MARKETING STRATEGY

Gaining and maintaining competitive advantage

MARKETING STRATEGY.......................................................................................................1 Analysis of the UK Digital Television Indust y........................................................................! INDUSTRY STRU"TURE......................................................................................................................! S.#.$.T. Analysis IT% &ithin the DT' Indust y.....................................................................( St engths...................................................................................................................................( ISLAMIC TELEVISION PROJECT COPYRIGHT2003 ..................................................................................................................................................1 CUSTOMERS AND TARGETING..........................................................................................................6 #ea)nesses...............................................................................................................................* $++o tunities............................................................................................................................* Th eats ....................................................................................................................................., "$NS$-IDATI$N.............................................................................................................................., The .utu e................................................................................................................................/ .$RE"ASTS !001 T$ !00(..................................................................................................../ 1o& Isla2i3 television + o4e3t &ill Gain and Maintain a "o2+etitive Advantage...................5 E6tension of the % odu3t life 3y3le.........................................................................................11 Ma )eting St ategy.................................................................................................................11

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MARKETING STRATEGY
Gaining and maintaining competitive advantage
Analysis of the UK Digital Television Ind stry
T#is section o$ t#e report introduces t#e %K &igita' Te'evision industr( b( giving a brie$ introduction to t#e )a( it #as deve'oped since 1!! * and cites a $e) o$ t#e bene$its t#at digita' te'evision brings over ana'ogue+ ,urt#ermore an ana'(sis o$ t#e current industr( situation )i'' be given* #ig#'ig#ting areas in )#ic# a ne) entrant 'i-e Is'amic te'evision pro.ect /td+ can capita'ise on in t#e $uture+ T#e report )i'' conc'ude )it# recommendations on a number o$ strategies avai'ab'e to Is'amic te'evision pro.ect* to be ab'e to gain and maintain a competitive advantage )it#in t#e &T0 industr(+ Industr( Structure 1ctober 1!! sa) t#e introduction o$ digita' T0 in t#e %K 2 a more e$$icient )a( o$ transmitting T0 pictures t#an t#e e3isting ana'ogue s(stem* )#ic# it )i'' eventua''( rep'ace+ T#e bene$its o$ digita' T0 inc'ude greater c#oice o$ c#anne's* better 4ua'it( o$ pictures and sound* )idescreen $ormat and interactive services+ Ana'ogue transmissions #o)ever* )i'' continue $or some time+ 0ie)ers )i'' sti'' be ab'e to receive 5561* 5567* IT0* 6#anne' 4 8S46 in 9a'es: and 6#anne' ; as t#e( do no)* a't#oug# t#ese services are a'so being made avai'ab'e in t#e digita' $ormat+ T#e Government )i'' decide )#en ana'ogue services are to be <s)itc#ed o$$=> t#is )i'' depend* in part* on #o) 4uic-'( digita' services are ta-en up+ 6urrent'( t#e government #as set a target o$ !;? ta-e@up o$ digita' be$ore t#e proposed s)itc# o$$+ T#is target is #oped to be reac#ed b( 7"1"* but some ana'(sts suggest t#is target is too optimistic+ 6urrent'( digita' T0 ta-e@up stands at appro3imate'( 33? o$ %K #ouse#o'ds* according to t#e 'atest IT6 $igures+

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MARKETING STRATEGY
Gaining and maintaining competitive advantage DTV DTV Househol Househol ds ds 5.3 5.3million million 1.14 1.14 million million 564 564!!! !!! % %of of UK UK household household s s 22% 22%

UK DTV Penetration, Quarter 2, 2001

Platform Platform

4.7% 4.7%

2.3% 2.3%

"51 "513!! 3!!

3."% 3."%

T#e e3isting ana'ogue services $rom t#e 556* IT0* 6#anne's 4* ; and S46* are a'so broadcast simu'taneous'( 8<simu'castA: via digita' terrestria' T0 and t#e( are $ree+ E3tra services provided b( t#ese broadcasters ma( a'so be $ree* a't#oug# a number o$ t#e additiona' &TT c#anne's and services )i'' #ave to be paid $or+ &igita' cab'e or digita' sate''ite services are c#arged in a simi'ar )a( to t#e e3isting cab'e and sate''ite services+ 6ompetition amongst t#e service providers o$ &T0 is a t#ree )a( sp'it bet)een S-( &igita'* IT0 &igita'* and t#e &igita' 6ab'e operators nt'B and Te'e)est+ T#is t#ree )a( sp'it is mar-ed b( t#ree di$$erent tec#no'ogies used to broadcast and receive t#e digita' signa's+ S-( &igita' o$$er t#eir service in a'most t#e same )a( as it used to 8using sate''ite dis#es: but is no) using digita' receivers and sma''er* 'ess unattractive digita' dis#es+ IT0 &igita' #as its o)n tec#no'og( o$ a set top bo3 t#at receives digita' signa's t#roug# e3isting aeria's+ T#e &igita' 6ab'e services are transmitted t#roug# underground $ibre optic cab'es )#ere t#ere is a'most a ni' c#ance o$ t#e signa' being disrupted+ T#is is as opposed to t#e services t#at S-( and IT0 provide t#roug# t#e air)aves* )#ic# can be a$$ected b( adverse

