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Business P lan P roposal – F ebruary 6 th, 2 015

Group 5 Achard, David; Chams, Karim; Fiaux, Remy

Kocarslan, Yasemin; Polano, Nils Schaufelberger, Tatjana; Tayza, Htet

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Table of Contents EXECUTIVE SUMMARY ......................................................................................................................................................... 4 INDUSTRY ANALYSIS ............................................................................................................................................................. 6 INDUSTRY SIZE, GROWTH RATE AND PROJECTIONS ................................................................................................................................... 6 INDUSTRY STRUCTURE & NATURE OF PARTICIPANTS ................................................................................................................................ 6 INDUSTRY TRENDS & KEY SUCCESS FACTORS ............................................................................................................................................. 6 LONG-­‐TERM PROSPECTS .............................................................................................................................................................................. 7 COMPANY DESCRIPTION ...................................................................................................................................................... 8 COMPANY HISTORY ...................................................................................................................................................................................... 8 MISSION STATEMENT ................................................................................................................................................................................... 8 VISION ........................................................................................................................................................................................................... 8 PRODUCTS & SERVICES ................................................................................................................................................................................ 8 ADDED VALUE ............................................................................................................................................................................................... 9 CURRENT STATUS ......................................................................................................................................................................................... 9 LEGAL STATUS, OWNERSHIP & SHAREHOLDING ..................................................................................................................................... 10 KEY PARTNERSHIPS .................................................................................................................................................................................... 10 MARKET ANALYSIS ..............................................................................................................................................................

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MARKET
SEGMENTATION ......................................................................................................................................................................... 11 TARGET MARKET ....................................................................................................................................................................................... 11 PERSONAS .................................................................................................................................................................................................. 12 BUYER BEHAVIOR ...................................................................................................................................................................................... 12 COMPETITOR ANALYSIS ............................................................................................................................................................................. 12 ESTIMATES OF ANNUAL SALES & MARKET SHARE .................................................................................................................................. 12 THE ECONOMICS OF THE BUSINESS .................................................................................................................................

14
REVENUE
DRIVERS & PROFIT MARGINS .................................................................................................................................................. 14 FIXED& VARIABLE COSTS .......................................................................................................................................................................... 14 BREAK-­‐EVEN CHART AND CALCULATION ................................................................................................................................................. 14 MARKETING PLAN ...............................................................................................................................................................

15
OVERALL
MARKETING STRATEGY ............................................................................................................................................................. 15 Differentiation .........................................................................................................................................................................................

15
Positioning
................................................................................................................................................................................................

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Marketing
Message ..............................................................................................................................................................................

16
4
P’S ........................................................................................................................................................................................................... 16 Product .......................................................................................................................................................................................................

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Price
.............................................................................................................................................................................................................

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Promotion
.................................................................................................................................................................................................

17

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SALES CYCLE (FOR BETA TESTING PHASE) ............................................................................................................................................... 19 SALES TACTICS (FOR BETA TESTING PHASE) ............................................................................................................................................ 20 DESIGN & DEVELOPMENT PLAN DEVELOPMENT STATUS & TASKS ............................................................................

21
CHALLENGES
& RISKS ................................................................................................................................................................................ 21 PRODUCT DEVELOPMENT COSTS .............................................................................................................................................................. 21 PROPRIETARY ISSUES ................................................................................................................................................................................. 21 OPERATIONS PLAN ..............................................................................................................................................................

22
GENERAL
APPROACH TO OPERATIONS ..................................................................................................................................................... 22 Management of the Business ............................................................................................................................................................

22
Product
Development ...........................................................................................................................................................................

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BUSINESS
LOCATION: REPUBLIC OF SINGAPORE ..................................................................................................................................... 22 FACILITIES & EQUIPMENT ......................................................................................................................................................................... 22 Office ...........................................................................................................................................................................................................

22
Equipment
.................................................................................................................................................................................................

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MANAGEMENT
TEAM & ORGANIZATIONAL STRUCTURE .............................................................................................

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MANAGEMENT
TEAM & BOARD OF DIRECTORS ..................................................................................................................................... 24 Achard, David ..........................................................................................................................................................................................

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Chams,
Karim ...........................................................................................................................................................................................

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Fiaux,
Remy ..............................................................................................................................................................................................

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Kocarslan,
Yasemin ...............................................................................................................................................................................

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Polano,
Nils ...............................................................................................................................................................................................

24
Schaufelberger,
Tatjana ......................................................................................................................................................................

24
Tayza,
Htet ................................................................................................................................................................................................

24
BOARD
OF ADVISORS ................................................................................................................................................................................. 24 COMPANY STRUCTURE .............................................................................................................................................................................. 25 ORGANIZATIONAL CHART ......................................................................................................................................................................... 25 OVERALL SCHEDULE ............................................................................................................................................................

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FINANCIAL
PROJECTIONS ...................................................................................................................................................

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ASSUMPTIONS
.....................................................................................................................................................................

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APPENDIX
.............................................................................................................................................................................

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REFERENCES

........................................................................................................................................................................

47

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Executive Summary

“Committed to bridging the gap between hotels and their guest, Peach is revolutionizing personalized experiences by combining the needs of customers from a variety of enterprises on to one platform.”

Currently studying at École Hôtelière de Lausanne, the 7 founders of Peach aim to pursue this project upon their graduation in summer 2015. Throughout the time of their studies, each of the members have developed an overall knowledge of the hospitality industry and individual skills varying in areas such as Finance, Marketing, HR, IT and Leadership. These skills, combined with a common passion for creating the future in hospitality customization, led the 7 members to come up with Peach, a SaaS Web Application, hosted on Amazon Web Services platform.

Statistics show that China, with a growth rate between 8.7%-­‐11.1%, has become one of the most promising and appealing markets in the travel & tourism industry for the future. Additionally, a survey conducted by IHG in 2014, stated that 62% of Chinese travellers consider personalization as an important factor to make them feel respected. This survey also revealed that 62% of Millennials consider the ability to access personal content (i.e. movies, music) to be a motivational factor for them to return to a hotel (IHG, 2014).

Peach addresses this trend through a preference platform offering a service to hotels and guests with the aim of enhancing the personalization aspect during their stay. Our innovative SaaS platform provides customers with the opportunity to create a unique specialized profile documenting their individual needs and desires. When comparing Peach to competitors such as Loyalty Programs, CRM Systems, Social Media and others, Peach clearly sets itself apart through a combination of the amount and relevance of information that is provided to the hotels and how much control customers have on the type and amount of information they provide to hotels.

Following the results of hotel surveys like IHG’s and in-­‐depth market research, Peach has decided to launch its product in China, targeting Millennials of the upper-­‐middle class with plans to expand to other markets as of 2020.

Peach is currently in the preliminary stages of concluding the business plan and is looking for investors with the aim of launching a beta version to selected hotels in May 2016. Should this beta test phase prove to be successful, Peach will undergo an open beta test phase in the second semester of 2016 and launch its service to the public in January 2017.

Peach will only start receiving revenues after its launch in 2017. At that point, its most elementary revenue stream will come from hotel subscription fees. As the user base grows, the number of Premium users will increase and eventually become our main revenue stream. This will allow Peach to break even in November 2017. Other revenue streams include Google’s ad per click service and special deals offered exclusively to Peach users, on which Peach will collect a 10% fee on the sales by the hotels.

From the launch in 2017 to the end of our forecasts in 2020, Peach’s revenues are expected to grow by 581%. The ROI is 177%. In order to materialize our business plan, we are currently looking for an investment of $168’724 (CAPEX for the first two years) that will be used to acquire and upgrade fixed, physical and non-­‐consumable assets such as office space, equipment and payroll.

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Financial Summary over 6 year investment

Average Revenue per year (US$k)

1'457'301.57

Average EBITDA per year (US$k)

972'454.06

Average Gross Profit Margin

97%

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Industry Analysis

Industry Size, Growth Rate and Projections

The Travel & Tourism industry is expected to grow by 4.4% annually between 2010-­‐2020. In 2012 alone the top 10 international hotel companies opened 1250 new hotels (The Hospitality Industry, lrguas.ch). With an expected growth rate between 8.7%-­‐11.1% in domestic tourism expenditure until 2018, China is one of the most promising markets of the future. (Euromonitor, 2014) (See Appendix 1: Domestic Tourism Expenditure).

China had a growth of 11% on its revenues generated by tourism between 2013 and 2014 (travelchinaguide.com) which is a result of their efforts and policies to attract overseas visitors through methods such as the 72 hour visa-­‐free transit, incentive policies with travel agencies, and international advertisements of the country.

