A REPORT ON

“ANALYSIS OF THE PERFORMANCE OF VIDEOCON D2H IN SATELLITE BOX MARKET AMONG COMPETITORS”

SUBMITTED BY:Shashwat S. Gaharwar(Marketing & Finance)

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International School of Business & Media(ISB&M)

ACKNOWLEDGMENTS

It gives me immense pleasure, to express my unfeigned and sincere thanks to International School of Business & Media for giving me this wonderful opportunity to undertake my Summer Internship Project at Videocon D2H. I am lucky to get inspiration, motivation, guidance of admirable people and friends.

I would also like to extend gratitude and heartfelt thanks to Mr. John Kothari (Cluster Head, Sales) and Mr. Gorakh Fulsundor (Area Head, Sales) and for their wholehearted support and invaluable guidance, for their inputs and constant encouragement during the course project.

At last I am also thankful to my friends, to all known and unknown individuals who have given me their constructive advise, educative suggestion, encouragement, co-operation and motivation to prepare this report.

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TABLE OF CONTENTS

IntroductionVideocon D2H Theoretical background of the topicObjectives of the studyScope of projectLimitations of projectResearch MethodologyData AnalysisObservation and ConclusionRecommendationsBibliography and ReferencesAnnexure

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INTRODUCTION

Television in India is a huge industry which has thousands of programmes in many languages. Approximately half of all Indian households own a television. According to Pioneer Investcorp, the Indian cable industry is worth  270 billion and is the third largest in the world after television in the People's Republic of China and television in the United States. The number of TV homes in India grew from 120 million in 2007 to 148 million in 2011. Cable reaches 94 million homes with 88 million analog connections and 6 million digital ones, while DTH has commanded 41 million subscribers.

India currently has 7 major DTH service providers and a total of over 35 million subscriber households in mid 2011. Dish TV(a ZEE TV subsidiary), Tata Sky, Videocon D2H, Sun Network owned ' Sun Direct DTH', Reliance Digital TV, Bharti Airtel's DTH Service 'Airtel Digital TV' and the public sector DD Direct Plus. As of 2010, India has the most competitive Direct-broadcast satellite market with 7 operators vying for more than 135 million TV homes. Digital DTH services in India have been started less than a decade back and are gaining popularity and acceptance in India mainly because of their superior picture and sound quality. The concept of a prime band will be passé after introduction of digitization. Viewers will be able to access digital services only through a set top box (STB). Eventually, you will be facing a black out of analog signals in major metros like Mumbai, Delhi, Kolkata, and Chennai post October 31st 2012, in cities with more than one million populations like Pune, Ahmadabad and Bangalore by March 31, 2013, the deadline for complete digitization in urban areas is September 30, 2014 while the entire country is expected to achieve digitization by December 31, 2014.

With mandatory digitalization being round the corner it becomes extremely important to know where they stand in set-up box market. Multi-system operators like Hathway and Digicable are struggling to meet the deadline of June 30 to usher in set-top boxes in Delhi, Mumbai, Kolkata and Chennai. It is the best opportunity to hold maximum market share because this is a durable product and customers do not prefer to replace them again and again. Every DTH company in India is preparing for the opportunity that lies between 2012 to 2014. Moreover, Videocon D2H is competing with DTH companies which have already established In India. Videocon D2H was founded in 2009 while Dish TV was the first company to enter India in 2004 followed by Tata Sky. Airtel Digital TV, Sun Direct DTH, Reliance Digital TV etc came within 2005-2008. These companies have already started building their market share which is why Videocon D2H must

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comprehend the competitiveness of these companies. So, this project will throw light on DTH operators in India and their competitiveness with Videocon D2H.

VIDEOCON

Videocon Group is an industrial conglomerate headquartered in Gurgaon (NCR Delhi) with interests all over the world, and is a Indian multinational company. It was founded by Nandlal Madhavlal Dhoot in 1979. At that time it used to manufacture TV and Washing Machine. In 1989-90, Videocon started manufacturing Home Entertainment Systems, Electric Motors & AC. Videocon entered Refrigerators and coolers segment in 1991. In 1995, Videocon started manufacturing Glass shells for CRT and in 1996 it ventured into Kitchen appliances and crude oil segment. In 1998, Videocon started manufacturing Compressors & Compressor Motors. In the year 2000, Videocon took over Philips Color TV Plant. In 2005, Videocon took over 3 plants of Electrolux India and acquired Thomson CPT. It is also the third largest picture tube manufacturer in the world. It has an annual turnover of 4 billion USD, making it the largest consumer electronic and home appliance companies in India. Since 1998, it has expanded its operations globally, especially in the Middle East. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico.

Broadly, Videocon group operates in key sectors Consumer Electronics & Home Appliances, Oil & Gas, Power and Telecom and DTH. In India the group sells consumer products like Colour Televisions, Washing Machines, Air Conditioners, Refrigerators, Microwave ovens and many other home appliances, selling them through a Multi-Brand strategy with the largest sales and service network in India. Display industry and its components and Colour Picture Tube Glass. Videocon, Sansui, Akai, Electrolux, Kelvinator, Kenstar, Next, Hyundai etc are the brands under the name of Videocon Group. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. Videocon Telecommunications (formerly Datacom Solutions), one of the subsidiaries of the company, has been awarded the license to provide unified access services in 21 local service areas and has also been allotted spectrum in 20 of these local service areas. It has become a leading group in its sector due to the high quality of its products which has led to customer satisfaction and loyalty. And so in the future also the Group Videocon must continue to supply good quality of products to its customers for this will ensure that it will be able to retain its leadership position in the market.

