Professional Documents
Culture Documents
Submitted By:
Puneet Acharya
32102
Marketing A
CERTIFICATE
Prof. Rajesh
Panda
Marketing Dept.
SIBM, Pune
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DECLARATION
Puneet Acharya
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ACKNOWLEDGEMENT
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Contents
Executive Summary............................................................6
Brief profile of players in the industry........................................8
GROWTH OF THE INDUSTRY............................................10
Strategies and Competition in the Industry......................................................10
Porter’s five force model...................................................12
Management problem & influencing factors........................................................14
Management problem......................................................................................14
Influencing factors............................................................................................14
Research Objectives............................................................................................14
Primary Research Objective.............................................................................14
Secondary research objectives.........................................................................14
Objectives.....................................................................................................15
Research Approach......................................................................................16
Sample Collection...........................................................................................17
Analysis Techniques used.............................................................................17
Findings: .......................................................................................................20
Recommendations: .......................................................................................27
Perceptual Mapping..................................................................................28
Annexure 1................................................................30
............................................................................................................32
........................................................................................32
Annexure 2...........................................................32
Annexure 3............................................................33
Major competitors.....................................................................36
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Executive Summary
In 1995, government felt the need of regulation in Cable TV and passed the
Cable TV network (Regulation) Act. This was also the time when the state owned
Doordarshan and All India Radio came under a new holding called as Prasar
Bharti to give them enough autonomy. The LCOs reported a lower number of
connections where as the broadcasters demanded a higher rate. MSOs were
finding it difficult to operate under these conditions. This led to an amendment
of the Cable TV networks (Regulation) Act in 2002 to provide Conditional Access
System (CAS). With CAS, the last mile distribution could be addressable with
accuracy and digitalization of 2 broadcasts was also possible. CAS was rolled out
in 2003 staring from Chennai and later to parts of Delhi, Mumbai and Kolkata. On
the DTH front, TRAI issued the guidelines for operating DTH. Country’s first DTH
license was awarded to Dish TV in 2003 which started operations in 2004. Prasar
Bharti also started its product DD-Direct+
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entertainment industry has the potential to grow explosively in the future. Now
the industry is ready to enter a second stage of growth powered by the twin
engines of technology (availability of quality infrastructure and the accelerated
penetration of digital connectivity) and an enabling regulatory environment.
DTH Digital TV system receives signals directly from satellite through the dish,
decodes it with the Set-Top Box and then sends stunningly clear picture and
sound to TV which is the business under taken by some companies by observing
the rate of growth and scope for business & opportunity in the Indian market
which has 120 million viewers of TV.
With the Indian economy growing at a GDP growth rate of 7.4%, there is a sense
of growth prevailing everywhere. The average Indian’s disposable income and
purchasing has risen to never before levels. The Indian entertainment and
media industry is not far behind. It is currently estimated at a worth of Rs.450
billion with a CAGR of 18% over the next 5 years. Terms which were alien to
Indian’s like capital DTH, digital cables, IPTV are suddenly finding presence in the
country’s journals.
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• Tata Sky joined venture between Tata and Rupert Murdoch’s Sky TV.
• Sun direct of Sun Network.
• BIG TV of Reliance Anil Dhirubhai Ambani group.
• Airtel digital TV of Bharti telemedia
• Videocon d2h of Videocon industries
Categorization of players in the industry:
Private players: Dish TV, Tata Sky, Sun direct, Big TV, Airtel digital TV,
Videocon d2h
DD DIRECT+
Dish TV
Dish TV is the first private DTH satellite television provider in India, using MPEG-
2 digital compression technology, transmitting using NSS Satellite at 95.0. Dish
TV is a division of Zee Network Enterprise (Essel Group Venture). DTH service
was launched back in 2004 by launching of Dish TV by Essel Group's Enterprises
Tata Sky
Tata Sky is a DTH satellite television provider in India, using MPEG-2 digital
compression technology. Tata sky is incorporated in 2004; Tata Sky is a JV
between the TATA Group and STAR. Tata Sky DTH endeavours to offer Indian
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viewers a world-class television viewing experience through its satellite
television service.
Sun Direct
Sun Direct is a DTH satellite television provider in India, using MPEG-4 digital
compression technology. It is the country's first MPEG 4 technology DTH service
provider. The service was finally launched on December 2007. Because of the
lowest pricing of any DTH in India Sun Direct spread rapidly all over the country.
