Thomas Cook Report

SUMMER PROJECT REPORT ON Customer apprehension towards non currency methods and build market for Borderless prepaid
cards.
For
Under the Guidance of Mr. Vinoth Kumar C Chennai Area Manager, Thomas Cook Foreign Exchange Services Submitted in partial fulfilment of the requirement for the award of Degree of Master of Business Administration By Students Name: Vignesh Karthick R Roll No: 29117
BHARATHIDASAN INSTITUTE OF MANAGEMENT (School of Excellence of Bharathidasan University),TIRUCHIRAPPALLI 620 014
SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES
ACKNOWLEDGEMENT
I sincerely thank Thomas Cook for providing me with an opportunity to pursue my internship at their organization. I extend my thanks to my mentor M r.Vinoth Kumar C, Area Manager , Chennai for providing me the necessary guidance and road map for successful completion of the project. I am thankful to Mr Vinoth Kumar, Branch Manager Anna Nagars for facilitating all convenience throughout my project. Most importantly I would like to thank Ms Niveditha and Mr. Uma Mageshvaran for their valuable inputs and support
I am grateful to the Director and all the Faculty membe rs of BIM, Trichy, for supporting me and providing valuable guidance in all my endeavors.
Vignesh Karthick .R
Customer apprehension towards non currency options to carry money abroad and suggestions to build market for Borderless Prepaid Card Page 2
CONTENTS
1 Company overview 1.1Foreign Exchange Services 2 Scope of the project 4 4 6
3 Study on current trend of Multicurrency prepaid cards and customers apprehensions towards it 6 3.1Market research 4 Threats 7 15
5 Increasing Consumer Walk-ins at Anna Nagar and Spenzers Branch 15

