STICKINESS LEVERING STRATEGY TO MPV TOURS E BUSINESS

MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL MBMM PROGRAM Tran Thi Ngoc Bich Stickiness-levering Strategy to MPV Tours’ E-business FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor: Dr Nguyen Quyet Thang Ho Chi Minh City 2007 INDEX Contents Page Abbreviations & glossary i List of charts, figures and tables iii Executive summary Part Introduction – description of the case to be solved MPV Tours business context Why MPV Tours move online? MPV Tours corporate strategy − Mission & Vision − Objectives − Key success factors − Business model − STP (Segmentation – Targeting – Positioning) Why stickiness is an issue of e-business? 2.1 What is stickiness? 2.2 Why stickiness plays an important role in e-business? Why stickiness is an issue of MPV Tours’ e-business? 4 Project description − Mission − Analysis − Research method − Strategy development work Part Analysis using relevant data 5 SLEPT analysis – Impact on Vietnam inbound tourism Vietnam Tourism Insight − General context − Issues − Market trends Vietnam inbound tourism e-business market situation analysis 3.1 General context 3.2 Tourism e-business situation & 7Cs analysis 3.2.1 Context 3.2.2 Content 3.2.3 Commerce 3.2.4 Community 3.2.5 Customization 3.2.6 Communication 3.2.7 Connection 3.2.8 7Cs summary: The best players 3.2.9 Sample of some best players 7 7 11 11 11 12 12 13 13 Summary of external analysis 14 MPV Tours’ website customer interface (7Cs) analysis 14 Part Recommendatory stickiness-levering strategy to MPV Tours’ website 16 Recommendatory description of ideal online customer experience 17 Recommendatory stickiness-levering strategy 17 2.1 Improving customer interface (7Cs) 17 2.1.1 Context 2.1.2 Content 2.1.3 Commerce 2.1.4 Community 2.1.5 Customization 2.1.6 Communication 2.1.7 Connection 2.1.8 7Cs summary 18 18 19 20 20 20 21 21 2.2 Improving web navigation 22 Part Recommendatory Budget, Controls & Implementation 22 Budget Controls 2.1 Project KPIs 2.2 Website metrics Implementation 3.1 Re commendatory organizational structure 3.2 Work breakdown structure 3.3 Activity plan 3.4 Project contract definition & follow-up 22 22 22 22 23 23 24 25 25 Conclusion 25 Reference 26 Appendix Appendix Sample of context integration Appendix Sample of best content offers Appendix Sample of innovative tour customization tool Appendix Sample of best multimedia offers Appendix Sample of online & booking payment Appendix Sample of company profile Appendix Sample of tour itinenary map & tour summary Appendix Sample of web navigation Appendix Sample of web verification Appendix 10 Recommendatory activity plan Appendix 11 Project request Appendix 12 Project definition Appendix 13 Project implementation Appendix 14 Project closure 27 28 29 30 32 33 34 35 36 37 38 39 40 41 Abbreviations & Glossary Abbreviations ASEAN CRM FAQs Info KPIs MICE N/a PATA Rev UK USA VITA VNAT The Association of Southeast Asian Nations Customer relationship management Frequently asked questions Information Key performance indicators Meetings, Incentives, Conferences & Exhibitions Not available Pacific Travel Association Revenue United Kingdom United State of America Vietnam Tourism Association Vietnam Administration of Tourism Glossary Click & mortar A business model where an enterprise starts with traditional business then moves online while maintaining its offline business iMode Wireless internet service popular in Japan and is increasing in popularity in other parts of the world (wikipedia.org) Paypal PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet It serves as an electronic alternative to traditional paper methods such as cheques and money orders PayPal performs payment processing for online vendors, auction sites, and other corporate users, for which it charges a fee (wikipedia.org) Skype Skype is a peer-to-peer Internet telephony network founded by the entrepreneurs Niklas Zennström and Janus Friis, also founders of the file sharing application Kazaa (wikipedia.org) SLEPT analysis Analysis of social factors, legal factors, economic factors, political factors and technological factors Thawte Thawte Consulting is a certificate authority (CA) for X.509 certificates Thawte, (pronounced "thought"), was founded in 1995 by Mark Shuttleworth in South Africa and is the second largest public CA on the Internet (wikipedia.org) Verisign VeriSign, Inc (NASDAQ: VRSN) is an American company based in Mountain View, California that operates a diverse array of network