1.

Give a brief description of travel industry and the business model adopted by the industry

DESCRIPTION OF TRAVEL INDUSTRY The travel industry was one of the earliest to go online. Since travel had few geographical boundaries, and, thanks to the widespread adoption ofe-tickets, which airlines aggressively pushed, the airlines faced none of the logistical issues of online product retailers such as shipping and variable tax-collection schemes, the travel industry was uniquely suited for the eb .The advent of online travel had revolutionised the travel industry by offering a cheaper alternative to !"S#G$S technology for travel service providers. %t had created new business models, changing the relationships among the key players which had become less interdependent but more competitive. &irlines increasingly reduced their dependence on travel agents and !"Ss#G$Ss by selling directly to consumers via the internet 'or example, !athay (acific &irways offered deeply discounted airfares that were available only on its website for a limited period each time. )f the total seat sales, average online sales had grown from *+.+, in *--* to .*.+, in *--/. %n the same year, sales via airlines0 own websites alone accounted for *+.+, of the total ticket sales, compared to only 1.2, in *--*. BUSINESS MODEL (romoting itself as a 3full-service travel guru4, 5uella featured a user-friendly design for both its main and regional sites, making them easy to navigate, as well as a strong selection of attractive deals. The company offered not 6ust flights from ma6or airlines worldwide but also hotel rooms and car rental services. 7sing its highly-acclaimed search function, which was considered to be one of the strongest in the industry, consumers could search for any combinations of the above offers as well as pre-packaged tours from a wide variety of suppliers8eg, airlines0 package tours like !athay 5olidays. 5uella0s sites also allowed users to modify their search parameters to include their intended dates of travel and displayed results that were up to three days around the preferred dates. 9oreover, users were also able to look for best fares within a self-chosen date range. 5uella only accepted online bookings and charged a fee of 7S:+;22. &lthough the ma6ority chose to use e-tickets for their travel, customers could also opt for paper tickets and would be required to pay for postage. <esides credit cards, the sites also offered various payment options, such as bank transfer or bank draft, to cater to different needs.
2. 5ow do you see the performance of 5uella )nline Travel =td >5)T? and what are its

current concerns@ HUELLA ONLINE TRAVEL 'ounded in 2AAA in Buala =umpur, 9alaysia, 5uella )nline Travel was an %nternet travel portal targeting Greater !hina and the rest of &sia. 5uella was a subsidiary of <lue "ock, a7S-based private equity firm which owned a ma6ority stake in the company, and Cour Dourney (artner, an online travel agent headquartered in &ustralia. <lue "ock also owned stakes in some of the ma6or passenger carriers in &sia (acific, such as !athay (acific, Dapan &irlines, Singapore &irlines, &ir !hina, !hina &irlines, EF& &irways and Borean &irlines. %n less than a decade, 5uella had expanded into ten markets across &sia, including 5ong Bong, !hina, Taiwan, Singapore, Dapan and South Borea, among others, and each had its own localised websites. <y *--/, its total revenue across all markets had reached 7S:2-- million. CURRENT CONCERNS

%n &pril *--G, 5uella )nline Travel =td,2 a 9alaysian-based online travel portal targeting &sia, including Greater !hina, announced its results for the financial year *--/. Since the launch of the company0s 5ong Bong site in *---, its market share for the city had been hovering 6ust under 1,. %ndeed, 5uella0s performance in 5ong Bong had been lower than in its other markets. (revious market research commissioned by the company had found that low consumer awareness of the 5uella brand and the general risk-averseness among 5ong Bong people towards online travel purchases appeared to be the key factors behind this situation.
3. $efine the marketing management problem faced by 5)T

MARKET MANAGEMENT PROBLEMS Denny =eung, marketing and market research manager for its 5ong Bong office, had been with 5uella since it first opened its office in Buala =umpur, 9alaysia. %n *---, she was transferred to help set up the company0s 5ong Bong operations. Denny =eung, marketing and market research manager of 5uella 5ong Bong, was surprised that the online travel industry had not picked up in 5ong Bong despite the city0s high internet usage penetration rate and thetechno-savvy nature of its population, especially among young people. She was also interested in knowing how 5ong Bong consumers were taking the 5uella brand. Therefore, in *--*, she hired 9G), a 5ong Bong-based market research company with offices across the Greater !hina region that included Taiwan and several ma6or cities in !hina >eg, GuangHhou, <ei6ing and Shanghai?, to conduct a study for its 5ong Bong market. Major issues: Bra ! A"are ess: & ma6ority of the respondents had never heard of 5uella, whether it was before prompting >unaided awareness? or after prompting >aided awareness?. The few who had heard of the brand tended to have a vague impression of it. Bra ! I#a$e: &ll respondents perceived 5uella as risky and unreliable, mainly due to their concerns about the security and stability of 5uella0s website. 9oreover, a ma6ority of the respondents, particularly business travellers, also shared the view that the losses incurred from a travel-related purchase that went wrong would be difficult to compensate. The perceived risks would outweigh any potential benefits, thus discouraging them from buying their flights, hotel rooms or other travel-related products and services online. Bra ! Posi%io i $: Firtually all respondents categorised 5uella with other online travel agents#retailers >Group &?. Io one perceived 5uella as similar to traditional, brick-0nmortar agents, such as 5ong Thai, 9orningStar and ing )n >Group <?. Usa$e Pa%%er : $ue to the low brand awareness, a ma6ority of the respondents had never used 5uella0s 5ong Bong site before, nor had they used any other regional sites of the company. &mong the few who had heard of the brand, they normally only used it to obtain information about available products#services and to compare prices, with their actual purchases being made with traditional, brick-0n-mortar travel agents. ith regards to how they intended to use 5uella, all respondents claimed they would only use 5uella as an information provider and would purchase from traditional, brick-0n-mortaragents instead.
4. &s a business research consultant what could be your research ob6ectives@

RESEARCH OB&ECTIVE General purchasing habits and attitudes of 5ong Bong consumers towards travel and vacations, in particular online travel


5.

&wareness of the 5uella brand among consumers in 5ong Bong &ttitudes and perceptions towards the 5uella brand and its 5ong Bong website with its competitors0 &ctual or intended usage pattern of 5uella and its competitors. hat type of information you would like to collect to answer your research ob6ectives@

The information needed for answering the research ob6ectives would be the internet usage pattern of the local people. 5ow they use the internet. This would require answering of a questionnaire that would have questions like where the people use internet, how much time they spend on it, what websites they visit, which travel portals they visit for information#purchase transaction, etc. Juestions relating to traditional travel agents would also be included like what facilities draw consumers to the traditional agents, what are the ma6or area of concerns regarding to the online travel portals, etc. %nformation regarding the target market and their composition would also be needed. This would clarify if the target market of 5)T is internet literate or not.
6. 'ormulate a research program to help solve marketing management problems faced by

5)T To begin a research program for solving the marketing management problems faced by 5)T, the problem should be defined clearly so that the result of research would be of some actual use. The main issue with the marketing management had been stated above. %f the problem definition is glossed over or done poorly, the research results are likely irrelevant and potentially harmful. )nce the problem had been defined, next step would be to formulate research questions. "esearch questions express the research ob6ectives in terms of questions that can be addressed by research. &fter designing the research questions, various methods had to be used to collect information about the cause of the problem and factors that are closely related to it. <oth qualitative and quantitative research methods would be used to collect information.