Feasibility study of Amphibious Design vehicles in Goa, India Joint International Internship

Seminar 2015 - De Souza Group

Students Instructors Asmita Chakraborty Prof. dr. K. Vandenbempt (UAntwerp) Tim Molkens Prof. A. Guiette (UAntwerp) Gaurav Sharma Prof. D. Kaushik (GIM) Ben Van Campfort Prof. Meena Parulekar (GIM)

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Table of contents List of figures ........................................................................................................................................... 2

List of graphs ........................................................................................................................................... 2

Foreword ................................................................................................................................................. 3

Introduction ............................................................................................................................................. 4

Chapter 1: Presentation of the company and description of the problem statement ........................... 5

Chapter 2: Research methodology .......................................................................................................... 7

2.1 Framework – Go-To-Market .................................................................................................... 8

2.2 Main research question ........................................................................................................... 8

2.3 Sub-questions .......................................................................................................................... 8

Chapter 3: Presentation of the analysis and the findings ....................................................................... 9

3.1 Perspective 1: Market ................................................................................................................... 9

3.1.1 Understanding the market ..................................................................................................... 9

3.1.2 Porter’s five forces ............................................................................................................... 13

3.1.2.1 Threat of New Entrants: ................................................................................................ 14

3.1.2.2 Threat of Substitutes: .................................................................................................... 15

3.1.2.3 Bargaining Power of Suppliers: ..................................................................................... 15

3.1.3.3 Bargaining Power of Consumers: .................................................................................. 16

3.1.4.3 Intensity of Competitive Rivalry: ................................................................................... 16

3.2 Perspective 2: Consumer ............................................................................................................. 17

3.2.1 Understanding the consumer ............................................................................................... 17

3.2.2 Segmentation ....................................................................................................................... 18

3.2.3 Brand positioning ................................................................................................................. 19

3.3 Perspective 3: Product ................................................................................................................ 21

3.3.1 Marketing mix ...................................................................................................................... 21

3.3.1.1 Product .......................................................................................................................... 21

3.3.1.2 Place .............................................................................................................................. 22

3.3.1.3 Price ............................................................................................................................... 23

3.3.1.4 Promotion ...................................................................................................................... 27

3.4 SWOT-analysis ............................................................................................................................. 29

Chapter 4: Conclusions and recommendations .................................................................................... 29

4.1 Conclusions .................................................................................................................................. 29

4.2 Recommendations....................................................................................................................... 31

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4.3 Limitations and assumptions ....................................................................................................... 33

Sources and references ......................................................................................................................... 34

Annexes ................................................................................................................................................. 35

Part 1: before Goa ............................................................................................................................. 35

Part 2: in Goa ..................................................................................................................................... 41

List of figures Figure 1: Go-to-market framework ......................................................................................................... 9

Figure 2: Porter's five forces framework ............................................................................................... 13

Figure 3: Calangute and surroundings .................................................................................................. 14

Figure 4: Panjim ..................................................................................................................................... 14

Figure 5: Perceptual map ...................................................................................................................... 20

Figure 6: SWOT-analysis ........................................................................................................................ 29

Figure 7: Bullseye .................................................................................................................................. 30

List of graphs Graph 1: The total number of tourists in Goa ....................................................................................... 11

Graph 2: The number of domestic tourists in Goa (per month) ........................................................... 12

Graph 3: The number of foreign tourists in Goa (per month)............................................................... 12

Graph 4: Breakeven period for different booking fees ......................................................................... 25

Graph 5: Sensitivity analysis occupancy rate ........................................................................................ 26

Graph 6: Worst case scenario ............................................................................................................... 26

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Foreword

This paper gives the reader an objective view on the feasibility of amphibious design vehicles in Goa.

It is the result of two weeks of intensive cross-cultural work between two students from the University

of Antwerp, Belgium and two students of the Goa Institute of Management, India. The Joint

International Internship Seminar is a unique learning opportunity for all people involved and provides

a nice experience towards an international career. Throughout the project, we were put into contact

with a lot of experienced businessmen who provided us with the necessary information.

That is why, first of all we would like to thank Carlos and Ralph De Sousa for coming up with the subject

and giving us the opportunity to work on it. They provided us with a lot of information and knowledge

and we are grateful for that. Besides them, we are thankful to any other person/company that gave us

information during the seminar. In particular we want to thank the Managing Director of Goa Tourism

Development Corporation (Mr. N. Desai) for providing us with the contacts to the right people to make

good progress on the report. A big thank you goes out to Mr. Sairaj Dhond for giving us his view on the

Goa Duck Tours and convincing us of the uniqueness of this service. We also appreciated his 24/7

availability for extra information and help.

Apart from them, a special thank you goes out to our professors who have been of assistance whenever

needed (prof. Dr. K. Vandenbempt, prof. A. Guiette, prof. M. Nagarajan, prof. D. Kaushik and Prof. A.

Gonsalves). Their advice gave us a more critical point of view and definitely added quality to the report.

Finally we would like to say that we hope the JIIS program will continue in the future. It has been a

great experience for all four of us and we learned a lot from each other.

We hope that this work can provide a basis for future decisions about the project and trust that it will

give a complete overview of the feasibility of the amphibious vehicle project.

Asmita Chakraborty

Tim Molkens

Gaurav Sharma

Ben Van Campfort

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Introduction

To start off this paper, the concept of an amphibious design vehicle will shortly be discussed as it is

very uncommon in India and by extension in Asia. It is also important for the reader to understand this

concept so that the work is clear from the beginning on. Basically, the idea is to be able to drive both

on land and on water using one and the same vehicle (see annexes for a picture and two already

developed tours). By travelling this way, customers experience something new and unknown. It is due

to this novelty that the De Souza Group and the Dhond Group decided to invest in these vehicles and

start a service using them.

The goal of this work is to analyze the feasibility of exploiting such a service in Goa, India. This task is

far from evident because the market doesn’t exist yet and there are no direct competitors. Therefore

it is difficult to determine what impact this project will have on the touristic market in general. In order

to do some proper analysis, assumptions had to be made. All of them are explained thoroughly

wherever used so that the reader is always informed about them. One example of an assumption that

has been made is that the customer focus will be put on domestic tourists while foreign tourists can

also belong to one of the target segments. Another example is that in this document, the focus will be

put on the touristic use of these vehicles but it is important to realize that there are multiple possible

uses. At the end of this document some of these other uses will be discussed briefly and all assumptions

will be discussed objectively throughout the paper.

Structure-wise, it was decided to form the work around a specific go-to-market framework. Using this,

it was possible to structurize all information and analysis in a logical and organized way.

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Chapter 1: Presentation of the company and description of the

problem statement

The De Souza Group is a multi-division company that is active in the tourism industry in Goa. Their

main activities are hotels, travel companies and real estate. The best known part of the company is

`The Spice Route`, which is a travel agency. For this project the main contact was Carlos De Sousa, the

son of Ralph De Sousa who is one of the founders of the company. Within the De Souza Group, Carlos

is in charge of the amphibious vehicle project.

The operational side will be executed by a company named Goa Duck Tours, as explained below. The

manufacturing of the Ducks will be done by a company called `Amphibious Design India Private

Limited` (ADI). Ralph De Sousa is one of the directors of this company so therefore manufacturing will

be the main task of Carlos/The De Souza Group. It is important to know that these kinds of projects

are completely new to the company. They are the first to offer this sort of transport in India.

On the other side there is Goa Duck Tours. This is a company founded by Sairaj Gaurish Dhond and is

located in Panjim, Goa, India. Mr. Dhond is the owner and managing partner of the Dhond Group and

is in charge of the water buses project. The role of Mr. Dhond’s company is to get the project fully

operational and he will be the spokesperson and liaison between the product and the consumers. This

project will provide the first ever Amphibious Vehicle service in India and will thus open up a whole

new market in the tourism sector in Goa. It is not a stand-alone service offering but will try to revamp

the tourism ecosystem in Goa. How this will happen and what the possibilities are will be described in

what follows. The project will not only add a service but give a new face to tourism in Goa. For the

Duck Tours, the Dhond Group and De Souza Group will have a close cooperation with the Goa Tourism

Development Corporation.

