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CHAPTER II

Literature Review

In this chapter we will discuss more on theoretical background and analysis tools that

we use in creating our business model of online venue booking system. We also

going to elaborate more about the market and industry analysis that support our

business proposition as well as analyze further the online booking for venue by

SWOT matrix, then we will explain more on the idea generation, value propositions

as well as unique selling point of our business idea.

2.1. Business Model Generation using Business Model

Canvas

In Business Model Generation book written by Alexander Osterwalder & Yves

Pigneur, it explains that a business model describes the rationale of how an

organization creates, delivers, and captures value, it also elaborates on how a business

model can best be described through nine basic building blocks that could show the

logic of how a company intends to make money. The nine blocks cover the four main

areas of a business: customers, offer, infrastructure, and financial viability. The

business model is like a blueprint for a strategy to be implemented through

organizational structures, processes, and systems. (Business Model Generation,

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Alexander Osterwalder & Yves Pigneur, 2010).

In order to explain more thoroughly on our business idea of venue online booking

system, we are using this business model canvas that contains the nine building

blocks, below is the elaboration and details explanation of the nine building blocks

content of a business model canvas as per explained in Business Model Generation

book.

Customer Segments

The Customer Segments Building Block defines the different groups of people or

organizations an enterprise aims to reach and serve.

Value Propositions

The Value Propositions Building Block describes the bundle of products and services

that create value for a specific Customer Segment. The Value Proposition is the

reason why customers turn to one company over another. It solves a customer

problem or satisfies a customer need.

Channels

The Channels Building Block describes how a company communicates with and

reaches its Customer Segments to deliver a Value Proposition. Communication,

distribution, and sales Channels comprise a company's interface with customers.

Customer Relationship

The Customer Relationships Building Block describes the types of relationships a

company establishes with specific Customer Segments.

Revenue Streams

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The Revenue Streams Building Block represents the cash a company generates from

each Customer Segment (costs must be subtracted from revenues to create earnings)

Key Resources

The Key Resources Building Block describes the most important assets required to

make a business model work. Those resources allow an enterprise to create and offer

a Value Proposition, reach markets, maintain relationships with Customer Segments,

and earn revenues.

Key Activities

The Key Activities Building Block describes the most important things a company

must do to make its business model work. Those are the most important actions a

company must take to operate successfully.

Key Partnerships

The Key Partnerships Building Block describes the network of suppliers and partners

that make the business model work. Companies create alliances to optimize their

business models, reduce risk, or acquire resources.

Cost Structure

The Cost Structure describes all costs incurred to operate a business model. This

building block describes the most important costs incurred while operating under a

particular business model.

2.2 Diamond Strategy Analysis

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In order to establish a sustainable competitive advantage of our business idea, we use

the Diamond Strategy Analysis tools, below is a brief explanation of how the

Diamond Strategy could help us developing strategic business plan.

Figure 5 Diamond Strategy

Adapted from Hambrick, D. C., & Fredrickson, J. W. (2001). Are you sure you have

a strategy? Academy of Management Executive, 19 (4), 51–62.

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The strategy diamond was developed by strategy researchers Don Hambrick

and Jim Fredrickson as a framework for checking and communicating a

strategy. They concluded that if an organization must have a strategy, then the

strategy must necessarily have parts. The figure summarizes the parts of their

diamond model, its facets, and some examples of the different ways that you

can think about each facet. The diamond model does not presuppose that any

particular theory should dictate the contents of each facet. Instead, a strategy

consists of an integrated set of choices. The next part is the elaboration about

each facet, addressing first the traditional strategy facets of arenas,

differentiators, and economic logic; then we will discuss vehicles and finally

the staging and pacing facet.