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MARKETING STRATEGY
)eat#er conditions suc# as t#understorms* )#ic# can sometimes b'oc- out t#e signa's comp'ete'(+

Gaining and maintaining competitive advantage

!"#"$"T" Analysis ITP %ithin the DT& Ind stry

Strengt#s Nic#e Mar-etB Is'amic te'evision pro.ect is dedicated to provide its services to a untapped nic#e mar-et* )#ic# b( ver( nature )i'' a''o) t#e c#anne' to sustain its mar-et presence and gain an advantage over $irms targeting a )ider audience+ Second'(* Is'amic te'evision pro.ect #as positioned itse'$ to become t#e mar-et 'eader in t#e industr( o$ broadcasting $or its targeted mar-et segment+ ,ina''(* b( o$$ering Is'amic programming 8)#ic# is a uni4ue se''ing point $or t#e c#anne': t#at is not o$$ered b( t#e mainstream media* t#e compan( )i'' be avoiding direct competition and a'so prevent conventiona' ris-s invo'ved in suc# pro.ects+ Mar-et segmentation* t#e mar-et segment t#at is targeted b( Is'amic te'evision pro.ect $u'$i's t#e vita' re4uirements and is de$inab'e* siCeab'e* reac#ab'e and re'evant+ T#is enab'es t#e compan( to ma3imise its e$$ectiveness and e$$icienc( o$ t#e 'ong@term mar-et o$$ering+ customer & targeting illustration below). Advertising is a source o$ revenue a'most monopo'ised b( terrestria' commercia' T0 but t#eir strang'e#o'd on t#e mar-et is s'o)'( being )it#ered a)a( as more and more c#anne's enter t#e digita' arena+ Advertising provides an attractive source o$ revenue because t#e margina' costs are 'o)+ Subscription c#arges are a'so anot#er source o$ revenue $or digita' te'evision c#anne's> )#ic# i$ bac-ed up b( #ig# 4ua'it( 8See

programming can be raised in 'ine )it# investment+

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MARKETING STRATEGY
Gaining and maintaining competitive advantage
Is'amic te'evision pro.ect=s advertising and subscription c#arges are ;;? be'o) t#e industr( average and cou'd #e'p t#e c#anne' gain mar-et s#are 4uic-'(* amongst t#e Mus'im communit( in t#e %K+

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MARKETING STRATEGY
Gaining and maintaining competitive advantage
Customers and Targeting

#e$ment #ele%tion

Tar$et mar&etin$

Total Produ%t Positionin$

To tar$et -ustomers

-ommuni%ated (ia a .romotional mi,

'%hie(ed )* suita)le +ffer mi,

9ea-nesses In comparison to S-(* t#e programming budgets $or t#e ot#er digita' c#anne's and services are re'ative'( sma''* 'ac-ing t#e $inancia' strengt# o$ S-(+ T#e sums t#at regu'ar digita' c#anne's can a$$ord to pa( $or $i'ms and sporting events are considerab'( 'ess t#an S-(+ A serious )ea-ness o$ t#e ne) digita' c#anne' broadcasters is t#eir re'ative ine3perience in t#e pa(@T0 mar-et as opposed to S-( )#o #as dominated t#e scene $or over a decade in t#e %K+ Is'amic te'evision pro.ect #as deve'oped ver( natura''( over t#e past t)o (ears but o$ course* sti'' 'ac-s e3perience+ T#is is somet#ing t#at is being addressed t#roug# contacts )it#in t#e industr(* and t#e emp'o(ment o$ media e3perienced personne'+ Admitted'( Is'amic te'evision pro.ect=s programming budgets are not e4ua' )it# t#e 'i-es o$ companies 'i-e S-(* but i$ a substantia' portion o$ t#e mar-et is )on ear'( on* t#e 4ua'it( o$ programming )i'' certain'( improve* as t#e compan( ac4uires t#e sums o$ mone( needed to pa( $or $ootage 'ibraries and t#e necessar( production and editing $aci'ities needed to de'iver cutting edge programming+ 1pportunities Is'amic te'evision pro.ect #opes to be t#e $irst pro$essiona' and tru'( Is'amic* Eng'is#@spea-ing c#anne' catering $or Mus'ims and non@Mus'ims in t#e %K and be(ond+ T#is represents t#e greatest opportunit( $or Is'amic

