Synopsis of the Tata Sky Case for Comstrat 2008

Team eXcentric_XIMR Heemanish Midde | Jeetendra Haryani | Tristan Braganza 24th October 2008 Xavier Institute of Management & Research, Mumbai

Table of Contents
1 Overview 1.1 Introduction Market Research 2.1 Purpose and Scope 2.2 Research Objectives 2.3 Research Methodology 2.3.1 Research Design 2.3.2 Data Collection 2.4 Analysis and Findings 2.4.1 Primary Reason for Choosing DTH 2.4.2 Opportunity Analysis 2.4.3 Perceptual Mapping 2.4.4 JN Kapferer’s Brand Identity Prism The Road Ahead 3.1 Communication Strategy 3.1.1 Media Strategy 3.1.2 Creative Strategy Control & Testing effectiveness



3 3 3

4 4 5 6 8


9 9 10 11


Appendices Appendix I: Questionnaire Appendix II: Break-up of the Sample Appendix III: SPSS Output Bibliography

12 14 15 16


1 Overview
1.1 Introduction

India has about 133 million TV homes of which, Cable & Satellite (C&S) services are present in 76 million (57%) of the homes. The main DTH players are DD Direct, Dish TV, Tata Sky, Sun Direct, Big TV and Airtel. One of the issues faced by DTH players is the low average revenue per user. Also, companies sell their STBs at a loss and recoup the same over a period of time from usage charges (as of now, through captive pricing). 1 As a result of this, most DTH companies are expected to break even only after 5-6 years . As a result, customer alchemy (converting less profitable customers to more and more profitable services) is a very important consideration. Since the cost of customer acquisition is very high, it is important to retain customers. For now, the high switching costs involved in changing DTH providers (current-day Set-top Boxes or STBs are not compatible across providers) keep consumers from switching providers. However, TRAI is trying to push through norms to standardise STBs and allow for switching providers without having to change STBs. With sales of 29” and bigger colour TVs at 4-5 Million a year, the DTH market is poised for a period of growth, especially in semi-urban areas as well as smaller towns and cities. There are other factors also fuelling the growth in the DTH industry. With increasing competition it is important for companies to differentiate themselves. Differentiating is a challenge going ahead....

1 “

Dish TV, TataSky may post Rs 1,400-cr loss”, Business Standard, 09 Apr 2008


2 Market Research
2.1 Purpose and Scope
The main purpose of this research was to find opportunities for Tata Sky, given consumer satisfaction with existing products on fixed parameters for evaluation and importance of each parameter (to consumers) for evaluation of those products.


Research Objectives

The objectives of this study are: To find out the primary reason for which DTH was bought To study the consumer preferences for DTH To study consumer perception of Tata Sky, with respect to JN Kapferer’s Brand Identity Prism To find out satisfaction levels of consumers with respect to previously identified important attributes considered by consumers while evaluating DTH services


Research Methodology

2.3.1 Research Design
To accomplish the objectives, a study was conducted using secondary and primary data. The approach was descriptive and responses were evaluated according to set criteria.

2.3.2 Data Collection
Secondary Data: Secondary data was collected from the internet and online forums for DTH users to identify the main parameters that customers consider when deciding to go in for DTH services. Primary Data: Primary data was collected through the use of structured questionnaires and an online survey. A focus group was also conducted to determine consumer perceptions of Tata Sky, within the framework of the Think-Feel-Do Model and JN Kapferer’s Brand Identity Prism. Questionnaire Design: To keep things simple and reduce the time take to fill the questionnaire, most questions were closed ended. Rating scales (10-point scales) were used for questions related to preferences and satisfaction. Sampling: The sampling technique was non-probabilistic - convenience sampling and snowball sampling. Snowball sampling was used since a large sample across India was required in a relatively short period of time. The questionnaire was put up online and the link to it was circulated to respondents via email, along with a request to pass along the link. A free survey hosting service was used to host the survey at (link has been closed since data collection was finished) The sample size was 152 individuals. [Refer to Appendix II for a break-up of the sample]



Analysis and Findings

2.4.1 Primary Reason for choosing DTH
As shown in Table 1 and Chart 1, the largest number of respondents went in or would go in for DTH because of ‘Bad service from cable operators’ (41%). The direct implication was that consumes were looking for better service from DTH operators. Table 2.1 Primary Reason for choosing DTH Superior Video Quality More Channels Interactive Services Living in a CAS notified area (forced to for access to TV channels) More transparent payments Due to bad service from cable operators Total 26.32% 17.11% 3.29% 7.24% 5.92% 40.13% 100% 40 26 5 11 9 61 152

