Case : Tata Sky Tata Sky is a DTH ( Direct to Home ) satellite television provider in India.

It is a joint venture between the Tata Group, that owns 80% and STAR TV that owns a 20% stake. 'Tata Sky was launched' in August 2006. It offers over 110 channels and some interactive ones. Tata Sky uplinks all channels from broadcasters to its satellite ( INSAT 4A) The satellite sends these channels in digital format to a mini dish fixed outside a subscribers home. This relays the channels to the digicomp which decodes the channels and sends them to your television, giving you an unparalleled television viewing experience in DVD quality picture and CD quality sound. Tata Skys Multi Dwelling Unit (MDU) solution offers large multi-storeyed buildings the option of using a single minidish for the entire building. Individual homes still need to have their own digicomps and maintain individual subscription accounts with Tata Sky. The company aims to be a market leader, and is putting together an aggressive marketing and roll out plan. Leveraging the global expertise of Newscorp, it has invested in proven and best-of breed technology for its uplink centre, IT back office, EPG design and secure middleware. It has also put rigorous processes, policies and procedures in place, to ensure that its audience gets a world-class viewing experience. The strategy "Our strategy is to capture the market by offering superior value," says Vikram Kaushik, managing director and CEO of Tata Sky. Consumer insight shows that television is the only affordable family entertainment option available for middle-class Indians today and they would appreciate any enhancement in their viewing experience. Add to this the evolution of television technology from the CRT tube to flat screens, LCDs, plasmas and now HDTVs. What exactly is Tata Sky adding to the viewer's experience? Tata Sky, says Kaushik, gives people a new dimension in TV viewing, thanks to the 3Cs: Choice: It offers more than 100 channels, with DVD picture quality and CD sound quality. Control: Viewers can control the content; watch four news channels simultaneously, find out what's playing on all channels without changing channels and, most important, parents can regulate what their children watch. Convenience: The viewer gets seven-day programme schedules for all channels online, and reminders for favourite programmes. There's also the X factor the excitement of interactive services. Tata Sky offers a bouquet of interactive news, sports and games to subscribers all easily accessible with some simple hardware a small 65-cm mini-dish to receive the satellite signals, a digicompTM that supports CAS, and a DigicardTM. Roll out to launch Two months before the launch, the company tested its critical applications in over 1,000 homes of its employees across eight cities. The technology, systems readiness and integration, and the

installation process were rigorously tried out. So was the customer service readiness for using the Interactive Voice Response (IVR) system. Over 250 technology, IT, service and process issues were identified, fixed and documented by the company. In August 2006, Tata Sky was launched at a special introductory offer of Rs200 a month for more than 50 channels with Rs 2999/ for a set-top box and Rs 1000 as installation charges.. Two months post launch, the Tata Sky service was available at over 17,000 outlets across 3,700 towns. The company has been acquiring subscribers at a healthy rate. Accolades have been pouring in. "The market has responded positively to our service and our aim is to have one million subscribers by the end of a year. We are well on our way to achieving that target," says a delighted Kaushik. The company has a pan-India presence and has equal footing in both urban and the up-country areas. To expand its distribution network, the company has tied-up with ITC's e-Chaupal, Godrej Aadhar, the ITC International Business Division and the Indian Oil Corporation. It also has B2B tie-ups with Infiniti Retail's Croma, Tata Indicom and Pantaloon Retail in urban India. Tata Sky has a unique pre-paid subscription model, which not only reduces the credit risk factor for the company, but offers convenience to customers. Thirty to 40 per cent of cable customers in the new CAS areas of Mumbai, Delhi and Kolkata adopted Tata Sky's DTH service, claims the company. The company has also settled its outstanding requests that accumulated during the New Year, when CAS was applied to three new cities. The market is getting competitive with Sun Networks, Reliance Communications and future DTH players, such as Anil Ambani's Blue Magic, Sunil Mittal's Bharti, Videocon, and the Sun Network's Sun Direct ( All players are having strategic alliances with global partners.). Currently, Zee's Dish TV is the only other DTH provider.

