DILIP SoMAN, AWL WADHWA, AND BHAVNAHINDU}A

An online travel services portal has demonstrated spectacular results in the first few years ofoperation However, the future brings new challenges m their quest for growth. Should theycontinue to be a niche player and develop new value-added services, or should they look to

serve new market segments? Should they change the business model and look for new sourcesof revenue? It is obvious that they cannot grow by doing more of what they've been doing,

the question is-what do they need to do next?

Deep Kalra, CEO of MakeMyTrip (India) Pvt. Ltd. (MMT), glanced contentedly at vari-ous newspaper stories about his fledgling company displayed on a bulletin board in hisNew Delhi office. MMT is an online travel company focused on the leisure and small-business traveler coming to India. In its very first year of operation in 2000,MMT hademerged as India's largest e-commerce company Presently catering to the lucrativeNon-Resident IndianI (NRI market in the United States, the company aims to tap thepotential of the huge US$l, I) billion NRI market worldwide. As Kalra looked back atthe milestones that MMT ha i passed along the way, he stumbled on a headline thatwould catch any proactive business-man's attention'

Onlme travel bookings up 250 percent in FY '03 (The Economic Times, May 15,2003).

As Kalra skimmed through the article, he thought about several strategIc ques-tions. Should MMT continue to target NRIs? Or, should they expand horizons andserve the foreIgn tourist market from the United States, the United Kingdom, andAustralia? Should the company continue to be an India-focused company, or was ittime to start thinking about competing with global giants like Expedia and Travelocity?

The Tourism Market in India

Since 2001,India's tourism mdustry has been booming due to a rush of foreign touristsand increased travel by Indians to domestic and overseas destinations. Currently it isa US$3 billion industry. In 2003, the number of Indians traveling abroad increased by30 percent to 4.5 million. A recent surge in the IndIan economy had raised middle-classincomes, prompting more households to spend on vacations abroad or at home At thesame time, India's emergence as a global informatIon technology hub and an aggressive advertismg campaign b" the government are credited with changing India's Imagefrom that of a land of snake charmers to a modem economy, consequently sparkinginterest among overseas travelers. Moreover, domestic tourists are also fuelmg theindustry's revival. In the recent past, domestic airfares in India had been substantiallyreduced by 10 to 15 percen However, the rndustry is awaiting a revision to the dollardenominated airfare regulation applicable for inbound travels. As a form of pnce dis-crimination, Indians who travel abroad can purchase fares in Indian rupees, while NRIsand Persons of Indian Origin (PIOs) have to buy tickets in dollar denommahon Thispractice is WIdelyseen as a constraint on further growth in the demand for travel.'!

This case was written by Dilip Soman, professor of Markehng and Coms Entertamrnent and ofCommunication Strategy; and Atu Wadhwa and Bhavna HmduJa, Class of 2005 MBA students, RotmanSchool of Management, Universit ')fToronto. It is meant to be used as a basis for classroom discussion, andis not designed to illustrate effechve or ineffechve management situations. Copyright © 2005 Dilip Soman,Atul Wadhwa, and Bhavna Hinduja.INRI is an acronym for non-reSident Indians, the term used to describe people who hold Indian passports,but are residents of other countrie~ for tax and employment purposes. If these NRls decide to take <.ihzen-ship of their adopted countries, they cease to be NRls. However, under a new Government of India scheme,they could apph for a PIO (Persons of Indian Origin) status, which gives them many of the benefits avail-able to NRls.2LolaNayar Oanuary 23, 2004), 'ravel. Tounsm Industry Awaits Revision in Dollar Denornmated Alrtares(http://desltalk.newsindia-times )m/2004 0l/23/traveHop.html).

