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Mati Elahi

Mati Elahi

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Published by: Sh Mati Elahi on Feb 07, 2013
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05/14/2014

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Can MMT sustain its business model by targeting just inbound travelers, or does it needs to look at other markets and segments? If yes, which segments would you recommend? If no, how can they grow within the inbound segment? Yes they can. MMT can sustain this business model for medium term, currently they have 2,55% market share and the scope to expand within this particular segment also exists. Further, currently only 35% of people buy travel services on internet and this projected to grow to 55% in next two years which means that the pool of customers they can target will practically increase in two years. However, for long term success it will have to adapt its strategy because of the following reasons: • Consumer behavior – The studied 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 web sites 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. Our recommendations are as follows:• First target the inbound corporate clients. You will spend less advertising cost to capture this segment and the competition is not so intense. • Develop customer loyalty within the inbound segment by o 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. o Develop a CRM solution *Analyze the profit derived from purchases. *Profits from other customers that they referred to us. *Change in the willingness to pay.

2. Currently there is immense scope to expand business in existing segment (NRI’s to India and NRI’s to destinations other then India) and new segments (India outbound).  They have much higher Temporal Costs as compared to Retail travelers. However. MMT’s role in promoting some leading NRI focused brands suggests that this might be another avenue that Kalra could investigate. If we promote some product or service and the quality or experience that the user gets from that service is not right it might hurt MMT’s image. MMT needs to be cautious about the following when doing it: • It should not eclipse the MMT brand name. Ad revenues have never been core to MMT’s business plan. This will involve less advertising dollars as compared to the retail segment.e.  Corporate clients will help us achieve volumes more quickly. • If MMT wants to aggressively promote NRI focused brands it should open a new company for this purpose. o Try to take the loyal customers from low price and low service segment to higher service and premium price segment. It should not do to a limit where it hurt customers experience with us. So if MMT finds that it does not have enough resources i. manpower to handle advertisement business then it needs to stick to its core business. And how much they value those services.  Much higher chances of repeat business. • MMT should not overdo it. o Give special trips and rewards to profitable loyal customers. . with a few additions.*Use of the extra services provided by us. Does MMT need to look at advertising as a revenue generator? We think it is a good idea.  Once they get used to the service they are less likely to switch. • Now move to outbound corporate segment. it can share the resources of MMT but it should be a separate Brand Entity. In particular. Also MMT’s core strength is in its low operational cost and lean structure.

• The economical and political condition of the country. in particular China. • Understand the user concerns . The cost of media and advertising in these countries required to create a decent brand. Singapore and 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? MMT’s key success factor is that it has low cost as the back office/call centre etc is in India. (Psychological – Consumer Behavior) • Cost of creating a Brand Positioning in these countries. The government rules in the country. • The number of available competitors in those countries. Can MMT’s business model work in other countries. (Infrastructure) • The extent to which customers go on-line to buy tickets. (Infrastructure) • The availability of payment gateways and government regulations on ecommerce in those countries.3. MMT will have to evaluate some parameters: • The penetration of internet or the number of internet users in those countries. The low cost model can be adapted to China. Before expanding in a modular manner to any other country. The loyalty of customers to the existing competitors. Singapore and Philippines because there are many citizens in both countries that are from Chinese ethnic.

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