Insignia Tourism Marketing is an Indian company that specializes in customized outbound tourism experiences. It entered the market in 1998 with a focus on unique, personalized vacations for independent travelers ("FITs") under its brand "Mosaic Holidays". The company operates through a network of travel agents but faces gaps in its service model including a limited geographic footprint and lack of exclusivity and product knowledge among distributors. To address these issues, the company plans to adopt a "mass through niche" direct marketing approach with a wider range of specialized package types to appeal to different customer segments.

1. SERVICE MARKETING PROJECT Insignia Tourism Marketing Specialising in Leisure Tourism

3. OVERVIEW Global & Indian perspective of the Tourism Business

4. The Tourism Business Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people who "travel to and stay in places outside their usual environment for more than 24 hrs & not more than 1 consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited". Tourism has become a popular global leisure activity. In 2008 there were 922 million international tourists Total revenues: $944 billion to $1.1 trillion Source: World Tourism Organisation (WTO) TRAFALGAR SQUARE BY NIGHT

5. The Tourism Business Tourism is vital for many countries U.A.E, Egypt, Greece and Thailand, The Bahamas, Fiji, Maldives and the Seychelles, large intake of money for businesses with their goods and services opportunity for employment in the service industries associated with tourism transportation services, hospitality services & entertainment venues forex, travel insurance Source: World Tourism Organisation (WTO) Almost 50% of the world’s international tourists travel to only 10 countries This presents a huge opportunity with respect to visits to other attractions/countries TOP 10 TOURIST DESTINATION COUNTRIES Rank Country No. of Tourists (in mn) 1 France 81.9 2 Spain 59.2 3 US 56 4 China 54.7 5 Italy 43.7 6 UK 30.7 7 Germany 24.4 8 Ukraine 23.1 9 Turkey 22.2 10 Mexico 21.4

6. THE ONLINE REVOLUTION Online booking emerging as the largest growing segment for travel bookings Reasons: Cost sensitive traveler, avoid service charges, easy accessibility, slew of options Source: Jupiter Kagan report ‘US Travel Forecast, 2006 to 2011’ This is a trend that is reflected globally Revenues from online bookings in the US 2006: $43 billion 2011: $128 billion Share of mkt: (38%)

7. THE INDIA CONTEXT India is one of the fastest-growing outbound travel markets in the world.

8. The India Context The Indian outbound travel market has only developed in the last 6-7 yrs following The economic performance of the country Increase in disposable income Liberalisation of civil aviation policies thus making access to many countries possible Liberalisation of policies to issue travel documents like passports, visas, bilateral visa arrangements with several countries Relaxation in foreign exchange regulations The Indian travel market is growing at an annual average of 18% The Indian tourism market size was valued at US$13.5 Bn in 2009 with 8 million tourists Sources: The Economist Intelligence Unit, Euromonitor ‘www.euromonitor.com’, Phocus Wright Inc.

9. The India Context– ONLINE Major players like yatra, makemytrip, clear trip, etc. provide end to end solutions at every price point Sources: The Economist Intelligence Unit, Euromonitor ‘www.euromonitor.com’, Phocus Wright Inc. Revenues from online bookings in India 2007: $1.8 billion 2009: $4.8 billion Share of mkt: (35%) 2010: $5.7 bn Mkt. Share: 38%

10. The India Context-Competition There are approximately 10,000 players A mix of ticketing agents to large holiday package providers 3500 IATA (International Air Transport Association) agents & 6500 non IATA agents Some of the big players are Thomas Cook, Kuoni, Raj Travels, Cox & Kings An evolved market Entering into this market would mean a serious investment and clear strategic plan involving a differentiated product and a clear communication plan

11. Traveler Segments Education Business Leisure School Employment Free Individual Travel College Official trip Group holiday MICE Visiting Friends & Relatives