The distribution of travel services in India is fragmented and predommantlyretailer based. Though there are a few national compames, most are small, independentbusinesses. While airlines, railways, hotels, and car rentals supply their travel services.0 the industry, the consolidators, travel agents, and onlme travel portals distributethese serv Ices to the customers. The travel industry has expenenced drastic alterat onsm the manner in which airlines sell their tickets In the 1990s, airlines depended on con-solidators (who sold to agents/ dealers for retail sales) for most of their ticket sales.With all major international airlines reducing commiSSIOns, consolidators and travelagents across the country have tightened their belts. The fact that airhnes have startedundercuttmg fares on the Internet suggests that agents may soon become redundant.Currently, margins are being squeezed and airlines are using the Internet to reach rav-elers directly, thus elimmating the role of a consolidator Airhnes receive 15 percent oftheir business through Internet sales. As a result, retall margins have reduced to 2 per-cent for individual travelers. Travel agents sell airline nckets at cost to corporate travel-ers, charging a 1 to 2 percent service fee and have expanded their travel service offer-ings to hotel bookings, car rentals, and tour packages m order to earn profits from thissegment.

A study suggests that India's Internet population is around 46 million users.f owever these users predominantly use emall applications, but don t conduct 0 line, ansactions.3 E\ en Sl), on11l1etravel booking" in Indlc h,l\'e witnessed more m 11 a,,-50percent jump to 50,000 bookings from 2002 to 200) In 200 i, onlilll tran?l gene ltedUS$26 billion m sales and 12 percent of all tra\ el sen !Ceswere bought on the Internet.This percentage is expected to reach 30 percent by 2008. However, out of a total of lYer20 million air bookings 111India every year, online travel bookings ~onstitute 'eryminiscule portion. High cost of e-commerce, lack of proper systems, and low awar<.'1essare the main obstacles to growth of online bookings. Equally so, the dismtermedl, tionof the travel industry ISa double-edged sword for travel portals. While it leads to betterdeals on the Internet, something realized by most customers today, travel portals facestiff competition from travel service providers, such as hotels that guarantee to matchthe discount received from intermediaries.

Makemytrip: The Company and the Product

MMT offered competitively priced travel products, supported by real-time booking capa-bility, convenience, and stellar customer service and had generated a turnover of Rs. 23million (US$O.5million) m its first four months of operations. The portal (see Exhibit 1)provides its customers the entire gamut of travel sen Ices through the Internet by le\ ~rag-mg other technologies. In addition to airline tICkets MMT offers over 1,500 domesticand international hotels at negotiated rates, hundreds of attractive holiday packages,ar rentals, trams, and cruises for Indian as well 15 mternational destInations The

unique feature of the portal is that it allows online booking and confirmations, n und-the-clock customer support, online Web chat and a all-free number. MMT ISone ~t thefew travel service proViders that acknowledges the fact that inbound travelers prefer anagent at the destination rather than the origin, which gives MMT the added advantage')ver other travel agencies. They have recently sott launched www indiaahoy.Cl m, abusiness-to-business (B2B) site offering Indian ho l.ls and tour packages for int'rna-IOnal travel agents in Australia.

MMT bundles its basic travel reservation offenng With travel insurance, ace 'ss tobusiness lounges in India for all travelers, and valuable shopping discount booklets.Apart from these basic services, MMT believes that It offersm unsurpassed cust lmerservice expenence through a variety of media Theu l ustomer service represent, tlvesCSRs) are accessible 24/7 throughout the year through their toll-free numb! rs inndia as well as the United States. The CSRs are eqUlpped to handle almost an cus-

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information, foreign currency exchange rates, and time zone differences. CSRs recon-firm all tickets 72 hours before departure. The portal is a one-stop shop for all travel-related information. It offers information about travel-related issues like visas, passports,insurance, travel, and finance (in collaboration with a retail financial services company).MMT claims that it is different from other Indian travel portals as it provides value-added services like a free drop and pickup cab for its clients. The company goes the extramile to add value to its customers' travel experience during their visit to India with its"Tripper Saver" promotional program.4

The Business Model and Operation

To tap the NRI and international market, MMT has created a network of offices inNew Delhi, Mumbai, and 1\JewYork. In addition, it has appointed franchise partnersin all major cities in the United States, the United Kingdom, Australia, and India.MMT relies heavily on its network of leading tour operators to provide travel-relatedservices in India and over 30 international countries. Moreover, the company exploitsinformation technology, usmg India's natural cost advantage to service its customers

4Additionally, NetCarrots Loyaltv Services (a service proVider to MMT) has specially tied up with exclUSivebrand names and weip<nown establishments that provide discount coupons and freebies for MMT's customers.

