CASE ANALYSIS

Submitted to : Prof Sanjay Kar
Group 5 Ankur Shrivastava Archan Thakkar Chahat Thakkar Deepak Goyal Sparshy Saxena 20081005 20081007 20081011 20081013 20081035

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BUSINESS MODEL OF MMT Basics: Provision of Travel services to the US-India route travelers. Scope: The provision of e-travel services was in demand, both internationally and domestically. Following reasons for the formation of such a business model, as cited in the case, are mentioned below: 1) Online travel market accounting for 25% of the total US travel market. 2) Expected fervent growth of the travel market, products and services in India, thereby increasing the expectation of demand. 3) Cheap air travel due to LCCs, leading to increase in the number of people opting for air travel. 4) Shift of the airlines’ towards e-ticketing, increasing the expectant customer base for MMT. 5) Increased disposable income for the Younger generation, again increasing the number of people opting for air travel. Thus, MMT aimed at providing a user-friendly interactive service for online travel tickets. Model Pillars: MMT had based their model on three aspects: 1) Technology: The website designed to provide ticket booking for MMT had linkups with ticket suppliers to enhance the product database, thereby providing a varied range of options to the customer. 2) People and Processes: The processes were designed such that the customers were provided with economical and the best deals available with MMT, as per the requirement of the customer, with almost no hustle.

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3) Supplier Relations: MMT focused on maintaining cordial relations with their suppliers in order t help make their supply side efficient and as also to increase the product variety or offering by MMT to its customers. MMT ensured that the pillars were designed as such that it increased the chances of consumer preference to MMT as well as their satisfaction. Projected Profitability: Based on the model and the market scope, MMT had put forth certain projections in terms of financial aspects. 1) A turnover of Rs.600 Crore by FY2007, a 50% contribution by Indian operations. 2) High number of online operations. 3) Vast number of consumers. 4) Headcount of about 650 by 2007. The model put forth had great potential in terms of viability and had planned to cater to a new opportunity, which held great potential in India.

SEGMENTATION, TARGETING & POSITIONING: MMT has clearly defined its STP strategy by identifying the broader needs of the customers and by analyzing the environment prevailing in the country. Segmentation: Segmentation has been done by taking into consideration the occupation and income, along with the lifestyle of an Indian. The company has grouped the travelers into entrepreneurs, small and medium enterprises travelers, leisure travelers and small cities travelers.

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If we look at the entrepreneur travelers, they have got a distinct set of personality with more importance given to status and higher level of living. These groups have got characteristics to switch to a much better service provider who can match their lifestyle and status. The group has also got a great potential to become a loyal customer, if delivered an appropriate level of services. The segment consisting of small and medium enterprises has considerably good disposable income and is usually the one who make travel decision for themselves. They are more delighted if they receive a good experience with the service. The next segment which MMT considers is that of leisure travelers. They try to get the best out of cost incurred. MMT has the competency in providing cost effective service to the consumer, makes this segment very attractive. If the company is able to deliver adequate service to them, they can become a regular user. But being cost sensitive the company will have to maintain its cost efficiency as these people are more brand switchers and is difficult for the company to convert them to brand loyal. Apart from this the company classifies a yet another segment of people who are travelers from small cities. They are mostly those who are not the frequent travelers. Since they have limited access to information the company website can fulfill this need and thereby can generate some of the market in this segment. Targeting: If we consider the expenditure of an Indian on vacation or eating out with respect to different age group division, 24-34 year age group spend a lot on eating out while 45-58 age groups spend most on vacations. The company has decided to target the group within 24-44 age group with income of over Rs. 30,000. This age group includes both, the new earning youngsters as well as the people having adequate level of working experience. The new youngsters of India are more internet savvy making them a good target for online service providers. Despite these the company can attract the group with special holiday packages which brings good revenue to the company. The next group of people is expected to have a much better disposable income due to longer work experience. Since family holidays are important part of Indian tourism, the company

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aims to achieve higher revenue through this age group by providing them better price for the services. Positioning: The company aims to position itself as a total solution provider with convenience as a key driver. Its strategy is to attain cost leadership which will help it to sustain the growing competition in the future. Being the first entrant and cost leader the company will be able to achieve sustainability.

LAUNCH CAMPAIGN: MMT had designed their launch campaign in order to fulfill the following requirements: 1) Disseminating information to the public. 2) Inducing interest in the customer base. 3) Communicating and maintaining quality. 4) Establishing a psychological connection with the customers. The launch plan had been designed as such to cater efficiently to the customers who demanded cheap fares and were concerned about authenticity of a deal. Thus, MMT needed to communicate the quality and the economic aspect of their offerings. Reaching a wide and relevant consumer base was also a criterion. The advertising budget allocated to the various media chosen was the highest for TV, internet, PR and Analytics, outdoor and print and BTL. Here, as MMT identified a potential segment of entrepreneurs, SMEs officials who are internet savvy, a higher percentage of budgets should have been allocated to internet promotion as the TV viewing of these segments is not that wide. Internet promotions have a larger impact on reaching these customers. MMT had chosen various media, so as to have a maximum reaching effect. They covered TV, Print, Internet and Outdoors. The campaigns designed for these media were such that they launched MMT as a fresh new entrant which was different and never had an earlier version.

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EVALUATION ON MEDIA PLAN: The company makes its mark as the lowest cost solution provider with the tag line “if you find a lower fare we pay the difference”. For the launching of the campaign, MMT used a good mix of TV, internet, print and outdoor. The campaigns were designed such that they portrayed MMT as low-cost alternative, which were aimed at the leisure and corporate travelers. Viral campaigns were designed as such that they induced interest by the customers as well promoted their Low cost idea. These were posted on to some of the successful media, in order to have a maximum coverage of customers. However, some of the objectionable points in the campaigns are stated below: The company was initially in the niche market which provided services to the higher segment market. In India, company’s focus on the higher segment or corporate market but they can easily switch over to the other players if they do not feel comfortable with the service and price is not the major issue to them. Services are an important aspect for this type of target segment. So for binding these people or attracting these people, the company must also emphasize on the other things other than low cost benefit. The promotional campaigns got MMT were majorly targeted at the TV promotions. They failed to take into account the people who do not have access to Television. However, this has been made up to a certain extent by print advertising.

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