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10 Consumer Trends and Implications for Marketing Practice in 2015

As a marketing professor and therefore an active researcher, I pay close attention to changes in consumption and how these changes might impact marketing strategy. Below, I outline ten observations related to consumer trends and offer questions for you to contemplate as you fine-tune your marketing strategies for 2015.

1. Rent vs. Buy: “I use not own… and I share and experience.”


We have seen a number of interesting iterations with respect to ownership and consumption. First, Zipcar, Kindle and iTunes moved consumers away from the need to physically own cars, books and music while still satisfying the same underlying needs. Then organizations such as Airbnb and Uber appeared and encouraged people to share excess capacity with other consumers. Some Airbnb members took this a step further and added an experience element by hosting dinner parties with guests.


How does the sharing economy impact your organization and its brands?


2. The Blurring of Gender Roles: “We are partners, paid employees and parents.”


Women are starting to out learn and out earn men; more men want to spend more time with their children (and it often makes economic sense for them to stay home or take on primary responsibility for childcare). This has led to a blurring of traditional gender roles (see my recent post for a fuller discussion on this)..


Does your organization stereotype based on gender? Does your organization understand the role of women and men as influencers, buyers and users of your products or services?


3. The Rise of Swirlers: “I don’t move through traditional life stages anymore.”


Traditional life stages no longer apply nor do consumers necessarily move through life stages in a linear fashion. For example: students graduate from college with a lot of debt and can’t afford to buy homes; people delay getting married and having children; people remarry and new households form that blend families and add more children; people 65+ are still active and are not ready to retire; many people 65+ still have mortgages and can’t afford to retire; etc.


Does your organization still assume that life stages are a strong predictor of consumption patterns? Does your organization truly understand the demographics of your customer base and how this drives consumption?


4. Who Am I? “You should know me by now.”


Consumers know that a lot of data is collected on them, and many consumers have experienced, or are aware of, recent data breaches (e.g., Target and Home Depot). Good or bad, consumers now expect organizations to have abundant data on them, to “know them” and to recognize and acknowledge the value of their relationship with the organization.


How well do you know your customers? Do you acknowledge and value customer loyalty?


5. The Jekyll and Hyde Phenomenon: “I can take on different personalities.”


Many consumers post comments online and, if they adopt pseudonyms, organizations might not be able to identify them (e.g., by gender, age, ethnicity, etc.). In addition, consumers might assume an alter ego and, for example, consumers might appear quite aggressive toward your brand when in fact they are not.


What consumer data does your organization collect? What decisions do you make with this data? How accurate does this data need to be?


6. Take a Look at This: “I share a lot about myself.”


Consumers like to share stories about themselves and now they also share a lot of images as well. For example:
• 46% of adult Internet users post photos or videos online that they have created. 41% take photos or videos online and share them.
• 17% of online users use Instagram. 21% of online users use Pinterest.
• Snapchat has 100 million active users, of which 70% are women and 71% are under 25. Snapchat users send 400 million Snapchats a day,


Do you give your customers stories to share… and stories that contain photos and videos?


7. The Human Polygraph: “I’m good at detecting lies and sifting through information.”


Consumers are adept at doing research online, sifting through and filtering the information they find, and figuring out what information to trust, and from whom.


When you provide information do you tell consumers where the information is coming from – e.g., from your organization vs. an outside source and if an outside source, which source?


8. Connectivity: “I’m mobile and connected… anywhere, anytime.”


• 90% of adults have a cell phone; 58% have a smartphone; 42% own a tablet computer.
• 67% of cell owners check their phone for messages, alerts, or calls — even when they don’t notice their phone ringing or vibrating.
• 44% of cell owners sleep with their phone next to their bed because they want to make sure they don’t miss any calls, text messages or other updates during the night.
• 29% of cell owners describe their cell phone as “something they can’t imagine living without.”


Consumers use mobile technology when out shopping. Consumers also expect to be able to communicate with a person within an organization directly, and to have a response straight away.


How responsive is your organization to customer feedback? Does your organization have a mobile strategy?


9. The Suspicious Skeptic: “I don’t trust you or respect you.”


There were once boundaries between organizations and consumers – each had clear expectations as to the others’ role. Furthermore, organizations controlled messages to consumers and told consumers what they needed to buy. Now consumers do not mind competing with organizations (e.g., Airbnb competing with hotels) and consumers’ trust of organizations and brands has eroded. Many factors contribute to this – for example: the recession, organizations relocating headquarters to minimize taxes, the sharing economy and consumer-generated media.


Do your customers trust your brand? Are you open with your customers? Do you take care of problems they have with your organization? Do they trust you?


10. The Uneven Partnership: “I will co-create my own value with you.”


Organizations used to do more for consumers. Now organizations push consumers away. For example, consumers put their own gas in cars, do their own banking online or with remote data capture, book their own travel, check themselves in on planes, bring their own food onto planes, etc. As a consequence, consumers are getting used to co-creating their own experience.


How can your customers co-create value with you so that you both benefit?
What can you do to help customers personalize their experiences — e.g., Amazon and Netflix personalize recommendations for consumers.


