Final ppt

Marketing Strategy for

Background• Incorporated in 2004• Joint Venture between the TATA Group and

STAR• The SKY brand, owned by the UK-based British

Sky Broadcasting Group• Tata Sky Ltd is the First Indian DTH provider to

be awarded the ISO 27001:2005 accreditation

Marketing Objectives• Volumes & Profits : Company wants to double its

customer base by 2012.• Image: Projecting itself as an “Edutainment” service

rather than just an entertainment service provider.• Average Revenue Per User (ARPU) : The company

intends to gain value market share and increase its ARPU

• Regional and remote area: Capture new areas and increase the reach

The Product• Packages are provided to suit the customer

needs• Services provided by TATA Sky e.g. active

series

Competitors• Dish TV: Market leader amongst private players• Sun Direct: Price warrior, Strong Brand equity in south.• Airtel: Presence of a strong telcom infrastructure• Big TV: Strong brand image and superior telcom infrastructure• Videocon DTH: riding on its strength in television

manufacturing and distribution. Company wants to integrate set top box with television.

• Doordarshan: National presence (90% reach), free service.• Local cable operators: In market for close to 20 years and have

high market penetration

SWOT ANALYSIS OF TATA SKY (1/2)• Strengths

• Superior quality hardware and machinery used• High picture and sound quality and superior customer service

provided• Use the brand TATA for brand imaging• Established player in the market helps for the visibility of the product

• Weakness• High operating expenses• Higher service charges and installation charges compared to cable T.V

or other DTH providers.• Small distribution network limited to the urban; hassled by

distribution issues.

SWOT ANALYSIS OF TATA SKY (2/2)• Opportunities

• The share of the wallet of Indians have been increasingly moving towards education and entertainment as a consolidated function which TATA SKY can very aptly fulfil.

• Higher disposable income with the Indian population.• Rural market has huge potential.• Growing demand for customised television viewership.• HDTV services provide an opportunity with the Commonwealth Games and World Cup

around the corner.

• Threats• Online live streaming – Offers superior services and at much lower costs (effectively

almost free).• Established competitors like Dish TV who are majority market share holders.• Traditional cable TV has improved services which eat into the consumer share of DTH.• High dependence on individual channels foe fixation of price reduces their bargaining

power and making TATA SKY prone to frequent price changes due to arm twisting tactics.• IPTV provides superior technology if implemented.

Market Share

32%

24%

21%

13%

8%

2%

Dish T.VSun DirectTata SkyBig T.VAirtelD2H

Market Distribution of TATA Sky(%)

12%11%

7%

7%

7%6%5%

5%5%5%

5%

4%

4%

19% MaharashtraGujaratKarnatakaUttar PradeshTamil NaduPunjabOrissaWest BengalKeralaAndhra PradeshRajasthanAssamMadhya PradeshOthers

The present sceneNumber of subscribers availing of DTH Services

FY2008 FY2009 FY20100

200400600800

100012001400160018002000

Year WiseRevenues

Revenues

FY2008 FY2009 FY2010

-600-580-560-540-520-500-480-460-440

Year Wise PAT

Profit after tax

Growth potential

Porter’s Five Forces Analysis (1/2)

• Threats of new entrants– Proper distribution network: Distribution network takes time to mature so

an immediate threat from a new entrant is low.– License and regulation issues: TRAI regulates the players of the DTH

industry and hence entry into the sector is highly monitored. Besides the pricing Consumer Premise Equipment (CPE) like the set-top boxes and the positioning of transponders is patented. Hence this too makes the threat from new entrants low.

– Established players: The existence of established players in the market like TATA SKY, Airtel Digital TV, etc creates high entry barriers for new entrants.