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VIDEOCON D2H

In 2009, Videocon launched its DTH product, called 'd2h'. As a pioneering offer in the Indian DTH market, Videocon offered LCD & TVs with built-in DTH satellite receiver with sizes 19" to 42". This concept in the DTH service is relatively new in the presence of other players like ZEE TV's Dishtv, Tata Sky, Airtel Digital TV and Reliance's BIG TV providing only the set top box. Videocon d2h has 368 Channels and Services on its platform. It uses the revolutionary MPEG – 4 DVBS -2 technology. The Head Office is based in Mumbai while the Head end is located in Greater Noida. The state of the art uplink centre situated in Greater Noida includes the satellite dish farm and the main control room. Along with a wide network of 700 direct service centers and franchisees, Videocon d2h also has 24x7 customer care centres in Pune, Dehradun, Noida and Bangalore to cater to customer needs in ten different languages. Videocon d2h uses the ST 1 satellite at 88 ° east. Videocon d2h has 6 transponders for transmitting its services. With service centers all across India, it is equipped with 4000 well trained service employees. Videocon d2h has about a 5 million subscribers as of May 2012. Its tagline initially was “Direct Hai Correct Hai” which was later changed to “Digital DTH Service” in Nov 2011.

Vision & Mission

Videocon D2H’s Vision: “To be a DTH category innovator with most advanced products and services.”

Videocon D2H Mission: “To strive towards making brand Videocon d2h, the highest top of the mind recall in the DTH category with strongest brand equity and most satisfied customer base”

Products

a. Satellite Box: Its features are Mosaic (12 PIP) - Genre wise, Favorites, Multilingual Channel Guide, Preview Screen (Full Guide), Info Bar, Tickers and Active Services - Direct Active ( State, Channel & East). The market price is Rs 1590(with installation).

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b. HD Satellite Box with 3D: Its features are High Definition Satellite Box, Full HD Picture Quality (1080i), 5 x times Digital Quality Picture, HDD Sound – High Definition Digital Sound, 16:9 Wide Aspect Ratio, Active Music Space, Multiple Tickers and d2h Movies. The market price is Rs 2890(with installation).

c. Satellite HD DVR: Its features are Full HD Picture Quality (1080i), 5 x times Digital Quality Picture, HDD Sound – High Definition Digital Sound, 16:9 Wide Aspect Ratio, Record upto 200 hours and Slow motion feature. The market price is Rs. 5990(with installation).

d. Satellite DVD: Its features are Co-axial Digital Audio Output, Smart Power Control, DTH enabled Satellite DVD, USB Port, Multimedia Card Port, DVD / MP3 / VCD / SVCD / ACD / KODAK, DiVX / MPEG-4 compatible, Power Resume, DTH Set Top Box not required. The market price is Rs. 2990.

Competitors

Its primary competitors are cable television and other DTH service providers—Airtel digital TV, Reliance Big TV, DD Direct+, Dish TV, Sun Direct and TATA Sky.

Dish TV Tata Sky Big TV Airtel Sun Direct V D2H

Founded July’04 Aug’04 Aug’08 Oct’08 Feb’08 Aug’09Market Share

28.2% 19.0% 9.5% 16% 16% 11.4%

(Source: Singapore-based consultants Media Partners Asia)

Awards & Achievements

Since its inception in 2009 Videocon d2h has won many awards and recognitions. Videocon d2h won the Product of the year Award in 2010 for its Satellite DVD. This was achieved in a short span of a year since its launch. Videocon d2h was also selected as the 4th most successful brand launch of the year 2009 across all product categories in the Brand Derby survey carried out by Business Standard. Also the first to launch HD 3D DTH Services in the country. Videocon d2h -Awarded Winner for Best SEO at IDMA 2012.

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CABLE TV & DIGITALIZATION

Question1: What is Cable television?

Answer: Cable television saw the light of day because of the efforts of a man named John Walson. The year was 1948 and cable television has come a long way since then. Cable TV was invented to solve the problem of the people who live in valley or remote locations where signals are not strong. Cable operator use to put antenna up on hill and send amplified signal to multiple houses in valley.

Nowadays cable operators install big dish antennas to receive TV broadcast from channels and pays on behalf of customers to TV channel network. Cable Operator receives many channels through multiple dish antennas and puts them into single wire with different frequencies. One can take the same cable to multiple TV sets in the home and play different channels by paying minimum charge or no extra charge.

Question 2: How does Cable television works?

Answer: There are many satellites that revolve around the earth at a permanent height of 22300

miles from the earth's surface. The signals of hundreds of programs, from every corner of the earth, are relayed to these satellites.

On receiving these signals, there are transmitted to the local cable dish satellites that are present in different localities of a city or town.

These signals are then sorted out at the station of your cable company. Once processed along with local programs and broadcasts, the signals are sent to your homes through the cable wire network that is installed by the cable companies.

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To then access the cable television services, customers need to subscribe to a cable company which will then connect a simple coaxial cable or an RF cable to television sets and program television sets to receive the cable channels. 

Question 3: What is Cable Television Networks (Regulation) Amendment Bill, 2011?

Answer: The Cable Television Networks (Regulation) Amendment Bill, 2011 was introduced in the Lok Sabha on November 28, 2011 by Ms. Ambika Soni, Union Minister of Information and Broadcasting.  The Bill amends the Cable Television Networks (Regulation) Act, 1995, and repeals the Cable Television Networks (Regulation) Amendment Ordinance, 2011.

