thomas cook forex

SUMMER PROJECT REPORT

ON

IDENTIFYING PROSPECTIVE CUSTOMERS FOR FOREX

Under the Guidance of

Mr.Vinoth Kumar C

Head Sales –Retail Business

Thomas cook Forex, Chennai

Submitted in partial fulfilment of the requirement for the award of Degree of

Master of Business Administration

By

Rajkumar VR

29095

BHARATHIDASAN INSTITUTE OF MANAGEMENT

(School of Excellence of Bharathidasan University)

TIRUCHIRAPPALLI 620 014

2

IDENTIFYING PROSPECTIVE CUSTOMER FOR FOREX

ACKNOWLEDGEMENT

I sincerely thank Thomas Cook India Ltd for providing me with an opportunity to pursue my

internship at their organization. I extend my thanks to my mentor Mr.Vinoth Kumar C,

Head Sales – Retail Business for providing me the necessary guidance and road map for

successful completion of the project.

I am thankful to Mr. Toufeeq Naqash, Store Manager, OMR Branch,Chennai for Guiding

me throughout my project.

I am grateful to the Director and all the Faculty members of BIM, Trichy, for

supporting me and providing valuable guidance in all my endeavours.

RAJKUMAR VR

3


EXECUTIVE SUMMARY

Thomas cook is one of the India’s largest foreign exchange dealers in both wholesale

and retail segments of the market. It is one of the few non-banking institutions to have

been granted an Authorised Dealers license to deal in foreign exchange by the Reserve

Bank of India. As Authorised Dealers in foreign exchange Thomas cook provide foreign

exchange and payment solutions for leisure and business travellers, students going

abroad for higher studies, people traveling for employment, medical treatment,

emigration etc.

Apart from Foreign Currencies, Thomas cook also provides Borderless Forex Prepaid

cards, traveller’s Cheques, Foreign Currency Demand Drafts and also provide Money

transfer Services.

This Project ‘Identifying Prospective customers for Forex’ was undertaken so as to

Study and Analyse the Market for Foreign Exchange transactions and to identify

Prospect customers for Inward and Outward remittances.

The project started with the preliminary preparation by gaining knowledge about the

products and services offered by Thomas cook Under Forex. After the background study

a questionnaire was prepared to capture all the essential information required for the

analysis.

This was followed by an extensive census survey conducted with a wide range of

existing as well as prospective customers. The Portfolio of customers included Private

Visitors, Tourists, Film/Advertisement Shooting Companies, Business Travellers,

Patients for Medical treatment abroad, Tour operators and Travel agents, Student

Consultants, Students Going for Overseas education, Emigrants, Artists going on

Cultural Tours.

The results obtained from this survey were analysed and based on the findings,

recommendations were given to Thomas cook. Some critical Findings /

recommendations given are as follows

Only 31 % of the prospects were making Forex Transactions through Authorised

Dealers like Thomas cook. While Majority of the Prospects where

Making transactions through banks. The Prospects Consider banks to be more

secure and Trustworthy.

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While there is an option of buying Exchange online and getting it door delivered,

58 % of the prospects preferred Visiting the Retail outlet to Buy foreign

currencies

Only 28% of the prospects preferred Borderless prepaid cards even with its

Exclusive benefits. This Pointed out the need for promoting this Forex prepaid

cards.

Majority of the transactions with respect to outward remittances were for

Education Purposes indicating Students and their parents as the major Customer

base.

One third of the prospects were not aware of forex Services provided by Thomas

cook. Several Marketing Activities and Promotions should be carried out to

Increase the awareness among the customers.

As a part of the project the following marketing activities were carried out.

Visited around 40 Banks in the Mount road, Graeme’s Road and white’s road

areas and collected information about their Forex Business and a database was

prepared with all the contact details.

Visited the Student Education Consultancies in several prime locations in

Chennai and made briefings on the services provided by Thomas Cook foreign

exchange.

