“Marketing Plan of Wateen DTH”

Marketing Strategy MKT-511

Project:
Marketing plan of Wateen Direct to home (DTH)
Television
　
Submitted to:
Mr. Jawad Saleem
　
Submitted by:
Shafqat Raza (072135)
Ammarah Tahir (072156)
Khadija (071129)
　

　
 　

Wateen Telecom
　
Type Private
Founded 2007
Founder Abu Dhabi Group
Headquarters Lahore, Pakistan
Industry Telecommunication
Products Wimax,HFC Network
Parent Abu Dhabi Group
Website www.wateen.com

Acknowledgements
In the name of Allah, the Beneficent, the Merciful.

First of all we are very thank full to Allah who provide us knowledge, energy
and skills to avail opportunities and increase our knowledge and experience by
completing this Project.

For the successful completion of project we are thankful to Sir Jawad Saleem,
who given us in-depth knowledge of subject and equipped us with current
market trends.

We were not able to accomplish this task without the help of class of MBA
Pak-IMS and information provided by marketing department of Wateen
Telecom.

We are thankful to our parents how gave us opportunity to study and provide a
better living standard.

Project Objective
The objective of this project is to give overview of marketing strategy of
Wateen Telecom to provide DTH television services to viewers in Pakistan.
Analysis carried out on TV and cable market in terms of size and growth,
covering different segments present in the market.

It includes introduction of company and product, external and internal

environment, market and competitor analysis, and marketing mix.

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

Wateen Telecom is the Abu Dhabi Group's latest venture in Pakistan. After the
successful launch of Warid Telecom in Pakistan, which has a subscriber base of
over 10 million customers in 145 cities, Wateen Telecom has been set up to
become the leading "Carrier's Carrier" providing services based on quality,
reliability and affordability in the communication and media sector.

Vision

To launch Pakistan into the 21st century digital revolution by providing

complete communication solutions to Telecom Operators, Corporate,
Consumers and to be the leading “Carriers’ Carrier” by creating a world-class
cutting-edge network to deliver a broad range of reliable, affordable and quality
customer-centric services.

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 Telecom is Pakistan’s one of the largest communication company in

the private sector that has helped moving forward the country into a digital
revolution with its ability to seamlessly connect and enable smarter, faster,
cost-effective and flexible communication solutions to reach its customers.

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:

• Abbottabad

• 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

The last one decade has seen witnessed more concentrated form of political
turmoil and instability than ever before witnessed. Part of the reason is access
to information and the media boom of the 90s and early part of this millennium.
But that is just one reason, the major reason being that political forces used
media and information channels to shape political debates and provide a frame
of reference under which the discussions was carried out. Media on the other
hand also used it substantial power to influence those shaping the political
landscape of the globe. Control over information has become a critical success
factor in the political arena today and while stakes are high, the battle is
immense. Governments and the opposition both have identified the importance
of channels of mass communication and have invested heavily to propagate
their perspectives. Looking at the macro environment from the national and
regional level perspective, the last couple of years have seen a lot of turbulence
in the political arena. This as a result has translated into different measures
from the government from setting curbs on the media, imposing watchdogs like
PEMRA, to declaring freedom of press and the right to freedom of expression.

Legal

Under the 1973 Constitution, Fundamental Rights include security of person,

safeguards as to arrest and detention, prohibition of slavery and forced labor,
freedom of movement, freedom of association, freedom of speech, freedom to
profess religion and safeguards to religious institutions, non-discrimination in
respect of access to public places and in service, preservation of language,
script and culture. The judiciary enjoys full supremacy over the other organs of
the state.

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

With a per capita GDP of about $2600 in 2006, the World Bank considers
Pakistan a developing country. No more than 48.7% of adults are literate, and
life expectancy is about 63 years. The population, currently about 165 million,
is growing at 2.09% annually. The Gross Domestic Product in the country was
$106.3 billion (est. in 2007) with an annual growth rate of 6.4 percent in the
same year. The following graph shows the annual average growth rate of the
GDP in the economy.

　
 　

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.
Consumer Expenditure by Purpose: 1990-2015
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.
Population by Age: 1990-2015

'000

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.
Population by Educational Attainment: 1990/1995/2000-2003

1990 1995 2000 2001 2002 2003

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

Probably the most profound affect has been made by the technological
advancements. Flow of information has never been so swift and
uninterrupted. Advancements in the fields of telecom, satellite
communication, and information technology have been the driving
forces behind this phenomenon. In satellite TV communication the latest
technology in Pakistan is cable TV. Cable TV growth has witnessed
mushroomed growth over the last few years and now almost 38% urban
households have access to cable TV.

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.
Number of color TV Set: 1990/1995/2000-2003

per 100 households

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

In order to define the market in Pakistan, we need to understand what

needs are DTH to serve?
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

After careful analysis of all of the clusters, it has been revealed that all
of the consumers are same based on all of the demographic variables
as far as the TV channel providers are concerned, except for the Socio-
economic classes of them. Hence all of the following three clusters have
been differentiated only on the basis of their corresponding SEC class.

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

Terrestrial and antennas: Weakness

• Poor picture quality

 • Fewer numbers of channels

Market trends

Market trends in term of demographics, economics, social, technology,

environment and politics have already been mentioned. Some other
aspects of market trends are briefly discussed as follows.

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

Tata Sky launched DTH services on 8th August, 2006. Tata sky has
focused on southern areas of India. Data related to Tata Sky and the
challenges experienced in establishing its customer base are as follows:

• 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

Dish TV is India’s first direct to home entertainment service in India,

launched in 2003. The salient findings about Dish TV are as below.

• 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 strategy

To: TV set owners of Pakistan

For: Wateen DTH is a satellite television service brand.

Differentiation: it provides you superior picture quality, control and freedom from cable guy.

Marketing Strategy – Product

Product Mix

Three types of packages with value added features like parental control and programs in regional languages enables Wateen

Telecom to capture a large market share. There are three segments in market, based on different SECs. Different products
are targeted to each segment. The product details are as below:
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 – Price

Pricing Objectives

Though Wateen has no direct competitor in DTH field, however, market is predominantly captured by cable TV service providers. Therefore,
Wateen is pricing its products so that people would shift from their existing service provider to Wateen’s DTH. Another objective of Wateen
is to increase penetration and trial rate of DTH among potential customers. Wateen is following price discrimination strategy to siphon as
much customers as possible while ensuring profitability. Wateen is careful to keep its image as “affordable” for larger segment of customers
(which is SEC CD) in order to increase its penetration, else customers will compare the prices of DTH packages with their existing cable TV
service and in case if Wateen’s prices would be perceived too high, customers would probably not shift to DTH.

Marketing Strategy – Promotion

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 – Distribution

Distribution 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.himalmag.com/2002/july/profile_3.htm

• 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.