中国人民大学kaixin001

Front.
Bus.
Res.
China2011,5(4):619–634DOI10.
1007/s11782-011-0148-xReceivedDecember22,2010LinJiang()SchoolofBusiness,RenminUniversityofChina,Beijing100872,ChinaE-mail:fluffychen@sina.
comYadanZhangSchoolofBusiness,RenminUniversityofChina,Beijing100872,ChinaE-mail:zhangyadan1206@gmail.
comXunHeSchoolofBusiness,RenminUniversityofChina,Beijing100872,ChinaE-mail:gretter@163.
comHaijunZhangBeijingKuXunTechnologyCo.
Ltd.
,Beijing100081,ChinaE-mail:zhanghaijun@kuxun.
comJunKangIsenbergSchoolofManagement,UniversityofMassachusetts,Amherst,MA01002,USAE-mail:junkang@som.
umass.
eduBoZhangSchoolofBussiness,RenminUniversityofChina,Beijing100872,ChinaE-mail:zhangbo8327@126.
comTEACHINGCASELinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangStrategyTransitionandMarketingInnovationofaVerticalSearchEngine:TheCaseofKuxunCompanyHigherEducationPressandSpringer-Verlag2011AbstractKuxunisanonlinetravelsearchcompanyinChina.
Thispaperdescribesthetransitionandinnovationofthecompany'smarketingstrategy,fromcomprehensiveinformationsearchtoonlinetravelsearch.
ItshowshowKuxunhassuccessfullyachievedstrategicmarkettransitionfrom"all-round"to"specialized"throughefficientmarketsegmenting,targeting,andpositioning(STP).
ThecasealsoillustrateshowKuxunhasbecomethetopbrandofChineseonlinetravelsearchbycarryingoutvarioustypesofinnovativenetworkmarketing,620LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangincludinginteractiveexperiencemarketing,precisionmarketing,andcooperativemarketing.
Keywordsverticalsearch,onlinetravel,marketingstrategytransition,marketinginnovation.
1IntroductionWiththefastdevelopmentofInternetapplications,theworldhasenteredaneraofinformationexplosion,andsearchengineshavebecomeanimportanttoolforInternetuserstoacquireinformation.
Thoughtheonlinesearchmarketisdominatedbyacoupleofhugeplayers,e.
g.
,BaiduandGoogle,newsearchengines,asrepresentedbyverticalsearchengines,arerisingfastandreshapingthestructureofonlinesearchmarket.
Asaspecializedtravelsearchengineandtravelcommunitywebsite,Kuxunaimsatprovidinguserswithservicesofsearching,comparison,andsmartfiltering,etc.
,intheformofaseriesoftravelproductsincludingflightticket,hotel,vacationpackage,trainticket.
Atthesametime,Kuxunprovidescommunicationandinteractionservicessuchastravelexperiencesharingandsocialnetworking.
Sinceitsestablishmentin2006,Kuxunhasmaintainedarapidpaceofdevelopment.
ByJune2010,KuxunbecametheleaderinChina'sonlinetravelsearchenginemarketwithmorethan40millionindependentvisitorseverymonth.
ThroughoutthecourseofKuxun'sdevelopmentandexpansion,itsmarketingstrategytransitionwentthroughsegmenting,targeting,andpositioning(STP),andthemarketinginnovationshavebeenimplemented.
ThecompanyisawitnessofthestatusquoofChina'sInternetsearchenginemarket,especiallytheverticalsearchenginemarket.
Ithasgonethroughproblemsoftargetmarketselectionthatverticalsearchenginecompaniesencounter,andshownhownewemergingenterprisescansuccessfullyrealizemarketingstrategytransitionandinnovationthrougheffectiveSTP.
2VerticalConsumerSearch:AUniqueVantagePoint2.
1OriginofKuxun:AFormerTrainTicketSearchProviderDifferentfromotherInternetcompaniesimitatingforeignbusinessmodels,KuxunoriginatedfromanaccurateunderstandingofmarketneedsinthemainlandofChina.
DuringtheSpringFestivaltrafficpeakseasonof2006,itwasdifficultforStrategyTransitionandMarketingInnovationofaVerticalSearchEngine621travellerstobuytraintickets,asoveronehundredmillionpeoplescrumbledforrailwaytransportation.
Tohelprelativesandfriendsbuytickets,ChenHua,thefounderofKuxun,developedanonlineservicesystemofferinginstantinformationaboutexchangeoftrainticketsamongusers.
Bysubmitingsearchitemstotheengine,userscouldreceivethelatestinformationofticketsviacellphoneorE-mailaccordingtotheirownneeds.
Althoughhighlyappreciatedbyitsusersasatrial,thissystemwasinferiortoothergeneralsearchenginesbecausethelatterswereeasiertouse.