MMTOperations

based in high-cost economies. Kalra attributes MMT's success to the sound in tialstrategic decision to target NRI customers and subsequently supplementing it wit! ill-depth knowledge of thIS target audience, coupled with rigorous processes and goodJade relationships. MMT's operations are represented schematically in Exhibit 2

The sales team consists of three divisions-Internet sales, corporate sales andgeneral sales. MMT ensures a dedicated set of executives to service the sophisticated

)rporate and general sales business. In terms of human resources, Kalra believes inumoting from within to foster individual growth withm the )rganizahon.

MMT believed in the "no-individual-sales-target" model to ensure high leV(-s ofustomer service that may get neglected in a drive to compete for sales. Service 'ailsor schedule changes, following up on reconfirmations, itinerary confirmations, tc.)

a 'e estimated to form 40 percent of the total calls received. Instead of allocatmg ndi-\ Idual sales targets to its sales staff, MMT sets a daily sales target for the' entire earnthat is dIvided proporhonately among the three shifts In general, the night shiftachieves 55 to 60 percent of the daily sales target due to time zone differences. In rderto encourage team performance, MMT rewards all its employees upon achievement ofhe company's sales target; such rewards form 10 to 15 percent of an employee pay,ackage

MMT operates as two separate entities: MakeMyTrip-India and MakeMyTrip Inc.USA). Due to cost and labor advantages, MMT-India offers call center facilities to

MMT Inc However, most airlines traveling from the United States to India do not per-'lit tickets to be sold in India for travel originating outside the country-this requires

MMT Inc. to source tIckets from consolidators wIthin the United States. A transfer pric-'lg mechanism has been set in place that allows MMT-India to bill MMT Inc. for, I theervices rendered and tickets sourced in India, when permitted. Thus, both compmies

IIle theu mdividual balance sheets in the respechve countries.Sumit Gupta, Head, Finance and Accounting, believes that MMT's profitabhIty is

Irectl" hnked to sales \ olumes. MMT's current revenue model depends heavih on itsISoperations that generate about 90 percent of it...,sales, while the [ndian operations

MMTOperations

based m high-cost economies. Kalra attributes MMT's success to the sound Initialstrategic decision to target NRI customers and subsequently supplementing it with in-depth knowledge of this target audience, coupled with rigorous processes and goodtrade relationships. MMT's operations are represented schematically in Exhibit 2.

The sales team consists of three divisions-Internet sales, corporate sales, andgeneral sales. MMT ensures a dedicated set of executives to service the sophisticatedcorporate and general sales business. In terms of human resources, Kalra beheves inpromoting from within to foster individual growth WIthin the organization

MMT believed ill the "no-individual-sales-target" model to ensure high levels ofcustomer service that may get neglected in a dnve to compete for sales. SerVICecalls(for schedule changes, following up on reconfirmations, itinerary confirmations, etc.)are estimated to form 40 percent of the total calls receIved Instead of allocating indi-vidual sales targets to its sales staff, MMT sets a daily sales target for the entire teamthat is divided proportionately among the three shifts. In general, the night shiftachieves 55 to 60 percent of the daily sales target due to time zone differences In orderto encourage team performance, MMT rewards all its employees upon achievement ofthe company's sales target; such rewards form 10 to 15 percent of an employee's paypackage.

