Mini Marketing Plan for Comcast Cable

By
NaShawn Branch
MBA 505 Marketing Management
Jones International University
August 25, 200
I. EXECUTIVE SUMMARY
A. Prodct !ife C"cle
!he "omcast "a#le $ro%uct is in the maturity $hase o& the $ro%uct li&e cycle' "a#le
!elevision has #een aroun% since the ()*0+s
i
, the ca#le com$anies are utili-ing other $ro%ucts an%
services, i'e' %igital I. $hones an% high/s$ee% internet in con0unction with ca#le in an e&&ort to
make the ca#le services more $ro&ita#le' Accor%ing to an interview on "NB" with the "12 o&
"omcast, Brian 3o#erts, #asic %igital ca#le alone is not &ueling the growth o& the ca#le com$any,
#ut the 4!ri$le .lay Bun%le5 6i'e' %igital $hone, internet, an% ca#le7 is the %riving &orce &or the
increase'
ii
#. Com$etiti%e Position
"omcast ca#le is one o& the largest ca#le com$anies an% is consi%ere% a market share
lea%er in its in%ustry' Accor%ing to the most recent &inancial highlights on the NAS8A9
1:change, $ro&ita#ility &or "omcast has risen stea%ily'
&igre '
"omcast ;inancial highlights
Sales< 2='= Bil
Income< 2'=> Bil
Sales ?rowth< @(A'50B
Income ?rowth< @)('(0B
Net .ro&it Margin )'A>B
8e#tC1Duity 3atio 0'=A
C. Strategic (b)ecti%e
"omcast+s strategic o#0ective is to gain long/term market share an% %ominance' "omcast
is striving to #ecome the high/volumeClow/cost $rovi%er in the market' "urrently, "omcast is
.age 2 o& (5
reinvesting #ack into its in&rastructure inclu%ing hiring $ersonnel, $urchasing eDui$ment in large
volumes, an% o&&ering $ackage% low cost services such as %igital $hone an% high/s$ee% internet
along with the ca#le services' !heir marketing cam$aign has switche% &rom a%vertising in%ivi%ual
$ro%ucts to now, the inclusive, 4!ri$le .lay5 #un%le% services'
*. Cstomer Targets
!he customer targets &or "omcast "or$oration &or their $ro%uct are #roa% mass marketing
within their sanctione% mono$oly' "omcast is also utili-ing a%%itional ca#le $rogramming that is
narrow cast s$eci&ically to %emogra$hics in the &orm o& Ei%eo on 8eman% 6E287 $rogramming'
!he marketing conce$t is to utili-e the narrow segmente%Cniche marketing to #ring attention #ack
to the ca#le com$any'
E. Com$etitor Targets
"omcast ca#le has two ma0or com$etitors on the hori-on, #oth com$etitors $ose an eDual
threat to "omcast "or$oration' !hese com$anies are satellite $rovi%ers 6i'e' 8irec!E F %ish
services7 an% the tele$hone com$anies 6i'e' Eeri-on an% A!G!7'
&. Prodct Strateg"
"omcast "or$oration+s $ro%uct strategy is newCim$rove%' "omcast+s cre%o is to su$$ly
consumers with what is im$ortant in their lives' "omcast #elieves that what is im$ortant in the
lives o& consumers is to have new an% im$rove% technology to assist them in having more
internet channels, &aster internet, an% %igital $hones that re%uce the cost o& tele$hone #ills'
+. *istribtion Strateg"
.age > o& (5
"omcast+s %istri#ution strategy is #roa%' !heir goal is to saturate the market #y utili-ing
$ro%ucts manu&acture% in "hina an% %istri#ute% through their own retail stores an% in/home
installation' 1ach $iece o& eDui$ment is generic an% can #e %istri#ute% in any home'
,. Pricing Strateg"
"omcast+s $ricing strategy is to $rovi%e the #est service &or the lowest $rice, there&ore
a$$ealing to consumers that are $rice %riven in their %ecision making $rocess' !heir installation
services are at nominal &ees to com$ete with com$etitors' As an a%%itional low $ricing strategy,
