CASE STUDY

MAKE MY TRIP

Submitted to: Prof. G.K.Saini Submitted by: Group A

Executive Summary
In what could have ended up as a big joke, Deep Kalra decided to float a company by the name Make My Trip. While the joke which still goes on with those close to him is that it was launched on the 1st of April 2000, its success has left many of its critics and those wishing for its downfall wondering how it managed to sustain itself. There were various eyebrows raised in 2000. The idea of an entity which could provide more than just one travel facility such as rent-a-cabs, vans or other transport facilities was sniggered upon more than being viewed as a comic attempt at making many things work. Verily, as and when Make My Trip added the facility of booking tickets on flights, be it domestic or international, trains and buses, Make My Trip has grown in leaps and bounds. The acquisition of ticketvala.com, which was seen as a massive coup dtat in 2010, and the preceding year saw 1 in every 12 domestic flight bookings go through Make My Trip.com. Its entry into India in 2005 marked a sea change as to how people would perceive booking flight tickets and how theyd travel. With an increasing number of people having access to capital and many more people expanding the travel market, MMT is an example of how to ride the wave and come up on top. This case study of ours is aimed at explaining how Make My Trips success was made and how it has sustained itself.

About the MakeMyTrip (MMT):

MMT was launched in the US in 2000 to cater to the niche US-to-India travel market. The company survived the dotcom bust and the 9/11 tragedy and was able to breakeven in 2002. With over 100,000 customers and 130,000 registered users in the US, MMT had a renewal rate of 30 per cent. According to Kalra, the factors that worked well for the company were: 1. An all-pervasive entrepreneurial spirit 2. Cohesive culture 3. Home-grown HR practices

Launch in India:
The company received an investment of US $8 million (Rs. 352 million) from SB Asia Infrastructure Fund (SAIF), a leading Asian private equity firm. Some of the factors favorable to MMTs launch were: 1. Low-cost carriers had made air travel cheaper 2. Young India had more disposable income and a greater desire to travel 3. The airlines move to e-ticketing 4. MMT was the first and only comprehensive online travel site with real time bookings for flights, hotels, holidays and cars Moreover, the numbers were in favor of MMTs launch and its success in India. These include: Growth rate in domestic air traffic from April 2004 to April 2005 Estimated growth rate in air traffic Growth rate of air travel Growth rate of domestic trips in 2004-05 Growth rate of national tourism spending Growth in foreign tourist arrivals in India in 2004-05 Average spend per visitor in India in 2004 % of annual earnings spent by Indians on vacation/eating out Size of personal travel and tourism segment in 2003 Estimated size of personal travel and tourism segment Estimated size of business travel segment Growth of internet user base in India Estimated growth rate of gross booking for online leisure/unmanaged business travel in India Growth rate of online sales in travel accommodation in India in 2004-05 Estimated growth rate of MMT in constant value terms between 2005 and 2010 24.2% (39.02 million passengers in April 2004 to 39.86 million passengers in April 2005) 5 million passengers every year till 2014 17% 12.7% More than 15% 23.5% Rs.65, 460 15.6 Rs.791 billion Rs.1034 billion in 2005 and Rs.3748.7 billion in 2015 Rs.134 billion in 2005 and Rs.402.2 billion in 2015 39.2 million in 2004 to 50 million in 2005 600% 29% 75% in total transportation and 82% in air transportation

The three important reasons for travel in India were: 1. Travel for business 2. Travel for leisure 3. Travel for meeting friends and relatives The actual contribution and the estimated contribution of each of these were found at: Reason for travel Business Leisure Meeting friends and relatives Other Actual travel in 2000 (in000s) 1355.2 679.9 807 1773.8 Estimated travel in 2005 (in 000s) 1731.2 1032.6 1030.8 2108.4

Business Model: The MMTs business model is a typical B2C model which will allow MMT
to directly interact with the customer and provide them the required services. It can be depicted diagrammatically as the one shown below:

Technology

Customer s

People & Processes Supplier Relations

MMT

Enablers
The enablers act as medium through which the customers interact with MMT and get the best deals in terms of price & hassle free booking process which would later result in repeat transaction of the customer thereby giving MMT a realistic chance of achieving their desired targets. Focus on improving the efficiency of the enablers like reduced operational costs, improved technology and expanding supplier base with long term relations will allow MMT to improve its profit margins and achieve higher volumes.

Segment and Targets: MMTs plan to include both the Personal Travel & Tourism and
Business Travel in their agenda is clearly reflected in the way these segments are growing (Approximately 400 % in 10 years). With the penetration of internet growing at an exponential rate in the urban - suburban areas of the country MMT have a good chance of fortifying their first mover advantage. Their target groups i.e. married males in the age bracket 24 44 with an income in excess of 30K / month in the metro/mini metros. This was further bolstered by the fact the age group 26 45 spends the maximum on online hotel room bookings.