• Bargaining power of buyers: – Presence of seven established brands in the market in the form of Airtel

Digital TV, Big TV, Dish TV, Sun Direct, etc provides the consumers with a lot of options

Porter’s Five Forces Analysis (2/2)

• Bargaining power of suppliers: – Three major types of supplies – CPE (Customer Premise Equipment) like set-

top boxes, transponders and content.– The transponders are supplied by ISRO and the absence of proper

regulation in the pricing of bandwidths.• Pressure from substitutes: The threat to the DTH sector is three-fold:

– I/P TV: They provide a lucrative option for the buyer as they come with free set-top boxes and promise HD quality pictures. Besides they also have the added advantage of offering Internet services along with the television services.

– Traditional terrestrial cable TV: The market penetration of DTH players have still been slow because people have been showing a lot of inertia while involved with the switch. There is still a huge portion of the people who use the traditional cable TV services.

Environmental Factors• Political

• Political opposition• Content regulation• Coalition governments• Political connections

• Economic• Impact of economic policies• Higher disposable income

• Social• Aspirations• Vernacular Vs National channels• Peer pressure

• Technological• Bandwidth- restricted usage• Advancements

Company and Competitor Analysis

Picture Quality

Cost Effectiveness

Tech./Features Connectivity Customer Care and web service

Tata Sky 5 4 4.5 4 5Reliance Big TV

5 4 4 3.5 4

Airtel DTH 5 4.5 4.5 5 2.5

Strategies• Tata Sky is focused more on value added services• Airtel and Reliance are banking on their

established infrastructure• Videocon DTH is attracting its customers through

schemes such as an integrated TV and set top box

• Sun Direct have played its cards on the regional sentiments of the public

Marketing Mix (1/2)• Pricing

• Tata Sky is deemed to be expensive and Sun Direct to be cheapest

• Promotion• DTH providers have banked on the Bollywood

Marketing Mix (2/2)• Placing

• Sun Direct: concentrated on South India • Rest have a pan-India presence

• Product• Scope for product differentiation is not much • Much depends on the value added feature and services

Profits• New field and it requires high capital

investment• Gestation period is also high• 5-6 years and about 6 million customers

before profits begin to show • Focus is on how to retain customers

Value chain• Technology

• 1st one to launch the concept of recording live TV • Lined up the launch of HD services

• Content provided• Don’t have many variables to play with

• Delivery (customer service)• All players are equally strong

Segmentation General descriptors:

• Demographic – age and income levels• Geographic –urban vs. rural• Lifestyle –hedonistic or utility

The customer relation with the product has also been used as a variable:

• Benefit based segmentation – utility vs. price• User status – new user vs. “trade-up”• TV usage rate –heavy vs. intermittent

Consumer Behavior• The variables that determine the consumer

behavior:• Customer Service• Content choice• Reception• Technical support• Price

TargetingThe segments targeted are:

• DINK and the DIOK middle class families in order to increase the ARPU (Average Revenue per User)• First time users and the “trade-up” families• Rural markets –increase consumers citing advantages of

satellites as compared to traditional cable television services• Working parents - “Edutainment” for the children at

home

Positioning• HD quality pictures and seamless control• “Edutainment” package• Live TV recording up to 45 hours• Simultaneous viewership• Ease of installation and usage

Assumptions in Planning Process

• Market Potential• India will become the largest DTH market in the world by

2012• Rural TV market to increase by 3-4 million every year

• Forecast Assumptions• Monthly ARPUs of DTH players will climb to Rs 220 by 2014• Shift from pricing strategy towards value addition strategy• Expansion in the foreign countries will be relaxed• Addition of KU bands by the government• VAS (value added services), HDTV (high definition television)

will provide a boost

Proposed Strategy• Core Strategy

• Product differentiation by means of value added features

• Customer Targets• Rural Markets• Entering neighbouring countries • Entering travel area market • Tie up with hotels and restaurants

Proposed Strategy• Product/Service Features

• Common dish for a society.• Interactive services for stock markets.• Interactive video games including multi player games (with console).• Interactive Rural market services which will give regular updates

about prices of different commodities to farmers.• Use of regional languages in the guide panel for diverse customers.• Enhanced compatibility with digital equipments like laptops for daily

use.• Extensive use of Radio reception as one of its services.• Introduction of free channel for playing of on demand songs.

Value proposition