Mygola.

com: Planning its Itinerary into the Future

This assignment is submitted to Professor Ganesh Prabhu as part of the New Product Development
course at IIM Bangalore

Situational Analysis
The online travel industry was growing at twice the rate of the overall travel industry, with an
estimated one-third share of the global travel sales. It consisted of travel research and booking
via the internet. Travelers were spending more time researching and planning their next trip.
Travel websites provided review and advice on travel destinations and itineraries, generated by
experts or previous travelers. International travelers relied on friends and relatives for
recommendations. Online travelers also used Twitter & other social networking sites, and search
engines for research. Mobile devices were being extensively used to search for travel
information.
Mygola aimed at making the travel planning process simpler for the traveler. Their approach was
based on 90% technology, 10% human concept, using a technological platform Guide
developed in-house to pick up relevant information available across the internet, and using
human judgment to provide comprehensive answers to queries raised by travelers. A team of
travel freelancers was employed to do this. The answers provided were publicly available and
showed up as results on search engines, thus generating more organic traffic to Mygola. This
was aimed at the serious Do-It-Yourself (DIY) traveler, who looked for customized travel
experience instead of packages sold by travel agencies, who was short on time and required
quick answers, and who would influence future travelers.
The Guide technological platform allowed the freelancers to look at higher quantities of
relevant content in lesser time, first looking at past answers provided by Mygola. This helped to
improve operational efficiencies, reduce turnaround time and improve the quality of answers.
The freelancers were recruited and trained to ensure standardization in answers, thus improving
scalability of the business model.
The company experimented with travel affiliates commissions as a revenue stream for some
time, but ceased it after collecting unfavorable user responses. Mygola followed fixed fee
structure from the users. The priority was hence to grow the user base.
Social networking sites like Twitter were mined for a few 100 keywords representing travel
needs, using an in-house tool. When a match was found, an automated reply would be sent to the
user. The follow up conversation with the answer to the users query would be posted on the
Mygola website with the users permission.
Organic traffic through search engines constituted the high volume, medium quality source for
new users and Twitter constituted the low volume, high quality source.
To capitalize on the growth in the online travel market, the founders of Mygola had come up
with the idea of a new product that would help the users create the itinerary by themselves. This
minimized the human component thus improving scalability and reducing overall expenses. It
could extract the itinerary structure from Mygolas vast repository and use it as the template for
customization. This would replace the query-answer approach with a smart planner that takes
inputs from the user and creates an itinerary template. This would target the casual travelers who
were satisfied with generic travel experience, in addition to the serious DIY travelers. The casual
travelers would be happy with the first cut of the itinerary, while the DIY travelers looked for
customized itinerary with a higher willingness to pay, to ensure that the trip goes exactly as
planned.
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Product Development Options

The major strategic decision ahead of the Mygola management was whether to go ahead with
Mygola V3.0 (New Product) or stay with the existing product. If it decided to go ahead with
the new product, the four decisions it faces would be as follows:
1.
2.
3.
4.

Customer targeting: Same or differential treatment of casual and DIY travelers

Pricing: Irrespective of usage or dependent on depth of research
Marketing: Focus on more intense efforts or rely on tweets/ SEO
Mobile Applications: Whether to design mobile applications for smartphones and tablets

Sustained Competitive Advantage: Resource Based View

We would be analyzing the Mygola offering on the dimensions of appropriability, imitability,
durability and substitutability to understand whether it renders a sustained competitive advantage
to them.
1. Appropriability: The company is moving into casual traveler segment with already
existing DIY travelers which will increase the customer base. The appropriability will
depend on the ability of the company to extract revenues from the new customer base
2. Imitability: Technology is developed in-house, thus it is not easily imitable in the near
future. It also has a first-mover advantage and brand equity by way of word-of-mouth
which will be hard to replicate immediately.
3. Durability: The demand for traveling is unlikely to die out anytime in the near future and
travelers, especially DIY travelers would always need support to build itineraries for the
new places they visit. The repository gets bigger with increasing number of customers
and enquiries and the product is thus durable.
4. Substitutability: While the company has been able to differentiate itself from
competition, there are other online portals and local travel agencies offering tour and
traveling planning which come close to the kind of services Mygola currently provides. It
is thus fairly substitutable.
Sources of competitive superiority:

In-house built technology so the competitors cannot imitate it

Leveraged Data mining experience for freelancers
Provides freelancers with tools to provide quick answers to queries
Customer recognition with no advertising