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MARKETING STRATEGY
te'evision pro.ect to seiCe* be$ore anot#er c#anne' is setup t#at )i'' probab'( distort t#e true image o$ Is'am 8e+g+ A#madi((a T0:+ Is'amic te'evision pro.ect )i'' be producing uni4ue and dedicated programming $or its targeted audience+ As Is'amic content is not (et a mainstream product* t#e specia'ist programmes produced b( Is'amic te'evision pro.ect )i'' be o$ added va'ue+ T#us t#ese programmes cou'd be so'd to ot#er c#anne's see-ing Is'amic content* especia''( on seasona' demands* suc# as during t#e mont# o$ Ramadan+ revenue stream can be rea'ised+ T#e main opportunities $or Is'amic te'evision pro.ect )i'' arise t#roug# t#e e3p'oitation o$ its e3pertise and e3ce''ence in programme production using t#e $aci'ities avai'ab'e to it+ T#e o)ners#ip o$ va'uab'e and e3tensive programme 'ibraries cou'd a'so give a signi$icant and rising proportion o$ income $rom programme sa'es in t#e $uture+ T#is source o$ income )i'' be gained at a mar-et 'eve'* suc# as t#roug# Is'amic organisations and retai' out'ets+ 9#ereas t#e above mentioned revenue opportunit( is based at an industr( 'eve'+ T#reats As ne) advertising out'ets become avai'ab'e to mar-eters over t#e ne3t $e) (ears* competition $or advertising revenue is bound to increase+ It is 4uite possib'e t#at t#is )i'' drive do)n t#e price o$ advertising airtime even $urt#er+ 5ecause Is'amic te'evision pro.ect )i'' be t#e $irst c#anne' to cater $or Eng'is# spea-ing Mus'ims* t#e 'i-e'i#ood o$ $uture competition $rom a riva' c#anne' cannot be ru'ed out+ So to counter t#is* Is'amic te'evision pro.ect must e3ce' in a'' areas o$ digita' T0 broadcasting* and constant'( be a)are o$ t#e c#anging needs o$ its customers* to tai'or its services to meet t#em* so as to remain one step a#ead o$ t#e competition at a'' times+ 6onso'idation T#ere$ore an e3tra

Gaining and maintaining competitive advantage

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MARKETING STRATEGY
9it# conso'idation occurring t#roug#out t#e %K broadcasting mar-et* t#e

Gaining and maintaining competitive advantage

industr( is $acing an a'most comp'ete over#au' t#at )i'' a$$ect and bring c#ange to a'' sectors o$ t#e mar-et+ Do)ever* impacting pressures )i'' a$$ect individua' sectors in di$$erent )a(s+ T#e number o$ a'read( e3isting ana'ogue c#anne's s)itc#ing t#eir services to digita' as )e'' as t#e number o$ ne) entrants into t#e digita' T0 mar-et (ear on (ear is immense+ It is predicted t#at due to t#e s#eer number o$ c#anne's t#at )i'' be avai'ab'e to t#e consumer in a $e) (ears time* t#at a'most inevitab'( t#ere )i'' be )aves o$ mergers and .oint operations to conso'idate t#e mar-et+ %n'ess a c#anne' #as sound $inancia' bac-ing and #ig# enoug# vie)er ratings* it ma( be $orced to conso'idate and merge )it# most probab'( a 'i-e $or 'i-e riva' c#anne'* as t#e competition becomes too intense $or an( one c#anne' to survive a'one+

The ' t re
1n'( time and tec#no'og( )i'' te'' )#at #appens )it# digita' te'evision+ Ne) services are being t#oug#t o$ ever( da(+ 9idescreen T0s* $'at pane' T0s* computers capab'e o$ D&T0 are #ere no)+ &igita' Te'evision can on'( get better+ Is'amic te'evision pro.ect )i'' #ave to -eep up )it# t#e pace o$ tec#no'ogica' deve'opment )it#in t#e &T0 industr(* to be ab'e to sustain its competitive advantage over an( subse4uent riva's t#at ma( emerge* and not to be 'e$t be#ind in suc# a $ast c#anging business environment+

