MakeMyTrip.com: Case Study and Analysis
Post on 10-May-2015
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COMPANY OVERVIEW
An online travel service portal
Deep Kalra, CEO of MakeMyTrip (India) Pvt Ltd. (MMT)
Focused on the leisure and small-business traveller coming to India
Objective to tap the potential of the huge US$1.5 billion NRI market worldwide
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.
MAKEMYTRIP: THE COMPANY & THE PRODUCT
Offer competitively priced travel products – real time booking capability.
Entire facility of travel services through Internet.
Addition to Airline ticket, MMT offers Hotel booking, Holiday packages, car rentals, trains & cruises for Indian & International destinations.
Allows online booking and confirmation, online Web chat and toll free number.
Offer travel insurance, access to business lounges and valuable shopping discount booklets
Also offers information visas, passports, insurance, travel & finance
MMT launched www.indiaahoy.com a B2B site offering Indian Hotels and tour packages for international agents
Provide value added service like a free drop and pickup cab for its clients
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THE BUSINESSS MODEL & OPERATIONS
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Created network of offices in New Delhi, Mumbai & New York
Appointed franchise partners in US, UK, Australia & India
Operates to separate entities: MakeMyTrip - India & MakeMyTrip Inc. (USA)
Three modes of communication to reach sales/customer service team –emails, Web chats and toll free number
Sales Team
Internet sales
Corporate sales
General sales
Daily sales target for the entire team
THE BUSINESSS MODEL & OPERATIONS
Constant monitoring of the service quality given to the customer
Lack a system to track timely customer follow-up
Delay in resolving a customer issue or query
Tracking customer buying and traveling habits
Technological advancement
CONCERNED AREAS
Real-Time Airline Booking
Hotel Reservation System
Car Rentals Interface
CustomerMMT
Sales (CRSs)MMT
TicketingFed Ex
Customer
MakeMyTrip.com Interface
Airlines
Consolidators
Car Rentals
HotelsTour
OperatorsNet Carrots
Web Site Content
MMT Sales
MMTOperations
Offline (After Sales) InterfaceOnline Interface with MMT
Backend Operations
CUSTOMER SEGMENT & ADVERTISEMENT
Indian Market
International Traveler
Inbound Traveler
HolidayBusiness Traveler
Conference attendees
Students VFRs Others
Outbound Traveler
Domestic Traveler
CUSTOMER SEGMENT & ADVERTISEMENT
Low PC penetration, poor quality of dialup access
Limited credit card usage on the Internet
Hesitation to make purchase on Internet
Competition from traditional brick-and-mortar travel agent
Fluctuating international market conditions
CONCERNED AREAS
MMT
Coke
BCCI
Maruti Udyog
Matrimonial portal
Pilgrimage portal
COMPETITION
MMT
Expedia
Orbit
Travelocity
Priceline
Less competition from US market
Aggressive advertising campaigns
Large customer base
CONCERNED AREAS
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
4 P’s ANALYSIS - MARKETING4 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 moneySave timeSave energyConvenientTravel easier
PRICE
• Best Price offers• No middleman involved • Customer can choose as per budget & their income• Affordable to all class of customers
Best deal AffordableQuickly 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 queuesAnywhereAnytimeAnyplace
PROMOTION
• 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
Online websiteTravel agentsCommunicationAwareness
3P’s OF SERVICE MARKETING
3 P’s DESCRIPTION / STRATEGY
PEOPLE• Self service marketing – no direct interaction• Travel agents – distributors & dealers• 24*7 customer care service
PHYSICAL EVIDENCE• Customer care service• National and International Offices• Travel Agents offices
PROCESS• Easy and simple process• Mode of payment by any bank and any card• MakeMyTrip on Mobile
SERVICE MARKETING STRATEGY TO CREATE BRAND VALUE
• Short term travel insurance
• Offers the latest travel and health oriented informationTravel Insurance
• Country specific mobile connection before departure
• Fulfilling customers specific communication needs when traveling abroad
International SIM Card
• Online purchase & transactions facility
• Instant & convenient access to your money in the currency of your choice
Forex Card
• Welcome gifts
• Accelerated reward point system (Repeated Purchase)
• Discount vouchers
MakeMyTrip Credit Card
• Individual Gifting (Birthday, Anniversary, Honeymoon, Wedding, etc.)
• Corporate Gifting
MakeMyTrip
Gift Vouchers
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?
QUESTION 1
QUESTION 1
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In 2004, 3 million inbound travelers were seen visiting India.
In 2007, this figure is estimated to go up to 5 Million at roughly 30% CAGR.
So, We think MMT can sustain business model by focusing on Inbound Travellers.
There’s also a segment MMT can go for. Medical and Health Tourism is the sector MMT hasn’t been looked up at.
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QUESTION 1
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India provides high quality health services with affordable prices. Demand for Health Tourism is non-seasonal
MMT can also tie up with giant Hospital chains to provide overseas customer with HEALTHY DEAL!!!
Due to changes in trends in IT, foreign travel of Resources is the need
Corporate tie ups with middle level IT companies who lack Travel Department, MMT can provide them with Travel Solutions.
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CONSUMER BEHAVIOUR
• 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
For long term success, MMT
will have to change its strategy
QUESTION 1
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?
QUESTION 2
QUESTION 2: SOME STATISTICS
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Internet channel has grown the fastest since 2001,taking share away from most traditional channels.
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.
Total US internet advertising was $21.2 Billion in 2007, a 26% increase over 2006.
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Consumer related advertising made up 55% of revenue.
Fostering strategic Brand alliance associated with the Indian consumers is a right strategy to go ahead with.
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QUESTION 2
1. COKE:
Coke Registered 11 percent drop in sales after the pesticide allegations in India in 2003
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.
7.56
4.36
5.2
4.26
2003 2004 2005 2006
Coca Cola Revenue Year over Year Globally
LET’S LOOK AT BRANDS BEING ADVERTISED
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 Shaadi.com)
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.
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?
QUESTION 3
QUESTION 3• Overseas Chinese population is 50 millions which
is majorly present in Thailand, Indonesia, Malaysia, USA and Singapore (Source: wikipedia.org)
• 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.
CHINA
QUESTION 3
• 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.
SINGAPORE
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
1970(Census)
1980(Census)
1990(Census)
2000(Census)
2010(Census)
SINGAPORE POPULATION
Total Population ('000) Singapore Residents ('000)
QUESTION 3• 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.
PHILIPPINES
THANK YOU!
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