Arenas, Differentiators, and Economic Logic

The first three facets of the strategy diamond—arenas, differentiators, and

economic logic—is refer as traditional in the sense that they address three

longstanding hallmarks of strategizing, they cover the basics: (1) external

environment, (2) internal organizational characteristics, and (3) some fit

between them that has positive performance consequences. Specifically,

strategy matches up market needs and opportunities (located in arenas) with

unique features of the firm (shown by its differentiators) to yield positive

performance (economic logic). While performance is typically viewed in

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financial terms, it can have social or environmental components as well.

Arenas answers to strategy questions about arenas tell managers and

employees where the firm will be active. Beyond geographic-market and

product-market arenas, an organization can also make choices about the

value-chain arenas in its strategy. Meanwhile, differentiators are the things

that are supposedly unique to the firm such that they give it a competitive

advantage in its current and future arenas. A differentiator could be asset

based, that is, it could be something related to an organization’s tangible or

intangible assets. A tangible asset has a value and physically exists. Land,

machines, equipment, automobiles, and even currencies, are examples of

tangible assets. An intangible asset is a nonphysical resource that provides

gainful advantages in the marketplace. Brands, copyrights, software, logos,

patents, goodwill, and other intangible factors afford name recognition for

products and services. Differentiators can also be found in capabilities, that is,

how the organization does something. Economic logic tells us how profits

will be generated above the firm’s cost of capital. Profits above the firm’s cost

of capital are required to yield sustained or longer-term shareholder returns.

While the economic logic can include environmental and social profits

(benefits reaped by society), the strategy must earn enough financial profits to

keep investors (owners, tax payers, governments, and so on) willing to

continue to fund the organization’s costs of doing business. A firm performs

well (i.e., has a strong, positive economic logic) when its differentiators are

well aligned with its chosen arenas.

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Vehicles

The fourth facet of the strategy diamond is called vehicles. If arenas and

differentiators show where the company want to go, then vehicles

communicate how the strategy will bring the company there. Specifically,

vehicles refer to how you might pursue a new arena through internal means,

through help from a new partner or some other outside source, or even

through acquisition. In the context of vehicles, this is where you determine

whether your organization is going to grow organically, acquisitively, or

through a combination of both. Organic growth is the growth rate of a

company excluding any growth from takeovers, acquisitions, or mergers.

Acquisitive growth, in contrast, refers precisely to any growth from takeovers,

acquisitions, or mergers. Augmenting either organic or acquisitive growth is

growth through partnerships with other organizations. Sometimes such

partnership-based growth is referred to as co-competition, because an

organization cooperates with others, even some competitors, in order to

compete and grow. Vehicles are considered part of the strategy because there

are different skills and competencies associated with different vehicles. For

instance, acquisitions fuel rapid growth, but they are challenging to negotiate

and put into place. Similarly, alliances are a great way to spread the risk and

let each partner focus on what it does best. But at the same time, to grow

through alliances also means that you must be really good at managing

relationships in which you are dependent on another organization over which

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you do not have direct control. Organic growth, particularly for firms that

have grown primarily through partnering or acquisition, has its own distinct

challenges, such as the fact that the organization is on its own to put together

everything it needs to fuel its growth.

Staging and Pacing

Staging and pacing constitute the fifth and final facet of the strategy diamond.

Staging and pacing reflect the sequence and speed of strategic moves. This

powerful facet of strategizing helps to think about timing and next steps,

instead of creating a strategy that is a static, monolithic plan. Strategizing is

about making choices, and sequencing and speed should be key choices along

with the other facets of the strategy. The staging and pacing facet also helps to

reconcile the designed and emergent portions of the strategy.

2.3. Market and Industry Analysis

The MICE Industry has emerged over recent decades as an important

contributor to national economies. It is perceived as a significant and growing

component of tourism and other industries. The market and industry analysis

is comprised of Global and Indonesia’s condition this current year.

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2.3.1 Macro-environment in MICE Industry in Indonesia

In order to understand the macro-environment of MICE Industry in Indonesia,

we are using PEST analysis tools. PEST analysis is a key tool for prompting

consideration of aspects of the external business environment (R. Collins,

2010). Below is the elaboration of PEST factors to describe Indonesia’s

business environment.