Both the demand and supply are expected to keep growing therefore it is an industry worth looking into for further innovation and improvements to capture the increasing demand.

Airport taxes are significantly increasing in various parts of the world (for long-­‐haul and premium flights), which is expected to negatively affect the growth in the tourism industry although its influence, should only prove to be minor (Weissenberg, A. Global Sector Leader Travel, Hospitality & Leisure. Deloitte.com, 2014).

Industry Structure & Nature of Participants The hospitality industry is very broad and vertically integrated in the sense that it consists of Travel Agencies, hotels, restaurants, airlines and several other service oriented businesses. This ultimately shows the potential that Peach has for providing value to these service providers.

Currently, personalization in the industry is dominated by loyalty card programs and CRM systems however they are not fully optimized in the sense that it cannot be consolidated from hotel to hotel or sector to sector. Ultimately this is a lucrative opportunity for Peach as our software can be consolidated cross platform from hotel to hotel and sector-­‐to-­‐sector.

From the IHG survey, hotels have a poor understanding of what CRM is and how to use the data to their advantage (IHG, 2014). Independent hotels are currently lagging behind in terms of customization while hotel chains are a step ahead.

Industry Trends & Key Success Factors

‘Big Data’ can be seen as a rising trend in the hospitality industry as it allows service providers to personalize experiences based on individual preferences. Although companies are looking into ways to effectively leverage the power of technology to enhance customer experience (Weissenberg, A. Global Sector Leader Travel, Hospitality & Leisure. Deloitte.com, 2014), they are facing difficulties managing big data and using it to its fullest potential. (Maggie Chen, CIM 2013)

Studies show that travelers from emerging markets have the highest expectation for hotels to deliver customized service. This is reiterated by the fact that 64% of Chinese travelers demand personalized services when traveling (IHG Survey, 2014)

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In a survey conducted by the Four Seasons Hotel Group, 92% of respondents have distinct preferences and desires for personalization in regards to their sleeping environment – clearly highlighting the opportunity in leveraging services based on personalization (press.fourseasons.com, 2014). Additionally, 92% of respondents believe that hotel stays will be personalized around a set of choices they make at the time of booking or prior to arrival (Fast future accelerating innovation, N.a.).

Long-­‐term Prospects

2015 will be a year in which innovations in travel technology are made in a way that all methods of correspondence and contact will be available to travellers -­‐ text, e-­‐mail, voice, applications, etc. An example for such an innovation could be the application “M-­‐hospitality”, through which hotel guests can communicate with the concierge or front-­‐desk in order to improve the customer experience (Appendix 4: Competitors). Innovations like M-­‐hospitality will increasingly be present across all devices and the guest therefore will have total control over the way they plan their travel and communicate while they are on their journey (Young, A. CEO of Puzzle Partner. hospitalitynet.org).

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Company Description Company History Peach’s 7 co-­‐founders share a common vision of bringing change to guests’ experiences in hotels. As students of the Écôle Hôtelière de Lausanne (EHL), the idea of PEACH came to mind during our entrepreneurship course at EHL. What began as a university project eventually evolved and continued outside the classrooms, which has led to Peach’s development today.

Mission Statement Peach’s mission is to connect hotels and their guests in a revolutionizing way to permit authentic personalized experiences.

Vision Our vision is to become the preferred bridge of personalization by combining the needs of customers from a variety of hotels on one platform.

Products & Services

Peach is a customer information management platform that allows users to create a unique specialized profile documenting their needs, wants & preferences that can be used by hotels worldwide once they subscribe to Peach.

Users (B2C-­‐hotel guests) can access Peach’s website, signup and enter their information which upon completion will be awarded with a unique Peach ID which will dictate all their information entered on its website and can be utilized by hotels after booking.

For security reasons, the hotel cannot directly access the guest’s profiles only by receiving the Peach ID. Guests are required to grant access to their profiles by selecting hotels from a list of our current subscribers (hotels which users are already sharing their information to appear on the top). This procedure must be implemented maximum 3 days after booking. This allows the user to have control and an overview of which hotels he wishes to share his information with.

Hotels (who are ultimately our paying customers) will be able to subscribe to Peach with a monthly fee covering 100 bookings made by guest with Peach. Additional bookings will be charged an extra fee, which is charged based on the actual amount of bookings at the end of the month. In return to subscribing to Peach hotels will receive information about guests prior to their stay, giving the hotels enough time to cater to the guests’ specific needs and wants in order to personalize their stay.

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Added Value

B2B

B2C

v Competitive advantage by specifically catering to the needs and requirements of customers

v Create a WOW factor by anticipating guest needs and knowing their preferences

v Access to a broader range of data from a larger pool of hotel guests around the world v Increase in hotel service quality around the world as a result of personalization becoming the ‘norm’ – create competitive advantage through analyzing the profiles better than competitors v Build long-­‐term relationships with customers v Clear and updated information of customers v Avoid human errors by hotel staff

(misunderstanding information, outdated information, etc.)

v Big Data (stress free, no confusion, as you’re ultimately outsourcing the CSM) v Information based on what guests want rather than what hotels asked for

v One-­‐time entry of information that can be shared with any hotel (subscribers to Peach) v Simple to update v Rank preferences according to importance – show hotels what is most important to them

v User friendly and efficient (convenient). v A more accurate and realistic feeling of ‘home away from home’ v A more transparent approach to sharing of information than social media, CRM systems, etc.

v Control over the type and duration of information provided to hotels

Current Status We are currently in the preliminary stages of concluding our business plan and looking for investors. After graduating, in July 2015, we will start the development of the application with an expected timeframe of development of one year leading to the completion of the prototype of the application by mid-­‐2016.

All operating expenses including rent and payroll will commence in August 2015 as our team including three employees will move to Singapore where we will be located.

The recruitment process will start in April 2015 as we expect a 2-­‐3 month window for recruitment.

Peach will be registered as Peach Inc. Pte. Ltd in the Republic of Singapore by May 2015.

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Legal Status, Ownership & Shareholding We will be registered as a private limited company in the Republic of Singapore.

Peach will be co-­‐owned by all co-­‐founders and shares are divided equally. We have set asside stock options worth 30% of total shares for future employees and investors. The reason for setting aside 30% as stock options is to avoid any future dilution of shares (funderandfounders.com, 2013), which could lead to a loss of control of the co-­‐founders.

Htet Tayza 10% Tatjana Schaufelberger 10%

Stock Options 30%

Yasemin Kocarslan 10%

Nils Polano

10% David Achard 10%

Remy Fiaux 10% Karim Chams 10%

Key Partnerships

We have plans to enter a strategic partnership with independent, boutique and smaller hotel chains to benefit from economies of scale and reach our targeted user base faster.

In the initial stages we rely on a few loyal partnerships that promote our services to their guests and in the industry through word-­‐of-­‐mouth. These partnerships are vital both in the initial stages, as well as later when expanding to larger hotels and other markets as they prove that Peach is a trustworthy service and provides significant benefits.

We are also eager to receive support from EHL, a leading hospitality institute, to benefit from their extensive network and reputation in the industry.

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Market Analysis Market Segmentation B2B Side:

Segment 1: 4-­‐5* Independent hotels emphasizing on intimate environments and personalized services.

Segment 2: Boutique hotels with no star rating emphasizing on intimate environments and personalized service.

Segment 3: Small 3-­‐4* Chinese chain hotel, present in most touristic cities in China.

Segment 4: Large 4-­‐5* International chain hotel, present all around China.

B2C Side:

Segment 1: Business men; 35-­‐50 years old; lives in urban cities, i.e. Hong Kong; travels multiple times per year for work; stay in chain hotels due to corporate discounts; expect hotels to understand and anticipate needs as they are very stressed while travelling & have no time to waste.

Segment 2: Millennials (20-­‐25 years old); Upper-­‐Middle Class; University graduates; Tech-­‐savvy; travels 1-­‐5 times per year to discover China; generally short trips (3 days); stays in independent hotels or boutique hotels; value hotels that provide them with memorable experiences.

Segment 3: Middle Class Family; on average 3 kids; working husband, stay-­‐at-­‐home mother; go on family vacation on average 2 times per year; stay at hotels that are child-­‐friendly and understand the needs of parents travelling with children.

