Case Study and Analysis


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Analysis of a case study on India's No. 1 Travel Site, The presentation also contains the solutions to the questions raised after the case study.

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  1. 1. COMPANY OVERVIEW An online travel service portal Focused on the leisure and small-business traveller coming to India Deep Kalra, CEO of MakeMyTrip (India) Pvt Ltd. (MMT) Objective to tap the potential of the huge US$1.5 billion NRI market worldwide
  2. 2. THE TOURISM MARKET IN INDIA Increased number of foreign tourists & increased travel by Indians to domestic and overseas destinations. In 2003, the number of Indians traveling abroad increased by 30% to 4.5 million. Airlines receives 15% of their business through Internet sales. In 2003, revenue generated $26 billion & 12% of travel services.
  3. 3. MAKEMYTRIP: THE COMPANY & THE PRODUCT Offer competitively priced V travel products – real time booking capability. Offer travel insurance, access to V business lounges and valuable shopping discount booklets Entire facility of travel V services through Internet. V Addition to Airline ticket, MMT offers Hotel booking, V Holiday packages, car rentals, trains & cruises for Indian & International destinations. MMT launched a B2B site offering Indian Hotels and V tour packages for international agents Allows online booking and V confirmation, online Web chat and toll free number. Provide value added service like a V free drop and pickup cab for its clients Also offers information visas, passports, insurance, travel & finance
  4. 4. THE BUSINESSS MODEL & OPERATIONS 1 Created network of offices in New Delhi, Mumbai & New York 2 Appointed franchise partners in US, UK, Australia & India 3 Operates to separate entities: MakeMyTrip - India & MakeMyTrip Inc. (USA) 4 Three modes of communication to reach sales/customer service team – emails, Web chats and toll free number Corporate sales Internet sales General sales Sales Team Daily sales target for the entire team
  5. 5. THE BUSINESSS MODEL & OPERATIONS Constant monitoring of the service quality given to the customer Lack a system to track timely customer follow-up CONCERNED AREAS Delay in resolving a customer issue or query Tracking customer buying and traveling habits Technological advancement
  6. 6. Offline (After Sales) Interface Online Interface with MMT Interface Real-Time Airline Booking Hotel Reservation System Customer MMT Sales (CRSs) Car Rentals Interface Backend Operations MMT Ticketing Customer MMT Sales Airlines Consolidators Web Site Content MMT Operations Car Rentals Hotels Tour Operators Net Carrots Fed Ex
  7. 7. CUSTOMER SEGMENT & ADVERTISEMENT Indian Market International Traveler Inbound Traveler Holiday Business Traveler Conference attendees Domestic Traveler Outbound Traveler Students VFRs Others
  8. 8. CUSTOMER SEGMENT & ADVERTISEMENT Low PC penetration, poor quality of dialup access Coke Limited credit card usage on the Internet Pilgrimage portal CONCERNED AREAS Hesitation to make purchase on Internet Competition from traditional brickand-mortar travel agent Fluctuating international market conditions BCCI MMT Matrimon ial portal Maruti Udyog
  9. 9. COMPETITION Expedia Less competition from US market CONCERNED AREAS Aggressive advertising campaigns Orbit MMT Travelocity Large customer base Priceline
  10. 10. MOVING ON Targeting inbound travellers To move from 90-10 % split of revenues between air tickets and travel service to a 70-3- percent split Domestic tour packages to NRI travellers Targeting NRI/VFR tourist segment Expansion of operations within India Targeting European Market
  11. 11. 4 P’s ANALYSIS - MARKETING 4 P’s DESCRIPTION / STRATEGY REMARKS PRODUCT • • • • • • International and Domestic Air Tickets Holiday Packages and Hotels Domestic Bus and Rail Tickets Private Car and Taxi Rentals MICE (Meetings, Incentives, Conferences & Exhibitions) B2B and Affiliate Services Save money Save time Save energy Convenient Travel easier PRICE • • • • Best Price offers No middleman involved Customer can choose as per budget & their income Affordable to all class of customers Best deal Affordable Quickly available PLACE • • • • • Internet marketing Online e-portal / e-business Dedicated 24*7 customer care support 20 offices in India & 2 international offices Franchise across various location No queues Anywhere Anytime Anyplace • • Promotion through social sites like Facebook, Twitter, You Tube, Magazine Sales promotions  Festival discount  Round trip ticket discount  Best deal of the month  Special offers to different holiday destination PROMOTION Online website Travel agents Communication Awareness
  12. 12. 3P’s OF SERVICE MARKETING 3 P’s PEOPLE PHYSICAL EVIDENCE PROCESS DESCRIPTION / STRATEGY • Self service marketing – no direct interaction • Travel agents – distributors & dealers • 24*7 customer care service • Customer care service • National and International Offices • Travel Agents offices • Easy and simple process • Mode of payment by any bank and any card • MakeMyTrip on Mobile
  13. 13. SERVICE MARKETING STRATEGY TO CREATE BRAND VALUE Travel Insurance • Short term travel insurance • Offers the latest travel and health oriented information International SIM Card • Country specific mobile connection before departure • Fulfilling customers specific communication needs when traveling abroad Forex Card • Online purchase & transactions facility • Instant & convenient access to your money in the currency of your choice MakeMyTrip Credit Card MakeMyTrip Gift Vouchers • Welcome gifts • Accelerated reward point system (Repeated Purchase) • Discount vouchers • Individual Gifting (Birthday, Anniversary, Honeymoon, Wedding, etc.) • Corporate Gifting
  14. 14. QUESTION 1 Can MMT sustain its business model by targeting only the inbound travelers, or does it need to look at other markets and segments? If yes, which segments would you recommend? If no, can they grow within the inbound segment?