By 2009 it became leading DTH provider with 3 million subscribers. This makes it
4th largest DTH service provider of India.
BIG TV
Airtel digital TV
Airtel Digital TV is a DTH (Direct to Home) service from Bharti Airtel. It uses
MPEG-4 digital compression. Airtel digital launched on 8 October, 2008 with a
360 degree mega campaign 'Come Home to the Magic. Since then it has
launched 2 other campaigns: ‘Stars come home’ (March 2009) and ‘DTH Picture
Clarity (August 2009) has increased its channel base to 183+ channels.
Videocon d2h
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GROWTH OF THE INDUSTRY
The DTH service market in India has emerged as one of the most lucrative
markets which have successfully resisted the impacts of the current economic
slowdown. The slowdown has certainly proved a boon for the Indian DTH
industry as people have now started to cut on their entertainment expenditure
and instead of viewing movies at theatres, they are preferring to stay at home
with their television sets.
With the Indian economy growing at a GDP growth rate of 7.4%, there is a sense
of growth prevailing everywhere. The average Indian’s disposable income and
purchasing has risen to never before levels. The industry is anticipated to add
nearly 5 Lakh subscribers per month during 2010 and the numbers are
forecasted to surge further at a CAGR of around 30% through 2012, "Indian DTH
Market Forecast to 2012". 20% annual growth is being witnessed in the DTH
sector in India with over 8.5 million households having digital pay-TV.
A report attributes that the anticipated growth to the efforts of DTH industry
players who are all trying to lure viewers by cutting down prices as well as
offering perks even though it translates into loss of Rs 1,600-2,000 on each new
subscriber acquired by them. They have started to offer a number of value-
added services such as 'movie on demand', live recording of TV content,
matrimonial match-making, etc.
In the case of media products, means they should be offered at a price lower
than their competitors’ but with as good benefits, or, the unique benefits the
media products offer can over-offset the premium.
2. Differentiation
3. Focus
Focus strategy is also known as a 'niche' strategy. The clutter of ads has now
spilled out on the number of channel availability due to which people are spoilt
for choice. Thus Niche channels are the only way to maintain viewer loyalty.
TATA Photon plus is more niche oriented.
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Porter’s five force model
Threat of substitutes
DTH gives stiff competition from the terrestrial, cable & IPTV. As per the industry
estimates, there are 130 million TV homes of which 71 million are served by
cable and around 6 million served by DTH with the remaining taken by terrestrial
transmission. As IPTV is a new entrant there is not much data on its subscriber
base.
DTH industry relies on three major suppliers. Customer premise equipment (CPE)
Comparing of the satellite Dish, Set Top Box with the necessary Access Card, the
Ku band transponders are obtaining satellites and content. With India set to
overtake Japan as Asia’s largest DTH by next year, the bargaining power of India
DTH operators with CPE suppliers have been steadily increasing.
With enough operations to choose both from the point of alternate mediums like
cable, IPTV and terrestrial broadcast and from the point of increasing DTH
operators, the consumer is at his will to decide. Customers will continue to have
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a high bargaining power until DTH platforms try to differentiate them as superior
players with better content and clarity.
With 3 operational players and 4 players in the queue, inter firm rivalry is quite
high. The competition from state owned DD-Direct to private players in
negligible from the content point of view as the number of channels offered by
DD-Direct is very limited. However, DD-Direct does not change any monthly
subscription charges. Between Dish TV is Tata Sky there is an intense rivalry
exhibited by price war and discount schemes offered to new connections. Being
the first mover, dish TV had price advantage in both the STB offers superiors
DVD quality Video to its advanced STB.While Dish TV is planning to spend Rs.
850crs over the next 3 years, the rival Tata Sky is willing to spend Rr.2000crs
over the medium term. The companies have also set ambitious targets with Dish
TV aiming to reach 5 million subscribers in the next 18 to 20 months while Tata
sky aiming to reach 8million subscribers in the next 18 to 20 months while Tata
sky aiming for 8 million subscribers by 2012.
With already 7 player’s space in the DTH space, threat of new entrants is low.
There is already enough competition which will discourage new firms to enter
this business. While getting a licensee is relatively easy, the barriers to entry are
high when it comes to pricing of CPE and getting the required transponder.
There is a definite, first mover advantage.
