SNOW & SNOW EXPERIENCE FOR CLIENTS FROM INDIA

Alessandro Turi 6528 Marketing B Assignment

Introduction, project outline and methodology: In recent years it has been easy to hear something about the growth of the Indian Economy, in newspapers, tv-news, or financial dedicated websites. But nobody seems to have clear idea of what is the social and economical situation in this big nation. What is clear is that we are talking about huge numbers, in terms of population, geographical extension, demographical changes and other factors that contribute to the big confusion into which I found myself while looking for a wide overview of the country. For this reason Ive been in trouble firstly in deciding what would be the right approach to get the information needed in order to proceed in a logical way, without getting lost into millions of unneeded data. I decided to start working on a macro-economical analysis of the country, trying to understand the environment in which I should have to work and the actual size of the market I could target, in order to develop a successful strategy to market the product.

Project outline: 1. Macroeconomic Analysis 2. Snow Experiences IN India 3. Our Product 4. Objectives 5. Opportunities & Threads 6. Strategy

Methodology: The main source of knowledge has been the web, where I found most of the information about the Indian economy, the attitude of Indians to go skiing, the trade experience between Italy and India in the last years regarding the sport and leisure business. Books and course material were useful to develop the strategy I choose to use and the Kronplatz Tourism Board provided the statistics about affluence in the holiday region from India in the last five years.

1. Macroeconomic Analysis: India is the second-most populous country in the world with a population of ca 1.2 billion people. It is the most populous democracy in the world. Country's per capita GDP (PPP) is $3,290 (IMF, 127th) in 2010. By 2008, it is the world's second-fastest growing economy due to a huge GDP growth rate: 8 % in 2010 and 8,2 % in 2011 (forecast). Another factor contributing to the growth of the Indians purchasing power is the highly decreasing inflation rate: 15,1 % in 2009, 8,3 % in 2010, and 5,5 % in 2011 (forecast); as we can see, every year it goes down by almost half of the value, and this is important because it indicates us how fast this economy is developing itself. The contribution of the different sectors to GDP in 2010 was services (55.3%), industry (28.6%) and agriculture (16.1%). The key factors behind indian economic growth are: young and rapidly growing working population, growth of the manufacturing sector due to rising levels of education, sustained growth of the consumer market due to a rapidly expanding middle class.

India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers and this brought the economy to a fast and constant growth, due to the strong services sector that is now the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. However two-thirds of Indias people still depend directly or indirectly on rural employment for a living, and this brings us to underline the problem of the under-development of the agricultural sector, that is not sufficiently helped by the government policies, whit consequent problems of poverty and bad-nutrition of a considerable part of the population. So it is easy to find out what are the mid- and long-term challenges that India has to face in order to reach its economic potential: public sector reform: that could guarantee a better distribution of resources and better policies; transport infrastructure: to better link rural areas with big cities, centers of social development;

 agricultural and rural development: to be competitive on foreign markets thanks to technological development, improving at the same time the life-quality and living standards of agricultural workers; better labor regulations: to avoid problems like black-labor or child-employment, to keep being competitive on the services market and to increase export of industrial product; education: better education means better job opportunities and business developmet; energy security: to be able to sustainably improve business of both agricultural and industrial sector; public health and nutrition: it goes without saying that all the previous point are affordable only if better health and nutrition would be guaranteed for a larger part of the population, with respect to actual situation in which a quarter of the population is still living with an income below the government-specified poverty threshold of $0.40/day.

2. Snow Experience in India: There are several places in India where people can enjoy winter sport experiences and those are all concentrated in the northern part of the country, all along the Himalaya mountain range. The most famous are : Auli (skiing period from December to March) - 500 kms from Delhi, is a popular winter resort run by the Garhwal Mandal Vikas Nigam (GMVN) offering good skiing conditions.. This resort has the distinction of celebrating the National Winter Games Championships every year in the month of February/March. Gulmarg (Jan-March) - 46 kms from Srinagar Airport, is situated in the state of Jammu and Kashmir and is a famous skiing resort frequented by the tourists. Ski lifts and chair lifts provide basic utilitarian facilities, and a modern cable-car lifts skiers on the top of the slopes that are intended for expert ones. For the most ambitious, there is the possibility to practice Heli-skiing. Solang Valley near Manali (Jan - April) - 600 kms from Delhi / 60 kms from Bhuntar (Kullu Airport), have several ski slopes with ski lodges, lifts, trained instructors, and ski runs to suit all levels. Heliskiing facilities are available at Hanuman Tibba, Rohtang Pass, Deo Tibba and Chanderkhani Pass near Manali. Despite to the presence of quite a lot places where Indians could go skiing, in most cases there is only a little percentage of the skiers that comes from India. This is mostly due to the fact that ski, and other high-altitude winters and summer sports, are considered by Indians as Adventure