'$()CA!T! 200* T$ 200+

Ke( Note anticipates t#at* bet)een 7""" and 7""4* t#e va'ue o$ t#e %K &igita' and Sate''ite T0 mar-et in t#e %K )i'' gro) b( 74+!? at current prices* to E3+1!bn+ Muc# o$ t#is gro)t# )i'' be at t#e e3pense o$ t#e terrestria' ana'ogue $ormat+ ,ree@to@air T0 ma( )e'' be $acing a period o$ stead( dec'ine in t#e $ace o$ increased competition $rom riva' broadcasters and* over t#e period 7""" to 7""4* t#e ne) digita' p'at$orms )i'' drive suc# gro)t# as does occur+

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MARKETING STRATEGY
Gaining and maintaining competitive advantage
Advertising and Subscription Revenues to Digita and Sate ite TV providers 4 !!! 3 !!!
Revenue M illions

2 !!! 1 !!! ! 2!!! 2!!1 2!!2

Year

2!!3

2!!4

SourceB Ke(note Is'amic te'evision pro.ect )i'' need to invest #eavi'( in its mar-eting* in 'ine )it# t#e potentia' gro)t# o$ t#e &T0 industr(* to be ab'e to capture as muc# o$ t#e untapped mar-et o$ Mus'im vie)ers o$ &igita' T0 in t#e %K+

,o% Islamic television project %ill -ain and .aintain a Competitive Advantage
T#roug# our ana'(sis made on t#e &T0 c#anne' industr(* )e #ave identi$ied a number o$ strategies in )#ic# Is'amic te'evision pro.ect )i'' be ab'e to gain and maintain a sustainab'e competitive advantage )it#in t#e &T0 industr(+ T#is )i'' be ac#ieved in t#e %K initia''(* and t#en )it# a vie) to internationa'isation o$ t#e compan(=s operations b( t#e end o$ t#e $ive (ear deve'opment p'an+ T#e strategies inc'udeB

,irst'( to dedicated'( target a segment o$ t#e mar-et t#at is idea''( not being catered $or i+e+ a Fnic#e mar-et= or one t#at #as a 'ot o$ room $or improvement+ T#e Mus'im popu'ation o$ t#e %K #as ver( 'itt'e access to 4ua'it( Is'amic programming in t#e Eng'is# 'anguage+ &ue to t#is gap in service* )#ic# Is'amic te'evision pro.ect #opes to $i''* our targeted mar-et segment is de$ined+

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MARKETING STRATEGY

Gaining and maintaining competitive advantage

To produce programmes at a 'o)er cost t#an riva's t#roug# a'' t#e necessar( means suc# as outsourcing o$ production* 'easing o$ propert(* #ire purc#ase o$ e4uipment etc+ to increase pro$it margins+

To produce uni4ue and better 4ua'it( programming t#an riva's* t#roug# t#e deve'opment and ac4uisition o$ e3ce''ent production $aci'ities and $ootage 'ibraries+

To attract more vie)ers t#an t#e competition t#roug# uni4ue and 4ua'it( programming at 'o) cost subscription c#arges and pa(@per@vie) 8GG0: services* so as to attract as muc# advertising revenues as possib'e+ T#us creating a Fvirtuous circ'e= o$ comp'imentar( gro)t# o$ more vie)ers and subse4uent'( attracting more advertising revenues+

To o$$er uni4ue services and $eatures as part o$ a comp'ete pac-age )it# t#e &T0 c#anne'* suc# as interactive $eatures and a 'in-ed )ebsite+ An initiative in t#is regard* )#ic# is a'read( in t#e 'atter stages o$ deve'opment* is Is'amic te'evision pro.ect InteractiveH* a distance@ 'earning venture+

1ne o$ t#e most important ob.ectives $or Is'amic te'evision pro.ect to be ab'e to ac#ieve a'' o$ t#is* is to incu'cate and deve'op a 'earning and innovation based cu'ture amongst t#e organisation=s emp'o(ees+ To deve'op t#e re4uired s-i''s and e3pertise and to provide a spring $or ideas t#at ma( bring )it# t#em ot#er sources o$ competitive advantage in t#e $uture+ To do t#is )i'' re4uire su$$icient investment in t#e training and deve'opment o$ a'' emp'o(ees+

It )i'' be t#ose companies t#at invest in t#eir #uman asset t#at )i'' attain t#e competitive advantage and be capab'e o$ sustaining it+ T#e management o$ Is'amic te'evision pro.ect rea'ises t#e importance o$ t#e #uman asset and is determined to invest t#e necessar( $unds in deve'oping a )or'd@c'ass

organisation+ 6reating a 'earning and adaptive organisation )i'' #e'p Is'amic te'evision pro.ect to gain t#e $'e3ibi'it( t#at )i'' be needed to react to sudden c#anges )it#in t#e business environment+ T#is cou'd prove crucia' as t#e &T0