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Management problem & influencing factors
Management problem
The management of Airtel is that it wants to know the reasons for low popularity
of Airtel Digital TV vis-à-vis the competitors and the factors that influence its
buying behaviour. The management also wants to carry out a feasibility study
for expansion of Digital TV service targeting semi-urban and rural areas.
An extensive research would be carried out to determine the reasons for low
popularity and success of Airtel Digital TV compared to competitors. This would
bring to light the problems associated with the current service such as user
friendliness, customer service, value voucher problems, channel availability
amongst many. The population for the research would include existing Airtel
Digital TV users and population that has subscribed to some other DTH service.
It also wants to carry out the feasibility study to venture into semi-urban and
rural areas which are being looked at the ‘next big thing’ by almost all
companies across the country because of growing purchasing power of the
consumers in these areas and changing attitudes and lifestyles.
Influencing factors
The factors as per management could be many-
• Increasing competition
Research Objectives
Primary Research Objective
To determine the reasons for low popularity of Airtel Digital TV vis-à-vis the
competitors by carrying out an in-depth research to find out consumer
perception in state of Maharashtra.
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• To determine the role of price points influencing brand perception and buying
decision in the DTH market.
Objectives
It will also give us information as to which attributes are more important and
the contribution of which of the variables is the highest in determining who
the market leader is. It will also help us in finding out the PODs (points of
differences) that the consumers strongly associate with Airtel Digital TV.
The data collected from Market research will also help us to find out if the
positioning of Airtel Digital TV need to be changed. Repositioning might
come out as a solution from the research.
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Value of information
The information collected from this research can help us in gaining crucial
insights on consumer buying behaviour in case of digital TV services.
Research Approach
This helped us identify and select major attributes that the customers seek
which affect their buying preference and behaviour.
Secondary research
Secondary research was carried out through the use of resources available on
the internet. It was also done through online consumer forums and through
opinion sites.
Questionnaires
Questionnaires method was used for Primary Data collection for Definitive
research. An online questionnaire was also prepared for people who prefer
the online mode.
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Measurement Instruments
Rating scale was used for doing the comparisons between brands. A need
semantic differential scale was also used to decide the relative importance of
the various attributes for purchasing a Ready to Eat food.
A 5 point Likert scale was used to find out the choice of specific brands, if
any.
The data was then extracted and put in MS Excel. All the further analysis was
then carried out using SPSS. The measurement was designed to get a fair
idea about the various attributes and conducted factorial analysis of the
important attributes.
Sample Collection
We collected 30 samples for our analysis. The samples chosen were such that
they had adequate awareness about Digital TV service or Using Cable TV but
still having awareness about Digital TV service. The main demographics
targeted were affluent people and double income families. Also we tried to
focus more on the newly married professionals and technology loving
youngsters as they would be more interested in buying Digital TV Service
owing to their variety seeking behaviour and also because they were more
aware.
The samples were taken under the assumption that respondents who already
have DTH service will be better able to answer the questions regarding the
influencing factors and the reasons for their purchase. The samples collected
from internet were also very valuable in the research.
The analysis techniques were used on SPSS and various tests were performed
to ascertain the factors influencing the consumer decision while subscribing
for DTH services.
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Matrimony Active
Matrimony
(bharat
matrimony.co
m)
City iCity
Informatio
n
Book iMatinee
Movie
Tickets
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Findings:
In the survey it was found that Tata Sky had the maximum share of
subscribers among the five prominent DTH players. This is attributed to
the fact of better service provision with prompt reply and wide variety of
interactive services.
Dish TV and Airtel Digital TV are the next players after Tata Sky to grab
the subscribers market. Dish TV being the oldest player in the DTH sector
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has gradually lost its grip to Tata Sky, Airtel Digital TV being new in the
sector has readily caught the market in a fast pace.
Big TV and Sun Direct have low market share. Sun direct is not catching
up with other players due to lack of attractive features and high
concentration of south Indian channels.
The survey indicated that the customers preferred the Gaming feature
more than any other interactive service which indicates that children
interest too play significant part in selecting the DTH.
The Movie was the second preferred segment of the customers.
It was not surprising to see Astrology catching the customer’s interest
with famous astrologers like Bejan Daruwala, Pandit Ajay Bhambi hosting
the shows in the channel.
