Executive Summary
Direct-to-Home (DTH) TV service has been one of the strongest growth drivers of the satellite industry in the developed parts of the globe. DTH is expected to continue to be a reliable revenue generator for the future.
The rapidly changing technology market in Pakistan, as consumers became more aware and technically savvy over the last few years, offering immense potential for new technological products and services. Wateen realize this potential and follow the natural new product development process.
Socio economic, legal and political forces and their bearing on the market dynamics were examined and it was ascertained that the market conditions are volatile and uncertain. Consumers were found to be more aware and more demanding and although the per capita income showed and upward trend; yet they were found to be price sensitive as well
TV is the biggest source of entertainment for the Pakistani population. The market size analysis shows that the estimated numbers of TV sets are 10 million in year 2008.
The market can be segmented into three clusters based on their SEC class (Socio-economic class). These were declared as SEC AB, SEC BC and SEC CD clusters. SEC AB preferred value for money i.e. price and quality, where all value was attributed to the picture quality factor. SEC CD liked customer service, maximum number of channels and variety of channels offered. SEC BC preferred all of the six attributes and made little differentiation among them.
Current Situation: Internal
The product
Direct to home (DTH) Television uses a single satellite that sends signals directly to your personal Mini-dish. All channels are bounced off this satellite, and brought directly to your TV set via the Dish. It offers you better picture quality as the picture is completely retained in digital format.
Besides elevating you to a new technology Direct to home offers you an option of complete freedom from the friendly neighborhood cable guy. Going the Direct to Home way has innumerable other advantages that change the way you watch television forever:
· Superior Picture quality, just like watching a DVD
o Stereophonic Sound
o Capacity up to 400 Channels
o Video on Demand
o Geographic Mobility
o Uninterrupted Viewing
o Video Games
o Exclusive International Channels
o Parental Lock Facility
o Electronic Programme Guide
The company
Vision
Mission
· To provide affordable communication services that meets and exceeds customers' requirements.
· To deliver high-quality, flexible and innovative solutions that is cost effective and conducive.
· To provide complete customer satisfaction on time, every time.
Company
Wateen offers a complete range of carrier class telecom and multimedia services like wireless and fixed line telephony, broadband for data, internet and TV/multimedia along with a host of other value-added services and applications like, DTH, Long-haul, Metro Rings, HFC, VSAT, WiMAX etc., to set the standards for a new era of communications and entertainment in Pakistan.
Situation Analysis (SWOT)
Strengths
· Related Business: Wateen Telecom is already into telecom business and has developed managerial and technical capabilities.
· Geographic presence: The Company is geographically present in wide areas. It has already a diverse customer base in various areas. There is no such competitor who has such a wide ranging presence in the country. .
· Innovation: The DTH is an innovative addition to the service as far as Pakistani market is concerned. It is in line with the policy of the company to tap the markets where consumers’ needs are not being addressed.
· Brand equity: The Company has an established brand name..
· Extensive distribution channels: Wateen has extensive distribution channels for the distribution of its new service.
· Market oriented: Company’s comparative advantage lies in already accumulated knowledge, experience and data in the field.
· Financial muscle: Wateen has sufficient resources to invest in the new project.
Weaknesses
· Unpredictable market: Pakistani market is very unstable.
· Unskilled workforce: Specialized training is required for workforce and management to cope with new challenges emerging from the introduction of the new service.
· No existing alliances: The company is making alliances with certain new suppliers for the equipment etc. which, at present it does not have.
· Low initial returns: return on investment are initially low..
· Cannibalization: The Company has also launched cable service for some areas. Due to launch of DTH these services are cannibalize each other.
· High turnover rates: The Company has not been able to retain good employees for long term. It would also hamper the ability of the company to handle the launch of new service successfully if the turnover rate does not come down.
Opportunities
· General flaws of existing services: people are not satisfied with the existing service of cable because of various reasons including interruptions, poor picture quality, a lot of advertisement, poor customer service etc. They have responded enthusiastically towards the DTH service.
· Remote access: The biggest opportunity in Pakistani market is that there are certain areas where the services of competitors (cable operators) can not reach due to the topography of the terrain. In those areas there are sufficient people who need the services the company plans to offer. So, there are sufficient unmet needs in the market which can be catered through the service.
· Inflexible existing services: In some areas the existing cable providers are not offering sufficient channels to satisfy the customer. The DTH service is promising as it would provide exactly what customer needs.