"omcast %oes not charge &or trou#le/calls' !he com$etition 6i'e' satellite $rovi%ers an% tele$hone
$rovi%ers7 all charge a service &ee &or trou#le calls'
I. Commnication Strateg"
"omcast ca#le %oes a com#ination o& #oth mass marketing an% narrowCtarget marketing'
;or e:am$le, "omcast a%vertises their 4!ri$le .lay5 via television commercials, ra%io s$ots,
#ill#oar%s, $rint me%ia, an% internet we# links' "omcast+s narrow marketing consists o& a$$ealing
to various %emogra$hics such as se:, race, ethnicity, an% location through the &orm o& $ostcar%s,
s$eci&ically %esigne% to highlight in%ivi%ual marketing'
!he strategy an% tactics o& "omcast "a#le make $er&ect sense an% is rea&&irme% #y its
long history o& $roven %ominance over the market share' !he %i&&erent %ecisions are consistent
an% show the growth o& the com$any &rom a sanctione% oligo$oly into a large nation wi%e
com$any with ma0or com$etitors'
-. Strateg" in Earl" Stage of !ife C"cle
.age * o& (5
In the early stages o& the ca#le in%ustry, very &ew channels were o&&ere% an% the
im$lementation o& governing laws an% $olicy struggle% to catch/u$ to the technology an%
sanctione% the oligo$oly' 8uring the intro%uction, there were no com$etitors o& ca#le com$anies,
there&ore, marketing was minimal' !he strategy o& ca#le com$anies was sim$leH esta#lish itsel& in
the market, $er&ect the technology in research an% %evelo$ment an% attract investors
.. Strateg" in +ro/t0 Stage of !ife C"cle
2ne o& the strategies in the intro%uctory an% growth $hase shoul% have #een to $er&ect the
network on the same scale as the tele$hone com$anies, which in turn has #ecome a ma0or
com$etitor' Secon%ly, to attract a #roa%er au%ience, $rogramming shoul% have #een %evelo$e%
early on to %is$lay a %iverse %emogra$hic o& customers that are nationwi%e versus those in an
imme%iate geogra$hic area' In regar%s to marketing, more a%vertising shoul% have #een
%evelo$e% to esta#lish the ca#le in%ustry an% #ran% i%entity as a more a$$roacha#le than its
current com$etitor, tele$hone com$anies'
!. Strateg" in !ater P0ase of !ife C"cle
"urrently, "omcast "or$oration is in the mature $hase' Base% on the e:$erience curve,
the com$any is evolving into a more e&&icient service $rovi%er #y %iversi&ying its $ro%ucts an%
services' Also, its current strategy is to $urchase other ca#le com$anies in ho$es o& $rovi%ing a
lower cost to its consumers' ;inally, I think the conclu%ing strategy in the later $hase shoul% #e to
o#tain a more e&&icient work &orce that can install all three services 6ca#le, internet, an% $hone7 in
or%er to com$ete with its com$etition an% retain its customer #ase'
M. !ife C"cle P0ase Consistenc"
.age 5 o& (5
!he li&e cycle $hases o& "omcast are consistent with each other &or a com$any that shows
growth &or a small com$any starting in the south to a large com$any' !he marketing strategy o&
"omcast has %emonstrate% that the metho%ology outline% in mo%ule ( an% the $ro%uct li&e cycle
in the Iarvar% Business Journal' !hroughout all $hases o& the li&e cycle o& the ca#le in%ustry, it is
a$$arent that managers have thought a#out the market strategy an% allocate% resources correctly'
II. C(MPETITI(1 A1A!YSIS
As the lines #lur #etween ca#le an% telecommunications com$anies, it is really
interesting to analy-e the customer+s $erce$tion o& the com$anies an% their $ro%ucts' .ricing wars