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Contents

ACKNOWLEDGEMENT ................................................................................................................. 2

EXECUTIVE SUMMARY ................................................................................................................ 3

1. INTRODUCTION ................................................................................................................... 7

1.1. Purpose ............................................................................................................................................... 7

1.2. Scope of the Project ............................................................................................................................ 7

1.3. Limitations of the Project .................................................................................................................... 7

2. FOREIGN EXCHANGE OVERVIEW ......................................................................................... 8

2.1. Foreign Exchange Market in India: ...................................................................................................... 8

2.2. Market Players: ................................................................................................................................... 8

2.3. Forex Market Types:............................................................................................................................ 8

2.4. Wholesale Forex Market: .................................................................................................................... 9

2.5. Retail Market: ..................................................................................................................................... 9

3. COMPANY & SERVICES....................................................................................................... 10

3.1. Thomas Cook in Foreign Exchange: ................................................................................................... 10

3.2. Forex Business Model: ...................................................................................................................... 10

3.3. Products and Services ....................................................................................................................... 11

4. OBJECTIVES & METHODOLOGY .......................................................................................... 12

4.1. Objectives: .............................................................................................................................................. 12

4.2. Methodology: ......................................................................................................................................... 12

5. ANALYSIS & FINDINGS........................................................................................................ 14

5.1. Sample Demographics: ...................................................................................................................... 14

5.2. Results: ............................................................................................................................................. 15 5.2.1. Purpose of Travel ........................................................................................................................... 15 5.2.2. Buying Behaviour: .......................................................................................................................... 15

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5.2.3. Preferred Forex Medium: .............................................................................................................. 17 5.2.4. Money Transfer: ............................................................................................................................. 17 5.2.5. Awareness about Thomas Cook: ................................................................................................... 18 5.2.6. Source of Awareness: ..................................................................................................................... 18 5.2.7. Customers Making Travel arrangements with Thomas Cook: ...................................................... 18 5.2.8. Customer Satisfaction: ................................................................................................................... 19 5.2.9. Receiving Money: ........................................................................................................................... 19

6. RECOMMENDATIONS ........................................................................................................ 20

7. CONCLUSION ..................................................................................................................... 21

8. APPENDICES ...................................................................................................................... 22

Questionnaire ................................................................................................................................................ 22

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1. INTRODUCTION

1.1. Purpose

To study and identify the Effective Prospect Customers for Foreign Exchange at

Thomas cook.

The project objective includes.

I. Studying the Forex Business Carried By Thomas Cook in Retail Market.

II. Identifying the Effective prospective customers for Inward and Outward

remittances in Thomas cook through Market research

III. Conducting Various Marketing Activities to Create awareness as well as

attracting Prospective customers.

1.2. Scope of the Project

Scope of the Project was Limited to Chennai City. The Respondents were Chosen

Conveniently from Various Segments being identified as Prospects for Foreign

Exchange.

1.3. Limitations of the Project

Though the project was done with best efforts possible, there are some limitations. Due

to limited time allotted to this project, few prospective customer segments were not

covered, though their views might have added more value to the project.

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2. FOREIGN EXCHANGE OVERVIEW

2.1. Foreign Exchange Market in India:

Foreign Exchange Market in India works under the central government in India and

executes wide powers to control transactions in foreign exchange. The Foreign

Exchange Management Act, 1999 or FEMA regulates the whole foreign exchange

market in India. Since the onset of liberalization, foreign exchange markets in India

have witnessed explosive growth in trading capacity. The importance of the exchange

rate of foreign exchange in India for the Indian economy has also been far greater than

ever before. While the Indian government has clearly adopted a flexible exchange rate

regime, in practice the rupee is one of most resourceful trackers of the US dollar. The

Indian foreign exchange market is made up of the buyers, sellers, market mediators and

the monetary authority of India. The main center of foreign exchange in India is

Mumbai, the commercial capital of the country

2.2. Market Players:

Players in the Indian market include (a) Authorised Dealers, mostly banks who are

authorised to deal in foreign exchange, (b) foreign exchange brokers who act as

intermediaries, and (c) customers – individuals, corporates, who need foreign exchange

for their transactions.

Authorised Dealers have been divided into different categories. All scheduled

commercial banks, which include public sector banks, private sector banks and foreign

banks operating in India, belong to category I of ADs. All upgraded full-fledged money

changers (FFMCs) and select regional rural banks (RRBs) and co-operative banks

belong to category II of ADs. Select financial institutions such as EXIM Bank belong

to category III of ADs. Currently, there are 86 (Category I) Ads operating in India out

of which five are co-operative banks. All merchant transactions in the foreign exchange

market have to be necessarily undertaken directly through Authorised dealers.

2.3. Forex Market Types:

The forex market is an OTC (Over the Counter) market without any centralized

clearinghouse. It consists of two tiers.

• The interbank or wholesale market,

• Client or retail market.