Basedonthefeedbackfromearlyusers,Chendecidedtoprovidemorefriendlysearchservicesandregisteredadomainname:www.
kooxoo.
com.
Fromthenon,Kuxungraduallyevolvedasaspecializedonlinesearchtoolfortrainticketsexchages.
Afterimprovementinthewebsitelayoutandtechnology,Kuxunprovidedbetterservicesinhelpingusersfindthelatestinformationabouttrainticketsexchangesfromthousandsofdifferentwebsitesinseconds.
Thenewfeaturesattractedmorethantenthousandvisitsperdaywithoutanymarketingpromotion.
By23January2006,Kuxunhasgotmorethan500000accumulativevisitsperday,andenteredtheAlexaTop2000intheworld.
Startingfromprovidinginformationontraintickets,KuxunsetsitsuniquepositionintheInternetsearchmarket.
AfertheSpringFestival,Chenwasintriguedbyhisinventionandthehugepotentialandmarketvalueofverticalsearch.
HedecidedtoquitfromMicrosoftResearchAsiainChina,tofoundKunxunCompany.
BecauseofKunxun'ssuccesswithtraintickets,thecompanysoongainedtractionfromventurecapitalists.
OnMarch11,2006,followingamerelythreehournegotiation,venturecapitalistsfromtheUSAmadethedecisiontoinvesttwomillionUSdollarsinthestartup.
ThedecisionwasmostlybasedonthehighcalibreofKunxun'stechnicalteamandtheirabilitytoseizemarketopportunties.
2.
2RapidDevelopmentofVerticalSearchThemarketofsearchenginehasagreatgrowthpotentialduetothedramaticincreaseofInternetusersandsearchengineusersinChina.
AstheChineseSearchEngineMarketReportin2005reveals,BaidurankedNo.
1inthedomesticmarketwith56.
6%ofmarketshare,andGoogletookthesecondplace.
Thesetwobiggestcomprehensivesearchenginestookupalmost90%ofthewholesearchmarket,andinfactmonopolizedChina'sonlinesearchmarket.
AstheneedsofInternetusersgrowfromentertainmenttodailylife,morepeopleareusedtodoingtheirdailybusinessonline,suchashousehunting,622LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangchatting,jobhunting,orevenshopping.
BaiduandGoogle,however,couldnotrespondtothischangeofneedseffectively,becausetheyusuallydisplayalargeamountofirrelevantinformationinsearchresults.
Therefore,themarketopportunityforverticalsearcharose.
Verticalsearchenginesaimtoprovideinformationandservicesinaspecializeddomain,foratargetgrouporaspecificdemand.
Theyarespeciliazed,technologicallysophisticated,withgreatmarketpotential.
2.
3SegmentionbyConsumerInformationBasedonthetrendoftheverticalsearchmarketandthemarketneedsofconsumerinformationsearch,Kuxundecidedtosegmentthewholesearchmarketverticallyandpositionitselfasaproviderofconsumerinformaiton.
Aimingatprovidingsearchservicewithdirect,specific,andin-depthinformation,Kuxuncreatedanewimage,"thebiggestconsumerinformationsearchengineinChina.
"Withinsuchaclear-cutmarketsegmentation,Kuxunexpandeditsproductlinesvigorouslly.
Toofferinformationofprofessionalqualityrelatedtodifferentaspectsoflife,Kuxunaddedaseriesofproductssuchashousehunting,job,privatetutoring,shopping,car,andrestaurantinformation,inadditiontoitsoriginalbusinessoftrainticketsbetween2006and2007.
Amongalltheseproducts,housinginformationsearch,includinghouseleasingandsecond-handhousetransactions,arethemostsuccessfulones.
ThankstoKuxun'soutstandingsearchperformanceandtheincreasingtradevolumeintherealestatemarketinChina,Kuxun'shousingsearchbusinessbecamethenation'smostinfluentialleaderinseveralmonthsafteritsintroductionin2006.
Duetoitsspecialityandaccuracy,Kuxungainedsupportfromusersandinvestorsalike,andgrewrapidly.
InSeptember2006,itreceived10milliondollars'ofventureinvestmentfromSIGandCEYUAN.
Kunxun'semployeesincreasedfrom20plustoover100,includinggraduatesfromtopuniversitiesinChinaandformerstaffofBaiduandMicrosoft.
Withthisfinancialsupport,Kuxunfutherexpandeditsproductlines.
2.
4Competition-AvoidancePositioning:ConsumerInformationSearchEngineAftersegmentingthesearchmarket,Kuxunadoptedadifferentiatedmarketingstrategybyprovidingsearchservicefordifferentkindsofconsumerinformationtosatisfyuserswithdifferentdemands.
Thispositioningcouldnotonlymeetconsumers'personalneedsbutalsoavoiddirectcompetitionwiththepowerfulStrategyTransitionandMarketingInnovationofaVerticalSearchEngine623comprehensivesearchenginessuchasBaiduandGoogle.