Target Market B2B Side:

Based on our analysis we have determined that the most profitable segments for the initial stages would be Segments 1&2; the 4-­‐5* Independent hotels and Boutique hotels with no star rating. They are present all over China, the amount of hotels is increasing (See Appendix 2: Forecasted travel accommodation outlets), they have privileged relationships with customers, however, often do not have the resources to implement costly CRM systems (IHG survey, 2014). Primarily we aim to establish a relationship with more local hotels and as we develop and build trust with our primary partners expand to larger hotels. This decision is concluded from the notion that, in the initial stages of our development, it will be difficult to acquire high-­‐name brands to work with us.

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B2C Side:

According to an IHG survey, 63% of Millennials said that being able to access personal content would motivate them to stay in a hotel, in comparison to 55% of travellers of all ages (IHG Survey, 2014). We have therefore decided to focus on attracting Millennials due to their high online presence, use of social media and their growing expectations to have a memorable experience while travelling (pgvadestinations.com, 2011).

Personas For personas and an example of a typical hotel we would be partnering with in the initial stages please refer to APPENDIX 3.

Buyer Behavior We have analyzed the buyer behavior for B2C customers based on “Maslow’s Hierarchy of Needs”(Forbes.com, 2014). At the base of the pyramid we have “Physiological needs” (eating, sleeping, drinking, etc.). PEACH takes these needs into consideration as users can provide information on their eating habits (special diets or intolerances), sleeping habits (i.e. special cushions), etc. In order to satisfy B2C’s safety needs, PEACH has a very secure system, which is necessary when handling a large number of consumer preferences. Also, every user can view a list of the hotels to which he has granted access and manage accessibility from this site. This protects users from being unsure which hotels they are currently sharing information with. The top three layers is where PEACH really comes into play as this service allows customers to feel more at home when travelling, being able to express their needs as well as having hotels meet these needs and expectations. We assume that PEACH’s B2C users have a very strong need to fulfill the top 3 layers of Maslow’s Pyramid. For example, their need to feel like they belong when travelling (through personalization) and that their individual needs are met, is the reason why they are loyal to Peach.

When looking at the buyer behavior of B2B customers (partnering hotels), their main purpose for using PEACH is to excel in service delivery and personalization. It is important for them to see the added value that PEACH brings (Big Data of guest’s preferences that is controlled by the guest), which we aim to achieve by starting with a small base of hotels to develop an initial relationship and then expanding to larger hotels and chains.

Competitor Analysis

We consider a hotel’s loyalty programs, CRM systems, social media sites and hospitality preference platforms as our main competitors. For a detailed list of our main competitors and how PEACH’s services differentiate from those of its competitors please refer to Appendix 4:Competitors.

Estimates of Annual Sales & Market Share

Since Peach only launches its product in 2017, there will be no revenue from sales prior to this date. To view the forecasted revenues for 2017, 2018, 2019 and 2020 kindly refer to the diagram below. At the initial stages our market share is minimal with 0.05 %(B2B)/0.001% (B2C) in 2016 and only increases to 0.26% (B2B)/0.079% (B2C) by the end of 2020. While this may seem like an insignificant number it is important to note that China is an extremely big market with promising growth

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potential in the travel and tourism sector. Additionally, our small market share shows that Peach still has ample room for expansion. For further information on estimates of annual sales and market share please refer to Appendix 5: Number of Users & Market Share.

Revenues 2017-­‐2020 (in $) 3000000

2557103.129

2500000 2000000

1725435.419

1500000

1170990.28

1000000 500000

375677.4687

0 2017

2018

2019

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2020

The Economics of the Business Revenue Drivers & Profit Margins B2B Side: Subscription There are two revenue streams on the B2B side, the first one being subscriptions fees of hotels. A subscription fee will cost $60/ month and includes 100 bookings received with a Peach ID. Should a hotel receive more than 100 bookings, an extra fee of $20 per 50 additional bookings is charged (actual bookings at the end of a period).

Every month, 5 hotels have the possibility to promote a special deal that is only offered to Peach users on which Peach collects 10% of sales, therefore being the second revenue stream on the B2B side.

Given that these offers will have attractive pricing we estimate a yearly revenue of $62’000. This value will be more or less constant over the years, as the number of offers is fixed to 5 a month.

B2C: Peach is provided as a free service with the possibility of upgrading to a premium account at a fee of $9.99/month. Becoming a Premium Peach user grants access to the Premium Peach Points Program (PPPP), having preferred access to the monthly special deals as well as receive an email with personalization packages from hotel prior to their stay. Peach will propose multiple marketing campaigns offering months of free Premium use in order to promote this service.

On non-­‐premium accounts partnering hotels will be able to post advertisements. The Ad-­‐per-­‐click revenue is forecasted to generate $0.40/click (C. Taglett, 2014)

Fixed& Variable Costs Peach is an asset-­‐light company and most of its costs are fixed. Peach’s biggest expense will be the salaries of the designers and developers, amounting to $7136.36 a month (T. Payscale, 2015). Further fixed costs include the rental of a physical office space from “The Co” ($1680/month) (The Co., 2015), an official phone line to attend to customer inquiries (initial cost of $53 followed by a yearly fee of $128.8) (B. Singtel, 2015) and a domain name ($10/month) (domain.com, N/A). The server will be provided by Amazon, allowing Peach to rent internet space and safe storage for a yearly fee of $600 (monthly $50) pre-­‐launch that will eventually increase to $29160/year after launch.(including maintenance) (S. Sofield, 2014)) . The only two variable costs are marketing (7% of revenues) and corporate tax rate (17% of revenues).

Break-­‐Even Chart and Calculation

Concerning the breakeven analysis we accumulated the pre-­‐launch costs (June-­‐December 2015 & 2016) disregarding the marketing and tax expenses for that period and included the first year of launch. After computing the total expenses of the pre-­‐launch period with the first year of launch we could conclude that a breakeven revenue of $ 313,989.16 is required. Using this figure we could identify that the period of breakeven is at the start of November 2017, as the accumulated yearly revenue at the end of October is of $ 313,064.56. (Appendix 7: Break-­‐Even Chart)

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Marketing Plan Overall Marketing Strategy Differentiation

PEACH’s services differentiate themselves from competitors in two main aspects. The first main aspect is on the B2B side and relates to the amount and relevance of information that is provided to the hotels. By subscribing to PEACH, hotels have access to a vast amount of customer information and preferences that are important to customers when visiting a hotel. Additionally, customers can rank their preferences according to their personal importance so hotels can clearly see which customers place value on which aspects of service quality.

The second differentiation point of PEACH is on the B2C side and relates to the control a customer has over the type and duration of information provided. By granting access to their profiles, customers know what information hotels have on them. Additionally customers can access a list of all the hotels to which they have granted access and by simply unmarking a hotel remove that hotel’s access to his profile.

Positioning

In order to decide on the positioning of PEACH, the two main differentiation points of PEACH’s services were analyzed as decision criteria:

1.
2.

The relevance and amount of information provided to the hotel The amount of control the customer has over the information

PEACH was then compared based on these criteria to: Social Media Platforms; CRM systems and Loyalty Programs of hotels and ranked on a scale from 1-­‐5. To view the positioning map, kindly refer to APPENDIX 8: Positioning Map.

The outcomes were as follows:

Name

Result Criteria 1

Explanation

Result Criteria 2

Customer decided

Limited amount of Loyalty Programs

3

information provided; type of information provided

Explanation

whether he/she wants to 5

join the program and what information they

decided by the hotel

provide

Customer information tracked throughout their

Customer has no idea

stay; however, hotels have a CRM Systems

4

problem reading this data

1

and the data is often

what information is stored and utilized in their CRM system

outdated or incorrect due to human errors Social Media

3

Information “Pushed” by 15

4

Customers decide what

customers; they post what

they post (i.e. on

they want and hotels track

Facebook), however,

the information. However,

have no control over the

social media data is not

information the hotel

necessarily relevant to the

receives or uses.

hotels Information provided by the PEACH

5

customer knowing that it will be used to customize their next stay

Customers can chose the 5

type of information they provide, to which hotel and for how long.

Marketing Message The message that Peach wants to communicate to its customers is that they can control their hotel experiences as well as the type of information they want to provide to hotels in order to facilitate customization. This will in return help hotels assess customer needs and wants more efficiently as well as track behavioral changes. By providing the information to the hotel the customers benefit both themselves (through more personalized hotel stays) as well as the hotels (as they can analyze the data and improve their service quality).

We have decided on the following slogan, which we feel encompasses the full message that Peach is aiming to convey:

Peach – everything I want

This slogan relates to both, the B2B and B2C side as guests enter all their preferences and hotels have all the information they need.