Political factors

Major Government support in terms of infrastructure as well as business

encouragement that targets growth in local MICE business. Ministry of

Tourism and Creative Economy has set a target of 400.000 tourist visitors in

relation to MICE activities in Indonesia that will generate potential revenue of

IDR15.84 trillion in 2014. Sapta Nirwandar, Deputy Minister of Tourism and

Creative Economy, is targeting the visit for meetings, incentives, conferences,

and exhibitions (MICE) segment in Indonesia could reach 10% from last year

into around 400,000 people which is included in the total tourist visit that may

reach 9.5 million people in 2014. According to Sapta, the tourist expense from

MICE segment may reach three times higher than personal tourist whom

generally spend budget of US$1,200. Therefore, the total potential of tourism

revenue could reach US$1.44 billion or around IDR15.84 trillion. Under the

guidance of Tourism and Creative Economy department, the government is

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very active in promoting Indonesia as a MICE destination that encourage

business generation that support this industry as well as boost growth of the

number of the local MICE activities.

Economic factors

Indonesia is currently enjoying a vibrant economy environment with expected

growth in the range of 5.5%-5.9% that comes from balanced sources of

growth between external and domestic demand. On one hand, improvement in

the external demand is expected to continue and thereby boost exports

performance. On the other hand, domestic demand continues to moderate so

that imports and inflation will remain in check. PHRI predicts the MICE

growth could rise of up to 10%, or higher than the average growth of about

5%-7% every year. Visit Indonesia program had stated that MICE business

would raise up to second trend of general tourism in Indonesia with eco-

tourism as the number one spot.

Social factors

Indonesia currently growing as a very unique country that has vary culture

ranging from vibrant and cosmopolitan to remarkable and exotic culture, thus

the attraction of business development as well as investors. Multilingual

abilities for most people in major cities in Indonesia in particular for Jakarta

and Bali. Major development of facilities for leisure activities such as state of

the art shopping malls, luxurious hotels and resorts, as well as world-class

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restaurants that support MICE activities. The major rise of mobile and internet

user as well as sophisticated and familiarize of internet banking that paved

solid ground for the rise of e-commerce business. Traffic jam problem in

major cities in Indonesia as a common problem that faced by many

developing countries, that propel people to be more efficient in doing things

and using mobile or internet platform to get reliable information despite their

location.

Technological factors

Sophisticated and user friendly system of internet banking that provide major

support for alternative payment methods other than credit cards and bank

transfer, combined with fast development and innovation in technology and

communication that drive leap of growth in digital and e-commerce business.

2.3.2 MICE industry Indonesia

This part of our writings is going to elaborate more on the facts and figures of

MICE industry, properties and office building demand and supply growth as well as

hotels industry, shown in tables below the data of worldwide venues and trend of

usage of the venues that meeting facilities in Hotels and other venues spike up since

the year of 2008, this trend not only shown growth in general but also could be used

as a base assumption that the usage of venues for more frequent small scale meetings

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are increasing a lot.

Table 1 Type of Congress Venue, 1978-2012

Source: International Congress and Convention Association (2013)

Figure 6 Venues Used


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As for Indonesia, Jakarta in particular, the growth of office buildings rentals is keep

accelerating. According to the latest Asia-Pacific Prime Office Report released by

Knight Frank, despite a marginal increase in the index, activity continued to slow,

with the record performance of Indonesia’s capital skewing the index upwards. The

Knight Frank Asia-Pacific Prime Office Index record shown that Jakarta’s premium

Grade-A office market recorded a 28% increase in Q3 2013, and become the highest

quarterly growth on record in the region for the year of 2013. The forecast expect that

Jakarta will continue to see the largest rental growth by far within the region, in a

report of Asia-Pacific property market outlook 2013 released by Knight Frank group,

it is written that CBD office demand in Jakarta is expected to remain strong. Base

rental growth will increase for Premium Grade-A buildings due to limited supply in

CBD. In addition, the report also writes that most landlords have confirmed a raise of

service charges by approximately 10% in the year of 2013. The Jakarta office market

will continue robust growth supported by a resilient economic growth and rising

investor confidence. Space absorption remained strong, marking consecutive record

high. With surging corporate growth plans in relatively tight market, the market will

continue to enjoy a higher rental and price appreciation. Below tables and figures

showing trend that support the above report.