HavinganalyzedtheInternetusers'searchdemandsanditsowncompetitiveadvantagesinverticalsearchtechnology,Kuxundecisivelyadoptedastrategythatcouldavoidconfrontingitsstrongrivalaries:Itpositioneditselfinthelong-neglectedmarketsegmentbyprovidingprofessinalandin-depthinformation,andhelpeduserssolveagreatdealofproblemsconcerningtheirdailylife.
HenceKuxunhasbecomethetopbrandofconsumerinformationsearchinChina.
However,managerialandmarketingproblemsaroseasthecontinuousexpansionofproductlines.
Firstofall,aggressiveentrybringsaboutexcessivecompetitioninthemarket.
Someproductlinescouldnotacquireenoughtechnologicalsupportandresources.
Second,therequirementofbasicsearchtechnologykeptincreasing.
Thatis,buildingasearchenginewhichcandealwithmanydifferenttypesofdatarapidlyandefficientlyrequiresmorecomplicatedtechnologyinrespectofdatadiscoveryandcapture,semanticanalysis,andstructuring.
Third,thebroadexpansionstrategyadoptedbyKuxundidnotbringinenoughprofittoguaranteeasustainabledevelopment.
Abusinessmodelwhichisappropriateforthecompany'slong-termdevelopmenthasnotbeenestablished.
Tocopewiththeseproblems,themanagementofKuxunexamineditssearchproductportfolioandadjusteditsproductlinesinmid-2007.
Theydecidedtocloseseveralrelativelyweaksearchchannelssuchascar,shopping,andrestaurant,whereaskeepingthesearchchannelswhichhavealargebodyofuserssuchastrainticketssearchandjobsearch.
ThemanagementalsointegratedthetrainticketssearchserviceandthenewairticketssearchserviceintotheKuxun'searlytravelsearchproduct.
Consideringthemarketpotentialofhousingsearch,Kuxundecidetotakeit,togetherwithtravelinformationsearch,asthecorebusinessinfuturedevelopment.
Basedontheseadjustmentandintegration(asshowninFig.
1),Kuxun'sstrategicpositionofconsumerinformationsearchbecameclearerandmorefocusedthanbefore.
Meanwhile,itsbrandimagebecamemoredistinguishedandunique.
Fig.
1Kuxun'sNewStructureinConsumerInformationSearchStrategy624LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhang3TransitionofMarketingStrategy:Towardthe"LargestGlobalChineseTravelingSearchEngine"3.
1NewProblemsandOpportunities3.
1.
1DifficultiesFacingPost-DiversifiedKuxunFollowingthenewdirection,Kuxunbegantofocusontheremainingfourproductlines.
However,Kuxundidnotgetanysubstantiveachievementsinthesefieldsintermsofgrowthrate,marketcompetitiveness,ortheprofitabilityuntiltheendof2007.
Neithertheprofitmodeloftheproductlinesnoritsinternalfinancialmanagementwassatisfactory.
Whatwasworse,itseemedthatKuxunwasstuckinabottleneck:First,itbecameextremelyimportantforKuxuntofindabetterbusinessmodelforfuturegrowth.
Takingthehousingsearchasanexample,itfocusedontheinformationabouthouseleasingandsecond-handhousetransactions,aswellasthenewhousetradinginformationsearchservice.
AccordingtoasurveyconductedbyKuxun,mostusersofthehousingsearchserviceswereindividualswhowantedface-to-facemeetingswiththehouseowners.
However,itwashardforKuxuntomeetthisneed.
Forexample,theintroductionofabidrankingsystemintoitssearchengineincollaborationwithrealestateagentswasafailure,whichmadeKuxun'shousingsearchbusinessunprofitable.
Morespecifically,fornewhousesearch,onlineinformationsourceswerenotabletocompetewithvariouscreativeadvertisementsbytherealestatedevelopers(sellers).
Thesituationintheleasingandsecond-handhometradingmarketwasequallydifficult.
Theneedforinformationwasclearlythere,whichwastheopportunityforKuxun.
However,Kuxuntriedbutfailedtobuildasuitablerevenuemodelforitsowngrowth.
Inaddition,alongwiththeconstantexpansionofthecorebusinesses,requirementsforcapitalresourcesandthedecreaseincashflowsmadeiturgentforKuxuntoobtainastrategytransition.
Second,thecorebusiness,housingsearchservicewaschallenged.
Users'satisfactiontendedtodecreasewhiletheneedforhousinginformationincreased.
Onereasonwasthelargeamountsoffakeinformationreleasedbybrokersandagentstoenticeconsumersintheonlinemarket.
Asaresult,consumerconfidenceinonlinesourceswasdevastated.
TheotherwasalackofprofessionalswhounderstoodtherealestateindustryinKuxun.