The Cable Television Networks (Regulation) Act, 1995 requires and provides a mechanism for registration of all cable operators.  The Act empowers the central government to appoint a registering authority to review applications and grant registrations. The Act defines ‘pay channels’ as channels for which ‘addressable systems’ are required to be attached to the set top box.  The Bill redefines ‘pay channels’ to mean channels for which the cable operator pays the broadcaster and the broadcaster’s permission is required for transmission of the channel. 

The Bill will prevent Local Cable Operators (LCOs) from bypassing the digital set-top box, and deciding the mix and price of channels according to locality and customer base. The bill will also shift the balance of power away from LCOs to cable service providers and TV broadcasters who will now be able to monitor their subscriber base and control the flow of revenues.

Question 4: What is Digitalization?

Answer: Currently TV signals are distributed in analog as well as in digital and terrestrial formats. In Digitization, it will be mandatory for every consumer to have a digital set top box installed for television viewing. No analog signals will be transmitted post the deadline and the households without a set top box will not be able to watch television at all. With this digital Set top box, the consumers will now enjoy a superior entertainment experience, enhanced technology/features and host of interactive services.

Question 5: What are the benefits of Digitalization?

Answer: While the move preliminarily appeared only to benefit the Govt. & was opposed, closer inspection of the recommendations by the TRAI has revealed points with mutual benefits to all.

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1. Unlike the earlier scenario, wherein subscribers were forced to choose whole packages of channels even if they did not watch them all, in the new regime, they will be allowed to choose channels on a la carte( having unlimited choices with a separate price for each of them) basis. In other words subscribers will have much better choice at picking only the channels that they want.

2. The customers will not only experience better quality of picture and sound but also will be able to order Movies on demand.

3. TRAI has mandated a carriage capacity of minimum 500 channels. So cable operators cannot give the reason ‘No-Capacity’ to deny many channels.

4. From cost recovery point of view, Cable TV networks are now free to recover digitization costs from broadcasters through ‘Carriage Fees’. Earlier they were charging the consumers for it. Carriage fees borne by broadcasters are estimated to be around Rs. 4,000 Crores annually.

5. It is hoped that with digitization, there will be more transparency in the business model, resulting in increased revenue.

6. It makes possible for service providers to tap additional business opportunities in the form of value-added and interactive services.

Question 6: What is the sunset date of Analog cable?

Answer:

Last date of Analog Cable TRAI’s initial recommendation

TRAI’s revised view

Parliamentary Approval

Further ChangesPhas

eGeographies covered

I. Delhi, Mumbai , Kolkata & Chennai

31-Dec-11 30-June-12 30-Jun-12 31-Oct-12

II. All cities with population >10 lacks

31-Dec-12 31-Mar-13 31-Mar-13 NO

III. All Urban Area(Municipal area)

31-Dec-13 30-Sept-14 30-Sept-14 NO

IV. Rest of India 31-Dec-13 31-Dec-14 31-Dec-14 NO

Question 7: What is DTH and how does it work?

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Answer: The Direct-To-Home (DTH) service is a digital satellite service that provides television services direct to subscribers anywhere in the country. Since it makes use of wireless technology, programs are sent to the subscriber's television direct from the satellite, eliminating the need for cables and any cable infrastructure. The technology of DTH ensures highest quality of voice, video as it uses digital form of communication system. The DTH service also provides various value added services such as internet services, telemedicine, video conferencing etc. Since in DTH technology, all the encoded transmission signals are digital.

Question 8: Is Digitalization a strong opportunity for DTH players?

Answer: The DTH segment continued to expand in India, reaching a gross subscriber base of around 44 million at the end of 2011. On a net basis, this is estimated to translate into a subscriber base of 37 million. This represents a 31 percent penetration of DTH within the C&S subscriber base, compared to 26 percent in 2010. Despite strong growth, DTH saw a relative slowdown towards the later part of the year. Discussions indicate that a decrease in free viewing period offers across industry players, leading to a correction in demand, may have partially contributed to the slowdown. Going forward, while players continue to face transponder capacity constraints, the digitization mandate, leading to increasing penetration of digital platforms, is expected to provide a significant opportunity for DTH growth. Conversion of analog cable subscribers to digital cable is not expected to take place without some churn to DTH providers. The current mandate provides a strong opportunity for both DTH operators and MSOs (digital cable). A better consumer value proposition and preparedness of industry players to enter a digitized world may determine which platform takes the lead during digitization.

Question 9: What would be the expected change in the number of subscribers of DTH, Analog cable, DD Direct, Digital cable and IPTV in recent years?

Answer: Most viewers may prefer direct-to-home (DTH) to view television. However, cable (digital) will still be an important broadcast mode. This observation has been made by a FICCI-KPMG report on media and entertainment. The number of DTH households in the country is set to go up from 37 million in 2011 to 86 million by 2016.

Digital cable, on the other hand, would see its subscriber base explode from 6 million to 75 million over the same period. Not surprisingly, analog cable, which connects most households currently, would shrink from 68 million in 2011 to just 4 million by 2016. The market appears to be large enough to accommodate both digital cable as well as DTH service providers

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2009 2010 2011 2012(P) 2013(P) 2014(P) 2015(P) 2016(P)0

20

40

60

80

100

120

140

160

180

200

69 68 68 59 5032

12 4

4 5 6 19 3249

67 75

16 28 3746

53 64 78 86

67

88

88

88

DD DirectDTHDigital cableAnalog Cable

Source: (FICCI-KPMG Report)

Question 10: Does the government expect increase in average revenue per user (ARPU) after Digitalization?