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Table 2 Jakarta CBD Office Market Highlights (1H 2012)

Source: PT. Wilson Properti Advisindo (2013)

Table 3 Future supply completion schedule (2H 2012 – 2013)


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Figure 7 Occupancy Levels by Office Grade



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The positive growth of hotel market due to increased business traveling from private

companies and government institutions also giving a bright future for supporting

MICE industry in Indonesia especially in major cities. We should also take a good

look of an emerging middle class that will continue to spur hotel development

throughout Indonesia, particularly in Jakarta, Surabaya and Bali, by mainly

capitalizing on recognized international brands. Below figures and chart shown trends

and highlights of Jakarta hotel market.

Table 4 Jakarta Hotel Market Highlights (1H 2012)


Figure 10 Distribution of Hotel Room by Star Rating

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Figure 11 Projection of Future Supply Completion Schedule (2012-2013)



Meanwhile, the positive outlook also shown in Bali hotel market that would definitely

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support the growth of MICE activities and not only that, the positive trend would

push more and more international business meeting or conference that would be held

in Bali.

Table 5 Bali Hotel Market Highlights (1H 2012)


Figure 12 Occupancy Rate by Star Rating (2008-2012)

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Table 6 Bali Hotel Projection of Future Supply (2H 2012 - 2013)

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2.3.3 Information of growth in MICE industry in Indonesia

Looking at current major potential and development, Indonesia aggressively

strengthens its MICE industry with new Directorate and push for MICE and tourism

activities. Indonesia has recently established its Directorate of Special Interest Tours,

Convention, Incentive and Events Development, an initiative to improve the

competitiveness of its tourism industry. The Minister of Tourism and Creative

Economy Mari Elka Pangestu issued a statement describing the goal of the directorate

as developing human resources, facilities and other standards necessary for Indonesia

to become a “quality MICE destination.” The directorate will focus on destinations

such as Jakarta, Jogjakarta, Surabaya, Bali, Lombok, Medan, Batam-Bintan, Padang-

Bukittinggi, Makassar and Manado. Infrastructure projects are already in place for

several cities, including a new airport in Lombok, and a new convention venue in

Manado. Below graph shown revenue growth of MICE market in Indonesia.

Figure 13 MICE Market

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Source: PT Dyandra Media International Tbk (2014)

Below is the graph showing number of meetings per region derived from report of

The Association Meetings Market 1963-2012 showing an exponential growth of

MICE activities in Asia/Middle East region in the past few decades.

372 461

780

1,135

-

200

400

600

800

1,000

1,200

2010 2011 2012 2013

MICE market (B IDR)

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Figure 14 MICE Activities Across Regions


In the last 50 years, Europe consistently attracted the highest number of meetings per

region. However, Europe’s market share has shrunk from 72.3% in 1963-1967 to

54.0% in 2008-2012. Asia/Middle East has seen a rise in relative popularity over the

past decade, almost being a counter mirror for Europe; the market share of meetings

in Asia/Middle East has grown from 8.2% in 1963- 1967 to 18.2% in the last half

decade.

For Indonesia itself, growth of number of meetings per year 2003-2012 shown

healthy growth on sample data that shown the meeting industry has huge potential to

grow more in the next few years. There is ample room for Indonesia to develop into a

MICE center although it started to focus on the area relatively late compared to its

neighbors such as Singapore and Thailand. According to the 2013 ICCA annual

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report, Indonesia was ranked 41th globally in the international conference host list yet

has the scope to be far higher, receiving 51 conventions in Bali and 22 in Jakarta

respectively in the same year.