Thus,itwasvitalforKuxuntoguaranteetheaccuracyandreliabilityofhousinginformation.
Lastly,Kuxun'spositioningasaconsumerinformationsearchengineinStrategyTransitionandMarketingInnovationofaVerticalSearchEngine625markethasbroughtitintoadilemma:Ontheonehand,itscoreserviceswerestillunabletosupporttheconceptof"comprehensiveconsumerinformationsearch"thoughtheyworkedbetteraftertheadjustmentandintegration;ontheotherhand,emphasisonseveralunrelatedsearchservicessimultaneouslymadeithardforKuxuntotakeaclearbrandpositioninginthemarket.
3.
1.
2Transition:OpportunitiesfromtheExternalEnvironmentTherapidgrowthofChina'stravelindustryandInternetindustryhasprovidedgreatopportunitiesforKunxun'stransition.
Foronething,boththenumberoftravelersandtherevenueoftourismweregrowing;foranotherthing,thewideapplicationofInternetandrapidgrowthofInternetusersinChinahavecreatedapromisingmarketforInternetcompanies.
Inaddition,electronicticketsbecamethefirstchoiceformoreandmoretravelers.
Thesefactorsbroughtimportantfeaturestothedomesticonlinetravelindustry.
Consumersinonlinetravelmarket.
Onlinetravelerstendtosearchtravelinformationmoreactively.
Giventhedevelopmentofsearchengines,moreonlinetravelersstarttodirectlycontacttravelserviceproviders,ratherthancontacttravelagencies.
Thiskindofdirectinteractionhelpstoreduceinformationasymmetrybetweentravelersandserviceproviders.
ItalsoprovidesKuxunwithagreatopportunityforitstransitiontowardsatravelsearchengineprovider.
Onlineconsumersprefertopurchasetravelpackages.
The"ticket+hotel+trip"one-stopservicehavebecomeincreasinglypopularamongonlineusers.
However,fewcompaniesprovideservicesoftravelpackagesortravelinformation.
Therefore,Kuxunmaygetaconsiderablemarketshareifitcanfurtherimproveitstravelservicesonthebasisofitstravelsearchengines.
Onlineconsumersliketocommunicateandinteractwithothertravelersonline.
Theyhopetocontactwithothertravelersthroughatrustworthycommunicationplatform,sothattheycansharetravelinformationandexperiencewithothers.
ThistrendprovidesanewopportunityforKuxuninthetravelsearchenginearea.
Restructureofonlinetravelingindustry.
WhenKuxunintegrateditsproductlinesin2007,theonlinetravelbookingmarketexperiencedastructuraltransition.
Thedirectsellingbyhotelsandairlinesimposedastrongimpactontraditionalbookingfirms.
Specifically,intraditionalonlinereservationbusiness,usersusuallybookedroomsorflightticketsthroughonlinetravelagents(e.
g.
,www.
ctrip.
comandwww.
elong.
com).
Theseonlineagentsobtaintheirprofitsintheformofcommissionsfromtravelserviceproviders(e.
g.
,hotelsandairlines).
626LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangWhenadoptingthedirectsellingstrategy,however,hotelsandairlinesalsostartedtoreleasetravelinformationontravelbookingwebsitesfordirectcommunicationwithcustomers.
Differentfromtheonlinetravelagents,mosttravelbookingwebsitesprovidingtravelinformationarenotinvolvedinthewholebookingtransactionprocess.
Theymakeprofitsbychargingfeesforpublishingtheinformation.
Inthisway,directsellingcannotonlykeepcustomerinformationtoimprovetheefficiencyofreservation,butalsoincreasepotentialprofitforhotelsandairlinecompanies.
Asdirectsellinggraduallybecomesthemainstreamofonlinetravelbookingmarket,theemergenceoftravelsearchenginesprovidesproperchannelsandplatforms.
3.
2Re-Segmentation:HousingSearchorTravelSearch3.
2.
1Debate:TransitorNotIn2007,topmanagersofKuxunfrequentlydebatedoverwhetherthecompanyshouldimplementatransition.
ConservativemanagersinsistedthatalthoughKuxunwasthesameasotherInternetenterprises,whichwouldinevitablycomeacrossabottleneckintheprocessofgrowing,theywouldeventuallyfindanappropriatesolutiontoearnprofitduringthecourseoftransitionaslongasthecompanystickstotheoriginalmarketingstrategy.
However,iftheyexitedfromtheexistingmarket,thewholecompanywouldhavetofacegreaterrisksinthenewmarket.
Kuxunoccupiedconsiderablemarketshareinonlineconsumerinformationsearchmarket.
Consideringthemarketrisk,Kuxunwouldundoubtedlygiveawaycurrentmarketsharetoitsrivalriesifitexitedthemarket.
