Lessons in Marketing Excellence - Client MakeMyTrip

Al Ameen Sherfuddeen Sandhya Boyapati

Ashwin G

sweetLIME

Bets non air biz at 80% by ’12.

Claims largest bus ticketing inventory

Launched in India

Launches franchise model for expansion

Trends that prevail|Non air revenue streams | bus travel | train travel l ad revenues |

|alternative payment cash cards |

Ties up with Airtel for DTH distribution

Launches bidding website for travel

Introduces chatbots for rail travel bookings

Allows for renting homes on holidays

Launched by Kingfisher, Spicejet & Indigo

Launches Official Hatyachaar marketing campaign

Ties up with Dish TV for DTH distribution

Duniyadekho.com hindi travel portal

Chalbalchal.com enters travel search

Started to target wedding solutions

Travelocity bought out Travelguru

Lost by MMT to the Tatas

Recession shocks of 200826/11 attack

Market ImprovesIncreased ad spends

All in all 2009 wasn’t the best year for OTA’s as they tried their best to get out of the global slump and ventured into newer non air businesses. As we look forward towards 2010 OTA’s would have to move beyond just ticketing sites and look at delivering wholistic value be it planning travel or holidays for its users or even more.

All in all 2009 wasn’t the best year for OTA’s as they tried their best to get out of the global slump and ventured into newer non air businesses. In 2010 OTAs are moving beyond just ticketing sites and are looking at delivering holistic value be it planning travel or holidays for its users or even more.

Communications Content Commerce Search

Communications Content Commerce Search

Increase in share of consumer generated media

Top mobile internet usage stats

Internet penetration under 35 years of age

Skew in the Time Spent on the Web's 4 key activities

2010 segment snapshot40 million internet subscribers20 million broadband198 million debit+credit cards584 million wireless subscribers

77 % of online shoppers use reviews & ratings for purchase decision

86 % of respondents prefer a friend's / user recommendation over a critic's/ experts review

63 % of all WOM is positive

84% of online buyers have bought travel onlineHigh

margin segments

MarketSize

OTA’s increasing influence

MMT can take a bigger share of the growing market by

keeping sight of trends on mobile

internet, consumer behavior, consumer

generated media and usage statistics

Target segments

Opportunity

Internet penetration is growingSearch and social networking is big in mobile internetTarget segment is showing growthMore consumers are moving towards OTAs

BUT, why aren’t OTAs using consumer generated content to grow and differentiate?

OPPORTUNITY SPOT

Preference for buying airline tickets

Consumer Behavior

Top visited sites (million)

Primary researchPrincipal segment buying air tickets – 24 to 35First website they go to – MakeMyTrip.com (96%)What they find missing in OTA’s ?Personalized recommendations/itineraries, real time chatSuggestions based on interests, last mile connectivity,Cheaper fares than supplier websites, Forex/visa agentsPlaces that they go to for accomodation?Hotels.com, tripadvisor, Lonely Planet, Internet search,Company tieups, OTAs for co-ordinatesWhat do you use OTAs for other than airline booking?Holiday packages with pre-fixed budgets, hotels, ratings& reviews, understanding choices for travelOther use of Internet for booking?Movies, Plays, bus tickets, train tickets, concerts, hotels

OTAs are majorly used as research, comparison and information gathering tools by online travellers

It is observed that travellers tend to speak to the hotel desk or travel agent directly for cross-checking offline rates before booking hotels

Promotions, discounts, deals etc. are the clear preferences for online travel bookings

OTA’s serve dual purpose of booking as well as verification

MMT needs to leverage on its lead in market share and the

high brand recall that it has by giving consumer an experience

he/she hasn’t had before as

well as not provided by other OTAs

Price is numero uno in consumer mind

Frame of doubt existing in consumer’s mind if he or she is getting the best deal is pushing consumer to search more

Trust tops the chart in consumer’s mind to make a purchase decision and the consumer builds trust by COMPARISION

How does one combine best price, eliminate doubt and build trust?