in the communications in%ustry yiel%s evi%ence o& highly segmente% marketing %irecte% at
%istinguishing it $ro%ucts+ attri#utes' !he three largest com$etitors in the Mi%south are the ca#le
com$anies, satellite $rovi%ers an% Bellsouth' 1ach com$any has its own uniDue $ro%ucts with
$ros an% cons' Although mergers an% allies are very common, it is interesting to analy-e the
com$anies marketing strategies'
"urrently, it seems that "omcast is the emerging winner in these wars' Accor%ing to
MSN Money 6NAS8A97 "omcast+s stocks #oasts at 2'5
iii
' "omcast is a ca#le com$any that
has $rovi%e% solely ca#le service until recently' Jith the intro%uction o& Iigh s$ee% internet an%
I. $hone technology, "omcast is seeking to make the com$any more $ro&ita#le with the same
in&rastructure cost' "omcast+s #ack#one wiring consists o& coa:ial ca#ling' "oa:ial ca#le,
although not as relia#le as two $air wiring, can $ro%uce a higher #an%wi%th an% higher s$ee% o&
%ata tra&&ic there#y creating a seamless con%uit &or I. !ele$hony an% internet' "omcast also
leverages it+s Ei%eo on 8eman% 6E287 technology as a %istinguisher &rom the com$etition'
At &irst glance, it seems that "omcast is a $er&ect com$any, however, un%er &urther scrutiny, all
ones has to %o is ?oogle 4"omcast5 an% one can see vi%eo o& customers+ $erce$tions a#out
sche%uling trou#le calls within a smaller time &rame an% long wait times &or customer service'
.age = o& (5
"omcast has not res$on%e% to internet vi%eos an% #logs to change this $erce$tion, yet chose to
&ocus its marketing on the $erce$tion o& its $ro%ucts' "omcast ca$itali-es on highlighting the &act
that they o&&er three services 6ca#le, internet, an% I. $hone7, the com$any also works %iligently to
e:$loit the com$etitions+ ina#ility to $rovi%e one #ill' ;rom a consumer+s $ers$ective, the key
motivating &actors &or $urchasing "omcast+s services are convenience o& having one #ill,
com$etitive $ricing an% relia#le services 6i'e' I. .hone, high s$ee% internet o& s$ee%s o& = m#$s
an% E28 $rogramming with 8E3 services7'
III. S2(T A1A!YSIS
Strengths F "omcast+s strengths are that $rimarily, they are a#le to o&&er all three services at one
rate' Because they are a nationwi%e ca#le com$any they can #uy eDui$ment at a %iscounte% #ulk
rate an% $ass the savings to customers' !he tele$hone services are less e:$ensive' "omcast also
has Ei%eo on 8eman% !echnology' ;aster Internet services, relia#le rece$tion, no contracts, no
&ees &or trou#le calls are all a%%itional strengths'
Weakness IP technology is new an% there&ore the service is $ro#lematic' .oor customer service
an% large win%ows o& time &or trou#le calls an% installations' "omcast ca#le has too many $romos
an% s$ecials that customers can+t kee$ track o&' "omcast has #een una#le to a%a$t its culture to &it
%i&&erent markets'
Opportunities: "omcast has a uniDue o$$ortunity to %ominate the market #y %iversi&ying its
#usiness mo%el to inclu%e other revenue generating #usinesses that work well un%er their
cor$orate um#rella' !he only $ro%ucts that they o&&er in their vertical markets are television
$rogramming such as "omcast S$ortsNet, "omcast S$orts Southeast, S$ortsNet New Kork, the
mtn' / Mountain Jest, S$orts Network, "NA !he "omcast Network, 1L 1ntertainment, Style
Network, ?*/Ei%eo ?ame !E, !he ?ol& "hannel, AMN !elevision, !E 2ne, .BS NI8S S$rout,
.age o& (5
E13SUS, 1:ercise !E, an% ;1A3net