5.1 Market Research on the Shopkeepers of Spencers Plaza 16 5.2Promotional activities done in regions around Spencers 17
6 Recommendations for an Building Market for the card
14
1.Company overview Thomas Cook is one of the largest integrated travel and travel related financial services company in the country offering a broad spectrum of services that include Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Insurance, Visa & Passport services and E-Business. The Company set up its first office in India in 1881, and has been providing world-class travel service for 132 years.
TCILs footprint currently extends to over 251 locations (including 28 airport counters) in 101 cities across India, Mauritius & Sri Lanka and is supported by a strong partner network of 131 Gold Circle Partners and 162 Preferred Sales Agents in over 100 cities pan India.
Over the years they have evolved as a market leader in foreign exchange services in India. Borderless Prepaid card is a Multicurrency Prepaid card launched by Thomas cook during October 2012. Multicurrency card is a one stop solution for multiple foreign exchange needs, as it can be used for carrying money abroad, transfers, secured way of carrying money abroad. But as people being risk averse there is some hesitation in using the card as a primary medium of carrying money. This attitude has to be well unde rstood and market has to be created for this product. The product is unique of its kind and has its own POD among the similar products in the industry that needs to be communicated to the target audience. Thomas Cook (India) Limited is promoted by Fairfax Financial Holdings Limited through its wholly-owned subsidiary, Fairbridge Capital. Fairbridge is responsible for the execution of acquisition and investment opportunities in the Indian subcontinent on behalf of the Fairfax family of companies. 1.1Foreign Exchange Services All over the world Thomas Cook is well represented by its travel business, but in the case of India it is the other way around. The forex division brings in more revenue than the travel business close to 60%. Thomas Cook was one of the first companies to secure the AD-2 licence from the RBI. It was one of the first company to foray into such a segment and had a huge market share and was almost a monopoly, but the situations have changed with competitors making a tough competition to Thomascook. By AD-2 license category it could provide foreign exchange services only to certain restrictions and they cannot deal with forex requirements related to business which the banks alone could do. The Products that the Company deal with is as follows 1. 2. 3. 4. Currency Multi-currency cards Travellers Cheque Remittances
5. Demand Drafts 6. Money transfers (Moneygram and Express money) Bulk of the transactions happen through currencies , but from the firms perspective they prefer to sell through cashless means as it prevents importing currencies and gets backend revenue from the third-parties . Market Players: Players in the Indian market include (a) Authorised Dealers, mostly banks who are authorised to deal in foreign exchange, (b) foreign exchange brokers who act as intermediaries, and (c) customers individuals, corporates, who need foreign exchange for their transactions. Authorised Dealers have been divided into different categories. All scheduled commercial banks, which include public sector banks, private sector banks and foreign banks operating in India, belong to category I of ADs. All upgraded full-fledged money changers (FFMCs) and select regional rural banks (RRBs) and co-operative banks belong to category II of ADs. Select financial institutions such as EXIM Bank belong to category III of ADs. Currently, there are 86 (Category I) Ads operating in India out of which five are co-operative banks. All merchant transactions in the foreign exchange market have to be necessarily undertaken directly through Authorised dealers. Forex Market Types: The forex market is an OTC (Over the Counter) market without any centralized clearinghouse. It consists of two tiers. The interbank or wholesale market, Client or retail market. Wholesale Forex Market : Major Forex trading in the wholesale forex markets is undertaken by banks popularly known as interbank market. In this market, banks and non-bank financial institutions transact with each other. They undertake trading on behalf of customers, but majority of trading is undertaken for their own account by proprietary desks. Besides banks and nonbank financial institutions, multinational corporations, hedge funds, pension and provident funds, insurance companies, mutual funds etc. participate in the wholesale market. Retail Market: In the retail market, individuals (tourists, foreign students, patients traveling to other countries for medical treatment) small companies, small exporters and importers operate. Money transfer companies/remittance companies are also major players in the retail market. Retail traders buy/sell currency for their genuine business/personal requirements. For
Example, an exporter enters into forward contract to convert foreign currency to domestic currency. 2. Scope of the project The project mainly deals with the below mentioned objectives Study on the existing customer awareness on the product Analysis of customer apprehensions towards the product Increasing Consumer Walk-ins at Anna Nagar and Spenzers Retail Outlet Recommendations for Effective Distribution model of Thomas Cook
3. Study on the existing distribution model of Thomas Cook Foreign Exchange Services Pictorial Representation Of Thomas Cook Distribution network
In addition to this , the branches are also well networked with JUST DIAL which directs customer inquiries and to them and transactions are also through in-house LT(Leisure travel) Conversions. The relations with the NSAs will vary as they share their profits on the transactions made and sharing basis is left to the satisfaction of these travel agents . There is also franchise model at Thomas Cook where the franchisee is termed as Gold circle Partners (GCPs)TCIL is supported by a strong partner network of 131 Gold Circle Partners all over the country. In Chennai region GCPs are located in OMR and T.Nagar. Franchise
