Section+B+(2)

Section B (2)


 * Strengths of Tresto: **
 * Quick Boarding-** The Tresto card system speeds the boarding process as passengers are only require touching the card on the designated receiver. Passenger often fumble through their pockets searching for change, Tresto eliminates such encounters. (Presto 2008)
 * Convenience**- Tresto will partner ship with a credit card company in order to manufacture one single card that works for transit payment while it functions as a credit card. This innovation eliminates the requirement of reloading the card, and worrying about whether or not there is value in the card.
 * Easy** **Transfers**- A paper transfer is no longer required; rather the card is programmed to work out the transfer. If a passenger has already paid, then they do not get double charged. This eliminates the production and distribution of paper transfers. Also, the transfer system works between bus and train (Presto 2008).
 * Replacement**- the Tresto card can easily be replace if it is lost with the value restored (Presto 2008).
 * Record-** The Tresto system records the average number of passengers for each stop according time and day in order to provide more frequent service where it is needed. This system is better then the pervious speculations since it allow instant data upon boarding a bus.
 * Weakness:**
 * Opportunities**
 * Membership rates-** Adopting the current membership system will be greatly beneficial to Tresto as it requires passengers to prepay for transit service for a prolonged period. If this system is adopted the company needs to develop a program within that does not double charge passengers. This system will definitely benefit captive users and may pull choice users to more frequent usage of transit services.

- Since the current recession has caused the prices of automobiles to drastically drop, the segment of population that previously could not afford personal transportation may be able too now. This is a threat to the Tresto system as it may decline the number of choice users and potentially captive users. In this case, it is in the best interest of Tresto to reduce prices during recessions to maintain those customers. - The sole purpose of dividing the market into smaller segments is to allow our company, Tresto, to focus on a sector that is most interested in our offerings. It is of utmost importance to do this procedure properly. Before successfully segmenting the market, it is necessary to evaluate five requirements that include: homogeneous, heterogeneous, substantial, competition and resources (Target Market Segmentation). Homogeneous is referring to the similarities that individuals in each segment possess which ultimately translates to a uniformed demand from that particular subset. The heterogeneous criterion suggests that there should be strong differences between the segments. Furthermore, the results acquired from scrutinizing the market based on of the homogenous and heterogeneous, helps determine whether or not there is a substantial demand for the product or service. These must be established before commencing a with the business venture. The competition in the industry must be reasonably bearable. Finally, our company must establish that our resources relates to the demand of the segments. Since the product and service that Tresto offers relates the transit industry, its segmentation will be in accord with it. However, the qualities that Tresto offers will enable the transit industry to expand and better reach a potential segment of the market. This idea will be further discussed upon determining the present segments. Transit passengers can be categorised by the socio-demographic information of a population. In any given population, there are different levels of ridership that should be considered. The following is lists of socio-demographics that are considered to be transit users:
 * Threats:**
 * Segment **
 * Socio-demographics: **
 * Students**- Students use transit because they either do not possess the financial means of purchasing a vehicle, or they are beneath the driving age. For this very reason they often use transit for transportation. However, they do also get rides from their parents or older siblings.
 * Elderly**- elderly qualify not necessarily because of their financial status, rather their physical ability to operate a vehicle. Since they cannot depend on themselves, transit is convenient to get in and between cities.
 * Disabilities**- Again people in this segment cannot operate vehicles.
 * Low income families**- these families cannot afford to purchase vehicle and therefore qualify are transit riders. This includes **children** for that matter.
 * Middle class**- passengers from this group seldom board the transit. They tend to use transit, when they travel to the part of the city where personal mobility would accompany a parking fee, such as downtown Toronto.

After examining each group we determined that they could be further narrowed to illustrate three levels of demand, best defined as captive riders, choice riders, and non-users, who are currently non users (Krizek and El-Geneidy, 72). Each subset possesses its own levels of demand ranging from relatively inelastic to elastic. In this case captive riders have an inelastic demand since there is a lack of transportation options, as they cannot afford other means. They usually include the above mentioned socio-demographics, generally excluding those of middle-class. To further elaborate, if there is a price increase from $2.00 to $2.75 individuals in this group will continue purchasing tickets. Therefore, the benefits of the Tresto card will not increase profit from this segment however it may increase customer satisfaction gained from better service.

Since choice riders have other means of transportation, they are often more sensitive to transit changes (Krizek and El-Geneidy, 73). In this case, they have an elastic demand towards transits. In fact, this very sensitive attitude of choice riders that creates opportunity for the Tresto system. The company believes that the reduction in bus far and the many improvements to the service acquired by the Tresto card will pull more choice riders towards transit. Demand here is affected by several noteworthy concerns. The Tresto marketing analysis reveals that passengers primarily value their waiting time, thus there is a demand for service frequency. The easy transfer and quick boarding nature Tresto card, enables for a greater frequency of service by reducing the stop time for each vehicle.

Non-users of transit do not currently profit the industry, since they do not require it. However, it is possible for to capture a portion of this population if they are given strong incentives. Non-users may use transit given certain circumstances. Every large city has a certain period where traffic is more then usual, know as rush hour. During this rush hour period hardworking citizens rush too and from work. As a result the rush hour period can cause heavy traffic and consequently delays in arrival. In this case, the time frequency and improvements to the transit system may in fact attract this segment of the population; if they transit system can prove to be faster then personal mobility. Tresto market segmentation will use both captive and choice rider population group to focus the marketing plan. However, Tresto will use the market analysis to prove the existence of potential and current demands for improvements to transit services. In doing so, transit services will be open to another segment referred to as choice riders and potential riders. The objective here is to convince transit unions of the necessity of adopting the Tresto system, if they intend to remedy shortcomings with the current transit systems.
 * Transit Unions: **

Krizek, Kevin and El-Geneidy, Ahmed, "Segmenting Preferences and Habits of Transit Users and Non-Users".Journal of Public Trasportation 10.3 (2007): 71-94. Target Market Segmentation, "Witiger.com" (2009), consulted on 01/04/09: <[]>

Also the Presto site you probably have the reference.