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Foreign & Commonwealth Office case study

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1. Introduction:
Tata Sky, a leading India-based Direct To Home (DTH) service provider (launched in2006) had crossed the three million
connections mark in a period of 20 months, thusretaining its position as the fastest growing direct-to-home service provider across
theglobe. It is a joint venture between Tata Group that owns 80% and STAR Group that owns a 20% stake. It currently offers close
to 196 channels (as of December 2010) and some interactive ones; this count includes some numbers off HD channels offered
byTata Sky (as Tata Sky - HD) and interactive services
.
Currently TATA Sky has roped in Aamir Khan as its brand ambassador. Aamir Khan would feature in all TATA Sky brandand
product communication, including advertisements in TV, print and radio. Further, tie ups with ITC E-Choupal and Godrej Aadhar
give it wider rural reach. Also for its distribution, TATA Sky has a tie up with ITC International Business Division. The
24X7guru.com has joined hands with TATA Sky to provide content for Active Learning. Tata Sky has adopted a 360 degree
marketing campaign approach that encapsulates television, print, outdoor and radio along with on-ground activities and marketing
on thedigital platform. Tata Sky plans tie-ups with Sony Pictures, Fox for content- Pay per View service for exclusive events. Tata
Sky has targeted to have about eight million connections by 2012.
2. Analysis of Growth Strategies of Tata Sky over the years:
The success or failure of any business depends on the strategy that they adopt to grow.In this case, in spite of the fierce
competition in Indian DTH market, Tata Sky is able toincrease its subscriber base by 1-2 million each year. They are able
to position ³best-value´ brand image among the customer. The growth strategies behind their successcan be analyzed based on the
two generic growth strategies viz
i) Internal Growth Strategy
a.Intensive Growth Strategy
(Market Penetration, MarketDevelopment and Product Development)b.
Diversification Strategy
ii) External Growth Strategy
a.Integrative Growth Strategy
(Vertical integration i.e.Forward/Backward integration & Horizontal integration)In order to evaluate the Internal Growth Strategy of
Tata Sky, lets analyze based on the framework of
Ansoffs Matrix
(Product-Market grid Market
Exisiting New
Existing 1 market penetration 2. market development
Produrt
Product New 3. product development 4. diversification
As per the case study, we can visualize that Tata Sky has adopted all the three Intensive Growth Strategies viz. Market Penetration
Strategy, Market Development Strategy and Product Development Strategy as the Internal Growth Strategy. This can be further
analyzed as described below:
Market Penetration Strategies : Tata Sky is seeking to achieve growth with existing products in their current market segments,
aiming to increase its market share. In order to increase the market penetration, they are trying to increase both the number
of customers as well as number of uses. To increase the number of customer they are doing massive ad campaign like 360o
ad campaign using TVC, Radio, OOH (out of home), internet etc, several promotional offers like 50% discount on
installation, ,µrecharge and win offer, friends and family program, Tata Sky with a Nano car, reducedprice of digicomp, super save