· Growth in the market: The market for entertainment is growing with the growth of middle income segment in Pakistan. These customers are increasingly demanding better services as far as entertainment is concerned.
Threats
· Legislative environment: The independence of media is under scrutiny from the government. It is difficult to predict if there might be any legislation regarding DTH which could hamper the full advantages of the service. PEMRA might impose bans on channels as it did to cable. So, negative legislative developments remain a threat to the success of the service.
· Downturn in economy: The down turn in Pakistani economy might have impact on disposable income of the population which might not be inclined to spend much on the entertainment activities. General well being of economy always has favorable impact on all the businesses and the DTH service would not be an exception.
· Little potential differentiation: It is expected that other competitors would enter the market. It might start price war between Wateen Telecom and potential competitors. In that case there would be very less differentiation Wateen would be able to offer given the nature of the service.
· Increased bargaining power of suppliers: The company would need vital alliances with suppliers and other partners. They might be suppliers of the competitors. Suppliers’ bargaining power might increase in that case making input costs high and leaving the company in difficult position.
· Uncertain demand: It is very difficult to estimate the exact demand for the service. There might be variation which could result in losses for the company.
· Employee retention: The company might lose its key personnel to other competitors once they enter the market for DTH. So, retention of good staff would remain a challenge and losing it would always present a threat.
· Short product life cycle: The Company would have to continually innovate given the nature of the industry. Fast pace of technological developments might render the service obsolete in few years and it might be replaced by more advanced technology.
Critical Success Factors in the Industry
· Effective distribution: Wide geographic presence is a critical factor in case of the kind of DTH service.
· High quality in product and services: The quality of service which includes reliability, picture quality etc. is very important to the customers.
· Supplier Management: Relations with suppliers—both of equipment and channels—would play a critical role in success of this kind of service. It enables the service providers to ensure the reliability. Good relations result in low input costs which could be passed to the customers.
· Innovation: It is very important to stay ahead of competition in this kind of industry which is driven by technology. So, the company cannot be complacent and would have to focus on constant innovation.
· Trained Human Resource: Internal capabilities including the experienced and trained personnel would be a key success factor in this kind of business.
· Customer intimacy: Knowledge about the culture and habits of the customers is very important. The company would have to remain in touch with the changing needs of the customers.
Coverage:
Wateen is currently providing mainly outdoor and limited coverage in the following cities:
· Jhelum
· R.Y. Khan
· Bahawalpur
· Karachi
· Sahiwal
· D.I. Khan
· Lahore
· Sargodha
· Faisalabad
· Multan
· Sheikhupura
· Gujranwala
· Okara
· Sialkot
· Gujrat
· Peshawar
· Sukhur
· Hyderabad
· Quetta
· Islamabad
· Rawalpindi
Current Situation: Macro Environment
The macro environment has been discussed under the following:-
Political
Legal
When discussing the impact of legal structures and regulatory bodies on the mass communication channels; we can observe a spectrum where on one hand the government gave complete freedom to press and allowed complete freedom of speech; while on the other hand the government curtailed basic civic rights, imposed restrictions on free speech and banned certain news channels. These controls were exercised through various instruments like regulations of PEMRA, national security clauses in the constitution, and imposition of emergency.
Private television networks flourished after General Musharraf seized power in a military coup in 1999, the president publicly encouraging a free press. But media reports have been highly critical of General Musharraf after he tried to remove the country's chief justice in March. When President Pervez Musharraf suspended Pakistan's constitution early in November 2007, he also clamped down on independent news reporting. General Musharraf says the new regulations are meant to encourage what he calls "responsible journalism". The government shut down TV stations, stopped foreign cable newscasts and imposed a new law governing the content of news reports. Those found guilty could go to prison for up to three years, pay heavy fines and find their broadcasting licenses suspended. The government also stopped cable operators from broadcasting both local and international news channels in Pakistan and even stopped imports of satellite receivers. Media owners say the government requires them to sign a "code of conduct" before returning to air. A new law makes it illegal to report critically about the government policies, discuss Supreme Court cases challenging Musharraf's re-election as president, and broadcast live coverage of anti-government protests. The law outlaws content judged to be defamation of the president and other key government officials.