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2.4. Wholesale Forex Market:

Major Forex trading in the wholesale forex markets is undertaken by banks – popularly

known as interbank market. In this market, banks and non-bank financial institutions

transact with each other. They undertake trading on behalf of customers, but majority

of trading is undertaken for their own account by proprietary desks. Besides banks and

non-bank financial institutions, multinational corporations, hedge funds, pension and

provident funds, insurance companies, mutual funds etc. participate in the wholesale

market.

2.5. Retail Market:

In the retail market, individuals (tourists, foreign students, patients traveling to other

countries for medical treatment) small companies, small exporters and importers

operate.

Money transfer companies/remittance companies are also major players in the retail

market.

Retail traders buy/sell currency for their genuine business/personal requirements. For

Example, an exporter enters into forward contract to convert foreign currency to

domestic currency.

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3. COMPANY & SERVICES

3.1. Thomas Cook in Foreign Exchange:

Thomas cook is one of the India’s largest foreign exchange dealers in both wholesale

and retail segments of the market. It is one of the few non-banking institutions to have

been granted an Authorised Dealers license to deal in foreign exchange by the Reserve

Bank of India. As Authorised Dealers in foreign exchange Thomas cook provide foreign

exchange and payment solutions for leisure and business travellers, students going

abroad for higher studies, people traveling for employment, medical treatment,

emigration etc.

3.2. Forex Business Model:

Thomas Cook has been granted an authorized dealers’ license (category II) by RBI to

deal in foreign exchange through its designated branches. Under this license, we have

been, inter-alia, granted permission to undertake the following activities:

1. Retail purchases of foreign currencies and travellers cheques.

2. Bulk purchases/sales of foreign currencies from/to authorized dealers, money

changers and franchisees.

3. Release / remittance of foreign exchange for the following activities:

a. Private Visits

b. Remittance by tour operators/travel agents to overseas agents/principals/hotels

c. Business Travel (including for Central and State Government officials)

d. Fee for participation in global conferences and specialized training

e. Payment of crew wages

f. Film Shooting

g. Medical Treatment abroad

h. Overseas Education

i. Remittance under educational tie up arrangements with universities abroad

j. Maintenance of close relatives abroad

k. Stall rentals and participation fees in connection with participation in overseas

exhibitions / fairs

4. Import and export of foreign currency and export of encashed Traveller’s Cheques

5. Maintenance of foreign currency accounts with banks abroad and undertaking forex

cover operations in India and abroad.

Thomas Cook provides the foreign exchange and payment solutions for:

Individual travellers

Foreign exchange for leisure outbound travellers

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Foreign Exchange for migration, employment, medical treatment.

Remittances for students studying abroad, gift remittances etc

Encashment services & inward remittances for inbound tourists visiting India,

Non Resident / Resident Indians.

Corporate

Travel money and remittances for business travellers.

On-site support for inbound tour conferences.

Film production houses traveling for shoots abroad.

Remittances of tour proceeds for tour operators.

Institutions

Bulk purchases and sales of foreign currencies from Banks, Non-Bank Retailers and

Money Changers.

3.3. Products and Services

Purchase and Sale of currency notes in 26 destination currencies

Purchase and Sale of foreign currency denominated travellers cheques

Thomas Cook Global Money Card and Citibank World Money Card as

prepaid cards, which is a convenient way to carry money overseas

Foreign Currency Drafts

Wire transfer of Funds

Remittance of money into India through MoneyGram

Cash Advances against International Credit Card

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4. OBJECTIVES & METHODOLOGY

4.1. Objectives:

The prime objective of the project was to identify the prospective customer segments

for outward and inward remittances in Foreign Exchange and thereby to develop

marketing activities in order to Increase the Customer base. Thomas cook being the

leading authorised dealer in Foreign Exchange are looking forward to increase their

customer base. This Project aims to identify the Prospects along with their preferences

with respect to their Foreign Exchange Business.

4.2. Methodology:

The Project was carried out in four stages in 8 weeks Duration.

Study & Observation

Ground work & Questionaire Preparation

Survey& Analysis

Marketing Activities

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Stage 1:

For the first two weeks, the Forex Market and the company’s business in Retail

market was studied. The Branch’s operations were observed to understand the Business

and to learn about the various Products and Services that were being offered to the

customers.

Stage 2:

During the third and fourth week, the data required to develop a Questionnaire

was collected and the questionnaire was prepared. The insights were gathered from

several sales people from different branches.

Stage 3:

Once the questionnaire was completed, the survey was conducted from a wide

range of customers by directly meeting the respondents and getting filled by them

manually and also through Online by sending the online survey links to the prospects

Email Id’s collected from existing customer database and references. Once the Survey

was completed, the results were analysed and based upon the findings several

recommendations were reported.