Ensuring customer satisfaction "We rate customer service as the key differentiator that will carve a distinct place for Tata Sky in the market," says Kaushik. During the testing phase, the company undertook one of the largestever training initiatives in corporate India; in just five months it trained 2,500 people in field services, 1,000 in customer operations, 1,000 in IT and 20,000 in sales. A dedicated team of over 3,000 trained Tata Sky engineers are responsible for installing the service in the subscribers' homes. "They also solve technical problems. If the problem can't be resolved immediately, the subscriber box is replaced on the spot," adds Kaushik. Three highend 24x7 call centres, handled by customer care associates trained to answer customer queries in 11 different languages, deal with complaints. The call centres are managed by Group company SerWizSol, which has dedicated Tata Sky teams at its centres in Pune, Hyderabad and Chandigarh. Subscribers can also email their feedback to help@tatasky.com A 24-hour 'subscriber help' channel explains the features of the service, and a help desk application can be easily accessed on the television set itself. Tata Sky tracks customer satisfaction through a monthly survey of outbound calls. The company is also initiating an all-

India customer satisfaction survey. "Our field service gets a very positive feedback from the subscribers. We are rated high on professionalism and courtesy," says Kaushik. A recent launch was Active Sports service for cricket enthusiasts across the country. The launch coincided with the England-Pakistan one-day cricket series that was telecast on ESPN STAR Sports. Tata Sky believed that Actve Sports will revolutionise the way fans watch cricket on television. With Tata Sky's Actve Sports, cricket fans will no longer need to wait for the broadcaster to provide match highlights, player statistics or ball trajectory. The fans can access all these features at the press of a button, at any time during the match. Additionally, viewers can get commentary in multiple languages, expert analysis and a three-dimensional graphical representation of the match on Tata Sky's virtual stadium. Cashing in on the Cricket World Cup, Tata Sky had hired actor Hrithik Roshan as brand ambassador to sell its threemonths free subscription offer. However, when the cricket season is not on, these channels are some times not available. The Company has also launched two new initiatives which offers consumers greater value and choice. The company has introduced three new packages -- the Starter Pack, the Family Pack and the Western Pack -- in addition to its existing Super Saver Pack. Two new channels from BBC, CBeebies and BBC entertainment, will also make their debut across India on Tata Sky. The Starter Pack is priced at Rs 160 and will consist of 35 channels including regional channels, ESPN, STAR Sports and two interactive services. The Family Pack offers 71 channels at Rs 250, which include popular channels in Hindi and regional languages, sports channels and four interactive services. Whereas the Western Pack, priced at Rs 250, provides a wide range of over 67 channels in English and regional languages, besides the sports channels and three interactive services. According to Vikram Kaushik, The quick adoption of our service across the country has accorded Tata Sky the status of the fastest growing DTH platform in the world. We are the first in the Indian pay television market to offer our customers pan-India the freedom of genuine choice, at affordable prices with the launch of the three new channel packages." The company believed that this launch will make Tata Sky the first in the Indian pay television market to offer a 'genuine' freedom of choice. Consumer Concerns The companys has made a drive to look into some of the concerns expressed by consumers. The durability and working of the dish, given bad weather conditions sometimes raises consumer conflicts regarding warranty and liability. The sudden deletion of some channels or additions of channels like North East TV, that is suited to niche audiences. The availability of music channels. Improvement on quality of digital image, digital audio channels and the need for better interactive content. The access of their customer service number for redressal mechanism and the navigability of their web site. Their recent packs that have been marketed have also been criticized for not offering few channels in each package, so that consumers are forced to pay higher. Future forward The journey ahead is not without challenges. "We believe that satellite television is a new category and are working hard to educate customers about its benefits," says Kaushik. A 360degree communication approach is used for customer education through television, print, web, radio, outdoor media, call centres and direct mailers both in urban and rural areas. The