Islamic Television Project

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MARKETING STRATEGY
industr( is predominant'( a tec#no'ogica''( 'ed one* and so 'iab'e to more $re4uent c#ange+ It s#ou'd be noted t#at in an era o$ increasing bu(er sop#istication and mar-et competitiveness* mar-eting Is'amic te'evision pro.ect success$u''( can on'( be ac#ieved t#roug# deve'oping and managing competitive advantage t#roug# origina' service o$$erings and combinations associated )it# t#e Fpenumbra= o$ t#e tota' product and potentia' it o$$ers $or deve'opment and di$$erentiation+

Gaining and maintaining competitive advantage

)/tension of the Prod ct life cycle

Te est ial 7and&idth se vi3es Glo7alisation of 7 oad3asting 7and&idth

Ne& 2a )et

.ar0eting !trategy
,ive $orces ana'(sis provides an understanding o$ t#e competitive nature o$ t#e business+ T#ese $actors s#ou'd be identi$ied and ta-en under consideration )#i'e dra)ing t#e mar-eting strateg(* )#ic# )i'' consist t#e actua' imp'ementation o$ t#e compan(=s $ive@(ear deve'opment p'an+ The 'ive forces Analysis1

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Sales ()

Rage e6tension

S)y UK -aun3h

G o&th

Tim

MARKETING STRATEGY
Gaining and maintaining competitive advantage
6ompetitive Riva'r( T#ere are no signi$icant 'eve's o$ competitive riva'r( t#at t#e compan( ma( be e3posed to* as t#ere are no ot#er service providers targeting or catering $or t#is particu'ar mar-et segment+ T#e uni4ue services* )#ic# t#e compan( is o$$ering* )i'' attract not on'( domestic but a'so g'oba' consumers+ T#is di$$erentiation o$ t#e services o$$ered must be maintained )it# increasing 4ua'it( and va'ue+ In t#e 'ong term* price reductions $or advertisers )i'' not be an issue as t#e target audience and customer pro$i'e is an inva'uab'e too' $or Ftargeting=* as t#e vie)ers #ave s#ared interests+ Do)ever* as operators t#e importance o$ retaining business and potentia' reduction o$ customers s)itc#ing bet)een net)or- c#anne's must be recognised+ 5u(ing Go)er 5u(ing po)er is 'imited* as t#e -ind o$ service provided is uni4ue* a't#oug# t#ere ma( be some reservations on t#e 4ua'it( o$ t#e services o$$ered+ T#ere$ore* customers )i'' be encouraged $or tria' periods* $rom )#ic# t#eir reservations s#ou'd be reso'ved+ T#e compan( )i'' strive to o$$er 4ua'it( services* benc# ma-ing its 4ua'it( against t#e mar-et 'eaders+ T#ere ma( be some $inancia' constraints initia''(* but t#e 4ua'it( o$ services and programmes s#ou'd not be compromised at an( moment in time+

Go)er o$ Supp'iers T#e main supp'ier is 5SKY5* its bargaining po)er is signi$icant+ Do)ever t#is bargaining po)er is positive'( di'uted b( Government Regu'ations+ T#e )i''ingness and encouragement o$ SKY to

Islamic Television Project

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MARKETING STRATEGY
Gaining and maintaining competitive advantage
specia'ised c#anne's to broadcast using its p'at$orm $urt#er proves a #ig# degree o$ certaint( $or t#e $uture o$ t#e compan(+ T#is can a'so be seen in t#e mutua' interests o$ t#e compan( and t#e supp'ier* SKY* to attain and retain g'oba' customers+ T#reat o$ Substitutes T#e t#reat o$ substitutes e3ists* as t#ere )i'' be con$'ict o$ interests )it#in #ouse#o'ds* and a'so individua's in c#oosing a c#anne' over anot#er+ Do)ever* a discounted subscription* #ig# 4ua'it( and variet( o$ programmes )i'' minimise t#is t#reat+ In t#e 'ong run* it )i'' a''o) t#e compan( to estab'is# #ig# 'eve's o$ customer 'o(a't(+ T#is t#reat o$ substitutes is #ig# and common )it#in t#e industr(+ T#reat o$ Entrants T#e t#reat o$ entrants is 'o)* obtaining an operator=s 'icence is t#e princip'e barrier to entr(+ Do)ever* t#e 'ong@term aim o$ t#e

compan( is to be a mar-et 'eader )it#in its o)n segment+ T#e competitive advantages estab'is#ed )i'' sa$eguard t#e compan( $rom an( rea' competitive t#reats+

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