Table 7 Rank 38-42 of International Conference Host List


Interestingly, the studies for type of venues used for international association

meetings showed the usage of Meeting facilities in Hotels has been gradually

increasing at the expense of the Conference/Exhibition Centre over the last two

decades as per shown on below graph.

Figure 15 Venues trend


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Zooming back to MICE industry in Indonesia, Ministry of Tourism and Creative

Economy is targeting the tourist visit from MICE industry to reach 400,000 people

with revenue potential that reaches IDR15.84 trillion. Sapta Nirwandar, Deputy

Minister of Tourism and Creative Economy, is targeting the visit for meetings,

incentives, conferences, and exhibitions (MICE) segment in Indonesia could reach

10% from last year into around 400,000 people which is included in the total tourist

visit that may reach 9.5 million people in 2014.

According to Sapta in the press conference of 8th World Tourism Organization

(UNWTO) of Asia Pacific Executive Training Program MICE: A New Paradigm for

Tourism at Grand Inna Kuta Hotel, Monday (4/28/2014), the tourist expense from

MICE segment may reach three times higher than personal tourist whom generally

spend budget of US$1,200. Thereby, the total potential of tourism revenue could

reach US$1.44 billion or around IDR15.84 trillion.

Bali will be the first region with most tourists from MICE segment, even higher than

Jakarta. The fact is supported with the increase of facility required by MICE industry

such as the increase of convention center and adequate infrastructure. In order to

develop MICE industry, not only the ministry strives to support government

institution in securing the opportunity to organize international agenda in Indonesia,

but also encourages corporation including state-owned enterprises (SOE) to hold

meetings, conferences, seminars, especially exhibitions for certain sector.

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Figure 16

2.3.4 MICE activities in Indonesia

Source: Ministry of Tourism and Creative Economy (2011)

2.3.5 Internet user in Indonesia in % and expected

growth in the next 5 years

Indonesia as the fourth largest country on earth (behind just China, India, and

the US) with almost 250 millions population is a huge market for Internet

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penetration. The below statistic shows the number of Internet users in

Indonesia in 2011 and 2012 with projections from 2013 to 2016. In 2012, 59.6

million people were accessing the Internet in Indonesia. This figure is

projected to grow to 102.8 million in 2016.

Figure 17

Source: eMarketer.com (2014)

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Figure 18 Internet Penetration Rate in Indonesia

The Internet Penetration Rate in Indonesia is shown by below graph.

Source: Nielsen (2012)

The Internet live stats recorded that Indonesia is listed as 13th

country with

biggest Internet users compared to worldwide Internet users.

Table 8 Rank of World Internet Users

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Source: Internet Live Stats (2014)

According to the survey conducted by DailySocial, search and social network

are the most popular Internet uses.

Figure 19 Most Popular Internet Activities in Indonesia

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Source: Veritrans, Daily Social (2013)

Figure 20 Commodities to Buy in online shopping in Indonesia

Source: Indonesia Internet Service Provider Association (2013)

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In terms of online shopping, fashion goods are the most popular things

bought, followed by online travel bookings as shown on below graph.

Figure 20 Commodities to Buy in online shopping in Indonesia


The preferred payment method in Indonesia for Internet transaction is bank

transfer.

Figure 21 E-Commerce Payment Methods in Indonesia

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The potential growth of the Internet usage in Indonesia is shown on below

figure.

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Figure 22 E-Commerce Growth Opportunity in Indonesia


Those supported by robust economic growth & increase of purchasing power

will eventually create an explosive growth in eCommerce.

2.4. Online booking system industry (web-based)

The recent "Global B2C E-Commerce Market Report 2013" by Hamburg-

based secondary market research company yStats.com provides information

about the global B2C E-Commerce market. Among the many findings

disclosed in the report is that the region of Asia is set to overtake North

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America in terms of total online sales. According to this new report, Internet

users now account for one-third of the world population and one billion

persons are expected to make a purchase online in 2013. Globally, the leading

product categories for online purchases are apparel and accessories, books and

travel reservations.