As Goa Duck Tours is the customer of the De Souza Group, there is a close connection between both

companies. Their main, mutual goal is to provide a quality, novel service that interacts with the

customers in a way that Goa has never seen before. Since this service is a completely new service in

India, this report will be looking at the feasibility of offering such a service not only to domestic tourists

(Indian tourists in Goa) but there will also be a small part on foreign tourists from all over the world.

The analysis in this report is built around a problem statement that involves both companies

mentioned. This report will examine what the feasibility of the project is but it will also look at different

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marketing channels through which the companies can contact their customers. The main research

question being posed is:

“What is the feasibility of offering an amphibious vehicle tourist service in Goa, based on a market

study?”

This research question is built up around multiple concepts. In what follows, the report is built up

around a go-to-market strategy that is itself built up around three perspectives. Secondly, the

feasibility is also examined, namely: ‘can we promote it, is there enough interest in the service?’

Thirdly, it is emphasized that it is a service offered in Goa, India for the very first time. Thus, the

product’s unique value proposition will also have to be talked about. By using the three perspectives

that will be talked about later on, every aspect of this research question will be covered.

This document provides an outsider's perspective to the project which can be of interest to both

companies. It is hoped that this document can help both of them to get more ideas and get an objective

and neutral overview of exactly where this project stands.

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Chapter 2: Research methodology

In order to represent the situation as clear as possible, the subject has first been studied through desk

research. A significant amount of work was done before the project had really started. Via Skype-

meetings with Carlos De Sousa and between the four participating students, a first load of information

was collected. The information that was collected, was some general information about the product,

the discussion on all various possible uses and the general idea of the project. Based on that

information, both Indian and Belgian students had brainstorming sessions that resulted in two

documents, with one including a mind map and the other proposing as much alternate uses as possible

(both documents can be found in the annex). Afterwards, the two documents were merged to form a

final proposition to send to Mr. Carlos De Sousa.

After that, there was another Skype session to determine the final scope of this project. The main

conclusion was that the focus was going to be put on the domestic tourist market. However, in this

stage the scope of the project was still very broad. The next steps were to be taken when everyone

had arrived in India. One of the first meetings in Goa was with Ralph De Sousa, as he is well aware of

the project and he could pass on contact details of many important information sources. After the visit

at Mr. De Sousa`s office, a visit was made to GTDC (Goa Tourism Development Corporation). Here

factual data were provided about the tourist sector (years 1998-2014), the places where tourists stay,

the average duration of stay, etc. These numbers were used in the market perspective but were also

looked at from a critical point of view. Later that day there was a meeting with Sairaj Dhond (managing

director of Goa Duck Tours). He had details on the project’s difficulties, more general information (that

was used throughout the whole report), information about the product itself and promised his 24/7

availability for questions and problems. These three meetings provided us with enough information to

start elaborating on the scope of the project. This was necessary to form the main research question

and all the sub questions. To form the problem statement we started from the general idea of

examining the feasibility of this new service. Then we split it up in sub questions. To do all this, the

gathered data and information were analyzed.

It was already determined that domestic tourists would be the main target audience. However, after

the meeting with Mr. Dhond, it was noted that the influence of the foreign tourists on the project

should also be investigated. By doing this the problem could be looked at from multiple angles to get

a more nuanced result. To take on the problem statement (as mentioned above) a research question

was written and divided it into - more manageable – sub questions.

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For the sub questions it was decided to base ourselves on a `Go-To-Market`-framework. The reason

for this is that the amphibious vehicles are completely new to the market in India/Goa and this

framework offers a complete view.

2.1 Framework – Go-To-Market

As already mentioned, the problem is being tackled from three perspectives that in their turn make

the sub questions more manageable. These perspectives enable to analyze the problem from different

angles that can be integrated in the end. The perspectives are:

1. The market perspective

2. The consumer perspective

3. The product perspective

Based on these perspectives a main research question and three sub-questions were derived. Every

question will be answered further in this document. Every perspective will deal with a sub-question

and the main research question will be answered in the final conclusion.

2.2 Main research question

What is the feasibility of offering an amphibious vehicle tourist service in Goa, based on a market

study?

2.3 Sub-questions

How does the tourism market in Goa work and what are the challenges the amphibious vehicle

faces?

What kind of customers should be targeted in order to become successful? Is there a difference

in audience (foreign/domestic tourists)?

Why is the product unique and what actions should be taken to reach its full potential on this

new market?

With these four questions the problem can be analyzed in an effective and efficient way. Most certainly

because the framework offers a broad view using the three perspectives. The interaction between

these three perspectives will provide an overview of the current situation and the needs in the tourist

market in Goa. After this overview, the report provides a detailed conclusion after which there will be

some recommendations. The recommendations can be interesting for all stakeholders that are

involved in this project.

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Chapter 3: Presentation of the analysis and the findings

Every company (De Souza Group, Dhond Group) uses some kind of go-to-market strategy because they

all, in one way or another, have a sales department, a marketing department, a financial department,

… However, most of the time these departments are islands, they operate in a stand-alone way;

although some successful businesses have already been very good at using the synergies between

different SBU’s and departments. When the

company does not exploit its synergies, their

go-to-market strategy is one that is not able to

react to changing market circumstances

whenever they happen (disruptive

innovations, new competitors …). (Bain &

Company, 2015) In what is described further in

this document is a full analysis of a responsive

go to market strategy for the new water bus

project. The market will be looked at from

three different perspectives and it will give a

general idea of the feasibility of the new

product as a tourist attraction.

3.1 Perspective 1: Market

3.1.1 Understanding the market

To examine the feasibility of a new product on the market first of all the market in which a company

will be operating, should be looked at. Using the market perspective, a complete answer to this first

sub question can be provided:

How does the tourism market in Goa work and what are the challenges the amphibious vehicle

faces?

As the go-to-market framework is the base of the analysis (as can be seen in Figure 1), most of the time

‘what are we selling = the product’ and ‘where are we selling it = market’ will be looked at in the market

perspective. First, the industry context is discussed (where to sell the product). Knowing in what

context a company has to work, is crucial as this determines the strategic options and therefore the

entire business strategy which leads to the company performance. In the literature, there are some

general industry contexts defined. As the market is relatively new (De Sousa is the first to use these

Figure 1: Go-to-market framework

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vehicles in India) and there is a lot of uncertainty about most aspects, the context is called ‘the

emerging industry context’. The structural characteristics of such an industry context determine the

average profitability. Some of the main structural characteristics of an emerging industry context are:

1) Technological uncertainty: This is very applicable to the water buses. Although, around the

world, there have been successful introductions of water buses; the concept is still new in

India. The technological uncertainty will be discussed more into detail in the third perspective:

product.

2) Strategic uncertainty: The water buses project is still in its preliminary stages. Although the De

Souza Group and Dhond Group get the first-mover advantage, they might have to look out for

first mover disadvantages (a lot of efforts to start the market in India, without the benefits).

Although, there is known for a fact that both companies have GTDC support on the project.

3) First-time buyers: What the water buses have to offer is something that has never been seen

before in the Indian market, so it speaks for itself that there will be a lot of first-time buyers.

Actually, this new market can be compared to e.g. the 4K HD movie market, the Blu-Ray market, etc.

All of the markets will try to create a new ecosystem in which they will work. It is absolutely necessary

for them to create this ecosystem as they cannot survive in a market that doesn’t react to new products

(the interaction with the second and third perspective can be noticed here: consumers and product).

The overview of the tourism industry can provide a general idea of what the market looks like. After

that, the market can be segmented and parts of the market to be targeted can be looked for.

The tourist industry will be looked at now, split into the domestic tourist market and the foreign tourist

market. Using numbers and statistics from the Goa Tourism Development Corporation, the tourist

market will now be discussed.

The tourist market in Goa consists of approximately 3.5 million domestic tourists and 500,000 foreign

tourists in 2013. The evolution in domestic tourists can be best described by using a polynomial

equation (2nd order). The evolution of the number of foreign tourists can be closest approximated by

a linear equation (see graph 1). It can be seen that overall, the total amount of tourists in Goa is

increasing when the period 2008-2013 is considered.

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Graph 1: The total number of tourists in Goa

The only thing that can be learned from this graph is the fact that the total amount of tourists in Goa

is growing. In fact, the foreign tourist market grew by 40% over the 2008-2013 period while the

domestic tourist market grew by 30.13%.