MMT operates as two separate entities. MakeMyTrip-India and MakeMyTrip Inc.(USA). Due to cost and labor advantages, MMT-India offers call center facilities toMMT Ine. However, most airlines traveling from the United States to India do not per-mit tickets to be sold in India for travel originatmg outside the country-thiS -equiresMMT Inc. to source tickets from consolidators within the United States. A transfer pric-ing mechanism has been set in place that allows MMT-India to bill MMT Ine. fo. all theservices rendered and tickets sourced in India, when permItted. Thus, both companiesfile their indIvidual balance sheets in the respective countnes.

Sum it Gupta, Head, Finance and Accounting, believes that MMT's profItability isdirectly linked to sales volumes. MMT's current revenue model depends heaVIly on itsUS operations that generate about 90 percent of Its sales, while the Indian operations

contribute only 8 to 10 percent. MMT's Australian initiative is still in its infancy, con-tributing 2 percent of the company's turnover MMT is funded primarily by privateequity, with less than 5 percent of bank loans (usually overdraft associated with day-to-day operations). In order to minimize costs and ensure high levels of customersatisfaction, MMT is in the process of making key mvestment decisions. One of the cnt-ical investments considered by MMT is the setting up of an entity that will allow it tosource tickets directly from airlines, thus elimmating consolidator fees. The mitialinvestment reqUired for tlus initiative is estimated to be in the region of US$300,OOOtoUS$500,OOO.and it is expected to translate into savings of 2 percent on air ticketssourced from consolidators Further, in order to address existing operational issues andincrease the team's efficienCies, MMT is planning to make a series of investments intechnological advancements in the region of US$200,OOOin 2004 and US$300,OOOin2005.

Keyur Joshi, Chief Operating Officer, is particularly interested in the movementand fluctuations m the distribution costs of the airline industry. Due to increasing com-petition in the airline industry, the market has seen the airline ticket distribution costsplummet from 9 percent to almost 0 percent in the past decade. Direct sales to cus-tomers through the Interne contribute to 30 percent of an airlines' total revenue. Theairline industry, even toda relies heavily on travel agents and other distributors torthe bulk of their ~ales. On ,e same note, travel agents have come a long way, altermgtheir revenue model fron- commissions earned from consolidators and airlmc~ tocharging service fees to customers for their ticketmg services while investigatmg bestfares and routes. Typically a customer pays between US$10 and US$20 to the travelagent for his serviCes.

Activities with various suppliers (e.g., consohdators and airlines for tickets, hotelsfor tourist gutdes and rooms, taxi operators for car rentals) need to be coordinated andsold as a package to customers. With the size of operations increasing manifold, there isa growing need for a software system that integrates various departments withm MMTefficiently. Moreover, although MMT has serviced 30,000 NRIs in the United States inthe last three years, it does not track repeat purchases. MMT is currently implementinga Customer Relationship Management (CRM) process that will allow it to trackchanges in its customers' buying and traveling habits.

MMT provides its customers with three modes of communication to reach MMT'ssales/customer service team-emails, Web chats and toll-free numbers. Emails andchat sessions are saved in MMT's system for constant monitoring of the service qualitygiven to the customers. All phone calls are recorded for quality control purposes. Eachone of the four Assistant Sales Managers randomly listen to 15 to 20 calls serviced byevery sales executive over a span of two weeks to provide them with critical feedback.Ashish Gautam, Deputy Manager, Quality, is cognizant of the fact that although tillsprocess helps address the quality of customer contact, MMT currently lacks a system totrack timely customer follow-up. Another cause of concern for MMT is the turnaroundtime taken by the sales executive to resolve a customer issue or query. This delay is dueto the inaccessibility of relevant information required by the sales executive Thisinformation typically needs to be gathered from vanous departments to ensur' satis-factory customer service.