4 P’s Product B2B Side:

On the B2B side, our main product offering to hotels will be our large online database which contains a vast amount of consumer preferences. Hotels will be able to access this data after subscribing to Peach. For Premium account users, within 3 days after the customer books his/her room, the hotels will be able to counter offer any possible upgrades in relation to their preferences. The user interface of the online portal will be easily accessible, user-­‐friendly and compatible for smaller hotel chains without requiring any substantial knowledge in IT. The colors of the interface will be based on Peach’s color tones, which is orange, white and grey. Peach Premium users will also be able to benefit from special offers i.e. personalized upgrades.

B2C Side:

On the B2C side, Peach’s product allows customers to control the type and amount of information they want to share with hotels and for how long. The advantage of Peach to users is that all the information entered can be used cross-­‐platform across all hotels that subscribed to Peach’s services. However, they have the option to choose which information they wish to share with a particular hotel as well as for how long– minimizing any privacy related issues. This can be done by customers accessing a list from which they can add and/or remove hotels

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whenever they wish by selecting/unselecting a box. The base service is free, however, a Premium version is available at $9.99/month. The benefits of the Premium version are: it allows users to have advanced access to special promotions, being able to collect Peach Premium Points and receive a counter-­‐offer from hotels on any possibly upgrades after 3 days of booking

Price

In order to decide on the pricing, the costs of existing online social media platforms as well as existing CRM and preference management system solutions have been analyzed and benchmarked (SEE APPENDIX 4: Competitors). Since the aim of Peach is to be an affordable solution on both the B2B and B2B side, we have tried to come up with a simple and affordable pricing strategy.

B2B Side: Independent hotels that subscribe to PEACH will be charged a monthly subscription fee of $60.-­‐ that includes 100 bookings made through PEACH within that month (per hotel). Should the hotel have more than 100 bookings at the end of the month, an fee of $20.-­‐ for any additional 50 bookings through PEACH will be charged (SEE APPENDIX 9: Hotel Subscription). Should a chain subscribe multiple hotels to PEACH, they will receive a $5 discount on the base fee of $60 for any additional hotel. This discount will be applied up to 5 hotels, where every hotel will pay a $45.-­‐ fee per month. The number of bookings included in the monthly base fee will be applicable for the all the bookings of the chain together. However, since we are not targeting chains at this point in time (only after 2020), this discount does not affect us at the moment.

For both, independent hotels and chains, the subscription fee will be paid in advance for a certain amount of months (quarterly, semi-­‐annually or annually) and the additional fees will be paid as a sum at the end of the period for which the hotel has paid the subscription fee.

B2C Side:

Customers will only be charged for premium accounts. The associated fee is $9.99/month can be paid on either a monthly or yearly basis. Since our aim is to provide an affordable solution for our B2C customers, even with the premium option, we have analyzed the prices of our competitors (see Appendix 4) and come up with a lower price. Additionally, we decided to set the price at $9.99 due to the psychological effect this price has on customers (Harrison Li, 2011).

Promotion As Peach benefits both B2B and B2C users, we ask our partners to promote Peach to guests who have not subscribed to the service as well as asking our frequent travelers to recommend it non-­‐Peach hotels. Thus, our partnerships with the hotels will be vital in the beta testing phase. In addition, we plan to expose Peach through our presence on social media platforms and e-­‐advertising i.e. Google Ads. Premium accounts will be ad-­‐free. The marketing budget of 7% (Boykin, G. 2014) has been set aside mainly for viral marketing, advertising, sales calls (meetings) and print.

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The promotional activities on the B2C-­‐ side are mainly related to engaging users to subscribe to premium accounts or spreading awareness of Peach through Word-­‐of-­‐Mouth.

B2B Side: 1.

Advertising of special offers

Every month, 5 hotels can offer a special promotion, which is only valid for Peach users on Peach start page for a limited amount of users per offer (defined by the hotel depending on availabilities and demand). Each of these 5 hotel’s promotion will be based on one of the below categories. In any month, no 2 hotels can promote an offer in the same category, as we want to provide the hotel with exclusivity over their competitors with their promotion. Additionally, no fee will be charged for the hotels to post their ads, however, a 10% fee on the sales of these offers will be charged to the hotel.

CATEGORIES:

v v v v v v v

Special Spa/Wellness discount Special Luxury Vacation discount Special Business discount Special Family vacation discount Special Honeymoon discount Special Sport vacation discount Special Cultural vacation discount

Should a user be interested in one of the monthly promotions, they can directly click on the advertisement that will redirect them to a separate page that sums up the whole offer and the time-­‐frame of its validity (the period cannot exceed 6 months after the ad has been posted).

B2C Side:

1.

Promotion of the Premium Accounts

a)

Rewards for booking

In order to encourage customers to subscribe to the premium account and to use their Peach account, customers th

are rewarded with a gift from Peach after a certain amount of uses. For every 10 booking made through Peach, th

the user will be offered a free dinner during their next stay and for every 20 booking through Peach a free hotel night will be offered.

b) Advanced view of special offers

Premium account users can see the monthly special offers one night before non-­‐premium users.

c)

Ad-­‐Free

Premium profiles will be ad-­‐free, with the exception of the special offers that will be posted on the start page.

18

d) Receive messages with personalized packages

Premium account users have the possibility of receiving an email explaining how the hotel has personalized their offer. Here hotels also have the possibility of upselling services (based on preferences in the Peach profile that may not be within the budget of the booking).

2.

Word-­‐of-­‐mouth Promotion

We encourage all of our users to promote Peach to their family and friends. In order to give users an incentive to th

do so, existing Peach users will receive a Peach point for every new member he attracts. For every 5 booking through a new, recommended member, the recommender will receive one free month of Peach premium. For users who already subscribed to Peach, the recommender will receive 0.5 Peach Premium Points instead of a free premium month.

Place Peach is an online service that will be available to users and partners worldwide. The company will be based in Singapore, since it is simple to start a business there and because Htet Tayza, one of the founders of Peach, already has a registered company in Singapore and therefore knows the business environment. The initial launch of Peach to users and hotels will be in China and from there Peach will expand.

B2B Side For hotels, Peach will be available as a website where the hotel will have a collection of all the profiles to which it has access. Should a user remove a hotel from his list and the users profile will be automatically be removed from the hotels collection of profiles.

B2C Side For users, Peach will be available both as website and as a WebApp to facilitate its use and accessibility no matter where the customer is.

Sales Cycle (for Beta Testing Phase) The sales process to attract Beta testers for Peach can be summed up in a 5-­‐step process for the B2B and B2C side(see Appendix 10: Sales Cycle. ).

Since aligning individual travellers with the exact hotels where Peach will be tested is difficult, we rely on the hotels that work with us in the test phase to promote their customers to test Peach.

Hotels in the testing phase will not be charged any subscription fees and we rely on these hotels to work with us in this initial stage in order to get relevant feedback. Additionally it is important to note that we need different types of hotels in the test phase in order to be able to test the application in a variety of environments and on a variety of users. The hotel will notify guests after booking and ask, whether they are willing to test Peach. As a reward for taking part in the beta phase, guests will receive one free month of Peach premium once the service is launched to the public.

Guests can then subscribe to Peach and share their profile with their respective hotel. In order to receive valuable feedback, beta testers will be able to comment and give suggestions on how to improve Peach’s offer after their stay. After

19

the first (closed) beta phase, we will conduct a second, open beta test in which the initial B2C beta testers can recommend Peach to their friends and encourage them to use the service. In addition to working with more B2C testers, more hotels will be working with Peach in the open beta test phase in order to receive feedback from a larger pool of testers (B2C) and partners (B2B).

Sales Tactics (for Beta Testing Phase)

Our sales tactics in the Beta Phase are to set up meetings with GMs of small 4-­‐5* independent and boutique hotels all over China to promote our service and get them to partner with us. Since we are working with a small number of hotels in the test phase, we will work with their respective GMs to clearly explain the benefits of Peach. Additionally we will apply our knowledge acquired throughout EHL to give examples of how the service can be used to the hotel’s advantage.

Through these meetings, we aim to build a relationship with the hotels and have a pool of trusting partners before the launch in January 2015. We assume that these relationships will help us acquire more partners after launch.

We decided to work with independent and boutique hotels in the initial stages as they are more flexible than large chains when it comes to adapting to guest preferences, do not need to follow strict standards and they do not have an international brand name to uphold. We assume that, following successful closed & open beta testing, larger hotels will consider PEACH as a trustworthy and valuable service and be willing to work with us.

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Design & Development Plan Development Status & Tasks In terms of development of the web application itself, we will be following a lean model over an extended period of time in order to incorporate users’ and hotels’ feedback and suggestions. This will allow us to deliver a functional final web app.