company is also demonstrating the service at high-traffic sites like airports, malls and exhibitions. With half a million subscribers in its kitty, Tata Sky the Direct to Home (DTH) service provider is confident of acquiring another half million and leadership position with it within a year of its launch. The company, which had committed Rs 3,000 crore when it launched, has also invested a Rs 1,000 crore and claims to be technologically prepared for the next 15 years and to have capacity to uplink to four satellites, instead of the single one now. "This business has a long gestation period and we are not expecting to break even before five to seven years," said Mr Kaushik. "New entrants are a sign of how well we are doing," says Mr Kaushik. "The global experience in most countries is that the market can support just two or three large players," he added, when asked about what the future of DTH looked like. Mr Kaushik believes it is the quality of service, supported by high investments in technology, personnel and training that will set Tata Sky apart. Tata-Sky will develop programmes such as Active Sports, Active Newsroom, Active Khabar, Active Games, and Active STAR News. Provide additional services like digital audio channels and develop interactie content. The service is also likely to become more affordable. As volume grows, prices will come down, says Tata Sky. The company feels that the fact it manufactures its own subscriber boxes should work to its advantage as pay-TV increases its coverage. "We would like to be a benchmark for customer service and offer more value-added services to our subscribers," says Kaushik. The company is also keen to help the government formulate its DTH policy. Tata Sky has climbed mountains and crossed the oceans in its first few months literally it has installed services in Ladakh, Leh, and Kargil; and also a first 'at sea' installation on an oil rig. Now this youngest of Tata Group companies is all set to scale greater heights. "Tata Sky will change the paradigm of television viewing in the country," Kaushik predicts confidently. Adapted from Internet Sources and - All the entertainment you need by Candida Moraes

Appendix - Channels On Tata Sky DD National Play TV STAR Plus Aastha Channel STAR One Sanskar STAR Utsav Channel Sony Zee Jagran Entertainment Television STAR World SAB TV AXN Sahara One Discovery Travel & Zee TV Living Zee Smile Fashion TV DD National Zee Cafe STAR Plus Zee Trendz STAR One Zone Reality STAR Utsav STAR Gold Sony MAX Entertainment Television Filmy SAB TV Zee Cinema Sahara One Zee Premiere Zee TV Zee Action Zee Smile Zee Classic National STAR Movies Geographic PIX History HBO Channel Zee Studio Discovery Tata Sky Channel Showcase(7 Animal Planet Channels) Hungama TV DD Sports Toon Disney STAR Sports Disney ESPN Channel India TEN Sports Nick Zee Sports NDTV 24X7 Neo Sports NDTV Profit Neo Plus Times Now DD News Headlines STAR News Today NDTV India BBC World Aaj Tak CNBC-TV18 Zee News CNN Zee Business CNN-IBN CNBC Awaaz Subscriber Help Channel(Tata Sky)

Animax Cartoon Network POGO Channel V MTV ETC Zee Muzic VH1 DD Podhigai STAR Vijay Jaya TV DD Saptagiri ETV Telegu ETV2 Maa TV Zee Telegu TV9 DD Sahyadri Zee Marathi DD Chandana ETV Kannada Zee Kannada DD Bangla STAR Ananda ETV Bangla Zee Bangla 24 Ghanta TV DD Malayalam Asianet Asianet News Kairali Amrita TV Indiavision DD Gujarati ETV Gujarati Zee Gujarati DD Punjabi MH One ETC Punjabi Zee Punjabi ETV Oriya ETV Urdu 7Starcare DD NE Sales Promotion Channel (Tata Sky)