For predictions about the growth, the equations that are on graph 1 are used. These equations gave

the closest approximation with a simple trend line for the numbers of the five years represented in the

graph. There is one second order polynomial and one linear equation. For 2015, 2016 and 2017 the

equations give a total number of domestic tourists of approximately 3 million, 3.3 million and 3.6

million tourists. For the foreign tourists, there will be approximately 550,000 tourists in 2015, 570,000

in 2016 and 600,000 in 2017. These numbers imply a potential growth of 38.19% in the number of

domestic tourists in Goa for the period 2014-2017 and a potential growth of 21.76% for the foreign

tourists. Therefore it can be argued that targeting the domestic tourist market is more interesting

because of the larger absolute number and the higher potential growth.

What is interesting to know, is what the potential is for the De Souza Group and the Dhond Group.

That is why the split-up of these numbers month-wise can be interesting. Graph 2 displays the amount

of domestic tourists in Goa per month. From the graph it can be concluded that there is always a steady

inflow of domestic tourists to Goa. Starting from October, the peak-season is obviously present.

However, all the other months there is still a stable supply of tourists

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.

Graph 2: The number of domestic tourists in Goa (per month)

This is not the case when graph 3 is looked at. When compared with the previous graph, there is also

a peak supply of tourists starting from October until January. Throughout all the other months, the

inflow of tourists is almost equal to zero. Looking at the y-axis it can be seen that, in these months,

there is still an inflow of domestic tourists of 50,000 persons or more. Thus, it can be concluded that

the domestic tourist market offers a more stable supply of customers to Goa Duck Tours.

Graph 3: The number of foreign tourists in Goa (per month)

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Figure 2: Porter's five forces framework

3.1.2 Porter’s five forces

With a fundamental determinant of a firm’s profitability being industry attractiveness, it is important

to understand the rules of competition that govern industry attractiveness. To analyse the market of

water buses in Goa the framework of Porter’s Five Forces has been used. In any industry the rules of

competition are embodied in five competitive forces: threat of new entrants, threat of substitutes,

bargaining power of consumers, bargaining power of suppliers and the rivalry among the competitors.

The collective strength of these forces affects a company's ability to serve its customers and make a

profit. A change in any of these five forces normally requires a company to re-assess the overall market

information, this relates to the go-to-market strategy framework that was discussed earlier. However,

the industry attractiveness does not imply every company in the industry will return the same profit,

but it does give a clear idea about the ‘ease’ of making profits, in comparison to the risks involved, that

an industry sector offers. Companies can use this information to strategize according to their core

competences and business model. (Kotler e.a., 2012; De Wit & Meyer, 2010) It is to be noted that the

market-size of water buses in India and specifically in Goa is only as big as the market created by the

companies of Carlos De Sousa and Sairaj Dhond as they are the first ones to offer this kind of tourist

attraction.

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There are no other water bus manufacturers or operators in India, so obviously in that respect Goa

Duck Tours doesn’t have direct competition. But their indirect competitors such as boat tours, bus

tours, sea planes and hot air ballooning cannot be overlooked. This segment of secondary competitors

can pose a threat to the water buses and this will be analyzed in the following section. To give an idea

of the actual market size, some maps that show touristic activities in specific parts of Goa have been

included. There is however an important remark to make: party rides or cruises are not seen as genuine

competitors. The main goal of the amphibious tour is to show the local heritage with a guide and not

to take people on a tour while drinking and partying.

3.1.2.1 Threat of New Entrants:

Capital requirements: As the water bus is highly capital intensive, capital requirements would be an

entry barrier to new entrants in the industry. The price of manufacturing one water bus is

approximately 20,000,000 INR (= 265,000 EUR).

Government policy: Another entry barrier faced by new entrants would be the high import duties on

water buses. The De Souza group has a clear advantage in this aspect as they are manufacturing the

ducks in India and hence avoiding the steep import duty of 130%.

Access to necessary inputs: Due to the complexity of the manufacturing process of the water buses,

there are worldwide patents. This poses an entry barrier for new competitors and gives firms already

having access to the technology a significant competitive advantage.

Figure 3: Calangute and surroundings Figure 4: Panjim

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3.1.2.2 Threat of Substitutes:

Close or direct substitutes: As the water buses are introduced in India for the first time ever there are

no direct substitutes to the service in the Indian market.

Indirect substitutes: The indirect substitutes of water buses are the already existing city bus tours,

boat tours and the cruise rides. Also the proposed hot air balloons and seaplanes could pose as indirect

substitutes. But city bus tours and boat tours are lacking in novelty and cruise rides, hot air balloons or

seaplanes are priced much higher so none of them do target the exact same segment of consumers.

Therefore they are not a big threat as substitutes. The perceptual mapping of all indirect substitutes

on page 21 can provide a nice overview of the market.

3.1.2.3 Bargaining Power of Suppliers:

The bargaining power of suppliers depends on multiple factors: relationships, volume, patents, what

kind of materials, etc. As the Duck Tours market in India is only as big as the one the DS Group and

Dhond Group created, the reasoning will be applied to these companies. They in fact represent the

whole ‘amphibious design’ industry in India. It is assumed that the industry looks the same when the

same reasoning would be applied to America (few suppliers for technology/chassis and a lot of

suppliers for the raw materials). For the manufacturing of the water buses the main required

components are the chassis, the metal to build the hull, other raw materials and the technology for

the manufacturing process. The De Souza Group purchases the entire vehicle i.e., the Tata SA 1212,

and strips it open to only use the chassis. After that, they build the metal hull using raw materials that

are mainly procured in India. The rest is procured from the US. As for the manufacturing technology,

there are patents worldwide. There are thus only a few companies that have access to this technology.

The bargaining power of all three suppliers will be discussed in this report.

There are two inputs that have no or very few substitute suppliers in the market. First of all, the chassis

is procured from Tata and is the base for the water bus. Only the Tata Company manufactures this

vehicle, so they have a lot of bargaining power as a supplier. So far, there has been an agreement to

buy six vehicles from Tata. In this way, the volume of sold vehicles to the DS Group is not big, although

the SA 1212 poses the greatest cost to the manufacturers (DS Group). Secondly, the manufacturing

technology for making the hull is patented so that whoever want to make a water bus has almost no

bargaining power towards the supplier, who holds all of the power. The raw materials suppliers,

however, are not irreplaceable. There are a lot of substitute suppliers in the industry for metal, rubber

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and other raw materials, so that they cannot hold much bargaining power. Note: the costs that these

materials pose are obviously less substantial to the manufacturer.

3.1.3.3 Bargaining Power of Consumers:

Buyer concentration versus firm concentration: Goa, having a thriving tourism industry, has a huge

number of tourists who are all potential consumers for water buses but it is important to know that

the service of duck tours is completely new so gaining customer interest will take some time. It can be

said that the buyer concentration is much higher than the firm concentration in such a way that the

bargaining power of consumers is rather low.

Buyer volume: On average, the buyer volume in general is quite high throughout the year and this

again holds back the bargaining power of the consumers.

Product differences: The duck tour service being introduced in India for the first time ever rates very

high on product differentiation and thus ensures less bargaining power for the consumers.

3.1.4.3 Intensity of Competitive Rivalry:

Industry growth: The duck tours, being introduced in India for the first time, face a completely new

market and hence would obviously be in the growth phase. Due to the forecasted growth in the tourist

industry (mentioned above), more (new) competitors might be joining the market. Although, the

growth in the industry also provides a stable environment for the company to grow in.

Exit barriers: Although the service of duck tours would not require too many employees or employees

with very high salaries, it does involve a very high investment in non-transferrable fixed assets. Thus,

barriers to exit would be on the higher side.

Brand identity: The industry of the water buses is completely new in India. If the first firm to enter the

market is capable of successfully building a brand identity and developing brand loyalty among the

customers, then it will be difficult for other players, entering later, to compete.

The bargaining power between the De Souza Group and the Dhond Group has not been focused on as

they share a very cordial relation and are interdependent on each other for the success of this project.

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3.2 Perspective 2: Consumer

3.2.1 Understanding the consumer

By analyzing this perspective, an answer to the second sub-question is to be provided:

- What kind of customers should be targeted in order to become successful? Is there a

difference in audience (foreign/domestic tourists)?

The main part of this analysis is the customer segmentation in order to find the best target audience.