Moreover,althoughKuxunhasaccumulatedacertainamountofresourcesandexperiencesduetoitspreviousdevelopment,itwasdeemedunwisetoputalltheeggsintheonlinetravelsearchmarket,especiallywhenitwaswanderingattheedgeofloss.
Regardingthebrandrisk,thoseconservativemanagersarguedthatKuxunhadbecomethetopbrandinconsumerinformationsearchmarketaftertwoyears'development.
Ifitgaveuptheconsumerinformationsearchproductssuchashousingandjobsearch,andretainedonlyonlinetravelsearchbusiness,theuserbaseofKuxunwoulddecreaseandKuxun'sbrandvaluewouldalsobeseverelyweakened.
ThenthelossofKuxun'smarketingstrategytransitionmightoverweighthegain.
However,thosewhoadvocatethetransitionarguedthattheonlinetravelStrategyTransitionandMarketingInnovationofaVerticalSearchEngine627industryhadagreatpotentialforfuturedevelopment,asthedomestictravelindustryandtheInternetindustrygrewrapidly.
Havinggoodexternalopportunities,Kuxunshoulddecisivelygiveupunprofitableproductslikehousingandjobsearchsincetheyhadnotyetbroughtanyprofit.
Additionally,Kuxunshouldconcentrateitslimitedresourcesontheonlinetravelsearchmarkettoseeknewgrowth.
Asarepresentativeofthisargument,Mr.
ZhangHaijun,thecurrentCEOofKuxun,commentedoncompanyresourcesandtheindustrialenvironmentofKuxun:First,Kuxun'strainandflightticketssearchbusinessprovideasubstantialuserbaseforitscomprehensivetransitiontowardsanonlinetravelsearchengine.
Zhangclaimed,"thetrainticketssearchservice,inwhichKuxunstarted,isnowmatureandhasaccumulatedimportantcustomerresourcesforKuxun.
Inaddition,ournewonlineairticketssearchservicestartedin2007isalsodevelopingrapidlyandhasgainedagoodreputation.
Thesetwoserviceswillcertainlyprovideourmarkettransitionwithasubstantialuserbase.
"Second,extantenterpriseresourcesandtechnologyownedbyKuxunmakeitsmarketingstrategytransitionmorecompetitive.
AsZhangputit,"onlinetravelsearchenginesarenewtoInternetusers,andforKuxun,itisanopportunityaswellasachallenge.
Wecanappropriateexistingsearchtechnologies,enterpriseresource,userbase,andInternetentrancefortravelsearchenginetolowerthemarketriskwhichmightbecausedbythemarkettransition.
"Finally,inthecurrentonlinetravelsearchmarket,thereislargeroomfordevelopmentgiventhedifferenceinpriceinformationprovidedbyvariousonlinetravelsearchengines.
Kuxunhasagreatdealoftechnologyadvantages,suchasweb-widesearching,fastgrabbing,datamining,semanticanalysis,andstructuralprocessing,whichcouldhelpitstargetedusersgetinformationabouttraveldealsfasterwithlowercost.
Inthiswayitmightexertastrongimpactontraditionaltravelinformationwebsites.
Whethergivingupthemarkettransitionbecauseofpotentialriskandcontinuingtoexploreasuitableprofitablebusinessmodelforitsexistingbusinesssuchashousingsearch,ortakingtherisks,graspingtheopportunity,andadvancingtowardsacomprehensiveonlinetravelsearchenginewasatoughdecisiontomakeforKuxunatthattime.
3.
2.
2Focus:ChangetoWinAfterfiercedebates,themanagementinKuxundecidedtotakeamoderatepath.
Thatis,itselectivelygaveupsomeofitsexistingbusinessestoreducelosses,628LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangandalsogaveupitspreviousmarketingstrategywhichmadethelimitedenterpriseresourcesexcessivelyscattered.
Specifically,bothhousingandtravelsearchbusinesswereretainedtemporarilyandfuturestepswouldbecontingentontheirperformance.
Hence,fromthefourthquarterof2007tothefirstquarterof2008,thehousingandtravelsearchbusinessinKuxunprogressedinparallelwitheachother.
Kuxunhasfocusedonexploringasuitableprofitablemodelforfuturegrowthduringthisperiod.
Afternearlyahalf-yearoperation,Kuxunestablishedacompleteproductlineoftravelsearchservicesandattractedlotsofusers.
ThemoreimportantissuewasthatKuxunmadebreakthroughsintheexplorationoftravelsearchbusinessmodel.
Bycontrast,thebusinessmodelofhousingsearchservicewasstillnotclearandproblemsofcustomerloyaltywerenotsolvedwell.
Giventhefactthattherewaslittleoverlapbetweenusersofhousingsearchandthoseoftravelsearch,itsoonbecameobviousthatKuxunneedstofocusononlinetravelsearchandgiveuphousingsearchbusiness.