Analysis & Recommendations

The key strategic decision ahead of Mygola is whether or not to go ahead with the new product
offering- Mygola V3.0. While the company is doing well with its current product offering, the
major challenge they are facing is that of scalability. Mygola V2.0 is a great product for DIY
travelers and they are willing to pay the premium charged for the depth of research provided by
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the company. However, casual travelers would be unwilling to pay such a high price ($30 per trip
on a Pay per trip basis or $99 per annum for Unlimited number of trips). If Mygola intends to
scale up its product and reach out to a much wider customer segment than it does at present, it
will become imperative to leverage technology to reduce the cost of providing such services and
thus re-price their product to tap the casual travel segment as well.
We would now go on to analyze the four sub-decisions ahead of Mygola and formulate our
recommendations.
1. Customer Targeting
Recommendation: Differential treatment to DIY and casual travelers
Rationale: The original website was aimed at the niche segment of DIY travelers, who were
serious about the way they traveled as much as the places they traveled to. Their expectations
were sharply defined. Hence to meet their needs, Mygola had to follow the 90% technology,
10% human approach. Mygola repository was scanned for relevant answers, followed by the
search engines, and finally, the answers were customized by a freelancer, based on the users
query. However, with the launch of the new product aimed at increasing the customer base, and
attracting casual travelers, who were satisfied with basic travel guidelines, the human component
in travel planning becomes redundant. Technology can provide the answers to the queries raised
by the casual travelers without much input from experts or past travelers. Customization of
response was not of primary concern to the casual travelers. Hence, the treatment to be given to
the casual and DIY travelers on the basis of customization of answers, has to be different. While
the new product should cater to mainly the casual travelers segment, the old product should
continue to cater to the niche DIY travelers segment. This can be done by isolating the expert
opinion features from the other features that is available to the casual users. This way, the casual
users get to use the new product features and find the easiest first cut itinerary with minimum
customization. And the DIY travelers get to use the expert opinion feature that would help them
while they customize the itinerary that is generated by the new product. Hence, the new product
is utilized in an optimum way, without cannibalization of the original concept, and without
affecting the way the DIY travelers choose their best itinerary.

2. Pricing
Recommendation: Differential pricing options based on depth of research
Rationale: The expert opinion comes at a premium cost, since this feature is targeted at the DIY
travelers, who have a higher willingness to pay when compared to the casual travelers. From the
pricing plans (Exhibit 5), the Unlimited annual plan would suit the DIY frequent travelers,
while the Pay per trip plan suits the casual travelers. However, the casual travelers may not
always be willing to pay $30 if they do not have too many queries regarding their travel itinerary.
Hence, there is a need to add another plan to the pricing strategy aimed solely at casual travelers.
This should be charged at $10-$15 per trip, with a limit on the number of questions that can be
asked (maximum 10). This would just suffice to customize their itinerary as they need it, without
going too much into the depths of research and planning.
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3. Marketing
Recommendation: More allocation towards ads in search engines and travel booking websites.
Rationale: Mygola has relied entirely on organic traffic from search engines and Twitter mining
to increase its user base. Positive word of mouth has helped greatly. Mygola has not had to invest
heavily in marketing its offering, because the existing virtuous cycle of growth was selfsustaining. However, the launch of the new product may change this scenario. The casual
travelers, as can be inferred, are not hardcore travel enthusiasts. Hence, marketing through word
of mouth might take a hit. Since the new product is aimed at increasing the existing user base, it
is necessary to allocate a part of the revenue towards marketing it, particularly aimed at the
casual travelers. This can be done by advertising in search engines, organizing promotional tours,
publicity events like pro nights in peak seasons, seasonal offers, ad campaigns in television &
travel magazine, etc. Exhibit 1 suggests that the marketing budget has to be allocated more
towards ads in search engines and travel booking websites.
4. Design of mobile applications
Recommendation: Invest in designing mobile applications
Rationale: According to a case fact, 38% of leisure travelers and 57% of business travelers use
mobile devices to search for travel information. To tap into this segment, which is most likely to
grow in the future, Mygola needs to develop a mobile app for the same. This could be done inhouse or it could be outsourced to mobile app developers. However, the counter argument is that
travel planning is an effort-intensive activity. People usually spend a couple of months planning
their travel and browse through 20-30 website to get the required information. Mygola website
simplifies this task by providing all the relevant details with user reviews in one site,
consolidating research, planning and booking activities. To make this accessible on smartphones,
the Mygola app might need to do away with some of the high resolution features on its website,
to make it more mobile friendly and reduce load time. This will help Mygola to compete more
aggressively with other travel agencies that have expanded into the mobile platform.

Conclusion
Our analysis of the options ahead of Mygola suggests that it should go ahead with the launch of
its new product, in order to scale up its business and cater to the growing user base while not
compromising on the operational efficiency and quality of responses. In doing so, Mygola would
need to treat casual travelers differently from existing DIY travelers and their needs and
willingness to pay is very different. Accordingly, it needs to offer a larger variety of pricing plans
to be able to meet the needs of both the segments and change its marketing strategies slightly to
incorporate the new users. A mobile application would also be extremely beneficial to cater to
the increasing base of mobile savvy users and is likely to be a worthwhile investment in the near
future.