Brand positioning will also be included in this part. Finally, there is looked at the subject of promotional

channels. The specific marketing techniques and strategies will be discussed in the third perspective

as it covers a full 4P-analysis including ‘promotion’. Note: the analysis for this second perspective is

partially based on assumptions as there was no survey data available to work with. However, the

assumptions that are made are built up logically based on information collected from Mr. Ralph De

Sousa and TTAG (Tourism and Travel Association, Goa) and therefore they are credible. If the

companies involved would like more specific information, another survey should be executed.

The information about the consumers was provided by Mr. Ralph De Sousa and Goa Tourism

Development Corporation (GTDC) which in turn is based on the statistics gathered from Goa tourism

promotions & websites, travel agents, taxi drivers and from the hotels tourists stay in. An increase in

the number of domestic tourist arrivals in Goa of almost 40% (2013 compared to the numbers of 2008)

has been noticed. This increase in the number of domestic tourists can partly be attributed to the rise

in disposable income of the Indians. Looking at the purchasing power of different consumers, of course

this income varies between the different classes of Indians. The budget domestic tourists’ monthly

earnings lie between Rs. 20000 to Rs. 30000 per month while at the top of the chain incomes can lie

anywhere between Rs. 50000 to half a million Rupees per month. Unfortunately, information about

the income of foreign tourists was not available.

Other information gathered shows that the average stay of a domestic tourist is five days and that they

spend excessively or lavishly. The foreign tourists on the other hand, stay for a longer period (nine days

on average) and tend to spend frugally. Also, the MICE-tourism (meetings, incentives, conferences and

exhibitions) in Goa has seen a considerable expansion during the last few years. These are tourists that

come in large groups (20-80 persons), usually plan their trips well in advance, and are brought together

for a particular purpose. MICE tourists prefer specially tailored tours conducted by tour operators in

partnership with the chartered companies. They usually arrive in Goa during the off-season or mid-

season as the prices of accommodations and activities are lower these days. There are of course others

who are not interested in tours at all, like repeat clients and many of the domestic low-income tourists.

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3.2.2 Segmentation

Next, a segmentation-exercise is executed in order to determine the best target audience for the

amphibious vehicles. This has been done using two segmentation criteria: ‘geography’ and ‘purpose of

visit’. Both criteria are discussed shortly:

Geography: two kinds of tourists

Indian tourists: the Indians visit Goa in large numbers, going up to four million and

more importantly the influx of the domestic tourists is quite stable throughout the

year (dipping the most in the month of June) and has been quite consistent during the

last few years as explained earlier. The average duration of their stay is five days.

Foreign tourists: foreign tourists mostly visit Goa during the peak season (October-

January) and for a longer span compared to the Indians. Delegates and corporate

across the world visit Goa for conferences and conventions during the off-season

(June-August). These tourists can be categorized under MICE Tourists. The number of

foreign tourists has been growing as shown by the ‘arrival by charter flights’-statistics

(1128 flights carrying 261,452 passengers in 2014 as compared to 900 flights carrying

171,367 tourists in 2011). The average duration of their stay is nine days.

In this paper, the focus is on the domestic (Indian) tourist. Of course foreign tourists can also

use this service but they are not in the target segment for this study.

Purpose of visit: three segments can be determined

Couples and friends that are backpacking (and looking for adventure)

Married couples and families (with children) that come to Goa to relax

MICE-tourists that might also want to experience the heritage of Goa

The Goa Duck Tours will be accessible to most of the tourists due to their reasonable pricing (see

perspective 3) and would thus cover all of the categories (“mass-marketing product”). Specific Tours

(e.g. heritage tours, adventure tours, night tours, etc.) can be designed for each of the categories.

Children, along with their parents, should be really enthusiastic about this unique product and the

appearance of the Ducks should complement that.

As a conclusion it could be said that the goal is full domestic market coverage. This product is

completely new in India and will appeal to all the tourists who visit Goa. The proprietors of the Duck

tours want this to be a mass marketing product. As in, they want to offer the same marketing mix to

all the segments of the tourist market (independent of purpose of visit/kind of tourist) to start with.

Although, after some time, it might also be interesting for Goa Duck Tours to differentiate e.g. the

interiors, exteriors according to the target group. For now, there are a lot of reasons to go for an

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undifferentiated strategy and mass marketing. By ‘ignoring’ segment differences and going after the

whole market with a single product, the largest market potential will be created. However, product

specialization can also be used to sell different packages to tourists with different purposes. Special

offers and rides may for example be offered to:

1. The adventurous/backpacking segment (e.g. adventure tours, integrated tours with

kayaking/snorkeling, visits to islands)

2. The families (e.g. local bird sanctuary/sightseeing tours)

3. The businessmen (e.g. a unique conference location, an informal meeting)

3.2.3 Brand positioning

Based on this segmentation-exercise the company should think about their brand positioning. How

can they develop a brand that appeals to the target segment of (domestic) tourists? To do this, some

brand attributes of the amphibious vehicles were determined. The most important ones are: novelty,

informative, adventurous, entertaining, transport, etc. Besides these attributes it is a good idea to look

at so called ‘Points of Parity’ or PoP’s. These are similarities between the Duck Tours and the other

touristic transport means. Some of them are represented in this perceptual map below. Some of the

most important PoP’s in this sector are: entertainment, experience, convenience, etc. On these points,

the Goa Duck tours cannot deliver a unique value proposition. Although, the PoP’s don’t offer

something unique, they have to be present because the absence of one can be a reason to drop a

brand. Another interesting comparison can be obtained by looking at ‘Points of Differentiation’. The

Goa Duck Tours are a first-of-its-kind tourist service not only in Goa but also in India. The differentiation

factors for the water buses as compared to other tourist services are the connection with the nature

and its uniqueness in terms of its design and functioning. The unique value proposition will be

discussed in Chapter 4.

As a conclusion: the product should be positioned as a “mass marketing product”, in accordance with

the ticket prices (customers are, according to the De Souza Group, willing to pay Rs. 500-1000 per

Head), and with “On-Board Entertainment” provided by humorous and informative tour guides.

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Figure 5: Perceptual map

The above perceptual map shows the positioning of different products with price along the X-axis and

uniqueness along the Y-axis. Firstly, because the PoD is that the service is unique, it is clear that it

should be taken as one of the axes. If this is done, Goa Duck Tours can be positioned as one of the

more unique services compared to the other service providers. Secondly, due to the strategy that is

chosen for Goa Duck Tours, namely, ‘a mass marketing product strategy’, the product should be

affordable to all of the -already mentioned- segments. That is why the price should be included as the

second variable in the perceptual map. City bus tours cost Rs. 250 per head and are also a rather

ordinary & common tourist service in Goa. Hence, it scores low on both on price and uniqueness.

Similarly, boat tours cost around Rs. 350-500 per head and score quite low on unique experience.

Cruise ship tours cost approx. Rs. 750-900 and offer a fairly uncommon experience. Therefore, it is

positioned in the bottom-right quadrant. Seaplanes and hot air balloon trips will commence in October

in Goa and cost Rs. 2000 and Rs. 6000 per head respectively. Both these services are premium and

classy services and are not affordable for every tourist. These two services will be launched for the first

time in Goa and both score high on uniqueness.

On the other hand, the “water buses/Duck Tours” will be the first amphibious vehicle in India and

therefore score very high on uniqueness. Moreover, the tentative ticket prices will vary from Rs. 500-

1000. From the above analysis, it can be inferred that the product is a mass marketing product that

scores high on uniqueness and faces no direct competition in its segment.

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3.3 Perspective 3: Product

3.3.1 Marketing mix

3.3.1.1 Product

A product is seen as an item that satisfies what a consumer demands. In this part, the features,

benefits, appearance and branding of the water bus will be talked about. The Goa Duck Tours are

intended to provide a unique travel experience to the tourists. The product i.e. water bus combines

both land and water travel experiences and is a first-of-its-kind amphibious vehicle in India. It has state

of the art, proven, and tested technology, easy operation and unprecedented safety and reliability

guarantees. To ensure safety a thorough, time-consuming, and grounded process has been carried out

to develop the G-Duck and a thick six-gage hull is used to withstand an impact of min. 28,000 lbs per

square inch. For reliability, vented disk brakes on each wheel are backed up hydraulically, electrically,

and mechanically. It has a fully automatic fire suppressant system to close the machinery vents and

releases a non-toxic fire suppressant that not only starves the fire, but also brings the temperature

down to manageable levels for immediate inspection. However, as the technology is still quite new,

some technological uncertainty remains. It is important to keep screening the products when they are

in use to guarantee that all vehicles can keep running in a safe way.