Answer: Currently, ARPUs appear to be depressed largely due to the prevalence of analog cable, and competition due to fragmentation of the industry. During implementation of digitization, ARPUs may continue to be under pressure, as MSOs and DTH operators target the same subscriber base. Accordingly, ARPUs are expected to grow at a faster pace as digitization progresses across the various phases.

ARPU (INR per month)

2011 2012 2013 2014 2015 2016

Analog 160 165 170 170 171 171Digital/DTH 160 170 180 201 226 253

Question 11: What are the problems faced by DTH companies?

Answer: Apart from the shortage of transponders DTH companies have come to the fore with growing instances of DTH jammers being used in parts of Mumbai and Delhi NCR to distort

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DTH signals. DTH firms like Tata Sky, Dish TV, Reliance Big TV, Videocon D2H and Airtel Digital TV have detected fresh cases of DTH jammers causing disruption of services in Mumbai. DTH in India operates on Ku-band between 11-15 GHz. The Ku-band frequency range is allocated to be exclusively used by satellite communication systems as it eliminates the problem of interference with other microwave systems.

OBJECTIVE OF THE STUDY

The overall objective of the study is to understand the competitive strength of Videocon D2H in regards to other DTH players in the market. The objective is further divided into various parts so that we can know the various aspects which include service offerings, retailers and distributors.

The sub-objectives are:

To know the competitiveness of Videocon D2H as a product To know the problems faced by the retailers To know the perception of retailers about the best DTH product in the market (according

to them) To know the expectations of the retailers from Videocon D2H

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SCOPE

We are looking forward to provide all relevant information about the competitiveness of Videocon D2H. The report has been generated from the feedbacks collected from many retailers within Pune city. The areas which are covered in the project are Peth area (Somwar peth, Mangalwar Peth, Bhudhwar Peth, Shukrawar Peth, Shaniwar Peth, Raviwar Peth, Ganj Peth, Rasta Peth, Bhawani Peth, Sadashiv Peth, Kasba Peth, Narayan Peth, and Ganj Peth) Pune-Satara Road(Dhankawadi, Katraj etc) and some parts of Shivajinagar. The first step is to educate them about Videocon D2h and generating their interest towards the service offerings of the company and then collecting their feedback. The project will be a point of consideration to Marketing team to know where their strength is and at the same time what should be done to eradicate the weaknesses. The project will also show the real market situation of all DTH companies in respect of market acceptance, monthly sales (Pune), visibility etc which will help marketing team to identify close competitors. The project is expected to show the real picture of the DTH market to the Top & Middle level of management of Videocon D2h. It is also believed that after studying

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the report the management will be clearer about the demands and expectations of the retailers in the market.

LIMITATIONS

Although the project was carefully prepared and it has reached its aims, there were some unavoidable limitations and shortcomings.

The retailers selected were on random basis in the areas suggested by the distributors because it meets both requirements i.e. opening up of new counters and recording the feedback of retailers. However, it is expected that every area mentioned above has been thoroughly visited.

Small retailers do not maintain authenticated records of their monthly sales. So, the data collected is based on their best of knowledge.

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The feedbacks collected do not record any special occasion when the demand of DTH products is high, example IPL season.

The sample size take for the project is relatively small as it should have been, considering that the number of retailers in Pune city is in huge. The time constraint of two months is one of the reasons for the same.

The project do not consider DD Direct Plus as a competitor as it is a free DTH service by Doordarshan and no retailer

RESEARCH METHODOLOGY

Size & Characteristics of Population

The population size is extended to the retailers of all lines of business such as Medical Shops, Grocery shops, Electronic shop, Stationery shop etc but the main emphasis was on mobile repair and recharges shops because they are in the same line of business and they also have relevant information that is required o fill up the questionnaire. Most of the retailer who belonged to other line of business seemed to be happy and satisfied with their line of business and some of them

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were not ready to expand their business. So, the main characteristic of the population is Retailers within Pune city.

Sample Selection

The total sample size taken for the purpose of project is 175 of which 136 samples belong to the Peth area and remaining 29 are from Shivajinagar and Pune-Satara road. These samples include all the retailers visited during the summer internship. The areas were suggested by Mr. Gorakh Fulsunder (Area Head, Sales) keeping in mind the limitations of the local distributor allotted areas. The areas visited were Peth area (Somwar peth, Mangalwar Peth, Bhudhwar Peth, Shukrawar Peth, Shaniwar Peth, Raviwar Peth, Ganj Peth, Rasta Peth, Bhawani Peth, Sadashiv Peth, Kasba Peth, Narayan Peth, and Ganj Peth) Pune-Satara Road (Dhankawadi, Katraj etc) and some parts of Shivajinagar. These retailers were selected on Random criteria taking some consideration from their affordability and visibility.

Data collection

The project has been made taking both Primary and Secondary data. The primary data has been taken from the retailers from the areas mentioned above while secondary data has been taken from some previous reports made by FICCI-KPMG and websites. Some of the information was also collected from UTSAV which was a 10 day festival organized in Agriculture ground, Shivajinagar. During the festival Videocon D2H organized branding activity in which we met more than 100 customers every day. The main task was to inform them about the service offerings of the company and create their interest. Most of the customers who walked in already had some idea or experience about few DTH companies. Their ideas and experiences made their perception about DTH services. A huge number of enquiries helped us to understand the requirement and expectation of the end consumer. The platform of UTSAV provided us the opportunity to interact with end consumers directly and to now their demand and expectations. These customers were not asked to give their feedback on questionnaire but we observed the behavior of customers and solved their rebuttals.

