Challenging assumptions, great example

I have heard about megabus several times in the last couple weeks and then I saw a megabus on the road last week; this has go to be a sign!

Megabus is a "no-frills" intercity bus service run by Stagecoach Group in the United Kingdom.

This is a good example of applying the assumption challenge to a service that has become a commodity.

Greyhound and Trailways have been transportation staples in the USA for many years. Greyhound grew by having a station in every major city and making stops in many smaller towns. Regulation and few competitors allowed them to grow and rule the road. Unfortunately, deregulation, unfocused management, and Greyhound's sale to new owners over time caused a loss of focus. Greyhound has suffered in recent years by being part of Laidlaw International, Inc., a holding company mainly known for owning several companies that make school buses. See for more history.

Some of the assumptions being attacked by the megabus model is the pricing system, bus branding, and routes. Greyhound and Trailways use a flat fee system. Megabus follows the yield management model typically used by low-cost airlines where the lowest fares are offered to those who book early or on less popular journeys.

Megabus is taking an approach to marketing that challenges the assumptions of branding the bus: Instead of labeling the bus with just the corporate logo, megabus provides a distinctive and direct marketing campaign to tell you what megebus is and how much a trip will be starting out.

Megabus also does not stop in every small town on its way to the end destination. Megabus has focused on the target of getting people from A to Z, directly with no frills and no stops.

The assumptions being challenged:
  • Pricing is the same all the time.
  • The vehicle itself will just have the corporate logo.
  • The bus will stop in every town between X and Y to see if there are passengers to pickup/drop off.


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