i%
!ra%itionally, "omcast has #een a %ie har% ca#le com$any
service only' !he marketing strategy #ehin% %evelo$ing this $rogramming is to serve as an a%%e%
value to "omcast+s services' It has not investe% any resources into other &orms o& me%ia such as
$rint me%ia, ra%io $rogramming, cinema, an% #ooks similar to other ca#le com$anies, such as
!ime Jarner'
!ime Jarner has investe% a great %eal into trans&orming its com$any into a me%ia cor$oration
that encom$asses all &orms o& communications services an% $ro%ucts' It o&&ersH
A2O Internet Service / a lower tiere% %ial/u$ service'
!ime Jarner "a#le / which $rovi%es $hone, internet an% ca#le,
!ime Inc' / the lea%ing maga-ine $u#lisher in the worl% with a$$ro:imately (>0
maga-ines'
Jarner Bros' 1ntertainment/ which lea%s its in%ustry worl%wi%e in creating, $ro%ucing,
%istri#uting, licensing an% marketing &eature &ilms, television shows, home vi%eo,
animation an% other &orms o& entertainment'
IB2 / America+s most success&ul $remium television com$any, Iome Bo: 2&&ice
%elivers two 2*/hour $ay television servicesPIB2 an% "inema:Pto over *0 million
U'S' su#scri#ers'
!urner Broa%casting / !urner Broa%casting o$erates worl%wi%e entertainment, animation
an% news networks an% #usinesses whose $er&ormances le% their res$ective in%ustry
segments in 2005'
New Oine "inema/ !he most success&ul in%e$en%ent &ilm com$any in the worl%'
"omcast is trying to e:$an% it+s hori-ons into other vertical markets' Accor%ing to Mike Shiel%s,
Kahoo has inke% a %eal with "omcast to sell %is$lay an% vi%eo a%vertising &or the ca#le
.age A o& (5
com$any+s "omcast'net $lat&orm'
v
In ;e#ruary (*, 2005 "omcast ma%e a Q5* Billion #i% &or
8isney #ut the acDuisition never materiali-e%'
vi
I& "omcast ca#le can remain o$$ortunistic on acDuiring #usinesses that will a%% value to
its $ort&olio an% esta#lish customer loyalty, it can not only %ominate the ca#le in%ustry, #ut the
entire communications in%ustry'
Threats-Oike any large cor$oration, "omcast has many threats' "omcast+s #iggest e:ternal threat
is satellite services' Accor%ing to the chairman an% "12 o& "omcast, Brian 3o#erts, which en%e%
2005 with 2('5 million su#scri#ers, sai% that he %oesnRt worry a#out com$etition &rom the $hone
com$anies' Instea%, he sai% the #iggest challenge is &rom satellite !E com$anies like 8irec!E
an% 1choStar'
vii
!hese !elevision service $rovi%ers $rovi%e lower cost $rogramming in a $rice
%riven market'
Another threat to "omcast is the vi%eo over &i#er technology trans&er $rotocol 6;!!.7
that tele$hone com$anies are %evelo$ing' ;!!. uses hair/wi%th, &i#er/o$tic stran%s to carry
content // inclu%ing vi%eo $rogramming // to resi%ential an% small #usiness customers' !he #a#y
#ells conten% that the technology will ena#le them to o&&er a #etter #un%le o& television,
#roa%#an% an% $hone service'
viii
IV. PRICI1+ STRATE+Y
"omcast+s $ricing strategy is com$etitively $rice% in two out o& the three services'
Un&ortunately, the !E ca#le services cannot com$ete with satellite $rovi%ers' !he reason &or this
.age ) o& (5
is that "omcast has more &eatures in the ca#le service that reDuires more overhea%' 2ne way to
com#at this is through "omcast+s %evelo$ment o& new technologies such as Ei%eo on 8eman% to
gain more revenue $er customer'
!he &ollowing is a $ricing matri: o& the to$ > com$etitors in the Mi%southH
!EC"a#le Service Internet !ele$hone Service