The timeline for the development process is outlined in Appendix 11: Timeline Development Process.

Challenges & Risks Possible challenges Peach could be facing are:



Possibility of a major hotel chain producing a similar platform



Delivering Customer service with a small number of employees and delivering timely updates to the software will prove to be a challenge in the future as number of users increase



Ability to meet milestone targets in the development cycle of the “Peach” platform



Data Access



User Experience(i.e. product need to be optimized for each seperate plafrom and screen size variation)



Finding initial partners for the web app

In regards to associated risks, Peach could face:



Risk of having the business model or concept copied as China is very weak in terms of implementing copyright laws



Security issues since we deal with sensitive user data so the platform needs to be very secure to avoid a scandal



High burnout rates due to high hosting costs as number of users increase



Risk of developers leaving in the first 2 years of development



Hypotheses about the market prove to be incorrect



Inability to meet financing goals

Product Development Costs In terms of the projected development costs of the Web app, we have decided to hire an in-­‐house Ruby-­‐on-­‐Rails developer and designer in order to facilitate future updates to the software and to adapt quickly to our customer feedback. This will allow us to capitalize on the lean model and provide swift updates to our customers.

The projected initial development total costs of the Web App until launch are US$ 168’724.

Proprietary Issues

While “Peach” will not require a patent registration, a trademark will need to be registered in order to protect the “Peach” brand name and the slogan “Peach – everything I want”. After contacting a law firm in Singapore, we were informed that it would cost between 2000-­‐5000$ in order to register the trademark in Singapore.

This will cover the company legally in terms of copyright and brand name. For further details on proprietary issues (patents, trademarks, copyrights, licenses and brand names) kindly refer to Appendix 12, where an email conversation between H.Tayza and his lawyers is included.

21

Operations Plan General Approach to Operations Management of the Business Peach will be managed as a Software as a Service i.e SaaS, where users and hotels would only have access to the platform through our direct website or integrated web application.

Please refer to Appendix 13: Flowchart User Experience, for a flow chart of the processes on the B2B and the B2C sides and to see how these processes vary.

Product Development

Production of additional units: Since Peach is a software company, there are no additional costs in terms of production of additional units as no costs are involved in replicating the website.

However, the incremental updates to the software will require a constant investment in hiring two in-­‐house developers and one designer. Additionally, we will have to invest in a larger server once our user base starts expanding rapidly.

B2C users can subscribe to Peach any time either as free or as premium users for a respective fee of $9.99/month. B2B partners can subscribe to Peach for a monthly base fee and will start seeing guests’ profiles once they have granted access to the hotels.

Business Location: Republic of Singapore Despite the target market for both B2B and B2C being the People’s Republic Of China, the primary business location will be the Republic of Singapore due to the inherent risks and difficulties of starting a business in China without a Chinese partner as opposed to the ease of doing business in Singapore (Singapore is ranked Nr. 1 worldwide) (Economy Rankings. N.d.).

Facilities & Equipment

Office For the first year during development, we will work privately on developing the business in coordination with software developers. During the 2nd year, in which operations will start and extensive marketing will be required, we will be based in a private office as part of a co-­‐working space “The Co” in Singapore where the costs (700 Singaporean dollars/month/person, c.a. $521.5) (The Co, 2015) will be much lower than renting a stand-­‐alone office.

Additional advantages of renting a co-­‐working space include working with local startups and coaches through various networking events hosted in the office and through interaction with other startups and workers who rent offices at “The Co”.

22

Equipment There are several requirements to running this service for both B2C and B2B. Since Peach is a SAAS, we will be outsourcing the deployment of the service to Amazon Web Services ($50/month pre-­‐launch; 2430/month after launch) in order to focus on improving the core product and maximizing revenues.

Office supplies such as desks, chairs, lamps, etc. will be provided by “The Co” as the offices are rented fully furnished. Additionally, we assume that designers & developers have their own computers (the Peach founders will be working from their own laptops) and we will therefore only need to provide a phone line in addition to the equipment provided by “The Co.”.

23

Management Team & Organizational Structure Management Team & Board of Directors

Achard, David Currently a student at Ecole Hoteliere de Lausanne. Background in human resources and marketing. Previous work experience in Switzerland and Costa Rica.

Chams, Karim

Currently a student at Ecole Hoteliere de Lausanne. Background in human resources and operations. Previous work experience in Egypt, Switzerland and Hong Kong.

Fiaux, Remy Currently a student at Ecole Hoteliere de Lausanne. Background in finance and accounting. Previous work experience in Nestle and New York.

Kocarslan, Yasemin

Currently a student at Ecole Hoteliere de Lausanne. Background in Entrepreneurship & PR. Previous working experience the Four Seasons, Kempinski and Sales at a high-­‐couture fashion company in New York.

Polano, Nils Currently a student at Ecole Hoteliere de Lausanne. Background in marketing and entrepreneurship. Previous work experience in Indonesia and Myanmar working for start up companies. Schaufelberger, Tatjana Currently a student at Ecole Hoteliere de Lausanne. Background in marketing and sales. Previous work experience in Geneva in the regional marketing team at Bank Julius Baer, covering the SEMEA region (Southern Europe, Middle East & Africa)

Tayza, Htet

Currently Student at Ecole Hoteliere de Lausanne. Founder and owner, Wisper messaging app.

Board of Advisors Since Peach is a startup company, we are open to external suggestions or advice and are currently seeking out consultants to assist us in our day-­‐to-­‐day operations. Since the 7 co-­‐founders are currently studying at EHL, it seems appropriate to utilize this strong network of alumni’s and professors to form a board of advisors. We have already contacted Professor F. Nlemvo for his assistance in the development of our company and are planning to contact more industry professionals in order to have a selected group of prior to our graduation in summer 2015.

24

Company Structure Peach will be registered in Singapore and the company structure will be a partnership split evenly between the 7 initial members of the core group. The partnership will consist of sharing the ownership and liabilities evenly amongst the 7 board members. The initial investments of the company will be split evenly amongst the 7 members as to avoid having increased ownership by any member. We will thus apply a participative leadership organization in the company, with a flat organization structure. Also, to be able to maximize the level of expertise the 7 individuals will be working in their respective fields. The company will have a rotating honorary “chairman” position, rotating every second month. The responsibility of the “chairman” will be to lead the meetings and set in place the vote for each decision that is made for the company by the 7 group members. The convenience of having a board made out of 7 members is that there can never be a non-­‐decisive vote result. This horizontal leadership at the top of the company will be an advantage through the early stages of the company and should also give each member a fair contributing role in the company. The 7 board members come from very different international backgrounds and thus have various areas in which they are more experienced. But for the beginning stages of the company we have decided not to have specific roles as to enhance contribution and input from the members, believing that “7 heads are better than 1”. Naturally as time progresses and the company develops’ into mature stages, more specific roles will be appointed.

Organizational Chart

David Achard CEO

Tatjana Schaufelberger Head of Marketing

Yasemin Kocarslan Head of Design

Nils Polano Head of Sales

Remy Fiaux Head of Finance

Design Team

Karim Chams Head of HR

Htet Tayza Head of IT

Development Team

25

Overall Schedule 2/1/15

6/15/16 10/28/17 3/12/19

7/24/20

12/6/21

Looking for invetors Search for potential developers Partner with hotels Design & Development Prototype

Closed Beta

Open Beta

Of]icial Peach software

26

Financial Projections

Peach has concluded through its breakeven analysis that all pre-­‐launch costs required up to 1st January 2017 the launch date, added up to $168’724 (USD). This initial investment will go towards acquiring and upgrading fixed, physical and non-­‐ consumable assets such as office space, equipment and payroll.

Pre-­‐launch Necessary Funds

June-­‐Dec 2015

Investment Required

$62,189.44

Total Investment Required

2016

$106,535.14

$168,724.58

Therefore Peach is looking for a potential investor that can provide us with the adequate resources in exchange for 30% shares and our guarantee that the investment proves to be feasible. The positive ROI (177%) of the projected 6-­‐year period shows that any potential investor will receive a substantial return on their initial investment.

The positive value of our NPV ($1,762,438.45) and the fact that our IRR is greater than our cost of capital (163%>15%), shows that Peach will continuously create value in the long run.

Financial Summary over 6 year investment period Average Revenue per year (US$k)

$1,457,301.57

Average EBITDA per year (US$k)

$972,454.06

Average Gross Profit Margin

97%

NPV

$1,762,438.45

IRR

163%

ROI

177%

For further details on financial statements and calculation kindly refer to Appendix 14: Financial Projections or to the separate excel work sheet sent to Mr. F. Nlemvo.