Travel, News and Cooking showed neck to neck competition. With middle
income group growing in India, it is predicted that there will be increase in
tourism which will ultimately increase the need of portals giving travel
services
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When asked Commercials
to the customers about the ease of operating the remote
control to find the interactive services then about 89% agreed to be it as
easy while 11%Seenfound it difficult to operate.
The operation of remote control was found to be easiest in Tata Sky than
any other DTH remote. This was due to the fact of having being written
the function of each and every button than mere symbols which some
other DTH remote do have.
Generally senior citizens and children aged less than 4 years find it
difficult to operate the remote.
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Tata Sky seems to be successful in its aggressive marketing plan where it
is seen as the most widely viewed advertisement. Tata Sky was also voted
as their favourite advertisement featuring Aamir Khan and Gul Panag.
Airtel Digital TV and Dish TV are the next most viewed advertisements
after Tata Sky.
The brand advertisements of Tata Sky, Dish TV and Airtel Digital TV are
Aamir Khan, Shah Rukh Khan and Saif Ali Khan & Kareena Kapoor
respectively.
Heavy advertisements results in better brand recall which results in higher
sales of the product as could be seen in case of Tata Sky.
Commercials
Liked
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Almost three fourth of the population been interviewed felt that the
Interactive services increase the value of DTH package.
Interactive services like shopping, travel earns revenue for the DTH
Company if properly executed.
The survey showed that the majority of the cable consumers paid a
monthly subscription in the range of Rs 225 to 325. Upto 20% each paid in
the range of Rs upto 150 and Rs 150 to 225.
It also indicates that majority of the consumers are ready to pay in the
range of Rs 225 to 325 and so the DTH players should cast their monthly
subscription in this range only.
The price range of Rs 150 to 225 is also a lucrative one since the
consumers would be readily willing to pay in this range.
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Tata Sky and Dish TV share equal platform in terms of popularity among
the cable TV consumers. This is because of popular celebrities like Aamir
Khan and Shah Rukh Khan endorsing for the products.
The Airtel Digital TV gained popularity by advertising during IPL matches
2009 on SET Max. The result is within a short period after its launch it
spread its awareness.
Sun Direct followed an extension advertisement of Bajaj Exceed which had
become very popular. This achieved wide popularity for Sun Direct.
Reliance Big TV gained awareness in about 13% of the population
interviewed.
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With the population interviewed, about 70% showed the intention to
change from cable to DTH.
Tata Sky was the most preferred player among the consumers to change
from cable.
Sun Direct was the least preferred among the consumers because of the
heavy regional content.
Brand Image of the DTH was the most influencing factor among the
consumers for changing to a particular DTH.
Schemes & packages was the next factor of consideration for rational
consumers
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Most consumers were satisfied with their existing Cable operators and did
not intent to switch to any DTH player.
High initial cost of DTH including the STB was one of the inhibitions to
change to DTH player.
Some consumers were not satisfied with the existing package offered by
the DTH players and some did not understand the schemes of the DTH
players.
Peculiar problems like having more than one TV also restricted the
consumers to go for DTH.
Recommendations:
The consumers will be very happy to pay in the price range of Rs 151
to 225 as a monthly subscription since most of the cable consumers
pay more than Rs 225 to existing cable operators.
Many a times cable consumers are fooled by their operators about the
unavailability of particular channels which Airtel can make aware to the
masses.
Tata Sky and Dish TV are most popular among the masses due to their
distinct brand ambassadors. Airtel should come up with
advertisements with a brand ambassador who has a stronger mass
appeal to generate a top of the mind recall.
A perceptual mapping of the five strong players in the DTH market was
carried out to produce a picture of the competitive landscape from a
customer point of view identifying the aspects or factors that customers
use to conceptualise their choices. In this research technique, a
questionnaire was designed and responses were collected from 30
customers surveyed which were put into statistical package of SPSS
known as Multi Dimensional Scaling (MDS). Following are the observations
obtained from MDS –
In the above perceptual mapping there are two dimensions along which the
mapping was done. Dimension 1 indicates „Customer Service‟ ranging from Poor
to Excellent, whereas Dimension 2 indicates „Emotions‟ ranging from Rational to
Emotional. Following were the conclusions drawn –
Tata Sky was rated as the best player with respect to provision of
Customer Service.
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Sun Direct was considered to be rational in terms of its schemes and
packages, Set Top Box (STB) and monthly subscription.
Small distance between Airtel Digital TV and Dish TV indicate that they are
more or less perceived similar by the customers. It also indicates a close
competition between the two players.