Category Sport, belonging to a niche of adrenaline-catcher, and not as sports that could be practiced by the mass. In fact, almost all the Resorts are created by foreigners to bring tourists from outside the country. Surveys revealed that Indians participation and knowledge in niche sports such as skiing is very limited, not only from the tourism point of view, but even in the industrial and commerce field. Ski manufacturing clusters are very limited in India. There we can find some little ski equipment producer (in most cases those are outsources for other big european or american companies) in Dehli and Mumbai, and a few ski apparel producer in Tirupur, industrial district in which is located almost the total production of sports apparel in India. For all the reasons mentioned above we can affirm that demand for snow experiences in India is not existing (or is very limited) for domestic market. This could also be positive from our point of view because we want to bring Indians to ski on the european slopes, leaving the Himalayan Adventure experience to external tourism. 3. Our Product: The Kronplatz Holiday Region is a famous winter sports destination in Italy, and it offers to the customers one of the best snow experience they can find in the Alps. The mountain, that has a particular morphological conformation (a flat top and all the sides suitable for ski-tracks), was exploited as a ski resort since the early 60s when the first lifts were installed in the north- and south side of the mountain. Year by year new improvement in terms of slopes, lifts, shops and rental services, hotels and other accommodation and hospitality infrastructures, made the Kronplatz resort being a pioneer in the winter sport experiences market, a model followed in lots of other destinations in terms of business management. Kronplatz South Tyrols Nr.1 Ski Mountain. This is the mission statement that the Destination Management Organizations of the Kronplatz holiday region face on the webpage and on most of the printed promotional material. These words can have a strong impact on tourist from Italy and Europe where people already know something about South Tyrol and the context in which Kronplatz is located. For this reason it is not so hard for the receivers of the message to get an idea of what a ski experience at Kronplatz could be, and also to imagine themselves into the experience even before they come to enjoy it. This cannot be the same for Indian customers.

The table below shows that Kronplatz is not actually a destination that Indians choose for their holiday.

4. Objectives: The idea of marketing the Kronplatz snow experience in India rises up from the consideration upon the emergent new educated Indian middle class. Reading different studies on the sociocultural changes in this country made me understand that there is a new young and active part of the population that is starting to think and act a little closer to the west culture. They began to expend more, to pay with credit cards, to use new sources of information such as tv and internet, to travel around the world discovering new cultures, lifestyles and values. The challenge for the destination management organizations is to make the skiing experience affordable for Indians, or at least for that part of population that could be interested. The most important message to deliver to potential target should be that skiing is not only for Adventurers, but is suitable also for normal people, and this means that they dont have necessarily to be good skiers to enjoy good times on the slopes, and the activities are not so risky as they are in Himalayan resorts. The concept of todays ski resorts is that they can have fun while learning in complete safety and this is something that should belong to the everyday-life of people without any particular characteristic or prerequisite. The target market should be mainly composed by young people, between 25 and 40 years, educated and with good jobs that guarantee a considerable amount of disposable income, that

they could invest in an holiday (or part of it) in our region. They should have a good knowledge in foreign languages, at least in English, and they have to be reachable through internet. A success on the indian market could represent a huge occasion to introduce the Kronplatz snow tourism in Asia, and adapting the Kronplatz offer to match Indians wants and needs could be a good training exercise in order to extend marketing in the future also to other asian markets. 5. Opportunities & Threads: The business opportunities that we are trying to exploit are directly deriving from the demographic and social conditions of India. A big population like the Indian one represents such an incredible resource in terms of number of potential customers, that even if only a very small percentage could be interested in the product, this brings us to manage a lot of people. Another advantage derives from the fact that the market is completely new (as described by the Blue Oceans strategy). This brings us to be the pioneers in offering skiing experience tourism for indians outside India and Himalayan region, and probably this would give us a leadership position with respect to other destinations that will offer their product to the same target on the base of our desired success. The adaptation of the Kronplatz product in order to fulfill the gap between traditional and new (Indians) consumers needs and wants can give us the possibility to look at something that maybe before did not represent a resource but now can be integrated into the marketing mix. In other words, the composition of the product, made of both tangible goods and services, can include some new element that is introduced just to increase the appeal of the combination to the new potential customers. Those innovation may give benefits also to traditional customers. A big contribution in terms of visibility can be given by the enhancement of the Kronplatz Holiday Region as part of the Dolomites, that figure in the UNESCOs World Natural Heritage list since 2009. Together with nature and sport, the Kronplatz holiday region offers a wide range of cultural and gastronomic elements that can be associated to complete the experience in during the time not dedicated to the sport activities. Those elements can rise the interest of the Indian customer that wants taste the italian and south tyrolean food, or desires to learn something about south tyrolean culture and costumes.