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Primary Data Sources:

Retailers in Pune city, andUTSAV festival, New Agriculture College Grounds, Shivajinagar

Secondary Data Sources:

FICCI-KPMG Report and Internet

Scales of Measurement

A quantitative research was conducted. A questionnaire was designed for the purpose, and responses were taken by doing personal interviews with the respondents. The questions were mostly yes/no based, few were multiple choices based.

Tools used for inferences

SPSS & EXCEL are the tools used here to analyze the data. SPSS is very useful here to effectively analyze the data and get effective result which is reliable enough as sample size is sufficient to analyze.

DATA ANALYSIS

Monthly Sales Figure of DTH products in Peth area, Pune-Satara Road and some areas of Shivajinagar

Table no 1:

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The above data reveals that the present scenario of DTH products has stiff competition. Tata sky products enjoy maximum demand followed by Videocon D2H which is a very good sign for Videocon D2H while Dish TV is the market leader of DTH industry but it seem to have been facing problems in competing with Tata sky and Videocon D2H. Though these figures cannot determine the market share but it can show the shift in the customer demand.

Sales Figure of the Setup Boxes of all DTH Brands

We have visited various a numbers of retailers in the area in and around the Peth, Pune-Satara Road and Shivajinagar. It’s a vast and a very complex area with lots of passing by narrow lanes which made our work a bit difficult to reach all the retail outlets. But still we managed to visit around 175 shops out of which around 60 were already selling the DTH products while there were some who were willing to sell but not visited by the sales executives. The graph below is showing the present monthly sales of all the DTH products. The present market leader in

monthly sales is Tata Sky, and Videocon D2H stands second while others Dish TV, Airtel and Big TV in the order.

Although Videocon D2H is second but as it was launched just 1&1/2 years ago only. So we can see that the growth Videocon D2H has made in capturing the market is significant enough to get noticed.

Sales Figure of the Recharges of all DTH Brands

(Chart No: 1)

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(Chart No: 2)

1601500

2317500

1042000

696250 635650

PCS/RCV

Videocon D2HTATASKYDISH TVBIG TVAIRTEL

The pie chart shows the current monthly recharges of DTH of different brands. Here also Tata Sky is leading the market and Videocon D2H is following it. Here we can observe that although Dish TV setup box sale is low but recharges are done in significant amount. This is because of old customers retaining with the Dish TV. This also shows that customers are reluctant of

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732

885

280113

187

STB/GLK

Videocon D2HTATASKYDISH TVBIG TVAIRTEL

changing their DTH .This might be due to the extra cost of setup box they have to pay and wastage or very low resale value of old setup box.

Best DTH product in present market (Retailer’s view)

The retailers have exposure and knowledge of all DTH products present in the market. So, they are the best source of information. We have asked their opinion on the best DTH product in the market to know what the level of acceptance of various DTH products is. They were also asked to justify their selection on the basis of market demand, margin, customer care, and service provided by the company or distributor. Those who were not sure about the reason we have mentioned their reason of justification as not specified. In total, 72 retailers answered this question. These retailers are already selling DTH products and have fair information about the market condition. The pie chart shown below shows that 54% of retailer believe that Tata Sky is the best product followed by Videocon D2H. Meeting the expectations, Sun Direct did not get even one vote.

Airtel4%

Dish TV6%

Tata Sky54%

Videocon D2H35%

Big TV1%

Best DTH Company( Retailer's View)

(Chart No:3)

The next bar chart exhibits the reasons for which the retailers consider the DTH product to be better than others. These reasons cummulatively make the product superior in the mind of the

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reatilers. It is very important to convince a reatiler about the superiority of the product because most of the times they become the point of recommendation which results to final sales.

Airtel Dish TV Tata Sky Videocon D2H

Big TV Sun Direct0

5

10

15

20

25

30

35

40

45

2 2

15

10

1

9

7

1

3

18

12

2

Customer careServiceDemandNot specified

(Chart No: 4)

Though most of the retailers were not sure about the exact reason of choosing the best DTH product but it can be clearly seen that a large proportion of retailers choose their best DTH product because of the service provided by the company or distributor. The service provided includes regular visits by the salesman, timely delivery of products and recharges (balance) and keeping them updated with latest pamphlets, stickers and plans.

Visits by sales person at the retail outlets

We have selected sample size of 110 out of total 175 for determining the visits given by sales team to the retail outlets in all the Peth areas, Pune–Satara road and some parts of Shivajinagar in

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Pune city. We have done so in order to perform the analysis only on the retail outlets that were interested in keeping the product or were already selling it.

The table shows that 66 of the retailers says that sales executive never ever visited their outlet whereas 18 of the retailers says that the visit given by sales executive is non- regular ,and the remaining 26 retailers were satisfied with the visits of the sales executives and they were happy with their performance.

The same data is presented in a tabular graph below giving a pictorial view of the data in the percentages of the whole sample.

Here it shows that 60% of retailers voted for NEVER, 16.4% of retailers for NON-REGULAR and remaining 23.6% for REGULAR.

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Apart from the data given by retailers we have also observed that visits by Videocon D2H sales executive were irregular or biased to some retailers which have bigger showrooms, refraining themselves to only bigger players., whereas Tata Sky sales executive has very penetrable reach to almost every retailer who use to sell DTH.

Customer Care Satisfaction

In order to measure satisfaction level of the retailers of Customer Care of Videocon D2H, we have selected only those outlets that already used to sell Videocon D2H in the Peth area, Pune-Satara road and some areas of Shivajinagar.