Stage 4:

Finally as a part of the project, several marketing activities were designed in

order to Increase the awareness among the prospects and to increase the Customer

Walk-ins into retail outlets .After discussions with other interns and the sales head, three

Marketing activities were shortlisted. Visiting banks and Educational Consultants to

initiate tie-ups with them and Visiting Shops in Spencer’s Shopping Mall to increase

the awareness and also to direct Prospects to the Branch in the Shopping Mall.

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5. ANALYSIS & FINDINGS

5.1. Sample Demographics:

Gender:

Age:

Occupation:

Gender

Male 78

Female 42

Total 120

Age

18-25 65

26-35 43

35 + 12

Occupation

Student 40

Working professional 42

Business 33

Others 5

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5.2. Results:

5.2.1. Purpose of Travel

A. Tourism, Education and Employment were the three major travel

purposes.

5.2.2. Buying Behaviour:

B. Almost 50 percent of the people do foreign Exchange transactions through

Banks and 31 percent do through authorised dealers like Thomas cook.

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C. Almost 60 Percent of the customers prefer to visit the retail outlet in buying

foreign Exchange and 25 Percent prefer to Booking online and collecting

it from outlet.

D. Only 17 Percent Prefer Door delivery

E. Most of the customers prefer to buy Forex during the last 2 weeks before

Travel

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5.2.3. Preferred Forex Medium:

F. Almost 50 percent of the Customers prefer buying Forex in the Form of

currency notes

G. 28 percent prefer Forex cards and 20% prefer Traveller’s cheques.

5.2.4. Money Transfer:

H. Almost 40 percent of the customers who send money abroad are sending

for Education purposes

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5.2.5. Awareness about Thomas Cook:

I. 34 % of the respondents are unaware of Forex Services Provided by

Thomas cook.

5.2.6. Source of Awareness:

J. Almost 33 Percent of the customers get to know about Thomas Cook

Services through word of mouth.

5.2.7. Customers Making Travel arrangements with Thomas

Cook:

K. 85% of the Customers who make travel arrangements with Thomas cook

do foreign Exchange transactions through Thomas cook Forex.

Highly Aware

11%

Aware25%

Not so much30%

Don’t Know34%

AWARENESS

Newspaper and

Magazine ads20%

TV commercial

s17%

Referral13%

Word of Mouth

33%

Internet17%

SOURCE

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5.2.8. Customer Satisfaction:

L. Almost 50 % of the existing customers are dissatisfied with the services.

5.2.9. Receiving Money:

M. 15 % of the respondents both send and Receive Money from Abroad.

N. Of the 40 respondents who receive money, almost 35 % receive money

from abroad monthly (regularly).

Very Satisfied7%

Satisfied29%

Neutral14%

Dissatisfied29%

very Dissatisfied21%

CUSTOMER SATISFACTION

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6. RECOMMENDATIONS

The Number of students who travel abroad for education has increased

significantly in the recent years and they form a Prime Segment of Effective

Prospects for foreign Exchange. The students not only buy Foreign exchange

during departure but also use the Money Transfer Services to receive money

from their family members and to pay college fees using foreign currency

demand drafts. Thus by targeting this segment Thomas Cook Could foresee

longer term of Business with these Customers.

Thomas cook currently has tie-ups with few of the Student Consultancies in

Chennai. However by Increasing the Tie-ups with Student Consultancies,

Thomas cook could reach more Students who travel abroad for education. Also

they can offer certain benefits to attract students.

Majority of the Prospects where making transactions through banks. The

Prospects Consider banks to be more secure and Trustworthy. Thomas cook

should promote their Security features and focus on gaining the Trust of their

Customers.

Thomas Cook Provides Online booking of forex and Also Offer Door delivery

Services. However majority of the customers prefer buying Forex by directly

visiting the retail outlet.

Currency Notes are the most preferred Forex Products among the Customers.

However with Forex Prepaid Cards and Traveller’s Cheques, Thomas cook can

look at longer term of business with the customers. Thomas cook should promote

on the benefits offered by the Borderless Prepaid cards and create awareness

among the customers.

Still a Majority of the Customers are not satisfied with the Services offered by

Thomas cook. The major reasons are slower response from the sales person and

Higher Margin rates. By improving the response time and decreasing the margin

rates Thomas cook could increase their Customer base.

