Moving Forward: The Role of Marketing in Fostering Public Transport Usage

Abstract

To reduce traffic congestion and air pollution, public policy makers often try to stimulate the use of public transport, as it is a more sustainable alternative to traveling by car. This study therefore investigates the impact of firm-initiated marketing actions and traveler satisfaction on monthly cumulative traveled distance of a Western European railway firm, as well as possible effects of this cumulative traveled distance on satisfaction. Analysis of time-series data on traveled distance, advertising, promotions, and satisfaction using a vector autoregressive model with exogenous variables that accounts for seasonality, trending behavior, and gasoline prices reveals positive effects of advertising and promotions. Advertising elasticities are considerably smaller than meta-analytic values of brand-advertising elasticities. Similarly, promotion elasticities are lower than those frequently reported in marketing. The authors find no effect of satisfaction on traveled distance; however, they do find a negative effect of traveled distance on satisfaction, which could be explained by capacity constraints. The authors conclude that firm-initiated marketing actions are useful and effective in fostering public transport usage.