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The sample size selected is 38 for the analysis of the data on SPSS. There were 25 retailers who were satisfied with the Customer Care service provided by the company. But also there were a significant number of retailers i.e. 13 who were unsatisfied with the Customer Care service.

The pie chart below shows the pictorial representation of the above data. It shows that 65.8 % of retailers are in favor of Customer Care satisfaction, while remaining 34.2 % of retailers say that they are not satisfied with the Videocon D2H Customer Care.

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As being a service industry, the performance of the Customer Care is very essential for the growth of the company. So dissatisfaction of around 1/3rd retailers is significant and hampering the performance of the product. Retailers have compliant about the long awaiting in queue and inability to comprehend the problems.

Problems faced in refunding of recharges and expired GLK

For determining the problems faced by the retailers in refunding of the wrong recharges and expired GLK cards, we chose the sample size of those retailers who were already selling Videocon D2H i.e. N= 38.

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From the above table we can observe that 33 retailers out of 38 says they never faced any problem from the company regarding refunds of recharges and expired GLK’s, whereas only 5 retailers said that they have faced problems regarding the same.

The below pie chart is a pictorial representation of the above frequency table.

Here it shows that around 86.8 % retailers are satisfied with the company’s efforts in refunding of the wronged recharges and GLK’s while only 13.2% retailers refused to agree with it.

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Easy Activation of GLK

To analyze this problem I chose those retailers who were already selling the Videocon D2H setup boxes. So the sample size was N=38.

From the table, we can see that only 9 out 38 people were satisfied and reported problems regarding installation of the Setup Boxes at the customer end and also delayed activation of the GLK., whereas majority of 29 retailers said that they were very satisfied with the company’s performance regarding installation of the Setup Boxes and as well as activation of GLK.

The below shown pie chart is a pictorial representation of the above table ,which shows that 76.3 % people are satisfied with the companies process of installation and activation of the Setup boxes and GLK at the customer end while remaining 23.7 % of people are facing problems regarding it.

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The installation of set up boxes is done by the company and generally there is no problem faced by the customers. It generally takes 4-5 hours for installation at the customer end. There are certain complaints in Pune-Satara road especially in Dhankawadi area. The retailers have complained of local goons who are the owner of Local cable service. They create problems as they bully and beat the engineers visiting the customers in the area. So, retailers refrain from even keeping the setup boxes in their store.

Else there was no problem faced by the retailers of Peth area, Pune-Satara road and Shivajinagar.

Display and availability of Pamphlets, Banners and other Advertising materials

To get the feedback and analysis of the retailers regarding availability of various display materials at the outlets such as Pamphlets, Hoardings, Banners, Plan Pamphlets, empty setup boxes we chose all the retail outlets that use to sell the Videocon D2H products already. So for this sample size was N=38.

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From the above table we can see that 27 retailers out of 38 were not satisfied by the displays and other materials provided by the distributor as well as the company, while 11 says that they are having ample amount of display materials for advertising as well as pamphlets for describing the plans and channels to the customers.

The graph shows the pictorial representation of the above table. It shows that 71.1% of retailers are unsatisfied with the availability of channel list, pamphlets, and other advertising materials, whereas 28.9% retailers were satisfied with the availability of the materials.

The problem regarding display materials was observed and there was a significant lack of hoardings, pamphlets, channel list pamphlets etc. As observed Tata Sky leads in the displays provided to the outlets, even Dish TV hoardings were also visible significantly. There were some good outlets selling setup boxes of Videocon D2H, but were not having a single channel list pamphlet. They have this scarcity since a long time and they also add that they are not updated about any changes in the plans.

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Demo Setup Boxes Installed at the Retail Outlets

DTH companies provide a setup box for demonstration purpose on the retail outlets. They have certain norms regarding the supplying of demo box to retailers. They use to supply a demo box to the outlets if they are capable to sell a certain number of Setup Boxes in a month i.e. around 15-20 setup boxes.

Here we observed the retail outlets of the areas of Peth, Pune-Satara Road and Shivajinagar. We found out the stores having Videocon D2H installed at the stores. For this the sample size chosen was of the outlets who already use to sell Videocon D2H i.e. N=38

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From the table no.6 we can say that only 10 outlets were having the demo boxes installed at their stores while 28 were not having any such facility from company.

Similarly from the below graph i.e. a pie chart shows the above data in pictorial view and shows that 73.7 % of the stores were not having demo boxes whereas around 26.3 % of the electrical and electronics goods stores were having demo boxes.

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Retailers Satisfied with Margin Given By Videocon D2H

The satellite box market is becoming a too competitive market since the introduction of many big players entering into the market such as Videocon D2H, Airtel, Big Tv, Sun Direct in the recent years. So in order to capture the more of the market every brand is offering significantly good margins to the retailers. So we asked the retailers about the provided margins to them.

So to have good results I selected a large sample size of N=176, It includes all the retailers we visited who were already selling the product, who were willing to sell also and all those who were not interested in selling the product.

The selected data includes all the retailers visited. Although there might be other factors for not selling the product but it also includes the margin factor. So, it was also included in sample size.

From the table we can observe that out of 176 retailers 60 were not interested in selling the Videocon D2H, whereas 116 said yes to the product or were already selling the product.

The above data in the table is represented in a pie chart below .It shows that around 34.1 % of retailers were not selling the product due to margin problems, while remaining 65.9 % were not having any problem regarding margins provided to them.

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OUTPUT OF THE LINEAR REGRESSION ANALYSIS IN SPSS

Table No.

This table notifies the variables entered for the analysis of the Dependent Variable i.e.

GLK sales figures.

Table No.