Basedonacomprehensiveinvestigationandanalysisofbothinternalandexternalenvironments,Kuxuneventuallycompleteditsre-segmentationinconsumerinformationsearchmarket.
Theemergingonlinetravelsearchmarketwasthenidentified.
Besides,theflightticketssearchandhotelsearchbusinesswereaddedtotheoriginaltrainticketssearchbusiness.
Bymeansofthistransition,Kuxunintendedtomakeitselfanall-roundtravelsearchengine.
3.
3Repositioning:TheWorld'sLargestChineseTravelSearchEngineInJune2008,Kuxunofficiallyreleaseditsnewdomainname(www.
kuxun.
cn)andannouncedthetransitionofitsmarketingstrategy.
Afterthetransition,thenewKuxunpositioneditselfasaChinesetravelsearchengine.
Atthesametime,thehousingandjobsearchserviceswereloweredtoasecondarysectionoroutsourcedtootherwebsites.
Kuxunhopedthat,indoingso,itcouldconcentrateondevelopingtravel-relatedsearchservicesandmakeitselfanall-roundtravelsearchengineconcerningallelementsoftravel,suchasfood,hotel,trip,shopping,andentertainment.
3.
3.
1TravelSearchProductsThecoreconceptofKuxunistohelpusersfindusefulinformationaboutvaluabletravelproductswithhighefficiencyandlowcostfromavastseaofonlineinformation,includingbuyingdiscountedtickets,reservinghotelrooms,StrategyTransitionandMarketingInnovationofaVerticalSearchEngine629orpickingindividualizedvocationproducts.
Inthisway,Kuxunexpectstofinallyrealizeitsmissionofprovidingone-stoptravelinformationsearchserviceforonlineusers.
Airtickets.
Kuxun's"lowprice"and"savemoney"airticketssearchserviceischaracterizedwithawiderangeofaccurateinformation.
Withthistool,userscanacquirethelatestandcurrentmonth'sticketpriceinformation,bookdiscountedairtickets,andkeeptrackofflights.
Allofthesemakeonlineairticketbookingservicetime-saving,convenient,andlow-cost.
Traintickets.
Asoneoftheearliesttrainticketsearchserviceproviders,Kuxunhasaddedonlinesellingserviceofticketsinadditiontoprovidingtransferringticketsinformation.
Itsmodelof"onlinesearching+onlinepurchasing+offlinedelivery"savesusertime.
Italsoprovidesotherrelevantproductssuchastrainschedulewhichareusefultotravelers.
Hotels.
Relyingonitspowerfulsearchtechnology,Kuxunhasbuiltthelargestandmostcomprehensivedomestichotelinformationdatabase.
Inthischannel,userscanmakepreciseandeasydecisionsbyusingfilteringcriteriasuchaspricerange,starstandardandsoon.
Besides,thischannelalsoinvolveshotelreviewsandpictures.
Allofthemcanprovidecredibleandvividinformationforuserstomakethebestdecision.
Inthefuture,KuxunaimstobuildthelargesthoteldirectsellingplatforminChina.
Vacationing.
Tobuildacomprehensivetravelsearchbrand,Kuxunhascreatedthevacationservice.
Itprovidesinformationabouttravelstrategy,travelnotes,pictures,andvocationpackageofdestinationtohelpusersmakeabettertripplan.
Nowithasbecomeanindispensablesearchtoolforonlineusersintravelsplanning.
3.
3.
2InnovationofProfitModelOperatingdifferentlyfromthetraditionalprofitmodelthroughwhichonlinetravelserviceprovidersgetcommissionsfromairlinesandhotels,Kuxunobtainsmostofitsprofitsonthedemandoftransactionforeachsearch.
Specifically,Kuxun'sprofitmodelconsistsoftwoprofitsources:thebidranking,whichissimilartothatofBaidu,andpay-per-click(PPC).
SlightlydifferentfromthatofBaidu,thebidrankingofKuxunisprimarilydeterminedbythepreferenceofdownstreamusers.
Thebidrankingisontopofthesearchresultswhichfirstsatisfyusers'searchneedstoprotecttheinterestsofuserstoalargeextent.
Inotherwords,bidrankingtakeseffectamongservicesprovidersofequivalentproductandprice.
630LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangPPCreferstoaprofitmodelthatonlinetravelagentsanddirectsellingoperatorschargefeesbasedononlineusers'clicksonthelinksthatleadtocertainwebsites.
Throughprovidinginformationoftravelserviceproviders,Kuxunattractsuserstovisititswebsites.
However,Kuxunonlychargesforclickscreatedbyitself,whichdoesnot"swallowup"theprofitmarginsofupstreamtravelserviceproviders.