"omcast "a#le Q>> Q>> Q>>
8irec!E Q()'))
BellSouth Q*2')5 <<<Q>0 only local
.age (0 o& (5
V. CUST(MER A1A!YST
!he $otential an% current customers are $rice %riven an% want more relia#le &eatures'
"omcast is winning #ecause they have $lace% two o& their newest $ro%ucts in this category' !hese
$ro%ucts have argua#ly the most $ro&it $otential in the in%ustry' "onsumers in the Mi%south #uy
theses lu:uries #ase% on necessity an% li&estyle' !he #uying ha#its have strengthene% the views o&
technology an% $ro%uce% &irst innovators in the Mi%south'
Although technically savvy, they still em#race $urchasing items in a store with &ace to
&ace interactions' ;rom an overhea% $ers$ective, in or%er to com$ete in this geogra$hical area,
great %eals o& management %ecisions are ma%e in un%erstan%ing the $sychogra$hic varia#les'
?reater marketing resources are allocate% in the store&ronts over marketing through internet'
Accor%ing to the National "ensus Bureau, salaries in the south are #elow the national average'
i:

Most consumers are more $rone to #uy at the en% o& the month an% %uring holi%ay seasons' In
or%er to #e success&ul, larger com$anies have to un%erstan% the #uying ha#its o& #lue collar
.age (( o& (5
Oow
$rice Iigh .rice
More
;eatures
;ewer
;eatures
8irec!E
6!E7
8irec!E
6internet7
"omcast
6!E7
"omcast
Internet
Bellsouth
Internet
Bell South
6.hone7
"omcast
I. .hone
workers with smaller salaries o& the south' 8irect a%vertisements nee%s to #e more &reDuente%
towar%s the en% o& the month as o$$ose% to the #eginning'
A&ter reviewing the ma$ o& the customer $erce$tion, it is Duite clear that all three
com$etitors are $lacing themselves in the o$timal targete% au%ience' !his targete% au%ience is
mostly early a%a$ters an% early ma0ority classes that s$an over all generational cohorts'
"ustomers use this as a way o& com$arison sho$$ing &or the latest s$ecials' It is im$ortant to note
that #ecause the tele$hone in%ustry is una#le to com$ete with the I. .hones, they have %evelo$e%
a tier system &or internet su#scri#es to remain e:tremely com$etitive in' com$eting Internet
service' "ustomers o&ten $ick an% choose services a la carte an% lum$ tele$hone an% internet as
one #un%le an% !E as another' "ustomers are $re%is$osition to #e more &amiliar with ca#le &or
!E services'
In or%er to continue to %ominate, "omcast must lower the cost o& the ca#le services while
simultaneously changing the $erce$tion o& the customer that all three services are in &act one' In
or%er &or 8irect !E to com$ete, it must continue to $romote that it has more channels than ca#le
an% it is lower $rice%' It must also kee$ its+ satellite internet service highly $rice% so that it will
not #ecome a com$etitor o& Bellsouth' Bellsouth must lower its tele$hone $rice or continue to
$romote the $erce$tion that although it is more e:$ensive, it is more relia#le %uring an
emergency'
VI. REC(MME1*ATI(1S
2verall, the marketing team at "omcast %oes a great 0o# in their marketing e&&orts'
Iowever, accor%ing to the te:t #ook &or our class, there area cou$le o& a%vertising strategies in
this mo%ule that "omcast coul% #ene&its &rom' !his inclu%es "ustomer in&ormation &ile 6"I;7,
In&ormation/intensive strategies an% %evelo$ing a $ersonali-e% marketing a$$roach to customers'
.age (2 o& (5
Accor%ing to the mo%ule, !he "I; can #e thought o& as a single SvirtualS %ata#ase that