That’s the magic formula for CONVERSION

Consumers can book journeys with no service charge

Cars can be rented for self driven or chauffeur drivenEg. Ezeego, Arzoo

9 airlines sell cheap tickets on their own sites

12 Indian travel sites compare cheapest tickets

availability

Single search option provides users with train fares, schedules and availability simultaneously

Registered users can save their searches

Offers like getting one nights stay free while booking for one night

Discounts for consumers staying more than one day on remaining days

exclusive travel concierge, exclusive offers on car rentals e.g. Yatra Barclay Card

Discount offers and cash back in collaboration with the Banks

Online railway bookings is becoming the preferred segment in online travelEmergence of corporate travel packages

Growing Trend for “niche Tourism” Among Young People (rural tourism, medical tourism, sports tourism, gay tourism and wedding tourism)

Rising international travelOTAs looking for offline counters leveraging on their brand value

Emerging travel information portals backed by OTAsOTAs serving as a preferred search tool for checking fares and ticket availability

Hotels are preferring International OTAsGrowth coming primarily from Low cost carriers

Finding low fares Security

Ease of use Booking flexibility

Sorting options Speed of the website

Useful and relevant content Ability to book all travel services in one transaction

Design and presentation of the website OTA trends

Top factors consumers are differentiating OTAs upon

Proposed solution to tackle these factors

OTA Landscape

OTAs are chasing everything to differentiate and woo consumerVery little opportunity on flight prices as they come from common GDS source

OTAs are converging towards offering solutions for all modes of travel, BUT in SILOS

One bad experience, OTA loses the customer forever to a competitor OTA

Solution to stay on TOP?

Deliver a new experience to consumer that exceeds preconceived expectations of consumer and not offered by competitor

S WO T

Internal

External

Posi

tive N

egative

Strength Weakness

Threats

Opportunities

•Marke

t Leader in

OTA share and visit

ation

•High Brand value

•Leader in

innovation of service

(e.g. D

TH)

•Most o

f the LC

Cs are on th

e choice

supplies

•Loyalty

programs with

several le

ading banks

and debit/credit c

ard companies

•Has solutions fo

r all m

odes of tr

avel

•High marke

ting ability (vira

l campaigns)

•Size and ch

oices in

each segment

•Less flexibility in dynamic packaging

•Does not have two way consumer interface

•Choice supplies are not exhaustive and not

locally relevant (e.g. hotels)

•Absence of offline centers for point of sales

•Initiatives are imitable by other OTAs

•Inability to convert the volume of search into sales

•Unable to bridge air and non air travel for customized

solutions

•Competitors are incre

asing fo

cus on non air

travel

•Travelguru su

persedes M

MT on hotel sales

•Airlines g

etting together to

form

independent sites

•Hotels are preferrin

g International OTAs

•Service charges causin

g consumer to

use MMT only

for search

ing the best d

eals

•Competitors are se

tting up more offline centers

•Bad PR can defame brand value e.g. O

kTataByeBye

and Ezeego

•Tour o

perators going online

•Impact o

f Metasearch

•More margins in non air travel

•Leverage on market leader position to capture

increasing trends of online bookings

•Consumer is ready to transact more if trust is

built and assurance is given by peer consumers

•Social networking and mobile internet are

increasing trends that can be tapped

•Positioning as the one stop for dynamic

combination of travel solutions will make

consumers stick

Creating community to drive loyalty Sophisticated Loyalty schemes Improvements in targeting of marketing initiatives By initiating tie up with corporate houses and

providing customized services for travel/hotel bookings

Creating barriers to entry

High

Moderate

Low investments required in

infrastructure

Low switching costs. No Collective bargaining power

High

Price and nonprice competition

Porter’s five forces

HighMany providersSmall and Big

Medium/HighDiscounts

related to volume

ProductEnd to end

consumer driven choices

PriceLowest in the OTA

industry

PlaceOfflineOnline

Mobileheld

PromotionDiscountsBest deals

Convenience

PackagingDynamic

CustomizedIncentives

PropositionValue for money

6P’s – For success

TravelGuru

TravelocityiXigo

ClearTripEzeeGo1

Yatra

MakeMyTrip

MakeMyTrip is perceived as different from the other sites

Perception Map

Now that we know where MakeMyTrip.com is positioned with respect to its competitors, it’s time to go back to the consumer segments to propose our solution

Business Traveler Emergency TravelerEconomic Traveler

BehavioralAttributes

Demo--graphics

Mostly Business class travelerInternational and domestic flier

Advance and last minute bookingLess extensive web search

Preference for premium airlinesTravel duration very important

First class travelerMedium Price sensitivity

Associated with corporate houses

Mostly domestic travelersAdvance booking of tickets

Extensive web searchNo preference for any airline

Less importance to travel duration and time

Economic class travelersHigh price sensitivity

Both holiday trips and business travelsMostly domestic flights

Last minute booking of ticketsMinimal web searchNo airline preference

Travel duration very importantEconomic class travelers

Zero price sensitivity

Internet hours : 2 to 10 hoursAnnual income < 5 lacs

Single/Married/with kidsAge groups less than 30

Low cost airlines

Internet hours : >10 hoursAnnual income >10 lacs

Married/with kidsAge groups more than 30

All kinds of airlines

Internet hours : All rangesAnnual income: All ranges

Mostly singleAge groups less than 30

All kinds of airlines

Recommendations – Economic traveler – (Biggest segment)

Connect the Dots – Merge the divideA holiday from Hyderabad to Sri Lanka value chain (tickets to Sri lanka are cheaper from Chennai)

Current MakeMyTrip

Solution

What the Consumer

does?