VORA AND COMPANY*

Understand the Concept of Marketing Mix In December 1963, M.C. Vora, proprietor of Vora and Company manufacturers of Blossom Quick-Cooking Oats located at Lucknow, sought counsel from the Small Industries Service Institute at Lucknow regarding steps that might be taken to increase the sales of his company. The company had been organized in 1959, had started to sell its product nationally in 1961, but by December 1963 had failed to attain a profitable volume of sales. Mr. Voras family had been in the group business for several generations. In 1959, some four years after the Government of India had stopped the importation of packaged cereals, Mr. Vora and his family decided to enter the business of processing and selling a product similar to Quaker brand of quick-cooking rolled oats, a product of the Quaker Oats Company of the United States. For some years previous to the Governments embargo, this product had been imported into India by the firm of Muller and Phipps, which acted as sole selling agents. The firm had advertised the product in many Indian cities and reportedly had attained at least a moderate volume of sales, particularly in South India, in the states of Kerala and Madras. In 1956 shortly after the embargo on Quaker oats, the Ganesh Flour Mills of Delhi started to develop and market a quick cooking white oats under the trademark Champion. After some three years of experimental marketing in nearby areas, Ganesh Mills extended its distribution nationally, devoting a moderate amount to advertising in city markets throughout India The management of Vora and Company developed the machinery and the method of processing its product on a trial and error basis. The first product offered was not deemed satisfactory by the management and was withdrawn from the market. Not until 1961 was the company satisfied with the products quality and with its processing equipment, which, when perfected, could produce on a one shift basis 500 cases a month, each case consisting of 36 tins of 550 grams each. White oats of finest quality were imported from Australia under Government licence, since India grown oats of required characteristics were not available. The perfected product was submitted to test among consumers and was rated by them as equal to or better than the competing product. The management had made application for permission to use the mark of the Indian Standards Institution and learned that the product and its processing measured up to required standards. Mr. Vora anticipated early arrival of the papers, which would permit the company to place the I.S.I certification mark on its packages and to refer to the mark in company advertising and selling. He looked upon the I.S.I certification mark as a valuable aid towards building a reputation among the trade and consumers as to the quality and purity of the product. The competitive product Champion bore the I.S.I certification mark on its packages. ----------------------*This case was made possible by the cooperation of Small Industries Extension Training Institute, Hyderabad. When entering the business Mr. Vora had no definite data regarding the volume of sales that had been obtained by Muller and Phipps for Quaker Oats before the embargo, nor did he know the sales figures for Champion Oats. He did know that oatmeal porridge was the leading hot breakfast cereal in the United States and some European countries. He had been informed that

the cost of the imported product had restricted its sale in India, to families with high medium to high income. Moreover, he found that its use had gained wider acceptance in South India than in other parts of the country. From his discussion with agents Mr. Vora listed demand for quick cooked oats in order of quantitative importance by regions as follows : 1. 2. 3. 4. 5. 6. Kerala Mysore Madras Bombay Calcutta Northern region comprised of Delhi, UP & Rajasthan.

Apart from the high nutritive value of oatmeal porridge, its taste when eaten with milk and sugar or with butter or syrup was liked by many people. The quick cooking oats had appeal to many housewives because they had to be boiled for only four to five minutes to be ready to serve, whereas the older variety, rolled oats required about thirty minutes of cooking. Moreover, since the housewife had to exercise care to prevent the porridge from sticking to the pan and scorching, either by stirring frequently or cooking over a low fire, or by cooking in a double boiler, the long cooking type was less appealing than the new quick cooking type. The quickcooking type was made possible by pre-cooking in manufacture after the oat grain had been split and rolled. PACKAGING AND TRADE MARK Vora and Company adopted a round heavy tin package similar to that which was being used for Champion Quick-cooking Oats, which, in turn, was presumably patterned after the package in which Quaker Oats had been imported. The management had adopted the trademark Blossom. The label was printed directly on the tin. A bright green background had the brand name in large red type at the top of the can. Directly below this was an illustration of several sheaves of oats and a smiling girl. Beneath the left half of the illustration in large white type was the phrase White Oats with the word White over the word Oats. The phrase quick cooking in smaller type was to the right of the white oats lettering. The competing tin of Champion oats carried the smiling face of a young boy. The Blossom tin contained 550 grams of oats, the quantity contained in what was thought to be the largest selling package of Champion Oats, although Ganesh Mills also marketed a tin containing 750 grams. Quaker Oats had been sold in a 500-gram tin. The case in which the product was delivered to retailers contained 36 tins. The Champion case also contained 36 tins.

DISTRIBUTION CHANNELS AND TERMS FOR SALE To secure distribution of its products Vora and Company appointed agents, who generally were selling non-competing food products, with exclusive regional rights. For instance, for the State of Punjab, U.P., Rajasthan, Jammu and Kashmir and for the Delhi territory the management appointed messers. R.C. Ramanathan of New Delhi as exclusive agents for sale of the

