Product Strategy and Management Tata Sky

GROUP 4

Agenda
Business Problem Context Approach Industry Overview 3Cs - Company Competition Customer Framework based Research & Analysis

Key Insights and Recommendations

Business Problem Context

Context
Government mandate to digitize the TV content broadcast by Dec 2014 (Phase 3 & 4) Opportunity - 108 Mn. Subscriber base shifting to digital Technology differentiation of DTH players narrowing

Tata Sky
No. 2 player in DTH Industry Intends to have a massive share in premium segment and fair share in mass market segment

Problem
In view of the upcoming digitization opportunity, how to grow against competitors: Cable TV service providers Other players in DTH industry

Approach

1. Secondary Research 3 Cs, Product Features, Branding and Marketing, Customer Experience

2. Primary Research Interviews with Company Personnel Consumer Survey for Value Map

3. Frameworks Customer Value Map, Kano, Endowment Effect, Customer Touch Points

4. Inferences & Recommendations Brainstorming, Validations and recommendations

Product Life Cycle & Stages

TV Households growing @ 4% CAGR DTH subscribers growing @ 15% CAGR Tata Sky subscriptions growing @ 11% CAGR

Growing Industry Growing Category Growing Product/Brand

Tata Sky
Journey so far
Launched 1 Million Tata Sky+ Tata Sky HD Tata Sky +HD 10 Million TV Everywhere Incorporated: 2004

2006

2007

2008

2010

2011

2012

2013

Strategic position & direction

Tata Sky Market Share: ~20% Pay TV Market Share: ~7%

Our objective is to have a massive share of the high-end segment and a fair share of the mass segment. Harit Nagpal, CEO, Tata Sky "We will never sacrifice volume share completely for value share . Vikram Kaushik,
Former CEO, Tata Sky

Tata Sky ARPU: DTH category ARPU:

INR 236.72 INR 209.82

Tata Sky Subscribers

Socio Economic Category A Socio Economic Category B+

New Subscribers
Gross Subscribers: Rural : Urban Mix: Metro Non-Metro Vision: Connecting every television home Empowering every television viewer Revolutionizing home entertainment 10.41 Mn. ~50:50

33% 67%

> 70%

Competition
47 Million

95.7 Million

Cable + Already has the last mile coverage to subscribers premises + Deliver services with a personal touch + Transmission not affected by weather conditions + Post-paid facility available for payment - Reach to rural area is limited by Infrastructure availability - Lack of interactive content - Mobility is an issue if the subscriber changes city / location

DTH

Cable

Pay TV Subscribers (MPA, 2013) Tata Sky + Superior customer service compared to competitors + Mobile based access and account management + Multiple re-charge options available + High quality interactive content - Costlier packages as compared to competition - Technological superiority of competitors (MPEG4) DTH Market Share (MPA, 2013)

Customer Needs & Perception

Customer Needs & Perception

Key Observations Quality Better (> 1.0) Price Higher (>1.0) Indifferent Customer (Q=P) Marginally better than other DTH Digital Cable perceived better Quality Conscious Clear Winner w.r.t. Cable Better than DishTV Marginally better than Airtel Price Conscious Marginally better than Airtel DishTV & Cable perceived better
Q>P Q=P

Q<P

Product Feature Analysis Kano Model

Consumption Chain & CX

Marketing promotions, Dedicated STB Channel

Awareness

Vernacular, Website, Twitter

Customer Service Consumption chain

Order/ Purchase

Website, Helpline, Dealers

Voucher, IVR, Online, ATM

Payment

Delivery

Tata Sky Kit, Installation Technicians

Service Request
Online, SMS, Helpline

Branding & Marketing

Technology
(Quality of hardware)

Features
(Interactive series, vernacular, etc.)

Services
(Reach, customer service, etc.)

Incentives to Switch

High endowment for existing analog cable subscribers

Make Tata Sky offering behaviorally compatible to analog cable subscribers

Target un-endowed (non cable subscribers in Phase 3 & 4) 10x improvement (Analog Cable vs Tata Sky)

Key Insights & Recommendations

Customer Value Map
Reduce upfront STB costs with respect to cable Increase number of HD channels available Improve basic feature set e.g. DVR on USB Introduce excitement features e.g. vernacular programming guide Enhance usage experience by improving user interface Enhance customer service by increasing self-help avenues Brand innovation & First to market capabilities Brand customer service as a differentiator Target the un-endowed by bundling with TV sales Bring behavior compatibility with cable services

Kano Model

Consumption Chain and Customer Experience

Branding and Marketing Analysis

Endowment effect

Thank You