Customer Segments and Advertising

The Indian travel market can be classified into two broad categories-"internattonaltravelers (those crossing mternational borders) and "domestic travelers" (those 'avel-ing within India). The inter'1ational travelers can be further classified as "inbound tra\elers" (those who travel mtl India from overseas) and "outbdents of India whc travelinternationally). Domestic tourism is growmg, and this seems to provide a good oppor-tunity for technologically advanced travel portals like MMT to focus on customer loy-alty and maXimize the Internet's ability to drive repeat purchases by getting 'l.stantcustomer feedback. Converuence and good deals fueled by changes in lifest les ofIndians haH' changed consumer behavior toward transacting on the InternetHowever, the Indian domestlc traveler is suscepttble to a number of constramts that

Country of Residence NRI Population (in Millions)

Middle East 1.5USA 25United Kingdom 1.5Far East and Southeast ASia 2Sn Lanka and Nepal 1Europe 1MnQ 1Canada 1Australia 05Others 07Total 12.7

NRls Visiting India ('000)

308.81

635057.7661.8621.9418.6311.238.828.36

116.77

677.68

% of NRI Visitors from Country

45.57%9.37%

8.52%9.13%3.24%275%1.66%130%1.23%

17.2 %100

makes this segment difficult for MMT to penetrate-namely, low PC penetration POOrquality of dialup access coupled with increased competition among Internet ServiceProviders (ISPs) that lead to cramming a higher number of users with the same band-Width at the backbone. Moreover, the absence of proper cyber legislation in line wiinternational standards ISinhibiting credit card usage on the Internet.

In the outbound segment, there are currently six million Indians traveling abroadfrom India (up from five million last year). Countries m ASia Pacific (e.g Singapore,Malaysia, Hong Kong) along with a couple of Middle Eastern countries remain the pre-ferred tOUrIst destinations However, one of the critical challenges faced by MMT incatering to this segment is that of extremely high price sensitivity and mcreasmgcompetition from traditional brick-and-mortar travel agents. While the rate of Internetadoption in India is healthy, most people are still hesitant to make purchases on theInternet.

The inbound market in India in 2001-02 was 2.42 milhon arrivals This market IS

further segmented into SIXbroad categories-holiday and sightseeing, business trav-elers, conference attendees, students, visiting friends and relatives (VFRs), and others.Exhibit 3 gives details on the NRI populations worldwide. Although residents in vari-ous parts of the Middle East (UAE, Oman, Bahrain, Saudi Arabia, Kuwait) make it toth top of the list of NRis traveling to India, those residing in the United Kingdom andthl United States are an Important group for MMT Thl fact that 90 percent Of theNT jVFR segment plan their trips in advance implies that sales from this segment .Irefa ) y stable and predictable. The remaining 10 percent are emergency cases Kalra esti-mates that an NRIjVFR traveler spends approximately US$1,200 per person per trIP,m)st of which is the cost of the air ticket. More recently, there has been an increasmgtrend among NRI IVFR travelers to explore India and take short vacations while visit-mg their family. This provides MMT with another opportunity to serve this segmentw thin India. MMT estimates the average spends of this group of NRis who choose totake short vacations within India to be close to US$1,800 per person. Finally, they esti-mate that a non-NRI traveling to India would spend approximately US$2,200 per per-son However, hotel quahty and capacity in India remains an issue if MMT decides totarget larger segments-it is estimated that Las Vegas has 130,000room-nights, whereasIndia has only 120,000 room-nights, of Four- or Five-star hotel standard

The NRI population in the United States has doubled in the past decade-currently, it is home to over two million NRIs, of which 67 percent have traveled at leastonce over the past two years. The population figure is expected to grow at 10 percent peryear. Over the past few decades, NRis residing in the United States have undergone anidentity shift from "South Asians" to "Indian Americans" and thus, their buying behaVIOr

Sources. December 2003, De~p Kalra's pi ''>entation n TIEcon Indian 2003, and Tourist Statistics 2002 Ministry 01 TOUrismand Culture Governmer'of India

is strongly mfluenced by the .nternet-savvy American culture. A US survey done ill 2003indicated that 35 percent of travelers purchased tickets and packages online, which ISpro-jected to expand to 55 percent ill the next two years. MMT has good reason to believe thatNRIs residing ill the United States follow similar purchasing trends. It enjoys a 5 percentmarket share in the top 30 NRI-populated cities in the United States. According to a studyconducted by Simmons Research in 2002, the earning capacity of these NRIs has increased,averaging Us$88,OOOas compared to the national average of US$51,900. Expedia andTravelocity are major players ill the US market.