Also, ‘Transparency of payments’ was the primary reason for choosing DTH among 6% of respondents. Both of these are customer service aspects. Chart 2.1
Due to bad service from cable operators 41%

Superior Video Quality 26%

More transparent payments 6%

More Channels 17% Living in a CAS notified area 7% Interactive Services 3%

Superior Video Quality More Channels Interactive Services Living in a CAS notified area (forced to for access to TV channels) More transparent payments Due to bad service from cable operators


2.4.2 Opportunity Analysis
Average importance of each parameter (from Q7 of the Questionnaire) was compared to average consumer satisfaction levels (from Q9 of the Questionnaire) in the same parameter, and an Opportunity Score was found, using the formula: Opportunity Score = I*(I-S), Avg. Importance of parameter to Consumer, Avg. Consumer Satisfaction level with that Parameter and (I-S) >= 0* * - when (I-S) is less than 0, Opportunity Score is 0. Calculated Opportunity Scores are tabulated in Table 2 given below. Table 2.2 – Opportunity Score Parameter Special channels for elderly people Educational interactive channels Special channels for children Ability to record programs Matrimonial services Helpline DVD-quality video Quick response to complaints Quality of service Ease of payment Ease of purchase Continued service even in heavy rains MPEG 4 format video quality Sound Quality Price Number of channels Avg. Importance to Consumer 0.08 0.03 0.19 0.32 -0.76 1.47 1.59 1.75 1.80 1.31 1.08 1.40 0.82 1.51 1.37 1.60 Table 2.3 Factor 1. Value added services and interactive Services 2. Customer Service and basic quality 3. "Purchasibility" 4. Product Quality beyond basic quality 5. Price 6. Number of Channels Average Factor-specific Opportunity Score 0.03 1.87 0.37 1.16 1.97 2.87 Avg. Consumer Satisfaction Level -0.07 0.09 0.12 -0.07 -0.16 0.33 0.83 0.20 0.74 0.96 0.82 0.10 0.27 0.72 -0.06 -0.20 Opportunity Score 0.01 0.00 0.01 0.12 0.00 1.68 1.19 2.71 1.89 0.45 0.29 1.83 0.45 1.19 1.97 2.87 Factor where I = S=




4 5 6

Tables 2 and 3 show that among the important factors for consideration, ‘Number of Channels’ (2.87) shows the highest opportunity score. Considering that the number of channels a service provider can offer is easily imitable, focusing on only this aspect does not make strategic sense. Price has the next highest Opportunity # Score. However, considering that Avg. Revenues per User are low (Rs. 140 per month ), not much can be done in this direction. Customer Service has the next best score (1.87). Factors as shown in Table 2 were identified using Factor Analysis in SPSS v.16. Please refer to Appendix III – SPSS Output to see the Rotated Component Matrix for the same.

As seen on pg 2 of the Case



Perceptual Mapping
Chart 2.2 - Perceptual Mapping of DTH Players on the Basis of Price vs. Overall Score

Price Vs Overall
2 1.5 1 TATA SKY Airtel 0.5 Price 0 -2 -1.5 -1 -0.5 Sun Direct DD Direct -1 -1.5 -2 Quality, Customer Service and Interactive Services 0 Big Dish TV TV -0.5 0.5 1 1.5 2

Chart 2 was mapped using the deviation of each brand’s score (without considering price) from the average and then plotting vs. price i.e. the units are a relative measure of perception. As is evident from the chart, Tata Sky and Airtel are positioned closely in consumers’ minds. It is imperative that Tata Sky educates consumers about the points of differentiation between its offerings and those of Airtel.

Table 2.4 Consumer Scoring of DTH providers Ratings Price Quality Customer Service Interactive Service Dish TV 0.319149 -0.30303 -0.62821 -0.26506 TATA SKY -0.20155 1 0.767241 0.521008 Big TV 0.445946 0.794118 -1.05263 -0.72727 Airtel -0.23188 0.881356 0.458333 0.604167 DD Direct 0.985075 -0.20968 -1 -1.24242 Sun Direct 0.867925 0.058824 -0.6 -1.54054

* Note: These scores are absolute scores. They are the average of consumer scores given on a scale from 1 to 5, which were adjusted to -2 to +2 during coding.