infrastructure VeriSign provides a variety of security and telecom services ranging from digital certificates, payments processing, and managed firewalls to mobile call roaming, toll-free call database queries and downloadable digital content for mobile devices (wikipedia.org) Webcast Broadcasting over the internet List of Charts, Pictures and Tables Charts Chart Chart Chart Chart Chart Chart Chart Chart Chart Chart 10 Chart 11 & 12 Level of sites’ functionality & aesthetics/page Level of richness of information/page Web navigation/page Websites offering supporting tools / page Number of website offering travel tools / page 10 Websites offering online ordering & online payment / page 10 Sites applying multimedia mix / page 10 Content type dimensions / page 11 Web offering community tools / page 12 Web offering broadcast communication / page 12 Web offering interactive communication / page 13 Pictures Picture Picture Picture Hanoitourist-travel.com, one of the best players / page 14 Homepage of mpvtours.com / page 15 Sample of recommendatory context to mpvtours.com / page 17 Tables Table Table Table Table MPV Tours revenue / page Market segmentation / page Number of registered tourism companies having an active website in big cities / page Number of websites linked to vietnamtoursim.com/ page Acknowledgement I would like to express my deep gratitude towards all the professors of Solvay Business School, who have participated in the MBMM Program for their dedication and enthusiasm in providing the MBMM students with practical and updated knowledge in business management and marketing, especially Professor Claire Gruslin for her e-commerce course with attractive new concepts but very practical and trendy, which has given me motivation to select the topic of this project I would like to thank Ho Chi Minh City Open University for giving a chance to attend the MBMM Course, which has made a great contribution to my career path I believe that the knowledge from the course will continue to contribute to the success of my future work I would like to thank Mrs Pham Thi Mai Loan, the director of MPV Tours for her continuous support during the past months the project was carried out I would like to thank Dr Nguyen Tat Thang for his precious comments and guide lines that has led the project to the right direction Finally, I owe my family members for their support and motivation which have been the great encouragement to me throughout the course period EXECUTIVE SUMMARY Motivation E-commerce is a new business model to Vietnam and tourism is one of the industries that has pioneered in applying this new business model The work of this project has been built on the motivation urged by the MPV tours’ task to improve the company website’s stickiness in order to achieve its strategic objectives The topic of this project, stickiness-levering strategy, was driven by the attractiveness of totally new concepts and the practical application of the knowledge provided in the e-commerce course given by Professor Claire Gruslin Problem statement MPV Tours, a subsidiary of Mai Phuong Vy Co., Ltd., is a small-scaled private company operating mainly in the inbound tourism business Due to the pressures from internal situation, fast technological development as well as the pressures from market situation, moving online while maintaining its traditional business has been the strategic choice of the company management The website www.mpvtours.com has been developed to fit this strategic move Through a pre-launch test of MPV Tours’ website among a small group of company members the website has revealed potential indications of low stickiness through weaknesses in functionality and content offers Driven by the important role of stickiness in e-business, this project has been assigned the mission to develop and recommend a stickiness-levering strategy to MPV Tours’ website Approach Stickiness-levering strategy recommendation to MPV Tours’ website is based on SLEPT analysis, Vietnam tourism insight analysis, tourism e-business analysis and MPV Tours’ website customer interface analysis Customer interface includes dimensions, which are Context, Content, Commerce, Community, Customization, Communication and Connection Research method used in this project includes secondary research and web survey Project key deliverables The key work this project has offered to MPV Tours includes a SLEPT analysis, an insight into Vietnam tourism industry in general and an in-depth analysis of tourism e-business situation