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Variables Entered/Removedb

Model

Variables

Entered

Variables

Removed Method

1 Demos Installed

at stores, visits,

Easy activation

and Installation,

Refunds Problem

faced, Display

banners leaflets ,

Customer care

satisfaction

. Enter

a. All requested variables entered.

b. Dependent Variable: GLK

Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .860a .74 .048 22.696

a. Predictors: (Constant), Demos Installed at stores, visits, Easy

activation and Installation, Refunds Problem faced, Display banners

leaflets , Customer care satisfaction

b. Dependent Variable: GLK

From the above table we get the information about the correlation of the various

independent variables which are chosen. The model summary contains the essential

information revealing how well our regression model fit (or did not fit) the observed

data.

Here we are having a significant correlation coefficient i.e. 0.860.

The value of R square is 0.74 which is significant enough. The R2 value indicates how

much of the dependent variable, GlK sales , can be explained by the independent

variables such as visits by the sales person, easy activation and installation Customer

care Satisfaction, Displays advertisement materials etc.

The regression sum of squares tells us how much variability (not variance yet) is

accounted for by the regression model, which is the fitting of the least-squares line. The

residual sum of squares tells us how much variability (again, not variance yet) is

unaccounted for by the regression model. The total variability is the sum of both

regression and residual variability.

DF Regression is equal to the number of predictors in the model.

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From the table no. we can get the values of all the coefficients of our independent

variables that we have chosen. These coefficients are used to form the regression line.B

is the slope coefficient that results when X and Y are both standardized.

Here the constant is the constant of the regression line.

The regression equation can be presented in many different ways, for example:

Ypredicted = b0 + b1*x1 + b2*x2 + b3*x3 + b3*x3 + b4*

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CHARTS

Graph No.

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Graph No.

This is a plot that compares the observed distribution of residuals (“observed cumulative probability” below) to what we would expect if residuals were normally distributed (“expected cumulative probability” below). If the distribution of observed residuals matches up nicely with the distribution we would expect under normality, then residuals should fall along a straight line, as they more or less do in the plot above. If they deviate substantially from a straight line, it suggests a potential deviation from normality.

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Above graph shows the formed regression line which follows the normal line quite

precisely.

The graph below shows the Scatter plot of the data entered

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OBSERVATION AND CONCLUSION

The first objective of understanding the competiveness of Videocon D2H is based on three important factors

1. The product competiveness i.e. how strong is the chances that a new customer who is educated about the product will prefer to buy Videocon D2H.

2. The present level of acceptance in the market by the end customer. This will be shown by the sales figures of various DTH products.

3. The retailer’s perception about the DTH products as they know the industry in and out and their perception are very important for the study as most of the time they are the point of recommendation of the end users.

We first need to know that what the advantages of Videocon D2H are over the competitors. Videocon D2H had put up advertisement in The Times of India in which they have compared their services with Tata sky as it is the closest competitor of Videocon D2H. The snapshot of the advertisement has been attached in the annexure part of the project.

Product comparison with Tata Sky: The number of high definition channels provided by Videocon D2H is 19 while Tata sky provides only 9 high definition channels. The basic plan of both the companies is of Rs.180 but the number of linear channels (broadcasted channels) offered by Videocon D2H is 266 and Tata sky is 206. Videocon has 60 more channels in the basic plan. The top pack of Videocon D2H is Rs. 375 which offers 227 channels while top pack of Tata sky is of Rs 390 and it offers only 147 channels. Apart from all these regular benefits Videocon is offering lifetime warranty (5 years) while Tata sky products have warranty of only 1 year. Adding cherry on the top, it also provides one 3D channel which ensures the customer that it is 3D active and if they plan to buy 3D TV in future it is the right product for them while Tata sky do not offer such channel.

So, as a product Videocon D2H is very competitive and this is a very strong reason because of which it has taken over Reliance Big TV in a very short duration.

Now coming to the market acceptance of Videocon D2H, this will be very clear from the sales status that we have collected from the retailers. Again, Tata sky attracts maximum sales in both areas i.e. Set top boxes/GLK and recharges while Dish TV which happens to be the market

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leader of DTH market is not enjoying strong attraction by the customers as it comes on 3 rd

position in the market. While a new player in DTH market has picked up to 2 nd position. During the exhibition many customers were approaching with the question related to exchange offer of different company. It clearly explains that customers of other DTH company want to shift to Videocon D2h but they are unable to do it as it the money spends earlier would be wasted.

The retailer’s view also supports that the argument that Videocon D2H is the second most competitive product available in DTH market.

Though most of the retailers were not sure about the exact reason of choosing the best DTH product but it can be clearly seen that a large proportion of retailers choose their best DTH product because of the service provided by the company or distributor. The service provided includes regular visits by the salesman, timely delivery of products and recharges (balance) and keeping them updated with latest pamphlets, stickers and plans.

This brings us to the part of report where the problems faced by the retailers are to be comprehended. These problems have been recorded in the questionnaire. The problems faced by retailers are-

1. Related to Product

Volume is very low and it becomes necessary to buy speakers.

2. Related to Salesman/Distributor Distributor changes a lot. Do not know who the distributor of the area is. Salesman do not respond back even after approaching them. The last time a salesman visited was when the company started. Salesman visits the shop next to me and never turned up here. Distributor provides service to only big retailers. Do not deliver products as they need to remind and request again and again.

3. Related to Customer Care There is no separate line for retailers and most of the time lines get disconnected. The long waiting for operator encourages not calling. Operators do not understand the problems and take very long to comprehend the exact

problem. Every time one is required to give a long list of details to verify themselves.