Chart 2.3 - Overall
1.5 Price 1 Quality Customer Service Interactive Service 0.5





-2 Dish TV TATA SKY Big TV Airtel DD Direct Sun Direct

From Chart 3, it can be seen that Tata Sky ranks highest in Customer Service. Its closest competitor in terms of overall score as well as consumer perception is Airtel. Airtel is lower on the Customer Service score, but not but not by a very large margin. Also, when it comes to VAS, Airtel is ranked higher – Airtel even has the advantage of having experience with VAS on its cellular services, which it could leverage in DTH. The Single minded proposition which should be adopted to meet the business objective of accelerating subscriber acquisition is “Customer Service” (Refer 2.4.1, 2.4.2, 2.4.3)


2.4.4 JN Kapferer’s Brand Identity Prism
The Analysis was done using a Focus Group Discussion of current TataSky users. Points discussed in the Focus Group Discussion: Physique What is Tata Sky? What do you use it for? What is the basic need? What they like/dislike most about Tata Sky? Relationship How did Tata Sky interact with you when you were buying it? How does Tata Sky interact with you when making a complaint or calling service? How do you think the Tata Sky ads relate to you? How does Tata Sky affect your relationship with your family? How does Tata Sky affect your relationship with your friends? Reflection As a user of Tata Sky, what do you think that says about you? What kind of people do you think buy Tata Sky? Personality If Tata Sky was a person, what kind of person would it be? What kind of people do you think buy Tata Sky?

Culture What are the values Tata Sky stands for? How important do you think these values are to you, personally?

Self Image Please describe yourself in a few lines What kind of person are you?

The findings are as follows:

Access to entertainment World class technology from “SKY” Light weight box

Fun and young Trustworthy Making life ‘Jingalala’ (complete and fun) Reliability Simplicity

Trust and Innovation Driven Family Oriented They are well-educated They are modern They want value I am an up-to-date person I like new technologies


3 The Road Ahead
3.1 Communication Strategy
Objectives To enhance the brand image of Tata Sky as the most preferred DTH service provider To differentiate the Tata Sky brand clearly from its competitors To accelerate subscriber acquisition To connect with the target group on an emotional as well as rational level Target Audience: Families, especially young couples. The Single-Minded Proposition: Tata Sky, with its concentration on superior service, takes care of families’ entertainment needs everyday, all day long, so that they can enjoy time with their loved ones. Broadcast Attention Interest Desire Action Aware Educate Print Awareness camps Reach Educate Promote Retailers Internet Aware Educate Promote Shopping Buzz

Educate Promote Buzz marketing

3.1.1 Media Strategy
Scheduling Pulsing is an effective strategy as it will enable the company to advertising continuously as well as at low-weight levels which help reduce the cost. This form is suitable for the communication strategy as the strategy involves educating the target about TataSky’s customer service initiatives. Considering the increasing competition, it will be important to keep TataSky fresh in the consumer’s mind. The media schedule will consist of: TVCs in major General Entertainment Channels, regional TV channels and DD; Insertions a week – 2 in mainline print media, 1 in a lifestyle magazine. Awareness camps should be organized regularly in malls. e-Marketing should be an on-going activity throughout the year. Promotional campaigns can be held for members of Tata Sky's forums to encourage users to sign up on them and to generate excitement. Through our communication strategy we are communicating with our target group at various levels and using various Media mix. Broadcast: Primarily Television commercials and radio will be used to grab the attention of the target and make them aware about Tata Sky’s customer service initiatives. Print: Print ads will be used to educate the target about how can he use customer services and how Tata Slky’s superior customer service would enhance his Television viewing experience


Awareness Camps: Awareness Camps in the stores and malls will help create a platform through which awareness, education and promotion can be spread at the same time. These awareness camps will educate the customer why they need to have a Tata Sky DTH service and how Tata Sky’s unparalleled customer service will ensure uninterrupted television viewing, when they want it. Internet: The Internet will be used as an online platform through which we can spread awareness, educate and promote our services to the target group. This will be an online platform through which consumers can even address problems to Tata Sky. It was found during secondary research that there are a lot of forums created by consumers themselves online. These are, very often, the more involved and knowledgeable consumers (in the domain of DTH services) and thus represent a treasure house of lead users, who can act as barometers for future trends in the market. A forum for consumers should be maintained on the Tata Sky website. This will not only give the company advance warning of problems with its products, but also give consumers a feeling of commonality and belonging to a community. Social Networking sites can also be leveraged to educate customers and solve any problems they may face while using Tata Sky. Here we can create an animated Amir Khan who will have a profile on all networking sites and forums, he will be on friends list of all the TataSky users registered and will address all their problems to this animated virtual friend as well as ask for advice while purchasing a DTH service provider. (This will help the company to be a part of the information search stage of consumer’s decision making process) Buzz Marketing: Buzz Marketing is an important tool which should be exploited as it was noticed during the research that our target group relied on third party recommendations to make the decision to buy. The Internet and Awareness camps will ensure third party recommendations.