Positioning and Branding: MMT wants to position itself as the Lowest air fare provider in
the country which is a decent positioning strategy given the cultural aspects of India, where most of the consumers are deal hunters. However, given the product offerings MMT should strike a balance between various product offerings and its positioning strategy. Like positioning themselves as a Complete Travel Partner at the lowest expense/cost would allow them to encourage more consumers.

Initial Launch plan-MMT India

Advertising and promotional strategy; the way to go forward:
The senior management of the company plans to spend around Rs.30 million on the advertising and marketing activities in the first three months of the launch. The breakup of the advertising and marketing budget between different promotional avenues is as follows: 1. 2. 3. 4. 5. 6. Television Internet Outdoors Print Below the line Analytics and Public relations 40% 30% 5% 5% 5% 15%

Branding Concept:
The branding concept behind the Campaign strategy is to position Make My Trip as complete travel solution provider. Another objective of the strategy is to showcase the low cost aspect of the product which MMT is offering by campaign like Lowest Airfare Guaranteed. This two pronged strategy will act as unique selling pitch for the MMT in Indian travel and hospitality market.

Objectives of the launch Plan:

Communicate that MMT offers online one-stop-shop solution to travel consumers Build excitement through every customer contact Communicate a strong proposition and deliver consistently on the promise Build empathy via relevance

Media specific Campaigns:

1. Television: The television is used to project the Nothing is more attractive than MMT offer. Simultaneously, other critical elements like smart new kid on the block personality was to be communicated. The TV channels were chosen to give high levels of visibility at a base reach of 40 per cent in all markets. It chose two English news channels (NDTV, CNBC), four Infotainment channels (National Geographic, Discovery, Discovery Travel and Living, AXN), two English movie channels (Star Movies, HBO), one Hinglish entertainment (Star One), and one Hindi movie channel (Zee Cinema).

2. Internet: Internet is used as a marketing platform to ensure high visibilities among the targeted customer segment. Search engine Optimization: SEO is a technique which helps search engines find and rank your site higher than the thousands of other sites in response to a search query. This ensures high visibility for your sites. Users normally tend to visit websites that are at the top of this list as they perceive those to be more relevant to the query. Thus, doing SEO for its portal can ensure High visibility and high traffic for MMT. Coupled with SEO paid search ads are a good option to go by.
3. Print : This medium will support the brand building promotional campaigns carried out on television. Two popular sports magazines (Sports Illustrated India and Cricket Today) and two popular Lifestyle magazines (Cosmopolitan and G2) are chosen which will carry prints Ads of MMT. The advertisement was deliberately placed by blocking the strip position at the bottom of the page to build on the rock bottom prices theme. City-relevant offers were to be used to gain traction on the website.

4. Radio: FM Radio is a rage especially among the youth at the time of the launch of MMT in India. Using Radio as a marketing platform on Radio will also ensure big penetration among the primary target segment of youth male. Thus, High pitched campaigns can be carried out on popular FM Radio stations.
5. Travel partner for the 2007 Cricket world cup: As a part of its mid- term sustainability plan MMT intends to be travel partner for ICC Cricket World Cup that will take place in the West Indies in 2007. This strategic alliance between ICC and MMT will ensure high visibility among the cricket fans in the country. Moreover, this will be a very good brand building exercise for MMT which will ensure increase in its brand awareness among the youth of the country. 6. Mascot A cartoon stork will be the mascot of MMT. Storks have been revered in Europe since the middle ages. One popular stork tale revolves around the folk legend that the souls of unborn children live in watery areas such as marshes, wells, springs and ponds. Since storks visit such habitats frequently, they were believed to fetch babies souls and deliver them to their parents. The underlying logic behind keeping Stork as the Mascot is that you will be pampered and cared like a new born when you plan your travel with MMT.

Weaknesses/Threats/Challenges
Competition already on the anvil, other OTS players are gearing up for launch The market per se not tough to enter, so blue ocean advantage doesnt stand time Easily replicable positioning/business plan regardless of proprietary software Low internet penetration and lack of bandwidth/broadband for safe and speedy transactions Customers still wary about online banking transactions/ business dependent on credit cards E-channel account for about 90% sales- too many apples in a single basket Targeted clientele not wide enough, presently runs the risk of isolating other segments and losing first mover advantage to competition

Suppliers website threat in the emerging e-ticket era Conventional players like travel agencies and operators Tourism, travel and accommodation still taxed on the higher side