4. Related to reversal

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It takes very long to get the reversal.

5. Related to installation Problem in rural areas. Problem in Dhanakawadi area as local cable operator bully with the engineer who comes

for installation.

6. Related to Visibility/ Pamphlets and other Advertising material

No visibility as nothing is provided by the salesman. No updation of changes in plans and charges. The present boards placed were placed 2 years back when company was about to start.

These problems are clear from their feedback that also show that 60% of retailers voted for NEVER, 16.4% of retailers for NON-REGULAR and only 23.6% for REGULAR. As the case should be opposite and more sales executive should reach maximum retail store to provide Videocon D2H service.

The complaints against customer care were made by 34.2% of the retailers but they were very disappointed with the same and they have pointed out that Tata Sky provides them a different retailer number with which they call to a special number made only for them. This provides them opportunity to talk instantly as they get a query. The problem of refunds were also seen but only 13.2% of the retailers have issues with this while others are happy and satisfied with the policies of refund. The same case is with activation of GLK as almost one out of every four retailer have problem related to installation.

Another serious concern is about the availability of channel list, Pamphlets, hoardings etc. These are given to the retailers to display that they sell DTH products and it helps them to reach more customers. The retailer’s feedback says that only about 30% of them receive proper display material while remaining 70% arrange it from some sources or leave it at customer to find out the available plans and charges for them.

In short, Videocon DTH has very strong competitive strength that has allowed it to grow and achieve a very significant part of market in a very short duration. But the problem is with the service provided to the retailers. The retailers are interested to get Videocon D2H service offerings but Videocon D2H has to provide regular service so as to achieve the expectations of the retailers. This is very important that the company focuses its attention on service because

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Airtel is also suffering from the same problem as retailer have started neglecting Airtel services because of poor service. It is also important to note that retailers have chosen Tata sky as the best DTH product because of the service provided by them.

RECOMMENDATIONS

As we have already concluded that the service offering is already one of the best in the DTH industry and it has also acquired a significant market share and acceptability in the market. But we would like to make some recommendations on the basis of feedback and the study results.

1. The set top boxes should be given to research and development team to fix up the volume problem.

2. Every salesman must be asked to visit every counter under him/her atleast once in a week. So, that even if a retailer is not happy with the delivery of the service he can ensure that retailer gets proper service.

3. The distributor must give their contact number to each and every counter so that they can reach distributor at any point of time. This may increase the work load as they would need to resolve every small issue but it will also ensure that retailers are happy with the services provided.

4. If the sales team is falling short, more sales executives should be hired because it is the most crucial time of DTH industry where every player is busy snatching maximum market share. Sales executive must reach to the smallest possible retailer to ensure full utilization of opportunity.

5. It is expected that customer care is well equipped but it should be simplified by providing retailers a unique code which when provided by the retailers, the customer care do not ask any further question related to their identity.

6. The customer care should be quick and smart to understand the actual problem of the customer or retailer. So, it is better to provide them the required training and only those who clear the eligibility criteria should be allowed to be a representative of the company.

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7. The visibility is a very serious issue which if neglected may result in long term losses. Every retail store must have all pamphlets, channel plan, etc so that retailer so does not feel helpless while explaining the product. Every sales executive who visit a retail shop must personally check the availability of these items.

8. Some legal action must be taken against the local cable operators who create nuisance to DTH engineers. Every engineer must take some security before going to that area.

9. Retailers must be provided a number on which they can call and complaint directly to the company against any problem related to distributor or sales executive.

BIBLIOGRAPHY AND REFERENCES

The references have been taken from various studies that have been in the DTH industry. The sources of information are as under

www.videocond2h.com

www.tatasky.com

www.dishtv.in

www.dddirectplus.in

www.airtel.in/digitaltv

www.ibm.com/spss

http://en.wikipedia.org/wiki/Television_in_India

FICCI_KPMG 2012 Report

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ANNEXURE

Questionnaire

VIDEOCON D2H

Dealer Name…………………………………………………………………… Contact No……………………………………………………

Address……………………………………………………………………………………………………………………………………………………..

Contact Person……………………………………………………………….

Q1: Which DTH brand are you selling?

Videocon D2H Tata Sky Dish TV

Big TV Airtel None of the above

Q2. Are you selling RCV or PCS?

RCV PCS

Q3. Please specify selling quantity

Videocon D2H Tata Sky Dish TV Big TV AirtelRCVPCSSTBGLK

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Q4. Which is the best DTH product according to you? Why?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

Q5. Are you getting proper service from distributor or Company? If not please specify?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

Q6. If you are not selling DTH products is there any specific reason?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

Q7. Are you interested in selling DTH products? Please specify the reason?

Yes No ……………………………………………………………………………………………………………………..

Q8.Please specify type of shop

Grocery Stationary Medical Electrical Mobile Others………………………….

Extended Questions:

Q1: Does Sales Person visits your outlet regularly?

Regular Irregular Never

Q2. Are you satisfied with the customer Care service by the company?

Yes No

Q3. Have you ever faced any problem in refunding of recharges and expired GLK? If yes then was it resolved easily?

Yes No

Q4.Have you ever faced the problem in installation and activation of GLK?

Yes No

Q5 How do you rate the display of the product and availability of channel list and other advertising materials?

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Good Satisfactory Bad

Q6.Do you need a demo box to be set up at your store? is your demand fulfilled

Yes No

Q7 Are you satisfied with the margin given to you?

Yes No

SNAP SHOT OF EXCEL SHEET

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Advertisement in The Times of India

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