27

Assumptions General Assumptions

à Number of Users & Hotel Subscribers

v Once the Beta test is launched in 6 hotels we made the assumption that 5% of their total guests will use the application and provide constructive feedback.

v The average occupancy rate throughout the year we used is of 55%, using Euromonitor we could identify the rates for various regions in the industry. We also assumed the average number of rooms per independent hotel is of 50 as research showed that 77% of independent hotels had under 75 rooms.

v We made the assumption that 75% of Beta users were satisfied with the service and took part in the open Beta testing that consisted of 60 hotels for a period of 6 months. From these we expect Peach to be recommended to an average of 3 people per user.

v For the growth of the independent hotel market in China we assumed it remained at a constant of 101% until 2020 and that growth in chains stabilizes around 104% between 2019-­‐
2020.

v We assumed that there will be a steady 50% increase in subscribing hotels per year. Based on Spotify’s figures which we believed our premium service represents a service of similar value we assumed that 20% of users will subscribe each year to the premium service we offer.

Financial Assumptions

v Based on research we identified that most tech-­‐related enterprises with database-­‐driven websites, had an average of 7% in Marketing expenses based on its total yearly revenues.

v Our researched confirmed that office space included maintenance of the area and office supplies in the rent.

v The base monthly price we pay for the servers also includes all maintenance related expenses with the service. We decided that the all server related costs were to be labeled as our cost of sales for our calculations.

v For the monthly salaries which regarding the 2 software developers and 1 designer we assume that it includes regular work and maintenance on the website and application. We assume that the developers and designer have all the necessary equipment such as fully functioning computers for their tasks.

v A few of the costs were found in the local currency of Singapore, which we used the exchange rate of the day the prices were taken to convert all our expenses into US dollars.

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Appendix Appendix 0: Business Model Canvas

APPENDIX 00: Pirate Metrics (F. Delley, 2014)

B2B Side:

Acquisition • Meetings with Hotel GMs to show the added value Peach can bring to the hotel’s service quality

Activation • Booking guests will send access to their Peach pro]iles to the hotels

Retention • Hotels want to continue using Peach to anticipate guests’ needs and provide personalized experiences

Revenue • Generate revenue from hotel subscriptions once Peach has launched to the public

• % on sales of the special offerings of hotels

Referral

• Hotels will continue to promote Peach to booking customers in order to create personalized and memorable experiences

29

B2C Side:

Acquisition • Guest’s will be asked by partnering hotels to subscribe to Peach in order to personalize their experiences

Activation • Guests subscribe to Peach in order to personalize their stay • Will receive 1 month of premium as reward (once Peach is launched to the public)

Retention • Guests experience a personalized service and will want to use Peach in other hotels as well

Revenue • Revenues generated once customers subscribe to premium to receive more bene]its

Referral

• Referral to family/friends in return for Peach Points (premium) or a free premium month • Referral to hotels in order to encourage them to subscribe to Peach so that guest’s can personalize their services in as many hotels as possible

APPENDIX 1: Increase in Chinese Domestic Tourism

30

APPENDIX 2: Increase in number of Independent Hotels in China until 2018

31

APPENDIX 3: Personas

B2B

B2C

Calvin Sun, 23, University graduate

from Macau

Lily Liu, 26, fashion & lifestyle blogger from Hong Kong

-­‐ Recent graduate from NYU Shanghai who majored in international relations.

-­‐ -­‐ Only child and has a close relationship with her family who are in the tech industry. -­‐ With the support of her parents, Lily went abroad for university and received a Bachelors Degree in Media and Communications Studies from Emerson University. Lily then went on to pursue her Masters degree at the University of Hong Kong in fashion.

-­‐ Currently working from her laptop developing her new lifestyle blog about food, travel, and fashion in China. Her blog is gaining immense popularity and currently has 25000 followers.

-­‐ Currently taking a year off to travel and evaluate what career path he wants to take in life.

-­‐ Oldest of three children and comes from an upper middle class family from the city of Macao.

-­‐ Passionate about his Chinese background and plans to discover new and unique destinations while traveling in China.

-­‐ Never leaves the house without his smartphone and appreciates brands and services that have tech friendly environments.

-­‐ Highly present on social media and uses it as his main form of communicating with his friends, family, and fellow alumni.

-­‐ When searching for the perfect hotel, he is highly in]luenced by online reviews and does thorough research on how well hotels are able to cater to his technological needs.

-­‐ Calvin is on the lookout for one-­‐of-­‐a-­‐kind 4-­‐5 star independent hotels offering an unforgettable and memorable experience.

-­‐ Always on the go, travels with her Maltese puppy Toto.

-­‐ Seeks to discover unique and interesting destinations which she can post on her website and Instagram account.

-­‐ Values hotels that provide unique services and ]irst-­‐rate amenities catered to her distinct life-­‐style such as luxury shampoos, a powerful hairdryer, pet care, and a ]luffy bathrobe.

-­‐ As she often has a stiff neck from working on her laptop all day she appreciates hotels that have pillow menus as well as orthopedic beds.

-­‐ Searches and books her hotels through Expedia, Gilts Jetsetter application, and reviews and recommendations from her followers.

B2C

The Pudi Boutique Hotel -­‐ Located in a calm and discreet street in the bustling city of Shanghai

-­‐ Offering a clam and unique and calming oasis.

-­‐ 4 star hotel , 52 studio style rooms including 8 studio suites, 4 PuDi Suits and 32 standard studios.

-­‐The hotels unique selling points are the larger “studio” rooms as well as the unique services they offer.

-­‐ Designed by a French ]irm who aimed to provide cutting age design that fuses Oriental and European styles. The rooms provide an “Art Deco” environment and walls are adorned with the works contemporary Chinese artist that change constantly.

-­‐ The hotel offers free Wi-­‐Fi and parking and has a 24/7-­‐concierge desk and butler service. Pudi’s rates range anywhere from $110.00-­‐200.00 USD.

-­‐ Located in the French concession with close proximity to Yandang Pedestrian Street guests are able to take advantage of the colonial architecture as well Shanghai’s top entertainment and dining areas.

-­‐ In-­‐room amenities offered by the hotel

include: free adaptors, hairdryers, a Jacuzzi, DVD Player, and pet sitting services.

-­‐ Hotels guests are generally 25.35 years old &traveling for both business and leisure purposes.

-­‐ Easy to use hotel website -­‐-­‐> convenient to book online and is also present on several other websites such as Tripadvisor, Booking.com, and Expedia as well as being a member of Small Luxury Hotels of the World.

32

APPENDIX 4: Competitors

Company

Description

How do they differentiate to

Pricing

Peach? M Hospitality

User-­‐friendly creative mobile

Users only give there personal

interface designs that enable the

data/requests to the hotel that

-­‐

guest to communicate directly with they are currently staying in rather the reception & make requests, as

than providing all of the

well as improve customer

information on the app.

experience in the concierge,

Additionally, this application on

maximize revenue, have better

works with certain hotels and is

control, increase loyalty, and

exclusive to the hotel industry.

implement effective mobile advertising.

Blynk

Digital concierge app for hotels and Blynk is an app purchased by hotels

Ranges from

restaurants that offer customized

to connect to their guests only

$99/month –

concierge services and restaurant

during their stay. The apps aim is

299/month

digital menu apps which hotels can

not to personalize the guest’s stay

depending on the

utilize to be connected with their

according to their preferences but

number of rooms

guests 24/7 & increase revenue by

to utilize the app. to more

cross-­‐selling and upselling services.

effectively communicate with their customers.

Appy Hotel

Allow guests to maximize the

Appy hotel primarily focuses on

Free trial

experience of their hotel stay by

concierge related services for

Ranges from

giving access to an array of

guests during their stay, guests are

$1/Room/ -­‐

concierge-­‐related services directly

not permitted to use Appy hotel

$3/room

from an IPhone or I pad device. The has a booking platform.

users are able to book and order hotel services from the device during their stay, get information about the hotel prior to arrival, & stay in touch

Sugar CRM

Sugar CRM is a customer

Sugar CRM

Online and cloud

relationship management system

based versions

available for commercial and open

from 35$ to 150$

applications. They provide sale-­‐

per user/month.

force automation, customer support, Mobile CRM, and marketing campaigns.

Amadeus

Amadeus acts primarily as a

travel industry that acts as an

An IT provider for the tourism and

booking service through

33

-­‐

international network that provides search, pricing, booking,

program does not focus on guest

and ticketing to travel agencies

preferences and personalization.