through a survey of active websites of 54 tourist companies having established direct links to the website of Vietnam tourism administration The survey has revealed how leading tourist companies are investing in their e-business and making their websites appealing, hence providing valuable benchmarks for the development of stickinesslevering strategy to MPV Tours The project also provides an analysis of customer interface status of MPV Tours’ website, points out which parts of the site are weak and should be improved for stickiness leverage Observations from the analysis have acted as the foundation recommendations of stickiness-levering strategy focusing on improving customer interface and improving web navigation and recommendations of budget, controls and implementation of this stickiness-levering project Conclusion Moving online has been a widespread trend in tourism industry not only in the world but also in Vietnam MPV Tours has made the right decision to move online Based on the fact that MPV Tours’ website has succeeded in generating a first positive impression through high level of aesthetic appeal, and with the recommendations on stickiness-levering strategy and implementation, this project is expected to contribute to the success of the company new business model Part INTRODUCTION MPV TOURS BUSINESS CONTEXT MPV Tours is a small enterprise with registered capital of $ 120.000 The company has been involved in the tourism business for years with the main focus on inbound tourism Like other tourist companies, MPV Tours provides additional services such as hotel reservation, car rental and airplane/train/ship ticket booking The company has made steady growth until 2006 when MPV Tours decided to restructure the company’s business and organization Due to personnel restructuring turnover of MPV Tours in 2006 sharply went down by 56.31% as illustrated in table With the attempt to make a recovery to the situation, the company management board has decided to launch its business on-line while still maintaining its traditional offline business Total No of tourists Revenue (Rev.) Year No of tourists Growth rate Rev Growth rate 2003 389 291,360 2004 613 57.58% 467,845 60.57% 2005 846 38.01% 645,565 37.99% 2006 375 -55.67% 282,062 -56.31% Table MPV Tours revenue (Source: MPV Tours) Why MPV Tours moves online? Internal pressure - Revenue loss as a result from restructuring and reorganization has led the company to revise business strategy Market pressure - Online tour transactions have become a fast-spreading global trend - Several tourist companies in Vietnam have been starting exploiting ecommerce Technological pressure - MPV wants to exploit the opportunity of ecommerce, a new business model still at the early age of Vietnam tourism industry - Strong growth of internet and iMode* services MPV Tours corporate strategy Mission & vision: − Mission: To grow through offering best values for customers’ money trade-off − Vision: To be the best service provider in inbound tourism in Vietnam in 2012 Objectives − Revenue earned from online service offering reaches 300,000$ in the first year of launching the online business − Average annual revenue growth: 30% − Contribution of online revenue: 30% in the first year, 80% in 2010 Key success factors – strategic cornerstones: − Product innovation and customization − Service quality optimization & human resource professionalism − Excellent customers’ online experience through high level of online interaction and responsiveness, website aesthetics and functionality Business model choice: Click & mortar* Market Segmentation Drive-in Shipboarding Flight-in Transport ation Regio Deman English-speaking French-speaking Chinese speaking n/a n/a n/a Cam bodia Others Hong Taiw EU Rusia ASEAN & USA UK Australia France Belgium Canada China kong an Laos Sight seeing & culture Relaxation & health care Ecological Beach breaks Adventures & sports MICE Education Sight seeing & culture Relaxation & health care Sight seeing & culture Ecological Adventures & sports n/a n/a n/a Table Market segmentation Targeting ♣ Region: ◊ Green blocks English speaking countries: USA, UK, Australia French speaking countries: France, Belgium, Canada ASEAN ♣ Demand: Sight seeing & culture Relaxation & health care Ecological Beach breaks MICE ♣ Transportation type: ♣ Income: ♣ Age: Flight-in Above average & high income 30 - 60 Positioning Value optimization WHY STICKINESS IS AN ISSUE OF E-BUSINESS? 