Concluding Thoughts: The ten insights above are simply my observations and reflections based on what I see; others might offer different insights. I do however recommend you identify the three insights from the list above that will likely have the most impact on your organization and then determine what your organization’s strategic responses should be.



10 Consumer Trends and Implications for Marketing Practice in 2015

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MakeMyTrip: Market Expansion To Drive Earnings Growth (MMYT)



Summary


  • MakeMyTrip delivered revenue growth of 32% during the latest quarter. Losses narrowed significantly.

  • India’s e-commerce industry is poised to grow at a double-digit rate this year, which will prove to bring more customers to the company’s website.

  • Business-friendly government is pushing aviation industry ahead.

  • The company is expected to deliver a profit in 2016.


MakeMyTrip’s (NASDAQ:MMYT) share value has gone up by 33% in a year. The company operates a traveling website through which customers can research, plan and book travel services and products in India as well as overseas. MakeMyTrip has been a top performer in the industry since a long time: the company’s revenue growth has averaged 27% over the past three years, while the industry has seen its revenue grow at a far lesser rate of 9.1%. With the macro environment proving favorable for the company, this trend is expected to sustain ahead.


In this article, I will evaluate MakeMyTrip’s financial strength by reviewing its performance in the latest quarter. Later, I will discuss factors to highlight the future potential of the organization.


Second Quarter


During the period, MakeMyTrip achieved top-line growth of 35% on a constant-currency basis. The $32 million revenue figure was achieved on the back of strong performance across all the core business segments. Of particular importance was the performance of the company’s strategically important hotels and holiday packages “H&P” business: acquisition of easytobook.com and an increase in relationship contracts with suppliers helped MakeMyTrip grow its H&P’s transactions by over 70% during the quarter, and the company registered approximately 75% growth in revenues less service costs on a constant-currency basis.


In addition, MakeMyTrip investment in targeted marketing and lower prices helped it improve the mix of non-air revenue during the seasonally-low quarter to 43% versus 35% in the same quarter of last year. The improving business mix demonstrated that MakeMyTrip was capable of outpacing and differentiating itself from competitors in a fast-growing market.


Even though the top line remained strong, the company’s excess expenditure to achieve higher penetration led it to deliver an adjusted loss of $0.4 million. However, the loss was significantly lower than the $1.5 million MakeMyTrip reported in 2013. Looking forward, the company is expected to deliver a profit due to the reasons discussed below.


Market Growth


At first, let’s talk about the e-commerce market in India, since growth in this market directly affects the magnitude of customers that visit MakeMyTrip’s website. Fortunately, the e-commerce industry in India is changing fast. The market is expected to grow by 70% this year and is likely to cross $6 billion in revenues. The growth alone will make India one of the fastest-growing e-commerce markets in the Asia-Pacific region.


The expansion will be aided by the fact that more than 30% of traffic on e-commerce platforms is now coming from mobile phones and tablets. There is increasing traction in mobile shopping as marketplaces, consumer-goods companies, and food and beverage companies have started investing in mobile commerce.


Also, with the introduction of the first Microsoft (NASDAQ:MSFT)-branded phone after the acquisition of Nokia (NYSE:NOK), the market for cheap-end phones has expanded recently. The reasons are why bookings from mobile now account for over 16% of total online transactions of MakeMyTrip. They also explain why mobile users contribute nearly 34% of the total online domestic-hotel transactions to the company.


To leverage from this growth, MMY recently launched a nationwide TV campaign that focused viewers’ attention on the company’s mobile offering. The campaign has been successful as approximately 31% of the increase in downloads during the latest quarter came due to the commercial.


MakeMyTrip has also enhanced the overall performance of its app by reducing the app download size and bringing new mobile payment-security facilities offered by financial institutions within India. As a latest move, the company recently introduced vernacular content on its mobile app and mobile web, and will continue to expand the content nationwide this year. The vernacular content will allow MakeMyTrip to reach customers beyond the larger cities, where many potential users prefer an Indian dialect to research and shop. Together, these moves will help MakeMyTrip increase its market share in the mobile arena when the overall market is growing.


Secondly, MakeMyTrip will also gain through the aviation industry which is forecast to grow by 6.9% over the next five years. The aviation market is poised to benefit from the recent entry of Air-Asia and license issuance to Tata Airlines, thanks to the new business-friendly government’s plan to liberalize several markets. Also, the ongoing price war among airlines in India will prove to be another catalyst for online-travel companies ahead.


Bottom Line


The losses MakeMyTrip has been delivering are a product of investments that the company has made to position it well in the market. The analysts believe that these investments will finally turn fruitful in the upcoming year and MakeMyTrip will deliver a profit of 27 cents per share. The estimate has further led 10 brokers to value the company’s stock at $33.7 per share, which reveals that MakeMyTrip is undervalued by 24%. Therefore, the company holds a buy rating.


Source: MakeMyTrip: Market Expansion To Drive Earnings Growth


Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article. (More…)








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MakeMyTrip: Market Expansion To Drive Earnings Growth (MMYT)