  15. 15. QUESTION 1 1 In 2004, 3 million inbound travelers were seen visiting India. 2 In 2007, this figure is estimated to go up to 5 Million at roughly 30% CAGR. 3 So, We think MMT can sustain business model by focusing on Inbound Travellers. 4 There’s also a segment MMT can go for. Medical and Health Tourism is the sector MMT hasn’t been looked up at.
  16. 16. QUESTION 1 5 India provides high quality health services with affordable prices. Demand for Health Tourism is non-seasonal 6 MMT can also tie up with giant Hospital chains to provide overseas customer with HEALTHY DEAL!!! 7 Due to changes in trends in IT, foreign travel of Resources is the need 8 Corporate tie ups with middle level IT companies who lack Travel Department, MMT can provide them with Travel Solutions.
  17. 17. QUESTION 1 CONSUMER BEHAVIOUR For long term success, MMT will have to change its strategy • The study by PhoCusWright in November 2003 found that flight and rental cars are the travel services most likely to be purchased online, while offline channels still dominate the travel activities category COMPETITION • The aggressive advertising campaigns from the competitor like Expedia can take the MMT market share CHANGES IN INDUSTRY • The airlines might provide substantial discounts on their websites and take MMT out of business if they don’t diversify EMERGING MARKETS • The high growth in India outbound travel might make this as big if not the biggest segment in next few years. MMT cannot afford to leave this segment untargeted
  18. 18. QUESTION 2 Ad revenues have never been core to MMT’s business plan. However, MMT’s role in promoting some leading NRI-focused brands suggests that this might be another avenue that Kalra could investigate. Does MMT need to look at advertising as a revenue generator?
  19. 19. QUESTION 2: SOME STATISTICS 1 Internet channel has grown the fastest since 2001,taking share away from most traditional channels. 2 Internet advertising grew at an annual clip of 18% from 2001-2006 and only cable TV (10%) was close to a double digit growth rate. 3 Total US internet advertising was $21.2 Billion in 2007, a 26% increase over 2006. 4 Consumer related advertising made up 55% of revenue. 5 Fostering strategic Brand alliance associated with the Indian consumers is a right strategy to go ahead with.
  20. 20. QUESTION 2 LET’S LOOK AT BRANDS BEING ADVERTISED 1. COKE: Coca Cola Revenue Year over Year Globally 7.56  Coke Registered 11 percent drop in sales after the pesticide allegations in India in 2003 5.2 4.36  As we can see the revenues have fallen for coke, coke needed to pump up on marketing to persuade the customer. Hence they needed good online and offline reach.  Being a good influencer for NRI and VFRs, MMT could have been a channels coke could use in those times. 2003 2004 4.26 2005 2006
  21. 21. QUESTION 2 2. MATRIMONIAL PORTALS:  Matrimonial sites following their inception were booming due to innovative means of finding alliance.  Also the penetration of Internet was increasing which led to growth in Matrimonial top line (2 million matches till date for  There’s also a trend of marrying an Indian bride or an Indian Bridegroom for Overseas NRI people.  MMT would be a great point to tap such customers.
  22. 22. QUESTION 3 Can MMT’s business model work in other countries, in particular China, Singapore, and the Philippines? Are there any differences in consumers and segments in these countries that would render the model inadequate? What might need to be changed in other countries? Could MMT expand in a modular manner by replicating their business with overseas residents of other countries?
  23. 23. QUESTION 3 CHINA • Overseas Chinese population is 50 millions which is majorly present in Thailand, Indonesia, Malaysia, USA and Singapore (Source: • Consumer segment is nearly the same due to the similar demographics and geographies • Setup for MMT would suffice for Chinese Market • Addition of cheap deals for the day would increase the top-line, which can boost their Chinese customer base. • Outbound customers would be more than inbound customers, hence they’d have to focus on them.
  24. 24. SINGAPORE POPULATION QUESTION 3 Total Population ('000) Singapore Residents ('000) 6,000.0 5,000.0 4,000.0 SINGAPORE 3,000.0 2,000.0 1,000.0 0.0 1970 (Census) 1980 (Census) 1990 (Census) 2000 (Census) 2010 (Census) • As you can see from the demographics, population of Singapore is pretty less. • Singapore is seen as a tourist destination, hence there would be more non-citizen travelers visiting. • Hence, MMT has to use their network of offices worldwide to capture inbound travelers from all over the world.
  25. 25. QUESTION 3 PHILIPPINES • With more than 100 million Filipinos living in Philippines, there are well About 10% i.e. 10 million people living abroad (many were temporarily moved for work and many settled abroad permanently) • From those living overseas 34% people live in USA, 11% in Middle East and 15 % in South East Asian Countries (Source : CIA Fact book) • So, we can see a great amount of Non Resident Filipino Potential for inbound travellers. • MMT model for India would remain nearly the same in case of Philippines.
  26. 26. THANK YOU!