products to retailers. This firm also handled the products of a large and well-known firm of packaged food manufacturers. Messrs. R.C. Ramanathan were granted a commission off 10 percent of list price. They had three permanent salesmen covering their territory. In turn, they appointed sub-distributors in large town or cities such as Delhi, Agra, Gwalior and Mussorie to whom they gave 2 per cent off list price out of their commission. Retailers were allowed a trade discount of 10 percent off Vora and Companys list price. Thus, the company received from its sales, list price less 20 per cent. The company appointed agents for the remaining states on the same terms. The agents and sub-agents did not act as full fledged wholesale distributors performing the functions of buying, stocking and distributing Blossom Oats in their territories. They acted rather merely as indenting agents, taking orders in case lots from retailers for shipment by Vora and Company from Lucknow. The agents merely guaranteed acceptance of delivery and payment of orders. Vora shipped its products for destination with blank draft attached to invoice, which was released for delivery of the shipment on payment of the draft. Mr. Vora reported that in South India in the States of Madras, Kerala and Mysore, which were the largest consumer of Oats, sales had been very disappointing. The agent appointed for these States was new to the sale of food products. The agency firm for some time had no salesman of its own calling on retailers and the sub-distributors appointed with selling right for various areas with the total area had produced very little business for Blossom Oats. In light of the sluggishness of the sub-agents the agent had recently reported employment of salesmen to push the sale of Blossom Oats. Mr. Vora had not made a practice of visiting his selling agents, but communicated with them by mail. PRICING The list prices for Blossom Oats as of December 1963, varied by section of the country. In North India, the list price was Rs.81 per case of 36 tins. In Bombay and South India the price was Rs. 85. As stated previously, the product was sold F.O.R destination; the commission to agents was 10 per cent off list; sub-agents were granted 2.5 per cent off list our of the agents 10 per cent; the retailers were granted a trade discount of 10 per cent off list. Thus Vora and Company received from the sale of each case the following: In North India Rs. 64.00 (Rs. 81.00 less 20%)

In Bombay and South India Rs. 68.00 (Rs. 85.00 less 20%) Mr. Vora stated that reports received from the trade gave the list price of Champion Oats in North India as Rs. 93.00 per case. Moreover, he was told that the agents for this product received 7 per cent off list as commission and the trade got a discount of 7 per cent from the list. Champion reportedly sold its larger size tins at a list price of Rs. 108.00 for a case of 36 tins. These agents bought and carried stocks of Champion Oats in their godowns for delivery to retailers. SALES

Sales for Blossom Oats in the two years following improvement of the processing had been irregular and had averaged far below plant capacity. For the six-month period June-November end, 1963, sales averaged only 83 cases per month. COSTS Mr. Vora gave the following facts regarding his costs per case as determined from the accounting data of the June-November period referred to above: Direct Costs per case of 36 tins of 550 gr. each Material Rs. 24.12 Packing tins Rs. 21.60 Other packing materials, wooden case waterproof Rs. 4.00 paper, box strapping pads Direct Labour 1 Rs. 5.40 Railway Freight Rs. 4.80 OVERHEAD COSTS Monthly overhead costs were stated to be as follows Per month Rent Electricity and Water Coal Depreciation on Plant @5% (Rs. One lakh investment Interest on working capital

Rs 165.00 50.00 50.00 500.00 250.00 1,015.00

1.

Mr. Voras monthly wage bill was Rs 900.00 but the work force was used at least half the time of another project on which Mr. Vora was engaged. In light of the irregularity of production, the labour cost given is probably as compared with what it would be if the plant were operating at or near capacity.

When this overhead was allocated against the 500 case sales of the period, the overhead costs came to Rs.12.18 per case. In the above figures Mr. Vora did not include any salary for himself Advertising From the start of the national distribution the selling agents had urged Mr. Vora to advertise Blossom Oats. For some months he undertook such advertising in the major cities in which he had sales representation. After spending some Rs. 4,000 without any apparent sales response to justify such expenditure, he ceased his advertising.

While Mr. Vora had suffered considerable losses since the launching of his enterprise, he was still anxious to make a success of it and was willing to put more money into the venture if suggested changes for his marketing gave promise of bringing profitable sales. Questions For Discussion 1. Should Mr. Vora continue in this business? 2. What are the major problems faced by Vora and Company? 3. What should be Mr. Voras strategy with respect to major elements of marketing mix, i.e., product, price, promotion, and distribution?