Uses data from MMT and goes to parent website to book Chennai – Colombo flight to avoid service charges

Goes to redbus.in or irctc.com to book a bus/train from hyderabad to chennai

Calls DotCabs for a rate of 250 Rs to reach the bus station

Consumer is able to reach Colombo at Rs 4743 Vs Rs 8836 (proposed by MakeMyTrip)

MakeMyTrip loses out on conversion despite providing Air, Bus , Train and Cab solutions

MakeMyTrip positioning of lowest prices and best deals takes a hit in the consumer’s mind

WhatMakeMyTrip should do?

Experience Value for Money

Make the consumer choose Experience Vs Value (Economic traveler identified by Value choice)

Seek start position e.g ISB, GachiBowli

Seek end positionKandy, Sri Lanka

1

23 Integrate travel solutions and build trip schedule in the order of connectivity and cost priority

FlightChennai Colombo

Bus/Train/flight Choice + options

Hyderabad Chennai

Hyderabad bus station/train station/airport depending on previous choice

Cab ProvidersISB, Gachibowli

MMTCaptures

entire value chain

Net Sum Price

Integrating search solutions is a great start to improve conversion and visitation

We have attacked the best price problemHotel bookings will follow suit once consumers

perceive MMT to be churning out the best price and options

Now how do we attack “eliminate doubt” and “build trust”?

Bring in the consumer to the value proposition

MakeMyTrip

AirlineOperators

Hotel Operators Tour

Operators

Consumer?

Two way business model is missingwith the consumer

Consumer is forced to make choices from existing options

Bring the consumer as part of the value chain to promote end to end value based journey booking

The concept is based on location based services driven by user based content influencing other users to take a particular service.

User is incentivized to provide content through the form of discount vouchers or free accommodation stays

Local Transport

Accomodation

Experiences

Source Destination

Fully tapped segment – MMT Airline Online booking transactions

Growing segment – Not fully tapped

Holiday/Air travel value chainOpen Itineraries

For the consumer, By the consumer, To the consumer

Rich media content of places visitedSupplier contacts for transport

New hotel suppliers/Budget accoLocal Experiences

Local transport information

Serviceable (or)Informative

Check InConsumer activates information “check in” to the MakeMytrip system under appropriate category

ValidationMMT validates the entered data and passes/blocks the data entered

Go LiveValidated data goes live. Consumer getS a next trip discount/check in points redeemable against next booking

Drivers for consumer generated ContentMMT mobile solution“Propose” option between any two nodes in the itinerary built by MMTGPSServiceable Vs Informative“Informative” info gets built into MMT itinerary but not charged“Serviceable” info signifies a MMT tie up and hence charged.

Your Journey with MMTCase in point – Source : Chennai Destination : Bangalore Budget Traveller

Best Fares for Flights

User contributed transport choices

User contributed hotel suppliers

User contributed experiences

Travel Value Chain•User books an entire journey, places more credibility on user driven choices and content•MakeMyTrip evolves with receiving data pertaining to each segment as well as servicing choices to each segment•MMT makes money from the supplier side for serviceable data and is able to bridge its offerings with informative data•Over time, MMT evolves to become a social network within an online travel site promoting a community basedoffering•Best contributors are rewarded and consumers over time witness the quality of their journey choices as the data matures•MMT will be able to increase its conversion rate in categories other than airline travel and will be able to give its suppliers a boost by user generated content•With MMT’s foray into railway/bus bookings, they can add offerings for rural tourism, green tourism and rustic experiences

KingfisherKT-732,KT-733

Cab from B block entrance of airport350 rs Koramangala(Informative)

Hotel JanakiBudget650 rs* * (Serviceable)

Trek to Nandi Hills1250 rs(Serviceable)

Small incentives is enough to woo this segment to generate content and source suppliers

• Recency in ratings of hotels/cabs/flights/buses builds credibility and trust• Recency in rich content from users pushes up choice of a certain service and would help in MMT supplier consolidation

Internal External

Fixed

Brand VisionBrand to become the leading choice for “journey” between any 2co-ordinates

Brand PromiseCommitement to customers – A price you can’t beat, An experience you can’t forget