model seems to be the future of TCIL as it gaining popularity in the metros and profits could be reaped without any costs. In order to make a study on the preference of these channel partners, an exploratory research was conducted with the educational consultants in the city. It was more like interview sessions with these consultants to identify what Forex requirements are there for them and their students . In order to understand the market better, a visit was made to the Education fair at HYATT regency conducted by EDWISE. Bigger consultants like LYCEUM, PRINCETEN , EDWISE requires PAN INDIA tie-up and requires the support of the head office to strike a deal with these consultants. While these consultants are also well segmented, some of the consultants like Halycon consultancy at egmore and Educhannel at Annanagar deal with UK universities and Mancomp at egmore deal with Australian universities .Most of the consultants prefer bank loans for their students and Forex requirements happens only for those students who pay with their savings or Fathers money , hence it is a niche segment with huge volumes though which the company could never neglect. 3.1.Market research Exploratory Research Initially, to evolve with factors related to Multicurrency card, few sales people and Branch managers were interviewed to get the insights relating to it. Factors related to any specific target for this card, and factors that they feel is the advantage of this card over the customers. Based on the interactions, there were few factors that were identified and they are 1. Instant activation as Thomas cook is better known for its better service and fast operation in serving the customers 2. Safer and Easier as the card is easier and safer than carrying cash in hand 3. World wide acceptance 4. Easy reload Reloading facility is easier compared to other modes of transferring money 5. Multiple currency Upto 8 currencies, which most competitor are lagging behind Based on this survey was conducted among the existing customers of Thomas cook and others frequent flyers, and those who have travelled abroad before.
Survey Objective: Customer apprehension towards non currency options to carry money abroad and suggestions to build market for Borderless Prepaid Card Sampling Methodology:
The survey was conducted with the prospective as well as existing Customers by directly contacting the customer as well as through online surveys. 1. Sampling Type: Convenient random sampling is used to select the Sample. 2. Sample Population: The sample Population included a mix of Students, working Professionals and Business people. Tools Used: Data Processing and Analysis were done with the help of SPSS 16 And MS Excel Data Analysis: Sample Demographics: Sample Size: 120 Gender: Gender Male Female Total 78 42 120
Age:
Age 18-25 26-35 35 + 65 43 12
Occupation:
Occupation Student Working professional Business Others 40 42 33 5
Results and Inferences: 1. Purpose of Travel
2. Buying Behavior: a. Almost 50 percent of the people do foreign Exchange transactions through Banks and 31 percent do through authorised dealers like Thomas cook.
b. Almost 60 Percent of the customers prefer to visit the retail outlet in buying foreign Exchange and 25 Percent prefer to Booking online and collecting it from outlet. c. Only 17 Percent Prefer Door delivery
d. Most of the customers prefer to buy Forex during the last 2 weeks before Travel
3. Preferred Forex Medium: a) Almost 50 percent of the Customers prefer buying Forex in the Form of currency notes b) 28 percent prefer Forex cards and 20% prefer Travellers cheques.
4. Money Transfer: Almost 40 percent of the customers who send money abroad are sending for Education purposes
5. Awareness about Thomas Cook: 34 % of the respondents are unaware of Forex Services Provided by Thomas cook
AWARENESS
Highly Aware 11% Dont Know 34% Aware 25%
Not so much 30%
6. Source of Awareness: Almost 33 Percent of the customers get to know about Thomas Cook Services through word of mouth.
SOURCE
Internet 17% Ne ws pa per a nd Magazine ads 20 %
TV commercia ls 17%
Word of Mouth 33% Referral 13%
7. Customers Making Travel arrangements with Thomas Cook: 85% of the Customers who make travel arrangements with Thomas cook do foreign Exchange transactions through Thomas cook Forex. 8. Customer Satisfaction: Almost 50 % of the existing customers are Dissatisfied with the services.
CUSTOMER SATISFACTION
Very Satisfied very Dissatisfied 7 % 21% Satisfied 29%
Dissatisfied
29%
Neutral 14%
9. Receiving Money: a. 15 % of the respondents both send and Receive Money from Abroad. b. Of the 40 respondents who receive money, almost 35 % receive money from abroad monthly (regularly).
Mr. Mahesh Iyer, Head Foreign Exchange, Thomas Cook (India) Ltd said, Thomas Cook Indias internal research had revealed that for todays traveler who is always on the go, easy access, speed and convenience for his foreign exchange transactions was a critical requirement, as also for the youth who are always looking online for their needs. Hence, we launched our Online Forex Store, to empower customers with the ease and convenience of booking at home without compromising on the famed Thomas Cook India experience & offline compliance. While banks offer online services for their customers only, we have reiterated our consumer-centric approach by offering forex to everyone existing as well as potential customers. This indicates that people are still reluctant to move online and more people prefer going to the store to get currencies. It is understandable that for a new product there will be resistance among the customers. TCIL could target the Innovators and Early adopters who are generally the online shoppers like EBAY, Jabong , etc and it is a right move to start in the online medium and to shift into Click and mortar business but aggressive advertisements to create popularity for the service . An analysis with respect to why a people prefer the online medium. The following factors were considered and respondents were asked to rate on a likert scale (5 point scale) Affinity to travel to store Better security
Ease of use
On making co-relation among these factors the output from SPSS is as follows.
4.2 Threats
Delay in delivery (5 days).
Loss due to exchange fluctuations between transaction time and delivery. Untrained employees about the product
Channel Conflict between Retailers platform (Transactions charges differ).
& online
Confusion may lead to lack of trust in the brand.
5. Increasing Consumer Walk-ins at Spencer Plaza and Anna Nagar Branch Spencers Plaza is the sole branch operating in the Mall in the entire city. The mall concept was envisaged to tap the shopping customers, especially the NRIs and foreigners who look for encashment. The branch is operating for a reasonably long time and it used to be cashbox in the city as Spencers was the only mall around 7 -8 years ago, but the time has changed now , with Malls in the city have sprung up at various locations and Mall market has become too cluttered with footfalls drastically reducing in Spencers and brands have also started moving out. Thomas Cooks branch at Spencers was als o not spared due to the spurt in the Malls in the city , with its walk-ins coming down drastically in comparison to the previous years. There has been huge debate among the management whether to shift the branch or not. To add fuel to the woes of the Staff , Leisure travel (LT) has been shifted and the branch is left alone with its FOREX business. Similarly AnnaNagar is one of the main branch in Chennai, providing services in about half of Chennai center. Over the years the walkins have drastically come down. Banks which provide similar solutions, but they handle less of the currencies compared to Thomas cook. In order to increase the Customer walk-ins , a number of promotional activities and market research on the store shopkeepers and banks surrounding the branch was done.
5.1 Market Research on the Shopkeepers of Spencers Plaza An exploratory research was done on the shopkeepers of Spencers . A convenience sampling technique was used Sample Size: 103 Questions were generally open-ended to identify the core needs in terms of forex for these Shopkeepers and their customers. The following results were obtained ,
Stores doing Forex Transactions in Mall