These regulations acted as stimuli and it affected the industry in various ways, negative as well as positive. We shall see in the subsequent paragraphs that the government curbs actually acted as stimulus to create demand for different channels of distribution. As the government regulated the transmission and broadcasts via these regulatory bodies, the media and the masses went looking for alternative means to transmit and receive information.
Economic
Source: http://www.indexmundi.com/pakistan/gdp_real_growth_rate.html
However post elections scenario does not support the figures shown by the previous government. Economic experts say that these numbers were cooked up; most of the foreign direct investment shown was actually US aid coming in the form of military support for war against terror. The Shaukat Aziz government also received support from world bodies like the World Bank and International monetary fund.
After September 11, 2001, and Pakistan's proclaimed commitment to fighting terror, many international sanctions, particularly those imposed by the United States, were lifted. Pakistan's economic prospects began to increase significantly due to unprecedented inflows of foreign assistance at the end of 2001. Foreign exchange reserves and exports grew to record levels after a sharp decline. The International Monetary Fund lauded Pakistan for its commitment in meeting lender requirements for a $1.3 billion IMF Poverty Reduction and Growth Facility loan, which it completed in 2004, forgoing the final permitted tranche. U.S. assistance has played a key role in moving Pakistan's economy from the brink of collapse to setting record high levels of foreign reserves and exports, dramatically lowering levels of solid debt. A major part of the $3 billion five-year U.S. assistance package to address Pakistan's long-term needs in the health and education sectors. Also, despite the earthquake in 2005, GDP growth remained strong at 6.6% in fiscal year 2005/2006. In 2002, the United States led Paris Club efforts to reschedule Pakistan's debt on generous terms, and in April 2003 the United States reduced Pakistan's bilateral official debt by $1 billion. In 2004, approximately $500 million more in bilateral debt was granted. Consumer price inflation eased slightly to an average of 8% in 2005/2006 from 9.3% in 2004/2005. Low levels of spending in the social services and high population growth have contributed to persistent poverty and unequal income distribution. Pakistan's extreme poverty and underdevelopment are key concerns, especially in rural areas.
| PKR million | ||||||
| 1990 | 1995 | 2000 | 2005 | 2010 | 2015 | |
| Leisure and recreation | 4,204 | 10,554 | 19,613 | 32,455 | 38,575 | 44,417 |
Social
The socio cultural environment of Pakistan has seen some major shifts in the recent past as Pakistan became part of the Global Village due not only to the technological advancements, but also due to opening up of the economy. As we became part of a global village, there was more access to information about other cultures, religions and customs. There were imprints of this openness as our society adopted some of these while rejecting others. Celebration of events like Basant, Halloween, and Valentine’s Day were considered part of an alien culture but now these events have made their way into our culture as well and these are celebrated by the young with zeal and fervor. This can be attributed to not only the media influx but also awareness, understanding of rights and political freedom. Over the past few years, there has been this immense drive to break free, to express individuality, and to create a sense of harmony and peace with other cultures and religions. The people are now more open to watching foreign channels than before. TV viewing has increased manifold with the advent of dish antenna and cable TV. Over the last few years, the Pakistani society at large has become more open to change, more understanding and has developed more capacity to accept and absorb cultural differences. It did not come as a surprise when at one of the places it was announced to celebrate Holi, the Hindu festival.
Demographics
Pakistan’s population has been growing at a decelerating pace, from 3% in 1981 to 2% in 2004. It took almost 23 years for population growth to decline by just over one percentage point. Decline in the mortality rate owing to the elimination of epidemic diseases, improvements in health facilities, and a modest decline in the fertility rate resulted in negligible decline in population growth. About 50% of the total population falls in the age bracket of 0-19 years. In absolute terms, about 83 million people, equal to the total population of Germany, in Pakistan are below the age of 19 years. However, the decline in population growth and death rates indicate the future changes in demographics of the population. The proportion of the 0-19 age brackets will continue to decline, while the 20-39 age brackets will continue to increase. It is expected that 30% of the population will be in the age group of 20-39 by 2015.