3.1.2 Creative Strategy
Positioning Tata Sky is the DTH service provider with the best customer service to ensure no family will ever miss a minute of entertainment and relaxation with loved ones. Creative Execution Marcom Message: Customer Service bhi aisi, ki ab toh bus mazza ala hi ala Appeal: Soft-sell, emotional appeal, use of humorous situations Format: Use of humour, use of people, slice of life, demonstration. Brand ambassador: Brand ambassadors must be youthful, fun and playful. Tone of Voice: Playful, humorous, friendly.


4 Control & Testing effectiveness
Control is very important to measure the effectiveness of the communication program this ensures that money spent on communicating is well spent and the strategy used is effective or no. Sales-Effect Research; Advertising’s sales effect is generally harder to measure than its communication effect. Sales are influenced by many factors, such as features, price, and availability, as well as competitor’s actions. A company’s share of advertising expenditures produces a share of voice that earns a Share of consumers’ minds and hearts and, ultimately a share of market Share of expenditure

Share of voice

Share of mind & heart

Share of market

Sales-Effect Model


Appendix I: Questionnaire


[Link to a Preview of the Questionnaire]


Appendix II: Break-up of the Sample

Table B1 – Break-up According to Age Age Break-up Percentage Response Count <18 years 4.61% 18-25 years 56.58% 25-35 years 30.26% 35-45 years 4.61% 45+ years 3.95% Total 100% Table B2 – Break-up According to Gender Gender Break-up Percentage Response Count Male 85.53% Female 14.47% Total 100% Table B3 – Break-up According to Usage Status Status of Usage of DTH Percentage Response Count Yes 74.34% No 25.66% Total 100%

7 86 46 7 6 152

130 22 152

113 39 152

Table B4 – Break-up According to DTH Service Used Usage Break-up Percentage Response Count Dish TV 15.83% 22 TATA SKY 58.27% 81 Big TV 10.79% 15 Airtel 2.16% 3 DD Direct 2.88% 4 Sun Direct 5.76% 8 Other 4.32% 6 Users (includes repetition)* 139 Non-users 39 *Please note, the figure for users includes consumers who use multiple DTH-services, since multiple choices were available for this question.


Appendix III: SPSS Output
Table C1 – KMO and Bartlett’s Test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. ChiBartlett's Test of Sphericity Square df Sig.

0.8252791 844.75547 120 0.00

As can be seen from Table C1, KMO Measure of Sampling Adequacy is 0.83, indicating that the sample size was sufficient for carrying out Factor Analysis. Significance is 0.00, indicating that the test is valid at a 99% confidence level. Table C2 – Rotated Component Matrix Rotated Component Matrix 1 Special channels for elderly people Educational interactive channels Special channels for children Ability to record programs Matrimonial services Helpline DVD-quality video Quick response to complaints Quality of service Ease of payment Ease of purchase Continued service even in heavy rains MPEG 4 format video quality Sound Quality Price Number of channels Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

Component 2 0.17 0.025 0.189 -0.199 0.214 0.8 0.668 0.633 0.615 0.137 0.267 0.154 0.113 0.397 0.19 0.23 3 -0.002 0.117 0.045 0.221 0.003 0.156 0.033 0.312 0.254 0.908 0.85 -0.02 0.267 0.484 0.109 0.09 4 0.000 0.166 0.084 0.164 0.032 0.019 0.47 0.129 0.144 0.018 0.149 0.808 0.592 0.513 0.017 0.089 5 -0.03 0.183 0.059 0.161 -0.178 0.09 -0.072 0.238 0.454 0.081 0.142 0.338 -0.286 -0.138 0.826 0.084 6 -0.009 0.085 0.011 0.305 -0.139 0.191 0.098 0.039 0.013 0.164 -0.069 -0.042 0.199 0.117 0.094 0.912 0.845 0.831 0.822 0.71 0.706 0.187 0.082 0.176 0.095 0.017 0.195 0.128 0.24 0.009 0.048 0.037

Rotation converged in 8 iterations.


Books: Market Research Methodological Foundations: Gilbert Churchill Jr., Dawn Iacobucci Marketing Research: Seventh Edition: Aaker, Kumar, Day Articles: The Harvard Business Review Blogs Forums Communities on and Websites


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