In addition to these findings about the global picture, the report provides

details about the development of B2C E-Commerce in single countries and

regions. Based on eCommerce business market studies in Indonesia in 2011,

shown the percentage of eCommerce users out of the internet population was

about 6.5% and revealed a total revenue of US$0.9billion with average annual

eCommerce spend per ecommerce user US$256.

An Internet booking system is an application that helps the travel and tourism

industry support reservation through the Internet. It helps consumers to book

flights, hotels, restaurants, holiday packages, insurance and other services

online.

According to report published by Indonesia Internet Service Provider

Association, there are several devices to access the Internet as well as a

platform for online booking system. The usage distribution of those different

devices is shown as per below figures.

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Figure 23 Internet Access Device in Indonesia


2.5. Market profile

2.5.1 Demographic and Geographic distribution of

Internet users in Indonesia

The Association of Indonesian Internet Providers (APJII) had said that the

number of Indonesian Internet users reached 71.19 million in 2013, up by

about 13 percent from 63 million users in the previous year with forecast of

additional of 52 million more internet users, or around 22 percent of the total

Indonesian population by the year of 2015. Demographically, main Internet

users in Indonesia are age 12-55 with ranging income from medium-low to

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medium-high. Geographically, the distribution of Internet users in Indonesia is

shown as per below figures.

Figure 24:


Figure 25

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2.5.2 Consumer of venues & function rooms


Figure 26

2.5.3 Industry rank for MICE activities

Table 9 Meeting Subject/MICE Activities


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2.6. SWOT Matrix of online venue booking system in

Indonesia

In order to summarizes the internal strategic strengths and weaknesses of a marketing

or business strategy and the external strategic opportunities and threats that are

available to all competitors in a market, the approach would be through the SWOT

Analysis with matrix elaboration that shows 4 boxes for creating strategies to succeed

in the marketplace, this would helps define future direction rather than just focusing

on the present. As a tool of situation analysis, SWOT (strengths, weaknesses,

opportunities, and threats) is used in the preliminary stage of strategic decision-

making (Johnson et al 1989) where it provides the basic framework for strategic

analysis. SWOT generates lists, or inventories, of strengths, weaknesses,

opportunities and threats. Organizations use these inventories to generate strategies

that fit their particular anticipated situation, their capabilities and objectives

(Bourgeois 1996; David 1997; Miller and Dess 1996; Pearce and Robinson 1997;

Thompson and Strickland 1998).

Table 10 SWOT Matrix

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2.7. Diffusion of Innovation Model

Created in 1962 by Everett Rogers, the Diffusion of Innovation (DOI) Theory

explains how a product gains momentum and spreads, or diffuses, through a group.

The theory created five categories of buyer adopting new products. We are going to

use this model for explaining our focus target market group in different phase of our

business.

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Figure 27

The five categories of innovativeness in relation to digital market are:

Category Types of People How to Engage

Innovator

A small group of people

keens to explore new

ideas. Typically they use

the very latest gadget,

install and learn new

software, try latest digital

services

Get featured on blogs and

relevant news sites for the

new business we have

Early adopters

Opinion leaders who are

happy with new products

and services. Often

seeking improvements and

No persuasion need, this

group tends to want trying

new things. All the

business owner need is

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greater efficiency guides on how to use the