1990 1995 2000 2005 2010 2015
0-4 yrs 18,659 20,548 22,081 24,228 26,484 28,180
5-9 yrs 15,173 17,747 19,726 21,305 23,508 25,853
10-14 yrs 12,549 14,979 17,581 19,555 21,146 23,374
15-19 yrs 10,654 12,316 14,850 17,402 19,376 21,024
20-24 yrs 9,337 10,207 12,126 14,537 17,078 19,177
25-29 yrs 8,316 8,799 9,996 11,761 14,156 16,846
30-34 yrs 7,251 7,837 8,602 9,672 11,425 13,944
35-39 yrs 6,075 6,868 7,657 8,333 9,397 11,240
40-44 yrs 4,834 5,765 6,690 7,418 8,094 9,222
45-49 yrs 4,098 4,571 5,578 6,455 7,181 7,903
50-54 yrs 3,536 3,837 4,361 5,320 6,184 6,936
55-59 yrs 2,923 3,241 3,576 4,070 4,996 5,859
60-64 yrs 2,352 2,579 2,907 3,220 3,692 4,580
65-69 yrs 1,589 1,954 2,179 2,474 2,770 3,216
70-74 yrs 1,040 1,204 1,514 1,706 1,965 2,235
75-79 yrs 600 690 821 1,048 1,203 1,416
80+ yrs 402 473 591 729 940 1,155
TOTAL 109,386 123,615 140,835 159,232 179,595 202,158
Median age of
population (Years) 18.84 18.36 18.62 19.12 19.81 20.66
Death rates (per '000
inhabitants) 7.90 7.33 6.74 6.37 5.78 5.26
A substantial number of households run their own businesses or are self–employed. The major businesses are import/export, manufacturing, and retail. The nature of business also varies by region. Sialkot is the major centre for leather products, sports goods, and surgical instruments, which are exported all around the world. Faisalabad is home to the textile sector, whilst the major hubs of the financial and industrial activity are Lahore and Karachi. People in rural areas are mostly connected to agriculture. Recognizing the growth of the middle class, several multinationals have expanded the scope of their businesses in Pakistan. Services have also witnessed an enormous growth, offering attractive jobs and careers. IT is another sector that has raised the bar with respect to pay scales, especially in the metropolitan areas.
Education
Majority of the population with primary or no education live in the rural areas of Pakistan. Ideas regarding the importance of education are changing, aided by government programs to promote education. There has been an increase in the number of people attaining a level of education. Currently, the literacy rate is 54% in Pakistan. The government plans to improve it to at least 65% in the coming years. The main target is the rural areas where lack of educational infrastructure and awareness are the main constraints.
Primary & no education 52,609 54,837 62,331 64,099 65,869 67,656
Secondary 8,821 13,604 16,686 17,215 17,747 18,287
Higher 1,575 1,901 2,429 2,610 2,799 2,994
Consumer durables – a necessity rather than status symbol
The increase in incomes of the middle and upper-middle class, led by the growth of the industrial and the services sectors, has had a significant effect on consumer lifestyles. With fewer individuals in a household, and the increasing number of women in the workforce, consumers have limited time at their disposal. There is, therefore, an increased reliance on consumer durables by the average household. This means that demand for appliances has increased noticeably. Items such as microwave ovens tumble driers, and CD players, which were considered to be luxuries, have now become regular items in the urban household. However, appliances such as dishwashers and vacuum cleaners are not so common. The reason for this is that cheap domestic help is available. Dishwashing and house cleaning is usually done by maids and cleaners in the urban areas. The usage of mobile phones has also increased dramatically. In fact, the demand for mobile phones grew by more than 10 times over the 2-year period ending in 2003. Similarly, cable television gained immense popularity in the urban areas, leading to a greater demand for color televisions.
Pakistani consumers – becoming more quality conscious
Pakistanis, in general, are becoming more quality conscious. They are fully aware of the leading brands in consumer appliances, and now demand after sales service and warranty for products purchased. This is evident by the number of branded American, Italian, and German products that are readily available. It reflects changes in the buying behavior of the customer, and an increased sophistication level of consumers. Pakistanis seem more ready to adapt to new technologies that provide comfort and convenience. The advent of Chinese products is an important development, leading to a general reduction in prices, and hence increased affordability for consumers, which has further enhanced the trend for the increasing demand for durables, especially amongst the lower income consumers, as they are more price sensitive than other segments of the population.
Technological
TV is the biggest source of entertainment for the Pakistani population, as cinemas are a flop in Pakistan. The prevalent hobby of Pakistanis is watching TV. Viewer numbers run high for soap operas and movies, which some people follow religiously. Indian channels are very popular among Pakistanis, especially Star plus. However, some Pakistani channels, such as Geo TV, ARY Digital, and Indus TV are also popular amongst the public.
