price guarantee system among all public transportation services through official digital channels such as websites, social media, and email marketing. <br />