These are the main features that water bus will offer to its consumers. One of the differentiation

factors (attributes/benefits) that a water bus tour offers as compared to typical boat tours is consumer

comfort. Boat tours are quite bumpy, uncomfortable and have iron seats. On the other hand, water

buses provide customer comfort as it has additional aisle width that makes loading and unloading a

breeze. It also offers fully fitted carpet and padded seats and a great visibility to Goa’s heritage.

To move to the branding of the product, various branding elements will be looked at such as

logos/mascot figure, appearance, merchandising, etc. Logos e.g. are intended to be the "face" of a

company: they are graphical displays of a company's unique identity, and through colors, fonts and

images they provide essential information about a company. This allows customers to identify with the

company's core brand. The logo should complement the brand/product attributes of Duck Tours/water

buses. Some of the brand attributes that have already been mentioned are: novelty, informative, fun,

adventurous, entertaining, amphibious, affordable and mass appeal. All these should reflect in the

logo. In the annex are some logos of Duck Tours across various parts of the world. By analyzing these

logos, it can be observed that they all have the same key characteristics:

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The amphibious nature of the vehicle: presence of ducks in the logo.

A fun and adventurous experience: all the logos use cartoons/animated elements that depict

the fun and entertaining part of the Duck Tours.

Mass Appeal: the logos signify the family-oriented and affordable nature of the tours.

Based on the observations and the requirements, there can be concluded that they have to construct

a logo along the same line, i.e. one that encapsulates all the attributes of the Duck Tours. Together

with the logo, a mascot figure could be a good idea. Almost every Duck Tour across the world has a

mascot figure usually resembling a real duck. Tourists can take photographs with it and it offers an

option to develop merchandising. Ideally, it becomes the face of the company that people can relate

to.

Appearance is an important aspect of the branding of the water bus. Its appearance should appeal to

the tourists and should reflect brand attributes. It is recommended that colors and designs should be

specific to the routes, for e.g. adventure tours buses should have exciting/thrilling decals & designs on

it along with the brand logo. Family/children-oriented tours should have cartoon/animated elements

on the buses. The plan, although, is to start off with the same appearance for the first ten water buses

to ensure maximum brand awareness all over Goa.

3.3.1.2 Place

At the moment, there are only plans to offer tours around the North beaches of Goa (as both

companies are located nearby). One of the reasons is that there is some interesting heritage to show

over there. In the future there might rise opportunities to extend the service to other parts of Goa or

maybe even to other Indian states (there is plenty of water in the whole country). The distribution

rights are acquired by Sairaj Dhond so it lies fully in his own hands. This is however not a focal point of

this paper. The buses are manufactured at the Automobile Corporation of Goa Ltd. (ACGL) in

Sanquelim, Goa. GTDC has assured to provide parking space and start and stopping points (ramps) to

the operators. The vehicles will undergo regular maintenance check-ups and minor repair works in the

parking space itself and will have to be shifted to ACGL (or another equivalent workshop) in case of

any major repairs. One of the starting points that has already been identified is near the boat cruise

location in Panaji. The transport from manufacturing point to warehouse will just be by driving it there.

The same applies to the warehouse-starting point route. The starting and stopping points are the same.

Finally, the vehicles just return to the same place after their one-hour ride, so there are no extra costs

that need to be accounted for.

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3.3.1.3 Price

This part is entirely based on information that was obtained via Carlos De Souza, Sairaj Dhond and

GTDC. Besides that, some assumptions were made in order to be able to work on these calculations.

Everything has been merged in one Excel-template that can be easily adapted whenever needed. This

document can be found in annex and is also digitally available.

Method and description of the variables:

Each month: Revenue - Costs = Profit → Cumulated profit to see when the project reaches breakeven

situation and can start making a real profit. (See Excel-sheet). This situation is always converted to

number of sold seats as well.

Many variables and (possible) assumptions:

The vehicle cost for all six amphibious design vehicles is 120 million rupees. Two vehicles will

be used from October 2015, four vehicles from around April 2016 and from October 2016 all

six vehicles will be fully operational.

Fixed operational costs: 500.000 rupees for all six vehicles. These costs include salaries, fuel,

maintenance, insurance and other expenses. Note: during the first six months there are only

two vehicles available. The next six months there are four and it`s only from then on that the

six vehicles are fully available. There has been assumed that the 500.000 rupees can be equally

assigned to the six vehicles because most costs are vehicle-related. So during the first six

months the fixed costs are 166.666,67 rupees, during the next six months they are 333.333,33

rupees and afterwards the full amount is used.

Another cost will be the yearly fee that the company has to pay to GTDC. This will be 6 million

rupees + 5% of the revenue or 12% of the total revenue, whichever is the highest. For the first

few years (this is what the analysis will cover), there will be assumed that the 6 million rupees

will be the highest number. As calculations are only made up to the break-even point, there is

no real profit and the 5% does not need to be included. For the cost calculation the yearly cost

has been divided by twelve and added to each month (500,000 rupees).

An average of 70% occupancy throughout the year is assumed by the experts. Converted to

one month for one vehicle this is: 0,7*32*4*21 = 1881,6 seats (with 32 being the full capacity

of one vehicle, 4 being the number of tours per day for one vehicle and 21 being the average

number of working days in one month (assuming a year of 250 working days). These sums up

to approximately 3800; 7500 and 11300 seats for respectively 2, 4 and 6 vehicles (see Excel-

sheet in annexes for exact numbers).

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It is however too simple to assume 70% capacity every month. Therefore coefficients were

calculated that represent the seasonal effect of demand. To do this the statistics of the year

2011 were used because these were the ones available per month at this time (Number of

domestic tourists). Per month each number was divided by the average number of tourists to

get a positive seasonal coefficient with 1 being a neutral season. A possible way to simplify the

results can be the use of ranges. Define e.g. 0 - 0, 5 as low season, 0, 51 - 1 as mid-season and

>1 as high season. Note: 2013 statistics were used for the calculation of the coefficients. These

numbers are relevant because as shown in chapter 3 - Market perspective - the numbers are

rather stable throughout the years.

Based on the occupancy rate and the seasonal coefficients, the number of passengers per

month can be calculated by simply multiplying those two numbers.

The final information/variable that needs to be discussed is the booking fee or price of a ride.

Customers are willing to pay anything between 500 and 1000 rupees. In the file in annex 500

rupees was filled in for every month, regardless of the season. There are however many pricing

politics possible and therefore there will be elaborated a bit further on that. Especially because

this can be interesting for the management of the vehicles.

There is some information that wasn’t included in the calculation to keep the situation rather simple.

Of course the template can be adapted very easily so that extra information can be added or changed.

The extra information is:

For the moment the tour will start with four tours per day per vehicle. Later on, this will be

increased to six and there is a chance that a night tour will be offered as well. As this is not a

100% sure and there is no certainty about when the change should happen, it was not

included.

First of all, the top and bottom options were calculated: charging 1000 rupees and 500 rupees for

everyone in every season. This will show the best and the worst case scenario given the assumption of

70% occupancy. In the graph you can see how long it takes to get to the point where the company

starts to make money (break-even point). This is the point where each graph and the horizontal line

(120 million rupees = initial investment) cross.

Graph X shows that, within the boundaries of 500 - 1000 rupees, the initial investment can be paid

back in 16 to 32 months. As they expect this to take 3.5 years (42 months), there is still some back-up

time to deal with potential problems in the first operational year. It will probably also take some time

25

to get to the 70% occupancy. It can be useful to convert this to number of sold seats as this is interesting

to follow up.

70% occupancy at 500 rupees → about 306.000 seats to sell in the first 32 months.

70% occupancy at 750 rupees → about 189.000 seats to sell in the first 23 months.

70% occupancy at 1000 rupees → about 135.000 seats to sell in the first 16 months.

Secondly, we make a suggestion for a pricing strategy that differentiates based on the season. As

explained earlier, every month gets a label based on the seasonal coefficient (High, mid and low

season). During the high season prices can be high as the demand will probably be bigger. Therefore

we suggest charging the upper limit of 1000 rupees. During the mid-season we suggest to charge 750

rupees and during the low season we would charge 500 rupees as the demand will not be very high.