1990 1995 2000 2001 2002 2003
Color TV set 22.06 28.06 33.59 34.76 35.95 37.09
Cable and Satellite Television
Since the introduction of cable TV in 2000, the Pakistan Media Regulatory Authority (PEMRA) - the regulatory body in Pakistan - has issued broadcasting rights to 49 TV channels. However, the unofficial number of channels can go up to 100, depending on the local cable TV service provider. An average cable connection takes a monthly bill of PKR 250 to view an array of ‘free’ and pay channels. Satellite channel subscription lost its popularity with the arrival of cable TV in the major cities. However, it is still used extensively in distant areas where cable TV is not available. However, there was a 51% increase in the penetration of cable TV between 2000 and 2003, as compared to a 27% growth for satellite TV for the same period. These figures support the popularity of cable TV, but its wide usage is dependent on the availability of a proper infrastructure. With the development of this infrastructure, penetration levels of cable TV could potentially increase by 135% between 2005 and 2010.
Current Situation: Market Analysis
Market definition
Need: At present, DTH is serving the entertainment and information need of customers related to TV. In future, for further growth and with the application of new technologies, it could also serve this same need of PC users and owners of hand held digital devices. Thus, the market is currently defined as comprising of TV set owners of Pakistan.
Market size
Proliferation of Televisions
The opening of new channels and cable systems has fanned a buying passion among consumers. Sales of black and white TV sets have faded out, as locally assembled cheap color TV sets (around PKR 7,000 for a 21-inch television) are readily available. Sales of Color TV sets grew rapidly with a 68% increase between 1990 and 2003. Consumers purchased over 850,000 locally assembled TV sets in June-July 2003-2004 as compared to 764,000 sets in the previous fiscal year, benefiting from cheap consumer financing and the explosion of entertainment and news channels. Besides consumer financing, declining prices of TV sets during the last two years in view of stiff competition have also lured a sizeable number of buyers. Despite falling prices, however, there is a segment in Pakistani society that cannot afford TVs at normal rates. For such consumers, cheap reassembled color TV sets are available.
TV is the biggest source of entertainment for the Pakistani population, as cinemas are becoming less popular in Pakistan. The prevalent hobby of Pakistanis is watching TV. For the estimation of the TV sets, Federal Bureau of Statistics was consulted. Data from FBS has been used to find out the historical growth rate (optimistic and pessimistic) as well as forecast the market size in the year 2008.
The above analysis shows that the estimated numbers of TV sets are 10 million in year 2008, and this will grow optimistically at the rate of 14% and pessimistically at the rate of 7%.
Market segmentation
Demographic profiling of clusters
SEC CD prefers customer services, max channel and availability of variety of channels.
SEC AB prefers price and quality. This shows that they are more concerned of the value for money, rather than the variety of channels or company related aspects of trust and service.
SEC BC prefers each and every attribute and this is a largest of all clusters. This shows that they have a mixed feeling about the offerings of current service providers and they want best of all of the bargains.
Competition and Market Share
Cable and Satellite Television
Since the introduction of cable TV in 2000, the Pakistan Media Regulatory Authority (PEMRA) - the regulatory body in Pakistan - has issued broadcasting rights to 49 TV channels. However, the unofficial number of channels can go up to 100, depending on the local cable TV service provider. An average cable connection takes a monthly bill of PKR 250 to view an array of ‘free’ and pay channels.
Satellite channel subscription lost its popularity with the arrival of cable TV in the major cities. However, it is still used extensively in distant areas where cable TV is not available. About 7% of TV set owners has satellite dishes, which means that given the number of TV sets i.e. 8 million, satellite TV subscribers are 560,000 in year 2006.
Competitor’s Strengths and Weaknesses
Cable TV: Strength
· Availability of variety of channels
· Extensive distribution networks, specially in urban areas
· Economical pricing
· Admirable billing mechanism
· Social network
· Easily available
Cable TV: Weakness
· Poor or inadequate quality of channels
· Frequent interruption in transmission
· Inadequate coverage in remote areas
Satellite TV: Strength
· Access to remote areas
· Easily available
· Good picture quality
Satellite TV: Weakness
· Costly services, for each channel, customers need to buy decoders and pay periodically
· Non-availability of decoders
Terrestrial and antennas: Strength
· Very cheap
· Easily available
· Convenient billing mechanism
· Poor picture quality
· Fewer numbers of channels
Market trends
Due to limited sources of entertainment, television is probably the biggest source of entertainment for Pakistanis. A growing number of private TV channels and cable TV, providing access to more than 100 channels, has kept consumers watching. Indian and Pakistani soap operas are the most watched programs. People usually prefer to relax in their leisure time by watching television with their families.