product or service

Early majority

Followers who like to read

about new products before

purchasing

These people will check

out the products

introduced to them on,

Google, YouTube, or

Social Media platforms

and read reviews

Late majority

The skeptics who are not

keen to change and will

only do so when they’re

left behind. The example

are people hanging on to

the Nokia 6210 when the

rest of the world owned

smartphones

These group need lots of

marketing material,

evidence, reviews from

opinion leaders and case

studies to show how it

works and how the product

is good and necessary for

them to use

Laggards These type of people

prefer traditional methods

or products in all means

(maybe even not an

internet user) and will only

Only when others write

about what you’ve done,

provided hard research

evidence, statistics and

pressure from others, then

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adopt new products when

their old usual alternatives

have disappeared

they might want to try the

new products or services

offered

2.8. DRIP Model

DRIP is an acronym for differentiate, reinforce, inform and persuade. We use DRIP

model as the key element in marketing communications theory in our business and as

a critical guide in setting communications goals for our business. Developed by Chris

Fill, as in the 1970s and 1980s there had been various unrelated ideas, one of which

from Bowersox and Morash (1989), about the role of persuasion and information

within communications. DRIP is a communications model that defines marketing

communications goals from the point of view of what the company wants to achieve.

Figure 28 DRIP Model

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Each of the DRIP elements has a specific purpose and one follows the other as this is

a sequential or ‘flow’ model as explained below:

DRIP Element Explanation

Differentiate a product or service This element functioned as how to make a

product or service stand out in the

category. This involves showing where the

product sits in the market. This is often

elaborated in the marketing mix

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frameworks like 7Ps

Reinforce a brand’s message This element functioned as how to

consolidate and strengthen previous

messages and experiences. This means

demonstrating or explaining why your

product is different, superior, cheaper or

easier to use.

Inform or make people aware of a brand This element functioned as how to make

known and advise of availability and

features. If it’s a totally ‘new to market’

product, this may also be to educate the

market.

Persuade audiences to behave in particular

ways

This element functioned as how to

encourage further positive purchase-related

behavior. This could be to visit a website,

read about a new product, share with a

friend, request a trial.

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2.9. Marketing Mix 7Ps framework

The ‘traditional marketing mix’ also known as the 4Ps, consisted of Product, Price,

Place and Promotion. It was designed at a time where businesses sold products, rather

than services. This concept of the 4Ps is credited to McCarthy (1964) who created the

alliterative terms.

Over several years the model had developed further and in 1981 Booms and Bitner

added the three ‘service Ps’: People, Physical Evidence and Processes and an eighth

P, ‘Partners’ is often used in online businesses. In book authored by Dave Chaffey,

Digital Marketing: Strategy, Implementation and Practice, this model was refreshed

and explained to be applied it to online channels internet to give a practical approach

which works well for online and offline businesses.

Table 11 Marketing Mix for Online Business Marketing Mix for Online Business

Product Promotion Price Place People Process Physical

Evidence Partners

- Quality

- Image

- Branding

- Features

- Variants

- Mix

- Support

- Customer

Service

- Use

Occasion

- Availability

- Warranties

- Marketing

Communications

- Personal

promotion

- Sales

promotion

- PR

- Branding

- Direct

Marketing

- Positioning

- List

- Discounts

- Credit

- Payment

Methods

- Free or

Value-added

elements

- Trade

channels

- Sales

support

- Channel

number

- Segmented

Channels

- Individuals

on marketing

activities

- Individuals

on customer

contact

- Recruitment

- Culture

-

Training/Skills

-

Remuneration

- Customer

focus

- Business-led

- IT-support

- Design

features

- Research

and

Development

-

Sales/staff

contact

experience

of brand

- Product

packaging

- Online

experience

- Web

developer

- Suppliers

- Media

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2.10. Online Booking System Business Model Canvas

By the rapid growth of technological development and innovation that supported by

sophisticated internet system, online booking system is a familiar platform of choice

that also growing very fast in Asia, particularly in Indonesia. Below is the business

model generic of online booking system:

Figure 29: Bookingtempat.com Business Model Canvass

The main value proposition of online booking system is Efficient and Convenient.

Efficient as in providing fast, reliable and accurate information as well as quick

confirmation provided by the booking platform should the customer decide to use the

online booking system to purchase their needs. Convenient as in providing customers

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easy access to the booking platform despite their current location, thus at the same

time offering flexibility of time and place.