Graph 4: Breakeven period for different booking fees

In ideal conditions, this pricing strategy would lead to a breakeven period of about 18 months (as

shown by the light blue line on this graph). This would mean that they have to sell about 150.000 seats

in the first 18 months.

Besides varying the prices, another variable can be changed. We believe that an average occupancy of

70% throughout a year is rather high. Therefore a sensitivity analysis was executed on the occupancy

rate. Sairaj Dhond told us that they expect to start making a real profit within 3.5 years. To see what

occupancy rate is needed for that, that rate has been varied and the cumulated profit is shown for

every rate. The x-axis shows exactly 3.5 years so if a graph doesn’t cross the 120 million horizontal; the

occupancy is not high enough to reach this goal. This figure shows that an average occupancy of at

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least 30% throughout the first 3.5 years is needed. This would mean that they have to sell about

180.600 seats during that period. Note: for a sensitivity analysis all other variables have to remain the

same. This is why the pricing is the same for every occupancy rate. In this case, the differentiated

pricing strategy has been adopted (1000 rupees for the high season, 750 rupees for the mid-season

and 500 rupees for the low season).

Graph 5: Sensitivity analysis occupancy rate

Finally, a worst case scenario is discussed. What if the occupancy rate is low because people think the

price of a tour is too expensive? One option is shown, but again: the template is easily adoptable to

check other scenarios. This graph shows an initial situation without sustainable growth, a border

situation, and possible improvements. From the moment the occupancy or the fee goes up, growth

will become possible: 30% occupancy and a fee of 220 rupees → some losses, some profits, so no

sustainable growth possible. When raising the fee up to 250 rupees of raising the occupancy rate to

35%, sustainable growth will start.

Graph 6: Worst case scenario

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To end the discussion about pricing the main assumption will be looked at shortly. Assuming that

people are willing to pay anything between 500 - 1000 rupees, is quite strong. As there are no real data

concerning the willingness to pay, the assumption has been used but this implies that the whole

analysis should be looked at from a very critical point of view. It is therefore suggested to do some

research to get to know this willingness to pay and to afterwards execute the analysis again, based on

factual data.

3.3.1.4 Promotion

As the product is in the introduction stage of its product life cycle and it is time to roll out the novel

water buses, promotion will be of high importance. Initially, it is imperative to inform potential

consumers and create awareness about the vehicles. So, in this period the promotional expenditures

will be at their highest rate. Promotional activities may include sales promotions, special offers,

advertising, public relations, social media marketing, email marketing, search engine marketing, video

marketing and more. All these methods will not be looked at in detail because there are other

promotional activities that seem more relevant for this paper. The focus will be on online methods and

the formulation of special offers.

Nowadays, often used marketing tools are functional and active Facebook and Twitter accounts. From

the moment of the launch of the Duck Tours, the company should have a functional website, Facebook

and/or Twitter page that gives them the opportunity to create buzz about their business and provide

back-links to the company’s website. Via these communication paths viral marketing could be

implemented using a specific hash tag like #GoaDuckTours (similar to that of London Duck Tours).

Videos and Pictures of the tours should be uploaded frequently on the Social Media Platforms to keep

the online buzz about the company alive. Since 42.4% of the world population is already connected to

the internet, this marketing technique can reach very far and therefore be effective with little

expenses. In general, digital marketing (including email-marketing) can provide a great promotion

channel. (Miniwatts Marketing Group, 2015)

It is known that most foreign tourists and Indian travelers log on to travel websites, such as yatra.com,

tripadvisor.com, makemytrip.com, expedia.com, etc. to gain insights about the places they are about

to visit and the touristic activities that can be found there. Using Google Ad Words, the company can

publish and show ads of water buses on the travel websites in the Google Display Network to persons

planning a trip to Goa or looking for things to do in Goa. This approach will directly cater to the targeted

audience, i.e. tourists who are willing to come to Goa and hence, is a highly effective form of

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advertising. Though e-mail marketing is not considered to be a productive form of marketing, these

kinds of campaigns can be effectively implemented by using portals such as MailChimp.com,

Goresponse.com. These portals help us to selectively choose the recipients as it includes tracking,

social forwarding and complete analytics. Here, the key is to select relevant users and not to spam the

inbox of all possible subscribers.

Finally, to attract tourists and increase the acceptance/attraction level of those tourists towards a new

service, i.e. amphibious vehicles, the company will need to provide them with exciting and affordable

packages or offers. Based on the study of the international Duck Tours, these are a few ideas that can

be used as special offers:

Early Duck Discount: Provide some rebate to the tourists arriving in for the morning

tours (9-9:30 am) to increase occupancy even for the early tours. Another option is to

give a discount to people who come and make a reservation a day before their tour.

Family formula: In order to promote the family-oriented nature of the tours, the

company may provide cheaper packages to families.

Group arrangement: Provide a combined and cheaper package for large groups,

possibly up to 32 persons (full capacity of one vehicle). An increase in the number of

foreign tourists coming to Goa for conference and conventions (inferred from the

increase in number of charter flights and cruises) has been noted. This offer can be

useful to tap on that group-segment.

(Based on international duck tours websites: Boston Duck Tours, n.d.; London Duck Tours, n.d.; Ride

the Ducks of Seattle, 2014).

Another thing to think about is whether the company should offer the amphibious service as an

independent service. It could namely be interesting to link this service to other existing services. They

could for example combine the Duck Tour with a breakfast, lunch or dinner (depending on the time of

the tour) in one of the hotels/restaurants of the De Souza Group. This way, the company can create an

ecosystem consisting of all divisions of the group. By doing this, the activity takes longer than one hour

and can last for half a day, which might be more interesting for the clients. To examine this, it is

suggested to execute a survey that analyzes the real needs of the customers.

29

Strengths:

- Good relationship between both companies

- Expertise in tourism industry (DS Group + Dhond Group)

- Close relationship with owner of patented technology

- Procurement of raw materials from India (= less duties)

- First-mover advantage on Goan/Indian market

Weaknesses:

- Strategic uncertainty (new in India)

- Low availability of information about the industry of waterbusses

- High bargaining power of suppliers (technology, chassis)

- First-mover disadvantage

Opportunities:

- GTDC marketing campaign

- Possibility of market monopoly

- Creation of integrated tourism ecosystem

- Expansion of waterbusses to other uses: rescue operations, logistical solutions, navy, etc.

- Increasing tourist numbers

Threats:

- Introduction of new indirect competitors (at the same time) that are also fairly unique (hot air balloon, seaplane, ...)

SWOT-Analysis Water buses

Figure 6: SWOT-analysis

3.4 SWOT-analysis To summarize all three perspectives, a SWOT-analysis has been executed. All dimensions are explained

thoroughly in the figure so that no further explanation is needed. Everything that is mentioned in the

figure, can be found in the analysis of the perspectives.

Chapter 4: Conclusions and recommendations

4.1 Conclusions A short conclusion will provide an overview of how the main problem statement was answered:

What is the feasibility of offering an amphibious vehicle tourist service in Goa, based on a market

study?

Goa Duck Tours wants to target mainly the domestic tourists market. It has been examined whether

or not this is the best choice. There are a lot of advantages of targeting this part of the tourist market.

First of all, their average stay is shorter compared to foreign tourists and they spend bigger amounts

of money. As the Duck tour allows them to see a big part of Goa’s heritage, this is a good opportunity.

Secondly, as can be derived from the graphs, the potential growth in the next 3-4 years is bigger in the

domestic tourist market. Thirdly, the domestic tourists offer a more stable supply of tourists, even in

non-peak periods. Although, it is not recommended to completely ignore the foreign tourist market as

they bring in a lot of people from other parts of the world and can ensure some international word-of-

30

mouth marketing. From the five forces analysis it is inferred that the industry attractiveness for water

buses in Goa is high. As for the high cost inputs the bargaining power of suppliers is high and the exit

barriers are on the higher side, but the sector is not unattractive as the bargaining power of consumers

is very low, entry barriers are high and there are no substitutes for the product in the same segment

of the market. Some of the challenges of Goa Duck Tours for this market is that first of all they have to

be able to keep the tourists interested in the service. Secondly, they might want to be careful with

putting all bargaining power at the supplier’s side.