Variable

Brand DeliveryWill fulfil commitmentby integrating travel solutions and populating user generated content for suppliers and information regarding local experiences

Brand PositioningWe want to be perceived as a choice brand for anything, anywhere related to travel, experiences and holidays. Our competitive advantage will be pricing, choices, value and community

Drivers

1

2

34

5

Emotional Connection

Value

AccesibilityAwareness

Relevant Differentiation

Brand to connect with consumer who seek the best in value or in experiences and achieving the same through the same people who seek

Convenience, Multitude of choices, user generated information that wont be charged and ensuring every traveler gets the bang for the buck

Increasing offline outlets to bring in person interaction to the consumer thereby contributing to increased trust and relationship over the years

Approach will primarily be in the online space to tap in the consumer behavior of search ,social networking and gaming. Viral campaigns on the lines of “beat this journey at a lower price” and treasure hunt will keep consumers perceiving MMT as different from other OTAs

User interface, choice matrix,Information drivers, travel community, rich media content,Sophisticated loyalty schemes

This brand positioning will keep MMT well poised to be the one stop for all travel related solutions and ride the wave of this growing OTA segment while leveraging all its existing strengths and customer aquisitions

Possible value ad mechanisms

CarpoolingPassengers booking a

flight/hotel can be given an option to opt for a

carpool

• Booking facilitated by MMT

• Connection between passengers travelling

and reaching around the same time facilitated by

MMT• Value add will drive up

cab bookings and full journey bookings

Group booking discounts

Passengers can opt for being part of a pool for availing group discounts

on hotel bookings. Thereby people who book on MMT for the same day/hotel can

avail appropriate discounts as being part

of a group.

Will help in conversion from mere searches to

actual bookings

Brand your experienceConsumers are

motivated to contribute when personal branding

is activated.

Any new experiences that MakeMyTrip can

service and is contributed by a user will be branded with a

name according to consumer’s choice

before it goes up for bookings.

MMT can drive content and non travel sales in

this segment

Sample Marketing campaigns

Have you found a cheaper way than us to connect two places?

Let us know and get your trip FREE*

We shall take your WORD for it

Do you have anexperience that we

don’t offer?

Be the first and accumulate

200 Rs for your nextMMT booking

Exhausted searching for the best deal?Log on to MakeMyTrip.com & Rejuvenate!

Don’t miss

Enjoy the best of rustic experiencesRecommendedby your fellow travelers

Booking your holiday just got easierYour child can handle it

References 1. comSCORE data passport report H1 ‘10 and H2 ’102. Euromonitor International : Country Market Insight - June 2010 – Travel and Tourism – India3. EBSCO report on MakeMyTrip VIKALPA • VOLUME 35 • NO 1 • JANUARY - MARCH 20104. comSCORE Online Travel Trends In India Travel Distribution Summit – India 2010 5. A perceptual mapping of online travel agencies and preference attributes - Dong Jin Kima, Woo Gon Kima, Jin Soo Hanb6. Responsible tourism management: The missing link between business owners’ attitudes and behaviour in the Cape Town tourism industry Nicole Frey, Richard George* School of Management Studies, University of Cape Town (UCT), Rondebosch, Cape Town 7701, South Africa7. PWC : Hospitality Directions Europe Edition*Issue 14 November 2006: How to maintain success in the online travel space8. ResearchOnIndia : Online Travel Industry : August 2010 : 3 parts9. A Case Study on MakeMyTrip Mobile Travel Solution & breaking the Mcommerce Inertia10. Tripping along:Deep Kalra (PGP '92),makemytrip.com11. Travel 2.0:The future of travelling:Whitepaper12. LiveMint:Future course of Marketing and Advertising13. Sachin Bhatia on Social Networks: Vertical Social Networks, the future of online travel distribution 14. WebCredible:Online travel sector usability report15. Marketing Research in Online Travel Agency Space Faculty Contributor : N. B. Kanagal,Associate Professor,IIM B16. Rockey Nebhwani , 2009, "Indian Railways - Epicenter of Indian Online Travel Industry Revolution", February 2, http://www.infosysblogs.com/multi-channel-retailing/2009/02/indian_railways_epicenter_of_i.html. 17. IANS, 2009, "Indians Prefer Online Travel Portals to Plan Holidays", Aug 29, http://tech2.in.com/india/news/internet/indians-prefer-online-travel-portals-to-plan-holidays/85072/0.18. Marion Arathoon and P.R.Sanjai, 2008, "Online travel portals most prone to fraud", Jun 11, http://www.livemint.com/2008/06/10235627/Online-travel-portals-most-pro.html.