A Case StudyOn

By Group - 4

RAMESH NAIR

SNEHA NAGAR

SAURABH PUGALIA

RACHANA VATSYAYAN

PV BHANU PRAKASH REDDY

SADIQUE REZA

Tourism Market in India

According to the Travel & Tourism Competitiveness Report 2009, brought out by World Economic Forum, India is ranked 11th in the Asia-Pacific region and 62nd overall in

a list of 133 assessed countries in 2008.

In terms of travel, India stands 9th in the index of relative cost of access (ticket taxes and

airport charges) to international air transport services, having almost the lowest costs in the

world.

The contribution of travel and tourism to gross domestic product (GDP) is expected to be at 6.0 per cent (US$ 67.3 billion) in 2009 rising

to US$187.3 billion by 2019.

Tourism market in India (contd.)

The ministry is planning to develop three niche products – wellness tourism, caravan tourism

and helipad tourism this year.

According to the Tourism Ministry of India, foreign tourist arrivals (FTAs) during June

2009 were 341,000 as compared to FTAs of 340,000 during the month of June 2008. There has been an improvement in the growth rate of

FTAs in June 2009 (+0.2 per cent) as compared to May 2009 (-1.9 per cent), in fact, a positive growth has been witnessed for the

first time in 2009.

Customer Segments in Indian Travel Market

Indian Travel Market

International Travelers

Domestic Travelers

Inbound Travelers (Inbound Market)

Outbound Travelers

Holiday & Sightseeing

Business Travelers

Conference attendance

Visiting friends & Relatives (VFRs)

Students

Company Overview• MakeMyTrip.com, India’s leading an online travel company was founded in the

year 2000 by Mr. Deep Kalra offering airline tickets, hotel reservations, car

rentals, travel packages and holidays in India.

• It caters to the Indian Market in the USA, UK and Australia. Presently catering to

the lucrative NRI (Non-Resident Indian) market in USA, UK and Australia, the

company aims to tap the potential of the huge $3 billion NRI market worldwide.

• In addition to this, the VFR (Visiting Friends & Relatives) and foreign tourist

market from the US, UK and Australia is worth another $ 600 million.

• It has offices in 20 cities across India and 3 international offices in New York,

San Francisco and Sydney (in addition to several franchise locations)

Company Overview (Contd.)

• MMT currently enjoys a market share of more than 50% and is among the

largest players in this segment. • About 66% of its revenues come from Air Ticketing, and the rest come

from other travel services like hotels, car rentals etc.

• They have also soft-launched www.indiaahoy.com, a B2B site offering

Indian Hotels and tour packages for international travel agents in Australia.

• The year 2009 saw an increase in the number of visits to the MMT site.

MMT was second only to the Indian Railways.

Company Overview (Contd.)

• Make my trip is 24X7 on line portal for travel needs.

• Largest e-commerce company in its year of launch 2000.

• In Dec. 2007, Make My Trip won the “Best Online Travel Agency in India”

award from Galileo Express Travel World.

• Initial focus on NRI customer in US and worldwide with market pot of 1.5

billion USD.

• Customer base of one million customers and turnover of 280 million in

financial year 2007-08 & US $ 500 million (expected) for in the financial

year ending March 2010.

Make My Trip’s Products

• International and Domestic Air Tickets, Holiday Packages and

Hotels

• Domestic Bus and Rail Tickets

• Private Car and Taxi Rentals

• B2B and Affiliate Services

• Value Added Services such as free drop and pickup cab for its

clients.

Make My Trip’s Price

MMT offers competitive economical prices for tour packages

and moreover price is linked with advance booking also.

It aimed to offer a range of best-value products and services

along with cutting-edge technology and dedicated round-the-

clock customer support. 

Make My Trip’s place Make My Trip currently has 20 stores under the franchise model and 20

company-owned travel shops in various cities in the country.

Global – • USA - New York, San Fransisco• Australia – Sydney

India - Mumbai, Lucknow, Guwahati, Chennai, Goa, Ahmedabad, Kolkata,Nagpur, Bangalore, Hyderabad, Bhopal, Chandigarh, Delhi, etc.

According to MMT, its offline retail stores account for about 15 per cent of the total revenue of the company.