CRM system that offers an app and

Nimble differs from Peach in that it

integration with social media such

Nimble

international networks but the

links together different social

$15/month/user

as Twitter, LinkedIn and Google+. It media accounts. In Peach, our works by linking all of the

customers are able to share which

customer’s social media accounts

information they want for when

to provide a better relationship

they want on its own unique and

with the brands and businesses

personalized page.

they use. Has a mobile app for IPhone and has a flat monthly rate of $15.

Iris

Interactive hospitality applications

Iris is a collective group of diverse

provider covering the whole

-­‐

hospitality applications that’s

hospitality space including in room, purpose is to improve the guest’s lobby, restaurant, spa, guest valet

stay however the guest cannot

& conference rooms. The

choose how much information to

application’s purpose is to improve

release to the applications and its

the guest experience, generate

primary service is not to

additional revenue, reduce costs &

personalize the guest experience

elevate customer engagement.

but create additional revenue with elevated customer engagement.

Opera

A property management system

Opera Fidelio varies greatly from

-­‐

that provides tools for hotel staff in Peach in that it is a system used handling reservations, conserving a

primarily by hotels to input data

customers preferences and

about their guests. The guest is not

requirements, checking guests in

able to utilize the Opera system to

and out and handling accounting

fill out their preferences.

and billing.

Additionally Opera also has a wide range of tools to handle the check-­‐ in/check-­‐out and billings of guests.

Hotelmobile

Hotelmobile is an customizable

Hotelmobile is purchased by hotels

1 Hotel: 2000(Setup

hotel mobile application that

and does not require an account to

fee) 99/month

guests can utilize to explore the

be created by the guest. It is only

2 Hotels: 4000;

hotel’s facilities, attractions and

applicable to the guest during their

events, arrange their schedule etc.

stay in the establishment and

With the application hotels are

allows the guest to communicate

able to promote hotel specials, give more effectively with the hotel. conference and event organizers the ability to publish dynamic

guest to input their personal

agendas, and map nearby hotel

Hotelmobile does not need the preferences.

34

99/month 11-­‐20 Hotels: 6000; 89/month 21-­‐30 Hotels; upon request

attractions. It provides a fully integrated cloud CMS.

Hotel Loyalty

Programs such as Hilton Honors or

While hotel loyalty programs aim

Programs

Starwood Preferred guest aim to

to personalize and provide benefits

attract loyal guests which can

for guest experiences they do not

Hotels of the world)

obtain points, receive upgrades

seek in depth information on their

$150/year =

and benefits (such as late checkout, guests only standardized

Example: Leader’s Club (Leading

12.50/month or

complimentary breakfast, free

information such as allergies, room

(unlimited)

newspaper). They retain

preferences. Detailed information

$1500/year=125/m

customer’s basic preferences to

is not utilized.

onth

use at their next stay at any of their partner hotels.

Airline Loyalty

Airline loyalty programs such as

Excusive only to airlines and small

Programs

Miles&More, British Executive,

amount of partner hotels and

Miles&Smiles allow frequent fliers

cannot collect miles/points if you

to collect points or “miles” in order

fly with a different airlineà a

to obtain upgrades, access to

Miles&More members

special services, and retain their

information/preferences will not

personal preferences

be used for personalization on all

(aisle/window seat, allergies,

-­‐

airlines.

vegetarian). Qunar

China’s largest search engine that

Unlike Peach, Qunar is only a

provides a popular Qunar app that

customer booking platform rather

has been downloaded more than

than incorporating a CRM system.

16 million times. Has a luxury hotel

It has a large mobile base that

section site listing more than 2000

-­‐

users utilize only to book hotels.

properties in 10 cities. Ctrip

A China-­‐focused travel agency

Although both companies focus

-­‐

which also runs the Ctrip travel

primarily on the Chinese market, C-­‐

booking website. Currently has an

trip is more in the line of a booking

agreement with Priceline to cross-­‐

service rather than a

promote productsà primarily

personalization management

hotels that are aimed at outbound

systemà hotels do not utilize a

Chinese travelers. Represents

customers personal preferences

approximately 23% market share.

during booking only take certain special requests but these need to be reiterated during every individual purchase.

Social Media

Linked-­‐in: business oriented social

While on social media platforms

Accounts:

networking service connecting

such as linked-­‐in, Twitter, and

Twitter,

potential employers with

Facebook users are able to share

$29.99/month;

Facebook,

employees.

their preferences they cannot be

Sales Navigator -­‐

35

LinkedIn: Job Seeker Features -­‐

Linked-­‐IN

Twitter: online social networking

accessed or utilized by hotels only

service that allows users to send

$79.99/month;

collogues, friends, and peers.

Recruit lite –

short 140 character “tweets”.

109.95/month;

Facebook: one of the most utilized

Business Plus –

social networking services where

159.99/month

users create profiles and use it to communicate with their friends.

APPENDIX 5: Number of users & Market Share (For the complete excel sheet & calculations, kindly refer to the separate excel workbook)

Number of Subscribing Hotels

227

250

2016 2017

101

100

67

45

0.12% 0.18%

2020

150

0.08%

2018

151

0.05%

2019

200

50

Market Share B2B

0.26%

0 2016

2017

2018

2019

2020

1238034

Number of Subscribing users (B2C)

800000

12455

200000

12455

400000

122275 37366 159641

600000

825356

183413 366825 550238

1000000

Market Share B2C

2016 2017 2018 2019 2020 B2C users at the end of the year (based on hotel recommendatiosn)

Number of recommendations from last'year's B2C users Total number of B2C users 36

2016

0.001%

2017

0.011%

2018

0.036% 0.054%

2020

0

2019

412678

1200000

275119 550238 825356

1400000

0.079%

Appendix 6: Server Cost

Appendix 7: Break Even Chart

Breakeven Analysis Monetary Value (USD)

$400'000.00

$300'000.00

$200'000.00

$100'000.00

$-­‐

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Time (Months of 2017) Costs

Revenues

37

APPENDIX 8: Positioning Map

Rellevance and amount of information provided to hotel

Loyalty programs CRM systems Social Media PEACH

6 5

PEACH

CRM System

4 3

Social Media Loyalty Programs

2 1 0 0

1

2 3 4 5 Control of Information by Customer

6

APPENDIX 9: Hotel Subscription

38

APPENDIX 10: Sales Cycles

B2B Side:

Awareness

Consideration

Purchase

Service

Loyalty

• Generate awareness by meeting with GMs of the smaller hotels we want to partner with in the initial stage

• Demonstrate to the hotels what bene]its PEACH can bring them and how the information can be used

• Hotels in the testing phase will not be charged

• Hotel proposes PEACH to customers checking-­‐in

• Possibility for hotel to increase guet's loyalty by improving service quality which in return will generate loyalty in PEACH

B2C Side:

Awareness

Consideration

Purchase

Service

Loyalty

• Awareness generated through promotion of PEACH by hotels to arriving guests

• Guest considers this free service to improve his hotel stay

• Guest signs up to PEACH and shares his pro]ile with the hotel he is staying at

• Guest will experience personalized service throughout his stay

• Personlization of service: generate loyalty in the hotel and the guest will consider using PEACH for his next hotel visit in order to have an equally personalized experience

APPENDIX 11: Timeline Development Process

39

(H. EISENMANN, & M. PAO, & L. BARLEY. (2014).) Dropbox: “It Just Works”. HBS No. 9-­‐811-­‐065. USA: Harvard Business School.)

Appendix 12: Email conversation between H. Tayza & Lawyer discussing proprietary issues

From: YC Tay

Date: Monday 15 December 2014 09:53 To: Htet Tayza

Cc: Lee Serena

Subject: Re: Trademark Wisper Name Dear Htet,

We refer to the email below and note your confirmation to proceed with the trademark of Wisper.

You can pursue a US trademark in the US directly without applying for a trademark in Singapore first. As mentioned in our earlier email of 13 August 2014, there are generally two main routes to getting a US trademark:

1) Through Singapore, via the Madrid Protocol

To register for a trademark in the US via the Madrid Protocol, a trademark will first have to be registered in Singapore. Once a trademark has been registered in Singapore, we will then be able to use this registration as the basis for IPOS to register with WIPO (World Intellectual Property Organization), who will then notify the US. The US’ relevant authorities will then examine the registration and make a final decision.

You may wish to use this route if you want to have both a Singapore and US-­‐registered trademark. We will be able to help you trademark the name using this route. However, as this is a more circuitous route, it may be both more costly and time-­‐ consuming. The application to file in the US can only commence after the trademark has been granted in Singapore, which can take anywhere from 6 months to 3 years and beyond.