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7. CONCLUSION

The Major Findings of this Project clearly indicates the need for creating an effective

Customer Relationship Management System to keep track of their customer details and

come up with more efficient ways to market to them. Currently there is no such CRM

System Implemented with Forex Department. Thomas Cook can try to integrate the

existing CRM system which is used for Travels Business along with the Forex Business.

By collecting information that identifies customers' buying habits, including

preferences and frequency, CRM systems provides the Thomas cook, a closer look at

their customers' wants and needs so they can provide better customer service solutions

As Forex Is a Low margin Business, Thomas cook are not promoting it in Media. Hence

we had to come up with few of Low cost marketing strategies to Attract larger group of

Prospective customers.

Students traveling abroad for education and their Families are good prospects for Forex

businesses over longer term. They use a Variety of products and services.

Thomas Cook is a widely known as a worldwide travel Agent, however the Forex

division of Thomas cook is not very popular among the prospects. Though Thomas

cook is still the leading Forex Authorised Dealer in India, there are several small time

agents entering into the field and in order to be competitive and improving their

Customer base, Thomas cook should also focus more on Promoting Forex Business in

India.

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8. APPENDICES

Questionnaire

Gender

Age

Occupation

BLOCK-2:

1. How often do you travel abroad?

(If you have chosen option ‘Never’ above, please skip Questions 2-6 and move to Block 3)

2. Which of the following best describes the exact nature of your Travel abroad? (Check all the options that apply)

Tourist Private visits

Business Visits

Medical Visits

Education

Employment Emigration

Other (Please Specify)

3. Where do you normally buy the Foreign Currency?

Male Female

18 - 25 26 - 30 31-35 36-40 41-45 46-50 >50

Student Private Employee

Government Employee

Business Others (Please Specify)

Never Less than once a year

Once in a year

2-3 Times in a year

More than 3 times in a year

Banks Authorised Dealers/Brokers/Money Exchangers

Both

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4. Which is your most preferred form of carrying foreign currency abroad?

5. When do you Avail Foreign exchange?

6-8 weeks before travel



Within 2 weeks before travel

6. Which is your most preferred Medium for Foreign Exchange?

Proceed To block 4

BLOCK 3: (Never Travelled Abroad)

7. Would you be travelling abroad in near future?

Yes No Maybe

(IF ‘NO’ Please Skip Questions 8-10 and proceed to 11)

8. Which of the following would best describe the exact nature of your Travel abroad? (Check the

options that apply)

Tourist Private visits

Business Visits

Medical Visits

Education

Employment Emigration

Other (Please Specify)

9. Where would you buy the Foreign Exchange From?

Banks Authorised Dealers/Brokers/Money Exchangers

Both

Currency notes

Traveller’s cheques

Forex Prepaid cards

Directly visiting the Forex Retail outlet

Booking Online and collecting it from outlet

Booking Online and Door delivery

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10. Which of these would be your most preferred Medium for Foreign Exchange?

BLOCK- 4:

11. Do you Transfer money abroad to your family members living abroad? 12. Do you transfer Money abroad for Medical expenses?

13. Do you transfer Money abroad for your son/daughter /relative studying abroad?

14. Do you transfer Money Abroad for any other reason?

If so please mention the reason.

15. How often do you Transfer money abroad?

16. Do You Receive Money from Abroad?

IF Yes, How often do you Receive money from abroad?

Directly visiting the Forex Retail outlet

Booking Online and collecting it from outlet

Booking Online and Door delivery

Yes No

Yes No

Yes No

Yes - Reason No

Regularly (monthly)

Often Sometimes Occasionally Never

Yes No

Regularly (monthly)

Often Sometimes Occasionally Never

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BLOCK 5:

1. Are you aware of Thomas Cook Foreign Currency Exchange services?

Highly Aware Aware Not so much Don’t Know

IF Your Answer is Don’t Know please Skip Questions 2 & 3 and proceed with 4.

2. How did you come to know about Thomas cook?

3. Have you availed Services from Thomas cook Foreign exchange before?

IF ‘Yes’, how would you Rate the services provided from Thomas

cook?

4. would you Consider Availing services from Thomas cook in the future for currency exchanges &

Money transfers?

Yes No

5. Do you make your travel arrangements with Thomas cook travels?

Yes No

Newspaper and Magazine ads.

TV commercials

Referral

Word of mouth

Internet None

Yes No

Very Satisfied

Satisfied Neutral Dissatisfied Very Dissatisfied

thomas cook forex

Documents

foreign exchange thomas

forex transactions

prospective customers

foreign exchange transactions

forex acknowledgement

business travellers

foreign currencies

borderless forex prepaid