Yes 40% No 55%
Rarely 5%
The stores that do Forex transactions are mainly the handicrafts , Jewellery and Indigenous shops , whereas the branded stores and famous retail outlets generally dont deal with forex as they accept international debit cards. This is huge target market for Forex business which you cannot find in the other urbane malls.
Agents Dealt by the shopkeepers

TCIL 18% Inside the mall (Petronas, BPM ,Ne wwa y,e tc 54 %
O utsi de the Mall 28 %
Among the shopkeepers that deal with Forex business, 54% deal with other money changers inside the mall and only 18 % deal with TCIL which is indeed a hard fact to digest. TCIL could try to convert such shop owners . The general perception among the shopkeepers is that TCIL rates are much expensive than that of other moneychangers in the mall and they also commented on the reducing footfalls in the mall that has reduced the transactions within the mall. Firms like SM and Petronax have very well networked with these shopkeepers . TCIL also finds it difficult to tap this market as Thomas Cook has to abide by the Legal provisions of the RBI ,since the shopkeepers look for flexibility in their transaction and find the poli cies of TCIL to be stringent in comparison to the other Forex agencies. But at least 38% of the shopkeepers showed interest in referring the customers to TCIL in future and the result of such an activity could be found the very next day with a customer mentioning in the feedback form that he was referred by the shop in the mall. 5.2Promotional activities done in regions around Spencers As a part of increasing brand awareness of Thomas cook Spencers branch, the following areas were visited and pamphlet distribution was done across HNI flats and Villas in areas like Venugopal avenue , Subha rao avenue and Harrington avenues . These areas were concentrated on the purview that people living in these areas belong to the elite class The following flats were approached to distribute pamphlets to individual apartments and permission to put up posters was also sought. Vijayshanti strawberry Sarvakalyan apartments Kenwith Garden
Dr.Thoma Bhavan Harrington apartment Mist apartment Rosemere apartments
These apartments were chosen on the context that the residents of the flats could be our target segment. Pamphlets were also distributed to the individual homes / Villas across these streets mentioned above. Creating branding space within the famous retail outlets was also approached and the following Retail outlets were willing to promote Thomas Cook Brand in their stores, (despite many of the other stores turned down the offer). Ibaco icecream parlour - New No 2 Old No 73, Casa Major Road, Egmore, Chennai 600008. Kovai Pazhammudhir nilayam No 74, Near Prasanth Hospital, Harrington Road, Chetpet, Chennai 600031 Manager Ganesan -9789977869
These retail outlets are at prime locations and the shoppers spend considerable time in these stores, thereby placing up Thomas Cook posters over there will create greater visibility to the brand. Advertisements were also posted in the free listing websites like Quikr and OLX which is the next generation revolution of marketing that gives a better reach to the target consumers at free of cost. Tele-calling and e-mails were sent to the existing customers in order to maintain relationships with the customers who usually make bulk of the transactions in the branch. The responses varied with some of them were linked via LT and some were student related transactions and the customers were generally happy with the services done by TCIL and this makes them to come back to TCIL
A set of 29 banks were approached for referrals relating to forex requirements coming to their banks and requesting to divert all transactions which the banks are unable to perform. Most of the banks in these localities dont have a separate forex department and hence approaching the banks could provide useful business to the branch. The localities include
Anna salai, Whites Road, Natesan Road and Triplicane Road. Appointments were fixed with the branch managers and they were briefed about the products of Thomas Cook and a request for referral was put forward to them.
6. Recommendations for Building Market for Borderless Prepaid card Based on the various observations and interaction among customers, I would recommend, Push strategy When a customer walks-in, for currency exchange, they are not aware of the Multicurrency prepaid card. 1. He has to be informed about the Card at first. 2. Then the benefits and offers that he gets in the card, and offers if any, 3. When every branch are given specific targets on amount of profit to be made, Target should be given on Multicurrency prepaid card to the Branches 4. In my internship, and during interaction to customers, I feel, the customers are not informed about the card 5. As card yields us much better revenue than normal currency exchange, push strategy has to be used Internal Marketing The benefits of the cards are not well communicated to the customers where in the employees themselves are not recommending to get currency instead of Multicurrency card with doubt in mind that if the card fails at some cases the customer would retard back on us. Proper Internal Marketing needs to be done and all the employees working towards it should be trained and be made confident enough to tell customers about it. Sales force Strength of sales force is less than required for a company if foreign exchange industry. And sales people orientation towards particular branches and target of this borderless prepaid card needs to be given along with general targets. Marketing Myopia Branches capitalising on current walk-ins by slashing high margin and getting high revenue