The bullseye provides a visual overview of the second perspective: consumer. In the middle of the

perceptual bullseye is the Brand Mantra. This is what the product or service stands for. How Goa Duck

Tours will do this, is by offering as a bare minimum all the characteristics that the competitors already

offer (the PoP’s). Then, to differentiate itself, Goa Duck Tours will present itself as more unique, more

connected to the nature and affordable (see perceptual map). Some reasons to believe (substantiators

or RTB’s) that they will offer all of this are listed in the third circle: a humorous guide, a unique design

(first in India) and an advanced, safe and exciting technology. Goa Duck Tours can create its own visual

identity by e.g. working with an attractive logo and exterior. Also the interior might be different

according to the group that enters the water bus. From the analysis, the idea for the water bus project

is to -at least- start with the Goa Duck Tours as a mass marketing product.

Figure 7: Bullseye

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The unique value proposition of Goa Duck Tours can shortly summarize the third perspective. Goa

Duck Tours wants to offer a unique, affordable Goa heritage discovery with a close connection to the

nature that is different from genuine bus tours and cruises because of the use of both land and water.

Goa Duck Tours also differentiates itself from the new seaplanes and hot air balloons by offering a

more affordable alternative that is equally or even more interesting.

4.2 Recommendations

In this part, some recommendations are given, based on the analysis that has been executed. They are

ranked from most important to least important. So that, if there is a budget limit, the company can

work from top to bottom.

First of all, the company should always stick to its value proposition (see above). Goa Duck Tours should

be projected as a service that offers a unique Goa discovery and provides insights on the local heritage

and natural beauty of Goa, rather than being just another party place. This should be kept in mind all

the time and for every decision. Besides this general recommendation, these are a few important

remarks:

Stay informed

It is crucial to stay informed, on all subjects. The company should keep screening the products

when they are in use to guarantee that all vehicles can keep running in a safe way as there

have been a number of accidents in various countries pertaining to water busses. Hence,

assurance of safety should be paramount. Also, it is suggested to use the calculation template

to stay informed about the financial situation. It allows to see whether everything is still on

schedule to reach earlier defined objectives. More importantly: it can tell when there might

be trouble and when actions should be taken (improve marketing, lower prices, …).

Besides continuous screening of the product and the financial situation, there is also the need

to look at the evolutions on the market. Only by doing that you will be able to react fast

enough. The demand for the water buses should also govern the extension of the fleet in the

future. This way stable occupancy can be assured and premium prices can be charged.

Mind the financials

Concerning prices, it is recommended to use a differentiated pricing strategy as the target

audience consists of many kinds of tourists. Families and businessman should not pay the same

amount. Differentiating based on seasons is also recommended. This can be easily done by

using the seasonal coefficients.

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The most important remark related to pricing is that expectations need to be looked at again.

For example, expecting an occupancy rate of 70% throughout the year is very optimistic. That

is why a sensitivity analysis was executed for this rate. When you don’t have much information

about a situation, as is this case, it is better to have realistic, maybe slightly pessimistic,

expectations than very optimistic expectations.

Marketing as a growing tool

During the introduction phase of the water busses, the advertisement spending should be at

its maximum and offline/traditional promotions such as hoardings, newspapers ads and

billboards seem to be trivial. It is recommended to use digital marketing and social media. Also,

special promotional packages can be employed to increase repeat purchases. Some of the

techniques have already been explained in the promotion section. A recommendation can be

to apply more of an American way of marketing namely putting the majority of the profit in

new marketing campaigns.

As soon as the water bus splashes into the water, it loses its novelty. Therefore, on-board

entertainment is extremely important in order to maintain consumer loyalty and encourage

repeat purchases. The quality of the service would be critical for word-of-mouth marketing.

Branding of the Goa Duck tours is indispensable as it will not only allow the company to charge

premium prices but also will distinguish Goa Duck Tours from any other water bus operator,

in case someone ventures into this business. The brand identity can enforced by the use of

logos, mascot figure, appearance, associations, merchandising, etc.

Other tours, uses, segments and suppliers

It has been concluded that initially, the company intends to roll out tours to target all market

segments. After this, it is recommended specific routes should designed for different target

groups. Tie-ups with water sports operators can be an attractive offerings to adventure

enthusiasts. Also, integrated tours with sea planes/hot air ballooning is a plausible

opportunity.

After targeting the tourist market and gaining popularity along with acceptance, water buses

can be expanded to various other uses such as logistics, public transport and rescue

operations.

Don’t forget the foreign tourists. They might also be interested in a Duck Tour. In general: do

not focus too much on only one segment, this is dangerous as there will not be a backup plan.

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The bargaining power of some suppliers (see Porter’s five forces analysis) is very high. This is

not very desirable from the point of view of both companies. That is why it would be

interesting to look for alternatives in case something happens.

4.3 Limitations and assumptions

This work has tried to discuss the research question as detailed as possible. Of course there have been

factors that prevented us from delivering a perfect report. First of all, there were not much data to

work with. Besides some general data concerning tourist arrivals, duration of stays in India and a range

of average spending, we didn’t know anything about the possible consumers of the Duck service.

Therefore we have been obligated to make assumptions. The segmentation exercise for example, is

partially based on groups that seemed interesting to us without having a proof for that. To make a

more founded segmentation, a new survey should be executed.

Then, for the third perspective we go some information about the product and place, and some specific

numbers for the pricing part. These numbers have been thoroughly examined and analyzed but the

reader should be careful when going through the results. The data that are used, were rather general

and not very accurate. Assuming that the monthly fixed costs are exactly 500.000 rupees (including

some variable costs that have been turned into fixed costs) is maybe too simple. The same counts for

the willingness to pay. 500 to 1000 rupees is a very broad range with 500 still being a very high amount.

Also, assuming an average occupancy rate of 70% throughout the year is very optimistic. The analysis

has been executed correctly but because the data are obtained based on a lot of assumptions, we have

to be careful to make conclusions.

Throughout the work, everywhere where there have been some limitations or everywhere where

assumptions were made, it is stated. In that way, the report can still be useful when the assumptions

are changed.

34

Sources and references

Bob De Wit, R. M. (2010). Strategy Synthesis. Hampshire, United Kingdom: Cengage Learning EMEA.

Boston Duck Tours, n.d.; London Duck Tours, n.d.; Ride the Ducks of Seattle, 2014.

Corporation, G. T. (N.D.). Home Page : Goa-Tourism. Retrieved September 11, 2015, from Goa-

Tourism: http://goa-tourism.com/

Department of Tourism, G. o. (2015, September 11). Statistics:Department of Tourism, Government

of Goa, India. Retrieved September 12, 2015, from Department of Tourism, Government of Goa,

India: http://www.goatourism.gov.in/statistics

Department of Tourism, G. (N.D.). Tourist Statistics 2012. Panaji,Goa: Department of Tourism,Goa.

H. A. (N.D.). About Us: Hot Air Ballooning. Retrieved September 11, 2015, from Hot Air Ballooning

Goa: http://www.hotairballooningingoa.com/

Philip Kotler, K. L. (2014). Marketing Management-A South Asian Perspective. New Delhi: Pearson

Education Inc.

35

Annexes

Part 1: before Goa

Preparation JIIS2015 Goa – De Souza Group

1 Waterbusses/Amphibions: a definition and introduction

Waterbusses are vehicles that combine two traditional ways of transport. In an advanced ‘amphibious design’, a

bus and a boat are combined to provide a unique way of transport, not only can it be used for day-to-day commuting

but it can also serve touristic purposes. With a length of approximately 11m, a width of approximately 2.5m and a

height of 3.5m the amphibion can transport up to 34 persons

plus the driver. The gross vehicle weight is approximately 12

tons. The waterbus is able to drive on normal roads at a

speed of 95 kilometers per hour and sail at a speed of 8 knots,

which is around 14 kilometers per hour. Being able to sail for

about 800 kilometers, it can most certainly provide a unique

experience to tourists in Goa and its surrounding areas.

Moreover, due to its inexpensive and readily available parts,

it offers a cheaper alternative to more expensive, traditional

boats. The vehicle is able to enter and exit rivers using

existing ramps.

In what follows, we will brainstorm about possible (touristic)

usages for the vehicle. Secondly, we will formulate a research question and subquestions and take a short look at

the competitors in the market. We will examine the market potential not only for traditional touristic uses but also

for tours, planned trips, traditional transport, logistical purposes, ... We will do this by drawing up a questionnaire

about the interests of the tourists and people in Goa/Calangute and by gaining knowledge about the most popular

touristic attractions.