Launch Plan Pointers

Business case
Suppliers are a paradox They have a system of owned e-ticketing web solutions yet tie ups with them are vital to the OTS player as flexibility and availability of options are dependent on them. Good networks and relationships are important to build and retain advantage. Railway ticketing to be considered First mover advantage should never spare space for other OTS players to come in and establish a niche business space for themselves and considering the volumes involved in rail travel segment [both passenger and goods], its a venture to look at. Outward bound riches There is a strong case for both outbound and leisure travelers to choose MMT if the experience and relationship is smooth and strategically positioned. Tie ups with immigrant solutions providers and student exchange consultant players will reap dividends. Direct Marketing 90% e-channel sales looks good on paper, but that is too much emphasis initially to trust your low penetration internet market to pull you through the initial launch strategy. Existent players like non-OTS solution providers have had businesses and a leaf to take out of their book would be the direct access and tie-ups they maintain with corporate and offices for business travel plans and also for personal holiday solutions. Inclusive Financial options Spread the online banking web wide with tie ups and incentivized schemes for the customer to shed online transaction apprehensions and to bring in more options in a credit card dominated scenario. Debit cards/i-banking and even pre-paid MMT cards can be introduced. More banks can be sought to offer cash back points and rewards. Mind the cost Cost optimization and constantly improving on margins whenever/wherever possible is mandatory. In a recession prone industry, if systematic lean structures arent in place, the volumes when they disappear shall hurt you badly. Catch the young Turks The target group starts at the age bracket of 24 onwards, but there is a significant population of sub 24s who will be savvier and influential as well. They can decide the family tour on the net, they are the next metro man you will target and they are the ones who will spread word of mouth and be instrumental to your social networking plans. Plus added loyalty never hurts.

Positioning
Make the trip, not the ticket Being a low fare provider is easily replicable and it can never be an USP. Being a complete travel solutions partner can be! Air tickets, with on the road travel solutions, accommodation and carpooling to identical locations can all tap into the wholesome needs of a travelling customer. Touch and Go Reassuring the long term planning US traveler with a wholesome travel package Touch and catering to the dynamic and flexible last-minute travelling needs of an Indian domestic commuter on the Go has to be a two dimensional approach MMT should stick to and improve up on.

Customer Value
Be loyal, get loyalists Introduce frequent flyer initiatives and discounted offers for regulars This will build an incentive for repeat customer base and shall supplement the super saver/ tripper offer scheme. Bon Appetite Suppliers scores over MMT when the former has discounted on-board meals service integrated to their website. In MMT a customer has no option to do so for majority of the LCCs and thus pays for the same in flight. An understanding with the airline or caterers can solve this. Let your web be a sight Having good design features, multiple search/multiple window login options, SEO, pleasing content and layout, ease of navigation and immediate hassle free ticket download should be priorities that the MMT website shouldnt miss out.

Branding/Promotions
Orkut times The said launch period coincides with the time Orkut is positioned as Indias #1 social networking medium. Engaging customers and promoting your brand awareness online should be one of the key areas MMT should focus on. Viral Fever Having strong ads to connect with the young audience and yet to not isolate the secondary and tertiary customer segment is a challenge. A leaf can be taken out of the wonderful ads Vodafone came up with. It was O&M which briefed these concepts for Vodafone so having a prime ad agency tie up is inevitable for eyeballs Apart from the mentioned channels, MMT should also position across MTV and Hindi news channels. Women make decisions in nuclear family, so slotting primetime in GECs wouldnt be a bad idea as well. Ambient Marketing Nothing like some innovative hoardings in metros and weekend splashes in city centre malls and weekday initiatives in IT parks for catching the attention of your target segment.

We also believe that a specific approach to tap into the potential areas of OTS cycle or the virtuous cycle as explained in the case will pay rich dividends. This will not be limited to the

short term launch plan, but enable MMT to retain and sustain advantage as and when the competitive forces pick up in the long run. Building the brand with a strong launch plan and making sure the customer returns [by being proactive and innovative in sales approach and adaptive to business environment] will help MMT create a niche market for itself. Sitting on ones laurels in any business, especially on OTS will eventually lead to your decline. Constantly evolving and coming up with new product designs, customizations and solutions without losing touch with your core business model, will be a minimum essential to stay in the market and lead the pack. Augmenting the OTS cycle and ensuring that the customer doesnt lose out on value and options across all the stages of Search, Assure, Value Buy, Experience and Return. The same has been addressed in our launch plan analysis and suggestions incorporated. The BRAND-SAVER model depicted below is the structural framework of the ideations we have come up with.

BRAND-SAVER Model for MMT Launch

B R A N D

Build relationships Retain clientele Assess business environment Niche development Design and evolve
AUGMENT

Searc
h

Retur
n

Assur
e

Experie
nce

Value
Buy