The other brands viz. Tata Sky, Sun Direct and Big TV have distinct images
in the customers mind.
Within the rural markets, it is Dish TV and DD Direct plus DTH services
that have the most penetration. Tata Sky, Dish TV and Sun Direct DTH
services are preferred brands in top metros, the report says. The southern
market is dominated by Sun Direct DTH services, while in high-income
households (monthly income above Rs 50,000); Tata Sky is the dominant
DTH brand.
Over seven million DTH subscribers, or more than half the total of 13.2
million, come from rural markets alone, where Dish TV and DD Direct Plus
are the clear leaders. Towns of a population under one million (semi-urban
towns) contribute another two million DTH subscribers
The states of Maharashtra, Goa, Punjab, Uttar Pradesh, and Rajasthan are
the leaders in DTH subscription, contributing over 6.4 million DTH
connections or 48 per cent to the overall DTH subscriber base
Rural has the potential to push volumes—but there are still hurdles for
DTH companies.
Annexure 1
Tata Sky, Dish TV, Airtel digital TV, Big TV, Sun direct
3. Are you aware of the interactive services offered by the various DTH players?
Yes No
4. Which active service do you use frequently?
Complicated Easy
6. Does the interactive service offered by the DTH companies influence your
decision of purchasing a particular DTH?
Yes No
7. Do you find the interactive service helpful in your daily needs for example
cooking, learning etc?
Yes No
8. Are you willing to purchase your existing DTH without any interactive services
being offered, though with reduced price?
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Yes No
9. Any other service which you would like to have in the interactive package?
10. Which company DTH commercial have you seen so far on TV?
12. Are you aware of the ad of Tata Active Learning featuring small school boys
as Einstein?
13. Are you aware of Dish TV’s service of banking facility with ICICI bank?
Yes No
14. Are you aware of big TV’s 32 cinema hall feature?
Yes No
Yes No
17. Do you take part in the various contests held in the interactive channels?
Yes No
18. What do you feel about the feature of watching cricket from different angles
as provided by Tata Sky and Dish TV?
19. Overall, do you feel that the interactive services increase the value of the
DTH package?
Yes No
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Annexure 2
3. Do you get all your required channels from your cable operator?
Yes No
4. If answer to Q3 is no, then what reason does your cable operator gives for not
providing the required channel?
5. From the list provided below which DTH players are you aware of?
Yes No
7. Would you like to change from your cable operator to any of DTH players?
Yes No
8. If answer to Q7 is yes, then which DTH provider would you like to change?
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Others (then specify) _____________
Annexure 3
Questionnaire for Perceptual Mapping
Q1 – Give your ratings regarding the redressal of complaints for the DTH
companies? 1 denotes Excellent and 5 is Poor
1 2 3 4 5
Tata Sky
Dish TV
Airtel
Digital
TV
Big TV
Sun
Direct TV
Q2 - Give your ratings for the promptness of response from the DTH companies?
1 denotes Excellent and 5 is Poor
1 2 3 4 5
Tata Sky
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Dish TV
Airtel
Digital TV
Big TV
Sun
Direct TV
Q3 – Rate the given below DTH companies according to the overall customer
service provided by them? 1 denotes Excellent and 5 is Poor
1 2 3 4 5
Tata Sky
Dish TV
Airtel
Digital
TV
Big TV
Sun
Direct TV
Q4 – Give your ratings for the economy of the schemes and packages of the
various DTH players? 1 denotes Excellent and 5 is Poor
1 2 3 4 5
Tata Sky
Dish TV
Airtel
Digital
TV
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Big TV
Sun
Direct TV
1 2 3 4 5
Tata Sky
Dish TV
Airtel
Digital
TV
Big TV
Sun
Direct TV
1 2 3 4 5
Tata Sky
Dish TV
Airtel
Digital
TV
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Big TV
Sun
Direct TV
Major competitors
Dish
TV
168 channels, 7 movie
channels, 21 audio
channels
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TATA
Sky
150 channels
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BIG TV
202 channels, 32 movie
channels and 10
interactive channels
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SUN
DIRECT
110 Channels (initially
no Hindi channel)
Initial installment of
Rs.1999 with one year
free subscription, Rs.75
per month
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Prasar Bharti owned
DTH service which is
free to air service
which just needs an
initial installment to
buy set top box.
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