2.1 What is stickiness? - “Stickiness is one of the most important ideas in electronic commerce – and business in general In ecommerce, it’s a measure of how much attention a website receives over time.” (Thomas H Davenport, www.cio.com) - “Stickiness refers to a company’s ability to retain users and drive them further into a site” (Paul Peddoe-Stephens, www.wired.com) - My point of view: A website’ stickiness refers to the site’ s capability to attract users’ attention, to create a positive and favorable feelings among users towards the site and keep their attention to the site as long as possible For a more simple meaning, a website’s stickiness is like a woman’s appealingness to a man, it’s not only about the woman’s appearance but also about her revealing personality and intrinsic values Stickiness levering should start right from the first moment a visitor clicks on the site by generating a positive impression, a refreshing and comfortable feeling, then encourage them to move on to explore every part of the site Stickiness levers to a website is to provide to visitors excellent online experience by offering relevant information, giving them comfort, fun and interests while visiting the site, by offering them benefits and values beyond products and service offerings with high 27 Appendix Sample of Context Integration 28 Appendix Sample of Best Content Offers Appendix Sample of Innovative Tour Customization Tool 29 30 Appendix Sample of Best Multimedia Offers 31 Appendix Sample of Best Multimedia Offers 32 Appendix Sample of Online Booking & Payment 33 Appendix Sample of Company Profile Appendix Sample of Tour Itinerary Map & Tour Summary 34 35 Appendix Sample of Web Navigation 36 Appendix Sample of Web Verification 37 Appendix 10 Recommendatory Activity Plan MILE-STONES Project procedures PHASES Define project SMART objectives, task Project owner force, key people involved Project Clarify & communicate throughout Project owner communication involved departments & people Services Price Payment Promotion Text appeal Redesign company slogan & add animation Marketing MGR, IT MGR Marketing, IT Image appeal Prepare good quality photos of destinations by outsourcing Graphics Prepare slide show of photo gallery Marketing, IT, outsourced photographer Prepare good quality & inspirational music and music option tool Prepare good quality & inspirational video clips of trips & destinations by outsourcing Marketing MGR, IT MGR, outsourced Marketing MGR, IT MGR Marketing MGR, IT MGR Marketing MGR, IT MGR, outsourced Registration Redesign registration box IT Manager IT Security Work out detailed security policies Develop online booking system & booking form Develop online payment system & booking form Design forum operational system & Assign forum leader IT Manager Marketing MGR, IT MGR Marketing MGR, IT MGR Marketing MGR, IT MGR IT Design member club operational system & assign clud leader Marketing MGR, IT MGR Marketing, IT Marketing MGR, IT MGR Marketing, IT Forum Design online consultance operational system & define task force Design desired content & layout Configuration configuration system & decide applicable technical softwares Prepare operational system of EBroadcast newsletter, FAQs, Webcast & assign communication task force Prepare operational system of Interactive ecommerce dialogues, online customer communication service, user feedback, contests, CRM activities & assign task force Define pathway method applied to Pathway main parts of site Marketing, IT Marketing, IT Marketing, IT, outsourced camera man Marketing, IT Marketing, IT Marketing, IT IT Manager, Web IT, Web designer designer Marketing MGR, IT MGR Marketing, IT Marketing MGR, IT MGR Marketing, IT Describe desired detailed navigation Navigation path path & redesign accordingly IT Manager, Web designer Marketing MGR, IT MGR Marketing MGR, IT MGR Upgrade of 7Cs Detailed upgrading plan, upgrade & navigation contract with web designer IT Manager, Web IT, Web designer designer Follow up Project implementation status BD MGR BD Evaluation & Adjustment KPIs, IT metrics, Website metrics BD MGR BD Link CONTROLS Tour designer Tour designing Customer service Customer MGR, HR MGR service, HR Marketing, IT Online consultance NAVIGATION preparations CUSTOMER INTERFACE & NAVIGATION UPGRADING Tour designing Marketing MGR, IT MGR Member club CONNECTION preparations Tour designer Marketing, IT Online payment COMMUNICA-TION preparations Tour designing Marketing MGR, IT MGR Functional appeal Online booking CUSTOMIZA-TION preparations Tour designer Marketing Marketing