AsZhangsaid,notonlydoesthismodeleffectivelyguaranteetheinterestsoftravelservicesuppliers,butitalsoplaysapositiveroleinconstructingafaircompetitionenvironmentforonlinetravelindustry.
3.
3.
3SuccessAtthebeginningofthetransition,Kuxunofferedfreesearchflowtoairlinesandhotelsinordertocollectproductinformationfromthesetravelprovidersandestablishcooperativepartnershipwiththem.
AsKuxun'stravelsearchenginegraduallygotacceptedbymoreandmoreusers,agrowingnumberofserviceprovidersbecamemoreawareofthevalueofKuxun.
Inearly2009,severalairlines,includingAirChina,startedtopurchaseKuxun'ssearchflowandkeywordsinthebidranking,indicatinganinitialacceptanceofKuxuninthetravelindustry.
Inthemiddleof2009,thenumberofKuxun'sdailyvisitsjumpedtothetopthreeofChineseonlinetravelsearchengines.
Kuxuncompleteditstransitionsuccessfullyandstartedtomakeprofittwomonthslater.
Afterthistransition,KuxunhasdevelopedsofastthatitattractedtheattentionofExpedia,thelargestonlinetravelagencyintheworld.
TheninOctober2009,KuxunwasacquiredbyExpediaandbecameafully-ownedsubsidiary.
4MarketingInnovationsAfteritstransitionintoanonlinetravelsearchcompany,KuxunhasconstantlysoughtinnovationinitsmarketingmodeandeventuallydevelopedanewInternetmarketingmode,includinginteractiveexperiencemarketing,precisionmarketing,andcooperativemarketing.
4.
1InteractiveExperienceMarketingInteractiveexperiencemarketingreferstoaparticipatoryandinteractiveexperiencecreatedbyafirmforcustomers.
ThisstrategycanincreasecustomersatisfactionandloyaltythroughcustomerparticipationandmeetingtheirStrategyTransitionandMarketingInnovationofaVerticalSearchEngine631personalrequirements.
Forexample,inJune2009,Kuxunofficiallylaunchedanewinteractivetourismcommunity"Tour-Together"(http://yiqiwan.
kuxun.
cn),inwhichinteractiveservicesareprovidedfortheyouthwholiketravelingandsharingtheirtripsonline.
Thecommunityoffersnotonlysharingsuchastravelnotes,photoalbums,andgroups,butalsothecommentsonticketagents,hotels,andtravelsites.
Itprovidesaplatformfortravelerstosharetheiropinions.
Basedonthisvirtualcommunity,Kuxunbegantobuildanation-widetouristonlinecommunitywithitstechnologyofcapturinginformationfromtheInternet.
InSeptember2010,KuxunofficiallylaunchedtheTravelGuideChannel(TGC)whichcollected15milliontraveltipsandnotesfrommorethan300milliontravelerstoprovidefirst-handinformationforusers'personalizedtravelplans.
Meanwhile,touristscouldsharetheirtravelstorieswithothersandgivesuggestionsforothertouristsontheirblogs,whichgeneratesapositivecycleofinformationsharing.
TheTGCnotonlybuildsuparichandaccuratetravel-relateddatabaseforonlinetravelusers,butalsogivesnewideasforonlinetravellovers.
Duringtheperiodbetweentheintroductionoftourismcommunity"Tour-Together"andthelaunchofTGC,aseriesofinnovationsoninteractiveexperiencemarketinggreatlyimprovedthebrandloyaltyofKuxunaswellasprovidednewideastothefuturedevelopmentofChina'sverticalsearchenginecompanies.
4.
2PrecisionMarketingStrategyPrecisionmarketingisafirm'sdeliveryofinformationtotargetgroupsthroughvariousnewmediainordertoachieveprecise,measurable,andhighreturnfrominvestmentonmarketingcommunication.
Thekeytoprecisionmarketingistoidentifyaccuratelythedifferentneedsofaspecifictargetgroup.
Kuxun'stargetgroupsincludeupstreamclientsanddownstreamusers.
Clientsarethetravelservicesuppliers,suchasairlines,ticketagents,andhotels,whicharetheprimarysourcesofprofitsforKuxun.
UsersaretouristswhosearchtravelinformationviaKuxunandtheyarealsothefoundationofadvertisementincomeforKuxun.
Accordingtotheuniquenessofeachgroup,Kuxunadoptdifferentprecisionmarketingmodesaccordingly.
Foronlinetravelservicesuppliers,KuxunhelpsthemidentifyandaccumulatetargetcustomersandimplementsthePPCadvertisingmodel,whicheffectivelyensuresthattheadvertisingexpenseofclientsactuallybringsincustomerpurchase.
Thisdemandindicatesrealpurchasepower.
Forexample,accordingto632LinJiang,YadanZhang,XunHe,HaijunZhang,JunKang,BoZhangKuxun'srecord,thetransactioncompletionrateofleadingtheuserstoathird-partywebbyKuxunis8to10timeshigherthanthatofothersimilarsearchwebsites.