Watching movies is an alternative to cable TV. Indian and English movies are preferred over low-budget Pakistani movies. Nowadays, VCRs are becoming obsolete, while DVD players and large plasma screens are in fashion, adding to the craze for watching movies.
Evening is the prime time, that’s when people get back from their work and switch on the TV to relax. The prime time for TV is from 8pm till midnight. Board and card games, once a major source of home entertainment, have been replaced by computers. Now youngsters prefer to play games on their computer or Sony PlayStation, or perhaps play chess or pool online with other online gamers. Internet chatting is also quite popular amongst youngsters, and is an activity carried out in the evening and at late night.
Listening to music is a growing hobby amongst the young generation. New pop bands have flared up the passion for music. Conversely, the habit of reading is not so popular. Fashion magazines are preferred over novels and digests.
The once tightly regulated Pakistani media has succeeded in opening its wings, as new channels have emerged on the scene. Before 1999, only one Pakistani channel, PTV - Pakistan’s national TV channel - represented the whole nation. PTV was criticized for being biased towards the government. The new developments are welcome, especially in a country where the majority of the population is not in the habit of reading. Thus, far more Pakistanis watch TV rather than read newspapers. Statistics and data from various sources confirm this trend. According to figures, in 2003 one in 66 people had a television set, and one in 13 people had a radio, while just 16 per 1,000 people read newspapers. Furthermore, with a literacy rate of barely 40% and an urban-rural ratio of 31.5% to 68.5%, it is evident that the electronic media has an immense role to play, and will continue to sway public opinion in Pakistan for a long time to come.
Internet
Through research on internet, we found out following information:
· There are about 970 registered cable operators in Pakistan
· There are about 4.2 million subscribers, amounting to more than 25 million viewers in Pakistan.
Case Analysis of Tata Sky
· After launch of service, Tata Sky was adding a little over 500 subscribers per day across 1,000 towns. The low subscription figure in the first month of launch is being attributed to higher installation cost and low-awareness level.
· Sales and distribution challenges along the length and breadth of country.
· Massive logistical challenges for installation of equipment and placement of skilled labor in all potential areas.
· Government regulations, restrictions and imposition of 10% share of revenue beside corporate taxes.
· Tata Sky used exhibitions, fairs, and events to demonstrate their service actively.
· Advertisement through recommendations from friends or neighbors and marketing through word-of-mouth.
· One of the challenges is actually managing this whole constraint of capacity effectively in terms of selection of channels and managing their costs
Case Analysis of Dish TV
· Gross subscriber base stands at 2.7 million as on December 31, 2007
· Average subscriber addition of 99,000 per month
· Market leader with 64% share of pay DTH market
· More content - With 180 channels, Dish TV has the widest offering by Tata Sky DTH service provider.
· Distribution strengthened – Dish TV is now present in over 4,400 towns through 38,000 dealers and over 575 Distributors
· Company focus is on increase in ARPU; value added services, commercial sales (e.g. hotels, restaurants, pubs, clubs, malls etc), brand building and penetration, service capability ramp up resulting in value creation for the stakeholders.
· Till now, Dish TV is going in loss. The revenues of Dish TV on 31st December 2007 were Indian Rs. 1,120.65 million whereas the expenditures were Indian Rs. 1,762.26 million, thus operating loss of Indian Rs. 641.41 million.
One important question regarding the market which Dish TV is targeting remains to be answered, as far as the urban and rural areas are concerned. It has been found that they are following non-urban (rural), small cities penetration strategy. Surprisingly, they have opted for rural market not based on market research but due to the fact that they wanted to avoid cannibalization of their own cable distribution services. Dish TV is launched by Essel group, the parent company of Zee networks and they were already involved in the business of cable service provision. This pertinent argument leads us to the problem that Dish TV was facing in its growth phase. They are still going into financial losses, and this is because of the two major reasons. One, as discussed above, they have not targeted urban areas to avoid cannibalization and thus losing on potential sales, and the other reason is that they offered setup-boxes at 4000 Rs. and subscription fees of 100 Rs per month, in order to be competitive with the rivals. But because of the relatively huge setup box prices, fewer than expected consumers switch for the systems leading to low penetration. Subsequently the lower volume and the low price, failed to generate enough revenues to cover their expenses. Other reasons for the failure of Dish TV at that time includes but not limited to are that their product and services were not good, in terms of large boot time of box, offering only zee channels, considerable service charges and failed operations in rainy and cloudy days.