Based on website: http://www.adindia.us

2 Brainstorm and desk research 2.1 Brainstorm During our brainstorm we distinguished a few possible main uses for the waterbus. The brainstorm can be found

in full in the mindmap on the next page. We came up with six options for the waterbusses. We will now shortly go

through all of these options.

1. Purely Touristic: If the company wants to serve purely touristic purposes, we suggest that they incorporate

the following things in their offers. It can be very interesting to organise some tours that are mainly

focused on the nature and the culture of India, more specifically the region of Goa. We thought of three

possible Island Tours (Ilha de São Jorge, Ilha Grande and Pequeno). Divar Island or other inland islands

are also a possibility and are reachable via the rivers. They are home to a lot of churches, temples, musea,

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local markets and astonishing nature scenes (the Goa mangroves, Bird Sanctuary, …). The second

alternative can be more adventurous tours (see point 2 and 3).

2. Company Offers: During our brainstorm we thought about a way on how the company can offer the

touristic tours. We suggest that they create multiple fixed offer formulas in which they combine some

activities.

a. 2 or 3 adventure tours: Here the company can offer a combination of various adventurous

activities (listed below) on or around the islands that are listed in the first bullet point or on the

island rivers (kayaking, …).

b. 2 or 3 cultural tours: Here the company can offer a combination of various cultural activities (a

more relaxing alternative), in which the tourists visit multiple cultural places and enjoy the Indian

nature.

3. Adventurous: As mentioned above, another option is to offer some more adventurous activities. Many

tourists like to spend their holidays in a more active way. We came up with the following ideas:

a. Hiking/Camping: on islands (advised) or inland. Option to pass the night in a tent plus cook on a

woodfire.

b. Cliff Diving: if possible (islands).

c. Snorkling

d. Kayaking: around the islands or on inland rivers (+ combination with cultural tour?)

4. Extra ideas: We would also like to incorporate some of the waterbusses unique features. One of the key

features is the ability to drive on both land and acces the water with the same vehicle. That is why we

recommend offering some kind of formula in which the waterbus picks up tourists at previously agreed-

on points or at the tourists’ hotel. These pick-up points can be hotels/bars or restaurants with which we

have an arrangement. Also possible: certain bars or hotels that offer a room or a dinner in combination

with a touristic tour. Extra idea: a culinary tour in which the passengers of the waterbus can taste one

unique dish, meal or drink at every place they pass.

5. Logistical solutions: possibility of incorporating a logistical function in the company offer. For example:

providing the islands with food or materials.

6. Public Transport: Use of the waterbusses as a commuting service, trying to avoid traffic jams (using the

rivers or the sea) and using fixed pick-up points (‘car pooling’)

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Figure 1: Mindmap

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3 Research question and subquestions 3.1 Research question: What is the market potential for waterbusses in Goa, not only for touristic tours but also for other possible uses?

3.2 Subquestions 3.2.1 How big is the interest for purely touristic activities compared to logistical/commuting solutions?

3.2.2 What kind of touristic activities are preferred by the travelers in and around Goa?

3.2.3 What amount of money are tourists prepared to pay for the services/tours?

4 Qualitative research 4.1 Questionnaire – interviews

We expect to work on these subjects with the help of the Indian students as we do not yet own the necessary

(local) knowledge.

PREPARATION JIIS2015 GOA – DE SOUZA GROUP

AMPHIBIOUS WATER BUS

1. Background Research

We have been doing thorough desk research since we have received the details of the projects. We have

been exploring about the countries and places where the concept of amphibious vehicles is already in place.

Duck tours are quite popular in river and lake cities like Austin, Baltimore, Cincinnati, Washington DC

and Belfast.

In India, though it is not a new or an unheard concept but still is at a nascent stage. For instance, the state

of Andhra Pradesh has decided to start amphibious bus tours to pilgrimage places. The Andhra Pradesh

government is introducing an amphibious bus that will undertake a quick pilgrimage tour, a move they say,

is the first of its kind in the country to give the much-needed boost to temple tourism in the state.

Also, In India, only 0.3 percent of people use water transport and only three percent use the same for

transporting goods via inland waterways. In China, 44 per cent of people use waterways. Mumbai, Thane,

Konkan and Goa have a long coastline and waterways can be effectively used.

Safety issues with water bus in various countries:

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Great Britain's first amphibious bus service (2011) hit a slight snag in testing - a component failure halting

the Stagecoach Amphibious Bus in its third crossing of the river Clyde between Renfrew and Yoker in

Scotland. The bus stopped after a clunking, grinding noise as it went to exit the river. The noise turned out

to be a loose airbag at the rear - the coach was elevated out of the water by a series of such flotation devices

connected to the suspension, and one of them had worked its way loose.

News in 2013: Tourist terror as amphibious duck bus carrying 31 people sinks in Liverpool's Albert Dock

for the SECOND time in three months.

Successful Touristic Water bus tours in STOCKHOLM: OCEAN BUS

2. Scope and possible uses of Water bus in Goa

The only two issues with the water bus that we could come across were Maintenance issues and Safety

issues. While we were researching, we came to know that the company (ADI) has sourced more than 80

per cent of the required components indigenously. This would bring down the maintenance costs as the

parts would be readily available. The maintenance cost of a typical T-Duck bus is approx. $10,000 per year.

We expect this would come down as the components are produced indigenously.

After brainstorming, we could come up with the following possible uses for the water bus (these exclude

the ones already mentioned by the Belgium students):

City Tours

As water bus can run both on land and water, one of the possible uses can be City tours. In Goa, we have

the traditional city bus tours but they are limited to the land only. By using this advantage of the water

buses, we can expand the travelling scope for the tourists. The tourists can visit Hotels, Churches, etc, along

with the beaches, islands, etc.

Public Transport

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Here, we need to study and map relevant service routes for the commutation of general public. We need to

prioritize service areas according to the passenger demand, the proximity to Hotels and Universities

and population/employment concentration. For instance, Students of a College that is near the coastal

lines or the college students that reside in the coastal villages can use the water bus facility. Also, Road

transportation is difficult in Goa during monsoon season; hence, water bus can be an effective substitute.

Emergency Rescue Service

Water bus can be a useful mode of transport when it comes to Emergency rescue areas. Water bus can easily

be operated by a driver and is safer than a typical open boat. Also, it can accommodate many persons at a

time i.e. the capacity of a water bus is more.

Adventure Tours

The existing boats that are used in the touristic or adventure tours are bumpy and uncomfortable. The water

is faster than a boat and it can run for almost 800 km, therefore, it can be a good means of transport to reach

nearby inaccessible islands.

3. PROJECT PLAN LAYOUT:

Desk & background Research (already done).

Preparation of The questionnaires.

Study of the local tourist Market & the competition.

Identification of the various tourist activities in Goa.

Gauging the interests of the local public and the tourists.

Checking the feasibility of each possible use.

Notes 1st Skype-meeting (24/08/2015) Analyze current supply of tours in Goa

- how do waterbusses fit in this market - Influence of consumer psychology (information needed: Carlos) - Gaps and opportunities - Focus on domestic tourists/navy/army/rescue?

Financial - Invest in marketing? Online and/or physical?

Ideas - Analyze current tours (f.e. river cruises)

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- Background of the industry - Market analysis + what is expected from the waterbusses? Not only in Goa, look at the entire Indian market Wait for information (Carlos – Tuesday 25/08)

Information - Surveys already completed in 4 Indian states. Age: 25-45 years old What prices are customers

willing to pay for a 1h tour (25% water/75% road)?

Goal - “Think as a group of strategic advisors”

- Don’t execute a survey (already completed) Strategy instead of data collection

Agenda - 24/08-25/08: receive information from Carlos

- 25/08 or 26/08: Skype- meeting with fellow Indian students determine direction/scope

Afterwards: discuss direction with Carlos

Part 2: in Goa 1. Organizational structure

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2. Water buses illustrations

3. Two –already developed- routes

TOUR 1: HERITAGE ROUTE (OLD GOA)

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TOUR 2: HERITAGE ROUTE (CHORAO)

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4. Calculation of the seasonal coefficients (based on 2013 data)

5. General calculation table (cumulated profit)

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6. Breakeven period calculation

7. Sensitivity analysis (calculation)

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8. Worst case scenarios (calculation)

9. Market percentage calculation

10. Duck Tours logos