In contrast to the situahon in the United States, NRIs in the Middle East are pri-marily blue-collar workers or laborers, many of whose compensation package includesone paid trip to India per year. These tickets are arranged by employers who sourcethem from a preferred set of endors. making the Middle East a difficult market to pen·etrate into

Initially MMT targeted all three markets-d.omestic travelers, inbound, and out-bound Indian travelers. Kalra felt that if they had relied entirely on the foreign touristmarket, they would have been hit very hard by the fluctuating international marketconditions. But today, he is \ ery clear about the strategic focus on the NRI/VFR seg-ment since he believes thl segment has tremendous growth potential Moreover,MMT's infrastructure-full, integrated back-office function, business-to-consumer(B2C) salL>:>mode' lack of ) ices il IndIa, sen'jcl oriented sales team, relationship~with airlines dnd consolidat 'S, technology, etc -hd\ e been built around the needs andrequirements of the NRI/'v IR customer. Keyur Joshi indicates MMT's prionhes illterms of customer segments as NRIs m the United States, the United Kingdom, and theMiddle East, and Americar tourists visitors tra\ eling to India. Although MMT hasready access to the NRI segment in the United States, it is unclear if it should expand itsofferings to NRIs traveling to destinations other than India. If they did, they wouldhave to compete With Expedla, Travelocity, and Priceline, who already have a large cus-tomer base. Hence, these companies are able to purchase hotel nights and other travelservices m bulk and retail the same to customers MMT currently does not have thescale to bargam the same low prices with hotels and will, therefore, be expensIve onthese routes when compared to Expedia. Kalra wonders if it is feasible for MMT tomove in this direchon.

All the MMT advertisillg done in the United States is conceptualized in India.Devika Khosla (Head, Content) bases the company's advertising and commurucationstrategy on three pillars-ennvenience of 24/7 ser\!Ice, reliability, and competihve pric-ing (see Exhibit -± for sample advertising).

In order to foster growth, MMT has formed strategic alliances with brands thatare assoCIated With the Indian consumer ill a umque way. For example, its offlinealliance with Coke is based on specific promotIOn schemes, like the cricket seriesplayed routmely m Sharjah MMT also operates as the exclusive travel channel forsify.com and provides weekend getaways for Maruti Udyog (a major Indian automo-bile manufacturer). Apart from these three prime alliances, MMT has also tied up withmatrimonial and pilgrimage portals

Consumer Behavior and Decision Making

A study carned out by PhoCusWright in November 2003 on 'Exploring InternetTravelers" found that consumers use the Web early in the travel planning process, oftenimmediately after deciding to take a vacation.s The most common topics for Web travelresearch are the vacation arrangements themselves (air ticket, hotel, etc ), followed bydestmation mformation. Approximately half of the respondents indicated that theystar with flIght arrangements first when assembling a vacation. Hotel and rentals areplanned second and third, respectively. The study also revealed that flight and rentalcars are the travel services most likely to be purchased onlme, while offline channelsstill dominate the travel activities category. Despite the availability of one-stop travelshopping, consumers still tend to purchase different travel servICes on different SItes.Fe \ er than 30 percent of consumers have purchased a travel package of some sort. Insummary, consumers in the US market highly favor online travel agencies and des-tination Web sites for the purchase of vacation packages. A study conducted by A.c.Nielsen indicates that the reason why general sites like Travelocity and Expedia are sopopular is because the air travel category is so driven by consumer awareness-thus,ad 'ecall from continuous exposure to these brands is hIgh, and their names are the firstto ome to the minds of people who seek information on aIrfares 6