might turn out to lose the customer in a long term. The competition to Thomas cook is severe where in small players are performing very well by slashing rates. Long term orientation towards the market is required. Advertisement As management is ready to spend more on advertisement on this card, which if done soon, to get the First mover advantage over other competitors, who have similar products. Marketing Activities We approached around 50 banks in and around Anna Nagar, Mogappair, Anna Salai, Greams road, Thousand lights and Interacted with the forex departments. Banks like SBI, Bank of Maharashtra, Citi Bank, PNB, AXIS, KVB, Vijaya Bank, Corporation Banks etc were approached. As Banks deals with fewer currencies compared to Thomas cook, we requested them to refer Thomas cook to the customers who require currencies other than those dealt by the banks.
Most of the banks are already approached by competitors like Green channel, Express money, UAExchange etc., so we are slightly behind them in aggressive approach. Strength of the sales force has to be increased a little Disadvantages The requirement to pay the franchise fees and royalty to the franchisor, which in some cases can be exaggerated. The transfer of all goodwill built in the local market to the franchisor upon expiration or termination of the franchise contract. The necessity of abiding by the franchisors operating systems, standards, policies and procedures. Reduced corporate profit margin due to payment of royalties and levies.
Considering the present scenario TCIL could look for more GCPs as it reduces r unning cost and since Thomas cook is an established brand hence getting franchisees will also not be a difficult task. In order to maintain relationships with the channel partners ,the following steps could be implemented NSAs and Educational consultant could be given targets and their commissions will be based on the numbers shown rather than by negotiations as it would streamline and integrate the channel partners. Events for these channel partners can be held like a dinner or High tea once in a year or before the start of the business season apart from these commissions as it would create long time relationships with these channel partners. Rewards and recognitions can be given for those channel partners who perfor m exceptionally well. At the retail level, existing customer list should be tracked and a membership program can be started by giving membership cards and points re-imbursement could be done on repeat purchases just like how the banking sector started in the Credit card and now such a facility could be seen in even a Saloon like Naturals or Green Trends. Seasonal discounts or offers could be given to select currencies at off-season times . Generally the trend in the BTQ customers will be get currencies for INR worth 30,000 to 35,000 but if lured they can buy still around 50,000. These customers have the willingness to buy and have considerable buying power. A small gift can also be given to them for buying for 50,000 , thereby creating a customer delight and could make them to come back to the same store
SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES A facebook page could be created for every branch and customers may be instructed to like the page and any updates on Price, Offers, etc could be given. For example, consider the current situation where the dollar prices are on a historical rise , dollar purchasing customers could be updated with a sudden price decrease or similar kind of service. Such services would make TCIL differentiated from its competitors.
Selling BPC in other FFMCs and banks could be an option which would create a new platform for growth. Moneygram sub-agents could be scouted by converting big retailers and jewellers at prime locations as Moneygram provides commissions to TCIL and creates greater visibility for the brand . Newer market segments like NRI services and NRI guest houses could be targeted. A database was created during the tenure of the project and even mails were sent , though there wasnt much response, the sales team could work in converting them into channel partners.

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SUMMER PROJECT REPORT ON Customer apprehension towards non currency methods and build market for Borderless prepaid

BHARATHIDASAN INSTITUTE OF MANAGEMENT (School of Excellence of Bharathidasan University),TIRUCHIRAPPALLI 620 014

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

5 Increasing Consumer Walk-ins at Anna Nagar and Spenzers Branch 15

6 Recommendations for an Building Market for the card

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Age 18-25 26-35 35 + 65 43 12

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Occupation Student Working professional Business Others 40 42 33 5

Results and Inferences: 1. Purpose of Travel

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Not so much 30%

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Word of Mouth 33% Referral 13%

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Delay in delivery (5 days).

Channel Conflict between Retailers platform (Transactions charges differ).

Confusion may lead to lack of trust in the brand.

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Stores doing Forex Transactions in Mall

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Agents Dealt by the shopkeepers

O utsi de the Mall 28 %

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

Dr.Thoma Bhavan Harrington apartment Mist apartment Rosemere apartments

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

SUMMER INTERNSHIP PROJECT-THOMAS COOK FOREIGN EXCHANGE SERVICES

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