Because of increased competition and realizing the shortcomings Dish TV made some major changes in its strategy. They increased their marketing budget to increase awareness, appointing Shahrukh Khan as their brand ambassador. They are giving free set top boxes in order to increase market share hence positive cash flow from operating activities have been realized in year 2007.
Positioning strategyTo: TV set owners of Pakistan
For: Wateen DTH is a satellite television service brand.
Product Mix
Basic Package:
This package is targeted to segment “SEC CD”, with basic features of DTH, and with either 100 channels. It is because segment SEC CD is price sensitive and prefers price over variety and quality of channels.
Premium Package:
This package is targeted to segment “SEC BC”, with basic features of DTH plus internet facility, and with 120 channels. It is because segment SEC BC demands variety and quality of channels, but also it does not want to pay a higher price for the service. Therefore, a package with more number of channels than basic package, which fits into their buying capacity, is suggested for segment SEC BC.
Premium plus Package:
This package is targeted to “SEC AB”, with basic features of DTH plus internet facility, and with 150 channels. This segment is not price conscious and demands better service, quality and more number of channels.
Marketing Strategy – PricePricing Objectives
Broadly speaking the promotional goals of the company are:
1. To create awareness about DTH
2. To encourage attrition from cable to DTH
The company plans allocate a substantial chunk of its budget for spending on communication through electronic and print media for initially.
. For high success rate of advertisement the selection of channel and timing of the ads are also very important. As almost 68 % of respondents preferred programs in their local languages and almost 90 % of respondents preferred programs in Urdu, the message can be communicated effectively by utilizing such preferences. According to our findings, most of the T.V viewing happens between 6 PM to 12 AM. Therefore the advertisements on electronic media should be aired during this time period. In addition to that the company plans to utilize the substantial subscriber base of Warid as captive audience and plans to send promotion messages to them, in form of SMS, at least on weekly basis to increase recall and to create brand awareness.
Reema signs as Wateen's Brand Ambassador
Reema, a celebrity with an immense fan following around the world, signs with Wateen as the Brand Ambassador. She was formally introduced to the media through a press conference
Marketing Strategy – DistributionDistribution is one of the important decisions to be taken by the company. The company aims for 100% geographical coverage though in phased manner. It involves delivery of service to end customer, and starts from purchase of equipments, their installation and service. For this our own sales force and trade partners are very important. For this the company distributes total area of service in to manageable zones for like North, Central and South. The company plans to open Sales & Customer Service Centers at various major cities and towns in these zones. However, keeping in view of the nature of the service, new orders as well as customer complaints are managed electronically. For this purpose the website of company is playing a major role. For example if somebody logs on to website of the company and shows interest in purchasing system of Wateen, he can be asked to fill an information form electronically proving all necessary information of geographical location of the customer. This information is passed on electronically to the relevant area service centre or nearest franchisee through MIS of the company to contact and provide necessary service.
References
· Federal Bureau of Statistics, Pakistan
· PEMRA
· Consumer Life Style Reports.
· Economic survey
· http://www.bluechipmag.com/subarticledet.php?id=184
· http://books.google.com/books?hl=en&lr=&id=lua8BDAwM7sC&oi=fnd&pg=PA236&ots=FUXpcwzXYP&sig=S3TCi-3pcn85S4lmEPCCtXgfR6U#PRA1-PA10,M1
· http://www.voanews.com/english/archive/2007-11/2007-11-15-voa37.cfm?CFID=239578774&CFTOKEN=51248914
· http://www.economywatch.com/world_economy/pakistan/
· http://www.traveldocumentsystems.com/pk/economy.htm
· www.adb.org/Documents/Reports/pakistan-damage-needs-assessment.pdf
· http://www.buzzvines.com/reema-signs-wateen-s-brand-ambassador-0
· http://greenwhite.org/2007/09/07/wateen-fumbles-with-wimax-launch-campaign/
· http://indexmundi.com/pakistan/economy_profile.html
· Press releases, internet forums.