12. Customer perspective The Indian until a short while back did not have a huge exposure to international travel for reasons explained earlier This is the reason for large group travel/package offerings Security in nos. Familiarity of popular destinations The cultural risk factor Service quality level benchmarks of Reliability, Responsiveness, Adaptability, Empathy, Tangibility were evaluated within these constraints This can be explained through the customer decision making process

13. Customer perspective Customer decision making process Disposable income, status symbol, new experience seeking Need Recognition Information search Evaluation of Alternatives Purchase & Consumption Post Purchase Evaluation WOM, media Mood & Emotion Dissatisfaction/Brand Loyalty-leading to an evolved, well-heeled traveler Evoked set (primarily costs & no. of end to end package options)

14. The Business Segments Thomas Cook, Raj travels, Kuoni, Cox & Kings Singapore, Jet, KFA, Thai, Lufthansa, Star Cruises, etc. The Hilton, Holiday Inn, Ginger Hotels, etc. Kent Cars, Hertz Cars, Individual Tourist Guides & Local Excursions Education Business Leisure School Employment Free Individual Travel College Official trip Group holiday MICE Visiting Friends & Relatives

15. Existing player density & key factors Types Sub Type Players Factors E.g. Corporate Travel Ticketing Many Bulk rates with airlines Akbar Travels Employment, Business trip Many Bulk deals with airlines & hotels, Low cost Cox & Kings, Thomas Cook, etc. MICE Many Bulk deals with airlines & hotels, Low cost Cox & Kings, Thomas Cook, Kuoni, etc. Leisure Group Holiday Many Bulk deals with airlines & hotels, Low cost Cox & Kings, Thomas Cook, Kuoni, etc. Free Individual Travel Few Relatively new segment – factors vary from costs to type of holiday Smaller travel agents Visiting Friends and relatives Many Bulk deals with airlines & hotels, Low cost Smaller travel agents Cruises Few Ownership of a fleet of ships, licenses, etc. Star Cruises

16. Industry Summary Cluttered market No real differentiation of product Price point-real differentiator

17. INSIGNIA TOURISM MARKETING IF YOU CAN DREAM IT WE CAN ARRANGE IT

18. Company Overview Insignia Tourism Marketing is a Mumbai based company that entered the travel & tourism business in 1998 The organisation entered the market with a clear product differentiation-to provide unique, customised travel to FITs offering outbound tourism Insignia vacations are as individual as your signature It’s outbound tourism offerings operate under the brand name ‘Mosaic Holidays’

19. The product – Mosaic Holidays A highly personalised product for the well heeled traveler Special, rare & exotic lifestyle experiences that range in costs from $500 a week to $2500 a night! A 1st class experience in travel & accommodation along with ground handling & Facilitation services Most of all-continued follow-up with the traveler during the travel period. The company operates through a network of 60 travel agents that serve as it’s distribution channel to sell its products

20. The Team Managing Director – Brian Hoogewerf Managerial Team – 3 persons - average experience of more than 9 years in the industry Sales Team – 5 people

21. Financial snapshot Figures in rupees. Margin: 15% out of which 7-8% is handed to the distributor Particulars 2005-06 2006-07 2007-08 2008-09 Total Sales 27,137,372 51,775,048 47,841,320 45,301,647 Total Purchases/ cost of Operation 24,563,904 45,960,191 41,313,841 41,417,095 Less: Exchange Rate (Gain)/Loss (E) (100,721) (80,163) 497,355 40,399 Gross Profit 2,674,189 5,895,020 6,030,124 3,844,154 GP Ratio 10% 11% 13% 8%

22. Gaps Model of Service Quality Perceived service Expected sevice External communications to customers Customer-driven service designs and standards Service delivery Gap 4 Customer gap Gap 2 Gap 3 Customer Company gap 1: Company perceptions of consumer expectations Company

