Pricing Strategies Of Indian Railways

Presentation By:
Satyam Rathore 22BSPHH01C1561
Abhishek Patra 22BSPHH01C0031
Priyanka Pillala 22BSPHH01C0794
Santosh Kardak 22BSPHH01C0520
 Introduction
 Indian Railways struggled for years with losses in its passenger segment while
receiving 75% of its revenue from the freight division.
 Due to the fact that this sector was not profitable was a long period of
stagnation caused by a lack of investment, and no brand-new technological
innovation.
 This increased pressure on the current year's fiscal deficit and the resources
that could investments in other areas were being used for such losses.
 Considering the expansion of other service industries Indian Railways made
the decision to abolish its static pricing system policy. The Indian Railways
made the decision to use dynamic pricing. Such was done to broaden the basis
of both the passenger and both the freight division and division.
 What Is Dynamic Pricing Policy?

 Dynamic pricing is a strategy used by businesses to set variable prices for their
goods or services based on the current market demands.
 Several factors, including rival pricing, time-based pricing, and others, affect
the expenses. This helps the company cut losses by providing a low cost in a
low demand situation.
 Organizations adopt this pricing strategy with the express purpose of raising
occupancy rates while boosting profits. It is referred to as a "flexi fare rate
system" and is based on the typical aviation system. As much as 10 percent of
the total seats in these trains will be sold at the ordinary charge in the
beginning. After that, point the fare will increment by 10 percent with each 10
percent of the seats sold.
 Advantages and Disadvantages of
Dynamic Pricing Policy
 Advantages:
Though the benefits for this pricing for passengers are not much at present, it may
be a necessity considering the abysmal conditions of the railways.

 Disadvantages:
The major disadvantage of this move is that providing for higher pricing may
have a reverse effect on occupancy. People may choose to travel by other means
than pay an uncertain premium fare.
 Competitive Pricing Strategy

 A competitive pricing strategy positions your product in reference to other

options on the market. You set your price after considering the prices of
comparable products, using the product to send a message about whether your
offering is a better value or of higher quality.
 Competition-based pricing advantages and disadvantages include the
opportunity to leverage a simple tool to send a powerful message, and the
danger of locking into a price that makes it hard to break even, as you
undersell the competition.
 4 P’s of Strategies
 Indian Railways strategy helps the brand/company to position itself competitively
in the market and achieve its business goals & objectives.
 Product strategy
 Price strategy
 Place strategy
 Promotion strategy
 Product :
o Indian Railways is a government run organization which runs the rail network in
India and connects millions of people.
 Price:
o Indian Railways follows a microeconomic pricing strategy where the distance
travelled is same but at different price for different class of consumers.
 Place:
o Indian Railways covers almost 115,000 kilometers throughout India and is one
of the largest rail networks in the world.
 Promotion:
o Indian Railways has never been engaged in aggressive promotional policy as it
enjoys a monopoly market. Although recently it has been engaged in
campaigns for other reasons like cleanliness, tourism, etc.
 Conclusion

 Running the model is like trying to navigate a maze because there are so many
factors to take into account, and railroads are one of the key components of an
economy.
 Due to its public benefit and ownership by the government, the Indian Railways
concept might never reach its maximum potential.
 Even though the model has flaws and inefficiencies, it is a great step for the
improvement of the Indian Railways.
 With more revenue coming in it will offer better facilities and service to the
passengers.
Thank You