Competition

E\ cr since Its inception, MMT has been the only travel portal focusing on the NRI mar-h This gIves MMT a competitive edge over its internatIonal competitors such asExpedia, TraveloClty, Orbit, and Priceline. MMT currently enJoys a 2.55 percent marketshare, and Mr. Joshi is of the opinion that even if domestic competition replicates theirmodel, they would find themselves on a learning curve in order to function efficiently.Moreover, MMT faces relatively less competition from US travel agenCIes because theonly agenCIes surviving there are bucket shops-small agents with specific markets-or mega portals like Travelocity and Expedia that have only online operations.Companies like Expedia rely heavily on buying tickets in bulk at discount pnces andthen reselling them at hIgher margins. The margins allow it to undercut its competitors,outspend them for product development, and drive hard bargams with struggling sup-phers. Expedia IS known for its aggressive advertIsmg campaigns that run acrossonline, TV, press, and outdoor media to convey to its customers that it has all the toolsand ideas to let travelers book a perfect trip online.

Moving On

'i Kalra contemplates his next move in this e\ er-e 'olv1Og online travel business, he. l10ks of the various optIons available to him. Firstly the inbound and outbound mter-national travel market in India is growing at the rate of 20 percent annually. Currently,'1bound travelers pay a very high price for travel sen ices since intermediaries SIphon

off 50 percent of their charges. Kalra feels that MMT is 10 a good position to use ilieternet to reduce these distribution layers while retaming a healthy 20 percent margin

t)r travel services.Secondly, MMT would like to move from a 90-10 percent split of revenue:. be-

\ een air tickets and travel services to a 70-30 percent split. While only 20 percent of'\IRI/VFR travelers use additional travel services (e g car rentals), non-NRIs are moreIkely to consume addItional high-margin serVIces. In hght of the rismg trend to\\ard~x.ploring India besides visiting family and friends MMT could expand the se vice)ffering to NRI travelers-by providing domestic tour packages in addition to heir'1ternational travel-related needs, since the travel-related services offer hIgher marglOShan ticketing services The margins on domestic travel service vary across segments.

acation Packages: A Consumer Tracking and Discover> Stud, November 2003, PhoCus Writht Ir and'vidence (orporation (w" wphocuswriht.com) ..c. Niel~",n, ItVinnmg B( ) and Brand EqUlt\ Model, 2004 (http "w\\ Im~cart.(()m hotel re~l'f\ ltlon_

lttware "rtIel", J htm)

While domestic travelers generate margins between 15 and 25 percent, the NRl VFRtoUrIsts contribute margins as high as 50 percent Kalra wondered what addItionalvalue-added products and services might be introduced into the product portfolIo toextract more value from the NRl/VFR segment. Thirdly, the outbound internationaltraveler market is growing Iapidly. Currently, MMT has its representatives in threeother cities apart from their corporate headquarters in New Delhi, and tapping thisgrowing market would reqUIre it to expand its operations within India, And, finally,Kalra contemplates the European market. MMT is most likely to face stiff competitionfrom Expedia and Travelocit) who are able to bargain deals with hotels and car rentalcompanies based on their large customer bases, However, they have not penetratedinto the Indian market as yet

1. Can MMT sustain its business model by targeting only the inbound travelers, ordoes it need to look at other markets and segments? If yes, which segments wouldyou recommend? If no, how can they grow Within the inbound segment?

2. Ad re\'enues have neve, been core to MMT's busmess plan. However, MMT" rolein promoting some leading NRI-focused brands suggests that this mi~ 1t beanother avenue that Ka a could investigate. Does MMT need to look at advertis-ing as a revenue generator?

3. Can MMT's business model work in other countries, in particular China,Singapore, and the PhilIppines? Are there any differences in consumers and seg-ments in these countries that would render the model inadequate? What rrughtneed to be changed in other countries? Could MMT expand in a modular mannerby replicating their busmess with overseas resIdents of other countries?