The customer segment mostly targeted to travelers, online community, and younger

crowd below 40 years old. For customer relationship, the online booking system has

automated system to cater needs of its customer and provide 24/7 access to the

platform.

In the business of web-based online booking, main revenue streams could come from

sales, commission and digital ad placement by third party.

The key partners of this online booking business are IT producers and technical

support of internet, hardware, software, banks, media, third parties such as

restaurants, hotels, buildings, agencies.

The key resources that aid the process are personnel or staffs, technology support and

expertise, equipment, and brand equity. As for the cost structure, usually is made up

of website or platform development and maintenance cost, IT expertise cost, GA and

other personnel cost, marketing and promotion cost.

2.11. Idea generation & Value proposition & USP

Looking at the current infrastructure development by government in major cities in

Indonesia, it is a huge support and great foundation of capturing the fast growth of

tourism market, in particular MICE business, as Indonesia is currently soaring as

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major destination of investment and growing country that held big potential with its

vast resources and strategic location.

The positive growth of MICE activities in Indonesia is expected to spike up in the

next few years with a lot of demand in this industry from both local companies as

well as multinational or foreign corporation.

In order to grab market momentum of trend, we looked closer to the current

market behavior as well as the market needs, combined with our shrewd

business acumen, we then found that there are a lot of supporting tools in this

industry that could generate a good business as well as offering people

invaluable proposition and thus we propose a web-based online venue

booking system that called bookingtempat.com, a website that provide online

venue booking system.

2.12 Business Idea of BOOKINGTEMPAT.COM

As a pioneer of venue online booking system in Indonesia and in order to

secure a significant share of the venue online booking business by offering a

quick convenient booking service with the lowest price for particular venues

in major city of Indonesia.

57

Customers could easily access the www.bookingtempat.com website,

determine the choice of dates they want and then select the venues and

packages. After submitting credit card details, customers will be sent a

confirmation email with details of the booked venue as well as particular

arrangement that is inclusive of the add-ons packages. If requested by the

customer, a tax receipt will be issued by bookingtempat.com one working day

after the usage of the venue.

Bookingtempat.com will be designed to offer fast, easy accessibility and

convenient browsing and booking experience for users, it will categorized its

venue options by city, area, offer and price range.

Another major value proposition of this bookingtempat.com is it’s offering of

lowest possible rates for venues and packages price to the customer.

Marketing and promotion expenditures for bookingtempat.com will mainly

consist of the costs for search engine keyword purchases, referrals from

metasearch and travel research websites, online affiliate programs, online

banner and pop-up advertisements, e-mail campaigns, banking and non-

banking partnership.

Revenue stream would mainly come from commission given by the venue or

function room owner.

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2.13 Value Proposition of bookingtempat.com

Bookingtempat.com offers value proposition to its two major target, business

partners and customers. The first one is by providing sort of platform for

venue owners, whether it is a building, sport centers, function rooms or halls,

hotels and other venue spaces to get a chance of recognition by public and

bookingtempat.com link the customers who would like to book a venue to

their places, not only that, bookingtempat.com will also boost up venue

bookings rate to some or even all of those places by providing quick and easy

online booking system for the customer that will eventually raise up the

general venue usage. The second value proposition target is customers of

bookingtempat.com website that will get convenient way to book a venue for

various purposes, our website will reduce the time spent on contacting each

venue option, asking availability, comparing price, meeting with the

sales/marketing staff of the venue for package discussion and all that. In

bookingtempat.com, customers will experience smooth browsing experience

from date selection, checking availability and price, up to making special

request or specific requirement of the venue they need. The customer will then

get immediate confirmation by email and the most important thing is there is

no cancellation fee or agency fee charged by bookingtempat.com to the

customers. Upon request, customers also could get tax invoice that is crucial

for Major Corporation in terms of tax deduction record of expenditures.

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