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pack, a-la-carte offer etc. Similarly to increase the number of usage they have introduced many value added services like interactive
gaming, VoD(video on demand-Pay Per View) service etc. Similarly they are also showing newusage of DTH to their customers
by showing DTH is not just for TV product but also likecomputer/game console. As the result, by introducing new usage they are
attractingmore customers/converting non users to users. Their constant effort on quality control isalso churning few of the other
competitors customer to their network.
Market Development Strategies : Tata Sky is seeking growth by targeting its existing products to new market segments. Though
they have started with the target of urban customers but like Airtel and other DTH operators Tata Sky also has started expanding
their network to village and suburban areas throughout India, from North to South, from East to West. As a result they have
strengthen their distribution network to 35,000outlets and 5,000 towns across India. Moreover they have started SSD (sales and
service dealer) across semi urban and rural markets. This helped the company to increase its presence in those areas very quickly. In
order to develop a new market, Tata Sky has made a very wide distribution network. For Rural/Sub-urban areas they have
agreement with ITCs e-Choupal, Godrej, Indian Oil Corporation etc. where as for urban areas they have tie-up with Tata Indicom,
Pantaloon etc. This network is helping them a lot for new market development (geographical expansion).Similarly, to attract new
edge segmentation they have also started ad campaign for gaming and video streaming (without changing the product, expanding
segment
Product Development Strategies: Tata Sky is also developing new products targeted to its existing market segments. For example
to attract the urban busy customers they launched a new product in October 2008 called Tata Sky+, where consumers can record
their favorite program (up to 45 hours) while watching another channel ,record/pause/rewind program etc. They had introduced a
premium set top box with a personal video recorder (PVR), first time in India. Similarly they have upgraded their picture format to
latest MPEG4 technology in Tata Sky+ by introducing innovative interactive services like Active Sports, Active Khabar, cooking,
matrimonial, games and bilingual programming guide. In March 2009, Tata Sky received the ISO 27001:2005accreditation, an
internationally accepted standard for Information Security. Thus to attract new customer and retain their current customer Tata Sky
seems to be able to keep their pace with time. Similarly, Tata Sky also has adopted Integrative Growth Strategy as an External
Growth Strategy. Especially it has focused on Forward integration as the vertical integration e.g.distribution
channel as Tata Indicom (a subsidiary of Tata group) in urban area.
This is how with all the above aggressive marketing strategy Tata Sky is adding more that 1million customer every year.
3. Analysis of Marketing Mix of Tata Sky:
In order to meet all the above growth strategies, Tata Sky has adopted all types marketing mix. Lets analyze it based on 7Ps of
Marketing Mix as shown below:
i)Product
: It has adopted the DTH service based on 3Cs viz. Choice, Control and Convenience. It is offering almost 200 channels choice
with³DVD picture quality and CD sound quality´. Its user have control over channel to watch simultaneously (recording one
channel while watching another one). For customer convenience they give a µprogram schedules for all channels and reminders for
favorite program, which available in their website as well. In order to retain their existing customer and attract new segments they
are constantly improving picture quality (e.g. MPEG4), adding new channels (approx 200), new features (e.g. interactive services),
new schemes like Value Pack, Jumbo Pack, a-la-carte etc. As a negative feedback from customer sometimes the set top box get
hanged or bit low quality in some channels specially Z-channels. These things shall be rectified/improved.
ii)Pricing
: In order to catch the market Tata Sky has offered variety of price schemes to catch different segments of customers. In order
compete withother DTH operators & attract more customers, time to time Tata Skygives discount and launches various schemes
like reduced digicomp andsubscription fee, Super saver pack with various price option packages or a choice of a-la-carte (pay as you
view) etc. Recently it has launched Rs999 package to attract low income group/economic segment. Though Tata Sky is claiming
their price to be very reasonable, but stillcustomer feel their price is higher than other operator. They argue that Tata Sky had
removed some important channels from the base packagesand put those as separate package. Thus Tata Sky shall clear this issue
and try to provide the service at very attractive rate.
iii)Promotion
: As described above Tata Sky has adopted various promotionscheme to attract new subscriber as well as retain the existing
customers.For example it has adopted 360o Ad campaign, Customer awarenessprogram about DTH, attractive ads by using
famous brand ambassador like Amir Khan, association with famous ad agencies like Rediffusion,Y&R, Ogilvy & Mather etc. It

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  1. Introduction: Tata Sky, a leading India-based Direct To Home (DTH) service provider (launched in2006) had crossed the three million connections mark in a period of 20 months, thusretaining its position as the fastest growing direct-to-home service provider across theglobe. It is a joint venture between Tata Group that owns 80% and STAR Group that owns a 20% stake. It currently offers close to 196 channels (as of December 2010) and some interactive ones; this count includes some numbers off HD channels offered byTata Sky (as Tata Sky - HD) and interactive services . Currently TATA Sky has roped in Aamir Khan as its brand ambassador. Aamir Khan would feature in all TATA Sky brandand product communication, including advertisements in TV, print and radio. Further, tie ups with ITC E-Choupal and Godrej Aadhar give it wider rural reach. Also for its distribution, TATA Sky has a tie up with ITC International Business Division. The 24X7guru.com has joined hands with TATA Sky to provide content for Active Learning. Tata Sky has adopted a 360 degree marketing campaign approach that encapsulates television, print, outdoor and radio along with on-ground activities and marketing on t ...
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