23. The Service Blueprint Physical evidence Insignia/ DA’s office location & exterior Line of visibility Customer Interact with employee of Insignia/ DA Arrive at Insignia off/ DA’s offices Employee understands purpose, type of travel, budgets etc. Customer receives proposed holiday details & discusses further details Line of interaction Employee designs holiday keeping in mind all parameters Employee makes direct changes to Itinerary based on feedback Employee implements changes on the basis of customer preferences & constraints DA interacts with insignia employee, insignia interacts with principals (telephonic/email) Customer receives proposed holiday details Hotels, car, itinerary touch points Insignia/ Distribution agents’ brochure/website Customer calls DA/ Insignia Off. Customer approves & makes payment Employee makes necessary bookings & payments GDS, other internet portals, physical payments, confirmation emails, etc. Customer arrives at hotel, various other touch points in the itinerary Promptness off service, presentability, etc. Feedback brochure Customer gives verbal feedback Insignia acts on feedback Internal Line of visibility Contact person Support Processes GAP 2 GAP 3

24. Gaps in the Insignia Service Model Gap Details Gap 1 As we have observed in the earlier slides, customers on the whole prefer traveling to common tourists attractions, with the security of a group of like-minded and preferably familiar people. Thus Insignia estimation of the current customer gap is not true. ACTION REQD. Gap 2 To run a successful business for this product, it would require a high volume of customers to be reached through a personalised one on one interaction. Limitation of geographical footprint in service design coupled with lack of exclusivity & product knowledge of distributors makes this impossible to achieve Distributors contribute to 80% of the business out of which Insignia’s margin is approximately 7-8% ACTION REQD

25. Gaps in the Insignia Service Model Gap Details Gap 3 Largely no Gap once the customer has been sold the itinerary. In fact, the experience usually ends in customer delight. Feedback available to substantiate this fact. The only area that needs to be looked into is the time taken to actually get back with suitable options. Speed of package/offering design needs to be improved Gap 4 No gap. In most cases ends in customer delight. Feedback available to substantiate this fact.

26. We have chosen to address all of these issues We believe that Insignia’s product is just right for the new breed of Indians-inquisitive, discerning and willing to pay for a service that is according to him/her ‘value for money’ It is important that the new service design must talk directly to this audience By addressing the gaps, upgrading the service blue-print we believe that in the years to come, Insignia Tourism can become a market leader

27. The new strategy Go Direct with a ‘Mass through niche’ approach Talking to small audience segments with products that appeal to their sensibilities while in totality addressing a mass audience with the entire product range Product 1 Product 2 Product 3 Product 4 Product 5 Product 10 Product 9 Product 8 Product 7 Product 6 Potential Market Insignia Tourism Marketing

28. How does this happen? Widen product range: Set aside a Content team This team only researches new packages and puts this together as a unique holiday opportunities for various consumer segments at identified price points Functions such as supplier scouting & empanelment, supplier grading & verification are included in this process Result: Reduce package costing & designing time Wider & more exciting product offering at various price points Service design & delivery: Objectives

29. Package types Ski holidays Adventure Spa holidays Specific sports Heritage Religious PLATINUM GOLD SILVER BRONZE Clubs Resorts Agricultural Historical Royal Holidays Wine Tours

30. How does this happen? Strategic alliance: Look for a strategic partner with One travel agency with national footprint Ready bank of customers that have traveled abroad Profit sharing and exclusive rates Result: Access to wider range of customers Loyal customers ready to experiment & taste a different experience Service design & delivery: Objectives

31. How does this happen? The future is online The future is direct customer bookings The future is travel consultancy services Insignia will have to move into travel consultancy Domain expertise will lead to an internet portal The Future

32. How does this happen? The online portal will enable seek the best possible holidays/opportunities based on his/her preference From hitch hikers holidays to special exotic holidays all chosen through this portal Blogs, Link with networking sites – make it as interactive as possible Revenue to maintain the website can flow from: Banners Ads Articles, etc The Future www.insignia.com

33. If you’d see yourself in that picture there’s only one way to get there Contact Insignia Tourism Marketing