ca$tures all relevant in&ormation a#out a &irmRs customers'
:
"omcast shoul% a%o$t a "I;' !his &ile
shoul% have a $resent customers an% &uture customers' 1ach &ile shoul% list #e organi-e% into
three categories similar to the rea%ings an% contain "ustomer "haracteristics, 3es$onse to ;irm
%ecision an% .urchase history'
!he &ollowing is an e:am$le o& a Customer Information File or "omcastH
"ustomer "haracteristic John 8ow, Age >5, Q55N a yr, 2wn house
MarketH Southern/ "urrent customer
3es$onse to ;irms 8ecisions InDuire in res$onse to %irect mail
JhenH Aug (, 220, where at call center in
Mem$his,
IowH via internet an% tele$hone, whyH ki%s
home &or summer nee% a%%itional channels'
.urchase Iistory "ustomer since 2005' #asic channels an%
internet
A mass customi-ations strategy coul% #e use% to customi-e in%ivi%ual o&&erings at little
a%%itional marginal cost' Because "omcast is in itsel& a #roa%caster it ca leverage the &act that
$ro%uction cost is chea$' It coul% %evelo$ in%ivi%uali-e% commercials to s$eci&ic grou$s o&
customers &rom the Customer Information File in an% e&&ort to u$ sell the e:isting customer on
services that they have inDuire% a#out'
!o hel$ "omcast #ecome even a$$ear to #e more $ersonali-e%, "omcast can change the
we#site to have $ersonal &eatures s$eci&ic to that customer that not only ca$tures in&ormation #ut
also have s$eci&ic a%vertising to that customer' ;or e:am$le, using the a#ove e:am$le o& the "I;,
"omcast can have a%vertising that suggest that #ecause the customer has ki%s, in the summer,
"omcast will run a 4out o& school5 $romotion &or a s$ecial %iscounte% $rice only &or that
.age (> o& (5
customer' "omcast coul% even go to the e:tent o& using the we# to ca$ture the customer+s
chil%ren in&ormation an% %evelo$ a%vertising &or them to hel$ motivate the $arents to #uy'
!he #ottom line is that there are en%less amounts o& marketing a$$roaches to utili-ing
%ata mining strategies &or "omcast' As technology yiel%s more a%vances &or ca$turing customer
in&ormation, &orecasting s$en%ing ha#its an% analy-ing e&&ecting a%vertising cam$aigns, the
tren%s in the marketing mi: will #e trans&orme% in the &uture' As state% in the mo%ule, .ro%uct
Management, .ricing, Sales .romotion an% A%vertising "hannels o& 8istri#ution will #e
continue to #e a&&ecte% an% as this change is trans&orming so shoul% the marketing a$$roach &or
"omcast ca#le'
VII. 31;13N"1S
.age (* o& (5
i
"a#le !elevision IistoryH Bellis, Mary, htt$HCCinventors'a#out'comCli#raryCinventorsC#lca#letelevision'htm
ii
"NB"H Interview with Brian 3o#erts, 9uick, Becky
iii
htt$HCCmoneycentral'msn'comC%etailCstockTDuoteUSym#olV"M"SA
iv
www'comcast'com
v
Me%ia week, Kahoo .acts Jith "omcast'net to Sell A%s, S0ields3 Mike3
0tt$455///.media/eek.com5m/5ne/s5interacti%e5article6dis$la".)s$7%n6content6id8'99:;<=>?;
vi
Comcast bids for Disney, "NN Money, Monica, .aul,
htt$HCCmoney'cnn'comC200*C02C((CnewsCcom$aniesCcomcastT%isneyCin%e:'htm
vii
Comcast to telecoms4 #ring it on@3 Pal3 Monica3 "NN Money,
htt$HCCmoney'cnn'comC200=C02C0ACnewsCcom$aniesCcomcastCin%e:'htm
viii
Comcast4 20at &iber T0reat7, Colin C. Haley, Intenews'com,
htt$HCCwww'internetnews'comCstatsCarticle'$h$C>*25)(
i:
National "ensus Bureau, htt$HCCwww'census'govChhesCwwwCincomeCstateme%&aminc'html
:
htt$HCCcourses'0onesinternational'e%uC%is$lay'0kgU
cli%V)052Gui%VA*Gt$lV&ramesetG0essTcookieVnashawn#ranchH=*e#0A*H2&5)=e)a