Marketing Video COMMUNITY preparations Pre survey new tour itinerary & destinations Mapping itinerary Design service operational system & service standards & policies Business development Business development Marketing MGR Marketing MGR Marketing MGR Audio COMMERCE preparations Design new ready made tour offers Department Collaborate Pricing policies & programs Work out detailed payment policies Develop detailed Promotion programs Prepare travel tools: supply sources & design operational system; Prepare efficient customization tools Prepare emotional appeal tools & design operational system Emotional appeal CONTENT preparations: Multimedia mix Task owner Project contract CONTENT Product offers preparations: Offer mix CONTENT preparations: Appeal mix TASKS Define desired links & arrange deals IT, Web designer Marketing, IT Marketing, IT Start Due Buffer Dead- Status date date time line Check 38 APPENDIX 11 Project Request ( phase I ) Project name STICKINESS IMPROVEMENT Project owner To be assigned Project sponsor Mrs Pham Thi Mai Loan Project description To implement marketing strategy which is developed for stickiness improvement of MPV Tours' website Strategic objectives (W I A) Stickiness of MPV Tours' website is improved throughl the dimensions of customer interface: context, content, commerce, communication, community, customization, connection SMART objectives What How much When Number of repeat visitors over total visitors 30% Dec 2008 Online revenue USD 300000 Dec 2008 Online revenue growth 30% Dec 2008 Online revenue contribution 30% Dec 2008 Online revenue contribution 80% Dec 2010 Tracking tools Number of total visitors, numbers of repeat visitors, number of unique visitors, online revenue, online revenue growth Project accepted by Mrs Pham Thi Mai Loan Date of acceptance To be assigned 39 APPENDIX 12 Project Definition ( phase II ) Project name STICKINESS IMPROVEMENT Deadline To be defined Project owner To be assigned Task Force Web design agent IT Tour designing Tour execution Customer services HR - Admin Accounting Photographers Video clip makers Project description To implement marketing strategy which is developed for stickiness improvement of MPV Tours' website Strategic objectives Stickiness of MPV Tours' website is improved through the dimensions of customer interface: context, content, commerce, communication, community, customization, connection SMART objectives Number of repeat visitors over total visitors 30% Dec 2008 Online revenue USD 300,000 Dec 2008 Online revenue growth 30% Dec 2008 Online revenue contribution 30% Dec 2008 Online revenue contribution 80% Dec 2010 Tracking tools Number of total visitors, numbers of repeat visitors, number of unique visitors, online revenue, online revenue growth Scope In To be defined Scope Out To be defined Key people concerned Project owner Web manager IT Trouble shooting Tour designers Tour execution HR manager Photographers Video clip makers Action R/C To be defined To be defined Risks & Constraints R/C ==> To be defined Means Budget Sponsor ==> Action To be defined To be defined $15,000.00 Mrs Pham Thi Mai Loan Date OK budget To be assigned To be assigned Date OK sponsor 40 APPENDIX 13 Project Implementation Project owner : To be assigned Project description : To implement marketing strategy which is developed for stickiness improvement of MPV Tours' website SMART objectives Dec 2008 Dec 2008 Dec 2008 Dec 2008 Dec 2010 Number of repeat visitors over total visitors Online revenue Online revenue growth USD 300,000 30% Online revenue contribution 30% Online revenue contribution 80% Planning Phases & Milestones 30% Tracking Planned deadline Status * Problems to solve Recommendations Decisions A- Analyses ext-int / KSF / SWOT B- Definition of SMART objectives C- Strategy (business / human) D- Action plans - internal organization - external organization E- Implementation (ABP) F- Tracking * Status Green = according to plan Orange = problems to solve Red = objectives at risk Revised deadline 41 APPENDIX 14 Project Closure ( phase IV ) Project name : STICKINESS IMPROVEMENT Project owner : To be assigned Project description : To implement marketing strategy which is developed for stickiness improvement of MPV Tours' website SMART objectives Number of repeat visitors over total visitors 30% Online revenue USD 300,000 Online revenue growth 30% Online revenue contribution Online revenue contribution Online revenue contribution 80% Learnings Assessment of the RESULT (what) Assessement of the METHOD (how)