Thinking about the risks it must be kept mind that it is difficult to integrate elements close to indian culture in the european one and that distance could also be impossible to fill. The differences in habits and behavior, for example about the clothes, timetables or food, could sometimes be obstacles that do not allow the meeting between supply and demand. Another possible threat is the distance, and the fact that Italy is very far from India could be a difficulty for many potential customers, which might not be able to support so many hours of flight. The distance have an impact also the cost of the flights, and this influences the decision process of the customer. The language can also represent a limitation to the possibility of contact with all potential visitors of the Kronplatz. Even though English is the most important language for national, political, and commercial communication, Hindi is the most widely spoken language and primary tongue of 41% of the people, and there are 14 other official languages. Problems can arise for example if only one of the member of a group is able to speak in English, or it can be necessary to have an interpreter to ensure transactions between partners. Also the relationship with some partner could become a threat to the business as working on such a distance can sometimes be very difficult, or lead to trade-offs that often do not make satisfied both parties. The transaction costs can be high, for example due to the difference in working time in the two countries. The last thread that we have to face is linked to the different religions practiced in India. There could be repercussions on business for particular impositions and dictates of religion practiced by customers and it could be difficult to totally avoid situations of embarrassment or tensions with other frequenters of the ski slopes or structures that complement the offer of Kronplatz. 6. Strategy: As already mentioned, the Kronplatz Holiday Region, like most of the other tourism product, is composed by both physical elements (goods) and intangible elements (services). Another characteristic of the tourism product is that this cannot be delivered to the customer, but the customer should be willing to travel from his home to the place where the product is located, and spend some time there. All those considerations bring to the assumption that a single marketing action wont be efficient to reach the goals of the organisation. The strategy should contain different types of actions that

together will be able to rise the interest of targeted consumers. In any case it will be fundamental to have indian trustworthy collaborators. The entry mode that better fits to the characteristics of the product is a hierarchical mode, and in particular the one with resident sales representative. For this particular kind of organisation it is better to let the sales be finalized by local agents, that can have a better relationship with the customer. The first thing to check is whether there are particular periods in which Indians prefer to go on holiday; in such a way all can be prepared for the arrival and for the reception in the best conditions, and in peak-moments small events could be organized to satisfy the need of socialization and familiarisation with the new environment. A wide range of tools can be used in order to achieve our goals: considering that India has the biggest Film industry of the world, and it has been counted that every three months 1 billion people (almost the total population) goes to the cinema, it would be useful to produce short video clips to be projected in waiting times before and after the movies. Those clips has to be filmed with both European and Indian actors and they should show the activities on the snow and also all the other activities and elements of the product to be marketed. Regarding press management jobs, the organisation will need to have one or two indian journalists that can translate and adapt press releases for local press campaigns and for the dedicated winter-sport websites. Travel Agents are needed to contract with indian big companies to tailor some special incentive travel to Kronplatz for the managers, or to organise conferences and special meetings that would combine work and leisure. An important part of the promotion will be pushed through the web, thanks to insertions and banners on dedicated popular tourism portals and search engines that can help potential customer to reach the homepage of the Kronplatz tourism board, that give him access to a lot of information and several services. On those websites were the use of web 2.0 tools is allowed users that have enjoyed the product can spread good or bad word of mouth of the experience, and for this reason the social networking sphere should be carefully managed.

An interesting initiative can be to involve some indian university in international exchange projects in order to bring students to live in the Kronplatz region for several months, and those students will have the possibility to exploit a tailored package including both academic and ski courses.

In conclusion I think that marketing snow experiences to clients from India is not a simple task to perform. However today technology is really improving the possibilities to make marketing activities targeting customers from all over the world, and I guess that in the near future it will be possible to have clients coming to ski at Kronplatz from India. Sources: Websites: http://en.wikipedia.org/wiki/Economy_of_India https://www.cia.gov/library/publications/the-world-factbook/geos/in.html http://india.mapsofindia.com/culture/sports/skiing.html http://www.indianadventureportal.com/winter-sports-india/snow-skiing-vacations.html http://himalayanskiexperience.com/tours.htm http://www.ice.it/settori/index.htm

Papers and Books: Italian Trade Commission: The Sports Retailing Industry in India - Market Research 2010 Sven Hollensen: Global Marketing, 5th edition, 2010 Philipp Kotler: Marketing Management, 12th edition, 2007