ThusKuxuneffectivelyhelpsclientsachieveaccuratedeliveryofadvertising.
Forusersoftravelsearch,Kuxunclaimstoprovidethemwithdetailedinformationwhileenhancingtheirsearchexperiencethroughcontinuousserviceinnovation,andincreasedaccuracy,andintelligenceofinformationsearch.
Takingthetrainticketssearchasanexample,thenew2010versionofticketsearchsystemnotonlyupdatesticketpriceandschedule,butalsoaddsnewfunctionsofcorrectingticketpriceandupdatingschedule,whichfurtherimprovetheprecisionofinformationsearchservice.
Inaddition,Kuxunappliesintelligentsearchoftraintickets,whichallowstheticketssearchtobemoreaccurate,intelligent,andinformative.
4.
3CooperativeMarketingStrategyCooperativemarketingreferstoseveralfirms'jointengagementinamarketingactivity,suchasmarketingcommunication,brandbuilding,orproductpromotion,tosharemarketingresources,consolidatemarketingnetwork,orreducemarketingcost.
Toincreasethenumberofvisitsandstrengthenitspositionasthetopbrandofonlinetravelsearch,Kuxunhascooperatedwithavarietyofcompaniesandmedia.
InMay2010,KuxunsuccessfullystartedtocooperatewithKaixin(www.
kaixin001.
com),whichisthebiggestSNSwebsiteforwhite-collarsinChina.
Asaresult,userscansearch,compare,andbookdiscountedticketsdirectlythroughthebuilt-inapplicationofKuxunonKaixin.
AsZhangsaid,thecooperationofKuxunandKaixinperfectlyrepresentsthecombinationofentertainmentandsearchserviceduetotheoverlapofusers.
AccordingtoZhang,KuxunwillsharesearchtechnologywithmoreInternetplatformstogainaccesstocomplementaryresourcesandtoachievewin-winsituationwiththesewebsites.
InJune2010,KuxunstartedtocollaboratewithSonyChina.
UsersofSONYVAIOPseriescomputerscoulddirectlysearchtravelinformationthroughpre-builtlinksof"KuxunAirTicketSearch"and"KuxunHotelSearch"inthefavoritefolderofIEintheselaptops.
Thiscollaborationismotivatedbytheconceptsof"portableandfashionable"whicharesharedbybothSONYVAIOandKuxun.
Therefore,thiscollaborationbringsmorevaluableandconvenientservicestotheirmutualusers.
AsZhangputit,"wecanbringourtravelsearchStrategyTransitionandMarketingInnovationofaVerticalSearchEngine633servicetomoreusersthroughtheproductsofSONY.
Thisisagreatmarketopportunityforus.
"ThecooperationwithKaixinandSONYcoversbothonlineandofflinemarketing.
Also,thecooperationhelpsKuxunbuildastrongerbrandimage.
Basedonthecomplementaryresources,Kuxunhasnotonlyrealizedtheincreaseofwebsitevisits,butalsoaccumulatedvaluableexperienceforfuturecooperativemarketing.
5ConclusionThesuccessfuldevelopmentofKuxun,fromatrainticketsearchenginetoacomprehensivebrandofconsumerinformationsearchinthedomesticmarket,andeventuallytheleaderinonlinetravelsearchindustry,suggeststhatacarefulselectionoftargetmarketbySTP,timelyadjustmenttomarketingstrategyandcontinuousinnovationofmarketingmodesareveryimportantfornewly-builtdot-coms.
ThecaseofKuxunalsohelpsprovideculture-specificsuggestionsforotherverticalsearchenginecompaniesinChina.
Itisvitalforverticalsearchenginecompaniestochooseaccuratelyaspecificmarkettoenterandthespecificcustomerswhotheyintendtoserve.
STPcanworkasanessentialtooltoadjustmarketingstrategy.
CompaniesshouldcontinuouslyconductRe-STP(re-segmentation,re-selection,re-positioning)sothattheycanbetteridentifypotentialmarketsandcustomers.
Inaddition,searchenginecompaniesmayenhancetheirsurvivalandgrowthontheintegrationofinformationvaluechain.
Thecriteriaofselectingtargetmarketsandpositioningincludebothusers'increasingdemandforinformationsearchandthepossibilityofaprofitablewin-wincooperationmodelwithothersinthevaluechain.
Moreover,marketinginnovationsarealsoastrongdrivingforceforsustainabledevelopmentofverticalsearchenginecompanies.
AcknowledgementsTheauthorsgratefullyacknowledgethemanagementofKuxunfortheirsupportforthiscasestudy.
WealsowanttothankKaiLi,TiantianAi,andXingChenfortheirhelpfulfeedbackonpreviousversionsofthisarticle.
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