Make My Trip’s promotion

MMT’s advertising and communication strategy is based on three pillars:

1. Convenience ( 24/7 service)

2. Reliability

3. Competitive Pricing

MMT offers travel insurance and Business Lounges in India and overseas for all

travelers

MMT provides valuable shopping discount booklets

MMT goes extra mile to add value to its customer’s travel experience during their visit

to India with its “Tripper Saver” promotional program,

Promoting services with strategic alliances with brands like Coke, Sify.com, Maruti

Udyog and Nokia etc.

MakeMyTrip’s people

The sales team of MMT consists of three divisions – Internet sales,

Corporate sales, and General sales.

MMT believed in the “no-individual-sales-target” model to ensure high

levels of customer service that may get neglected in a drive to compete

for sales.

Make My Trip's spectacular success is in no small part due to the

unblinking vision of its senior management team and the dedication of

its employees. MMT employs over 700 “Trippers” from the travel,

tourism, hospitality and technology industries. 

Make My Trip’s process

Make My Trip’s physical evidence

• Physical evidence is the overall layout of the place i.e. how the entire MMT office has been designed. Physical evidence refers to all those factors that help make the process much easier and smoother.

• The MMT website forms part of the physical evidence in the form of Virtual Servicescape.

MMT’s Marketing Strategy

Customer focus with

operational efficiency and

customer intimacy.

MMT’s Target Market

NRI Population in US,

Europe and Asia.

Indians customers travel

abroad and within India.

MMT’s Positioning

In their commercial, they have advertised it as ‘Wish.Click.Go’

It shows that Make my trip provides an offering to satisfy the needs of an

aspirational middle class, which wants to travel everywhere at a low cost.

MMT position itself as a single portal for all travel and accommodation needs.

Its appeal is reliable travel booking with excellence.

MMT aims to position itself as a total provider of travelling solutions with

convenience as a key driver. Its strategy is to attain the cost leadership which

will help it to sustain growing competition in the future.

Review and Control Strategy

All calls are recorded & periodically examine to improve the quality

output of customer care executives.

Each web chatting and emails are saved in MMT’s system for

constant monitoring of the service quality give to the customer.

MMT from a dedicated set of executive to service sophisticated

corporate and general sales business.

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, how can they grow within the inbound segment?

• Recommend MMT to target Outbound travelers - - Tourism in India is growing with more and more people opting for Outbound

vacations. - Current markets of 6 million is very huge compared to inbound travelers of 2.4

million which MMT is currently catering to. (Source: comScore, February 2009)

- Outbound tourism is focused on certain countries which makes it easier to set up the additional infrastructure.

Focusing on the outbound corporate segment -o will involve less advertising dollars as compared to the retail

segmentso Will prevent less switching to a different service. o Much higher chances of repeat business. o Corporate clients will help achieve volumes more quickly.

• Sustenance of MMT’s current Business Strategy

- Online travel services booking projected to grow to 55% from the current 30% in the next three years.

- MMT can enhance their infrastructure to garner the healthier share of this growth.

- Profiling of customers

- Tie-up with holiday planners

- Target other countries like Canada, UK, South Africa.

• Develop customer loyalty within the inbound segment by– Launch Loyalty Programs

– Give points for every travel in addition to air miles. – Give large no of points for referrals. – Give double points for value add services.

• Give special trips and rewards to profitable loyal customers. • Try to take the loyal customers from low price and low service

segment to higher service and premium price segment.

Ad revenues have never been core to MMT’s business plan. However MMT’s role in promoting some leading NRI-focused brands suggest that this might be another avenue that Kalra could investigate. Does MMT need to look at

advertising as a revenue generator?

• Internet channels have grown the fastest till 2001, taking share away from all other traditional channels.

- Internet Advertising grew at an annual clip of 185 from 2001-2006 and only cable TV (10%) was close to a double digit growth rate, Total US Internet Advertising was $21.2 B in 2007, a 26% increase from 2006. Consumer related advertising made up 55% of revenue. (Source: IAB Internet Advertising Revenue Report)

- Fostering strategic brand alliance associated with the Indian consumers is the right strategy to go ahead with.

- MMT should make proper balance and not overdo Ads as it may hurt customer experience.

- It should not tarnish brand image of MMT.

Recommendation• Opening offices in key countries like Singapore, Malaysia and Philippines.•Expand business to cater to foreigners traveling to India. It is likely that foreigners traveling to India spend more than NRIs traveling to India as they will need more travel related services – hotels, car rentals, local sightseeing etc. • Focus on inbound NRI segments in UK, South Africa and Canada, etc. and NRI’s travelling to other countries.