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.
Market Share
Market Distribution of TATA
Sky(%)
 The present scene
Number of subscribers availing of DTH Services
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 Cost Tech./Features Connectivity Customer

Quality Effectivene Care and web
ss service
Tata Sky 5 4 4.5 4 5
Reliance Big 5 4 4 3.5 4
TV
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

 Targeting
The 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