2) Directly in the United States, via a US lawyer

If you only want to register a trademark in the US, it may be more expeditious to directly contact a US lawyer, who will be able to deal with the relevant US authorities directly for trademark registration. There is no need to wait for Singapore to grant the trademark first before the application can commence in the US.

If you also want to have a trademark registered in Singapore, this can then take place in parallel with your US application.

This route is more expeditious at the expense of being more complex. Also note that a US lawyer must be involved when dealing with this trademark, which may incur additional costs. This includes when you want to apply for trademark in other countries via the Madrid Protocol in the future using the US trademark as the basis.

The law firms we’ve contacted will require money on account before they will start work.

40

You have previously indicated that you would like to proceed for trademark registration in the US directly, via a US lawyer. One of the US law firms we’ve contacted will be able to give a professional opinion on the likelihood of objections and whether a third-­‐party search report is required. If you would still like to proceed via this route, please confirm:

-­‐ if you are agreeable to us releasing to this firm the name of the mark(s) you’re pursuing and Wisper’s nature of business; and -­‐ the name of the mark(s) you’re pursuing (“Wisper” and/or something else?).

We will also need US$2,000 so that we can put money on account for the US law firm to proceed.

Feel free to contact us if you have any further questions.

Thank you.

Regards, Yew Choon

On 4 Dec 2014, at 6:17 pm, Htet Tayza wrote: Hi Yew Choon and Serena

I refer to the email below.

I would like to confirm that I would like to proceed with the trademarking of Wisper’s name and Logo please. However I have a few questions I.e. As wisper is a singapore registered company, wouldn’t I have to apply for trademark in Singapore as well?

Please let me know the necessary documents, info you require for my side to start kicking things off.

Thank you and kind regards

Htet Tayza

From: YC Tay

Date: Thursday 9 October 2014 06:53 To: Htet Tayza

Cc: Lee Serena

Subject: Re: Trademark Wisper Name

Dear Htet,

We refer to the email below. We do not seem to have received a reply.

Kindly let us know if you would like to proceed with the trademark application in the US.

Thank you.

Regards, Yew Choon

41

On Wednesday, 1 October, 2014 at 4:15 pm, YC Tay wrote: Dear Htet,

We refer to the email below.

To pursue a trademark application in the US, fees vary from $2,000 to $5,000 (including disbursements), depending on objections to the registration and the number of classes. Disbursements would include filing fees, the number of classes, and whether a third-­‐party search report is required. Fees may go beyond $5,000 depending on the number of classes and if the objections are vigorous.

One of the law firms we’ve contacted will be able to give a professional opinion on the likelihood of objections and whether a third-­‐party search report is required. Please let us know if you are agreeable to us releasing to this firm the name of the mark you’re pursuing (“Wisper”) and Wisper’s nature of business.

The law firms we’ve contacted will also require money on account before they will start work.

Please let us know if you would like to proceed and we will formally instruct them. Feel free to contact us if you have any further questions.

Thank you.

Regards, Yew Choon

On Wed, Sep 17, 2014 at 10:39 AM, Htet Tayza wrote: Dear Serena

I would like to protect the name Wisper (assuming through a trademark) in the US.

Can you please help me start the process?

Thank you and I look forward to your reply

Kindest regards

Htet

42

Appendix 13: Flowchart user experience

B2B Side:

6. Service Delivery

Once hotel's have been granted access to pro]iles, they will be contacted and can access the informaiton

5. Premium

Hotels have the possiblity to incorporate Peach Codes on their webside so that they can be entred directly when guests book

4. Receive

Hotels make their employees aware that Peach is now implemented -­‐-­‐> set necessary SOPs

3. Incorporate

Hotels Subscribe to Peach for a designated fee

2. Train

1. Subscribe

Hotel can send packages as well as possibilities for upgrades to premium users

Hotel delivers personalized services

43

Provide feedback to the hotel & Peach and give suggestions of how to improve the service & offering on Peach

9. Recommend

Check-­‐in with Peach ID and experience personalize d services

8. Review & Feedback

Premium guests will receive an email with their personalize d offer as well as upgrade-­‐ possibilities based on their preferences

7. Service:

Guests grand access to their pro]iles by selecting the respective hotel from a list of subscribers on their pro]ile (max. 3 days after booking)

6. Premium

Guests book hotels & send their Peach ID to the hotels

5. Grant Access

Guests receive their individual Peach ID

4. Book

Guests rank their preference according to their importance (scale 1-­‐10)

3. Peach ID

Guests sign up to Peach and enter their preferences

2. Rank

1. Sign up

B2C Side:

Recommen d Peach to friends & Family as well as other hotels

Appendix 14: Finance (kindly refer to the separate excel workbook sent to F. Nlemvo for detailed calculations)

1.

Income Statement

2015

2016

2017

2018

2019

2020

Net Sales Cost of Sales Gross Profit Gross Profit Margin Operating Expenses Operating Profit (Loss) before tax Operating Profit Margin Tax Net P/L After Tax Net Profit Margin

-­‐

-­‐

$375’677.47

$1’170’990.28

$1’725’435.42

$2’557’103.12

$350

$600

$29’160.00

$29’160.00

$29’160.00

$29’160.00

$-­‐350.00

-­‐$600

$346’517.47

1’141’830.28

$1’696’275.42

$2’527’943.13

-­‐

-­‐

92%

98%

98%

99%

$61'839.44

$105'935.14

$132'232.56

$187'904.45

$226'715.61

$284'932.35

$-­‐62'189.44

$-­‐106'535.14

$214'284.91

$953'925.83

$1'469'559.80

$2'243'010.77

-­‐

-­‐

57%

81%

85%

88%

$-­‐

$-­‐

$63'865.17

$199'068.35

$293'324.02

$434'707.53

$-­‐62'189.44

$-­‐106'535.14

$150'419.74

$754'857.48

$1'176'235.78

$1'808'303.24

-­‐

-­‐

40%

64%

68%

71%

44

2.

Profit & Loss

2015

2016

2017

2018

Revenue

$1'277.13 Ad/Click Hotel

$62'100.00 Packages Premium

$308'280.34 Users Hotel

$4'020.00 Subscription Total Annual 0 0 $375'677.47 Revenue

Fixed Costs Domain $9.99 $9.99 $9.99 name $49'954.49 $85'636.26 $85'636.26 Salaries Office Rental $11'760.00 $20'160.00 $20'160.00 * $350.00 $600.00 29160 Server** $114.97 $128.89 $128.89 Phone

Variable

Cost Marketing &

$26'297.42 Advertising (7% of sales) Corporate $63'865.17

Tax (17%) $62'189.44 $106'535.14 $225'257.73 Total Cost $150'419.74 Profit/Loss $-­‐62'189.44 $-­‐106'535.14 Accumulated $-­‐62'189.44 $-­‐168'724.58 $-­‐18'304.83 Profits

• *Office rental cost including supplies • ** Server Cost including maintenance

3. Ratios

2019

2020

$4'401.90

$6'602.85

$9'904.28

$62'100.00

$62'100.00

$62'100.00

$1'098'458.38

$1'647'687.57

$2'471'531.35

$6'030.00

$9'045.00

$13'567.50

$1'170'990.28

$1'725'435.42

$2'557'103.13

$9.99

$9.99

$9.99

$85'636.26

$85'636.26

$85'636.26

$20'160.00

$20'160.00

$20'160.00

29160 $128.89

29160 $128.89

29160 $128.89

$81'969.32

$120'780.48

$178'997.22

$199'068.35

$293'324.02

$434'707.53

$416'132.80 $754'857.48

$549'199.64 $1'176'235.78

$748'799.89 $1'808'303.24

$736'552.64

$1'912'788.43

$3'721'091.67

2015

2016

2017

2018

2019

2020

Required Capital Net Income FCF

$-­‐62'189.44

$-­‐62'189.44

$-­‐106'535.14

$-­‐106'535.14

$150'419.74

$150'419.74

$754'857.48

$754'857.48

$1'176'235.78

$1'176'235.78

$1'808'303.24

$1'808'303.24

IRR NPV

163% $1'762'438.45

15%

WACC

45

Financial Summary over 6 year investment Average Revenue per year (US$k) Average EBITDA per year (US$k)

$1'457'301.57 $972'454.06

Average Gross Profit Margin

NPV

97%

$1'762'438.45

IRR with leverage

$1.63

ROI

177%

46

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50

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