Consumer Bahaviour

Marketing Mix

Product

The main advantage of Cable TV is provide consumer friendly service. It provides 67 24-hours non-stop broadcasting and less advertisement shown. Various channels are provided to suit different needs of users. The channels can be divided into several categories and basic and premium channels. (Exhibit 2)The main categories are sports, news and movies. Other fields include entertainment program, documentary, adventure program, adult program, and composite program for different countries. The variety programs can initiate people to acquire Cable TV service.

Cable TV offers different plans for users. They are Cable TV Basic Package, Super Family Pack, Super Movie Pack, Super News Pack, We-Wet Entertainment Pack, Discovery Mega Pack, International Pack, Zee Pack and CAT6 pack. (Exhibit 3)However, these plans are not flexible and consumers cannot their favorite programs only.

News channels are popular and can retain many current users due to its continuous updating and broadcasting. These news channels provide latest news and financial information in many countries. The updated information provided is extremely useful in nowadays world because of the increasing importance of service and information industry.

Movies channels broadcast local and international movies. These movies are comparability new and they can satisfy many people who like watching movie.

Cable TV wants to target on people who are interested in sports. It has many sports channels showing different sports events all over the world. The most attractive part of the sports channels is ‘live and exclusive’ football matches of the four biggest soccer leagues in the world to satisfy user’s interests. Besides these three aspects, Cable TV notices people tend to know more about other countries, it introduces many international channels in recent years.

There are 2 types of converters, analogue and digital converters. The rental fee is for both is the same but some of the channels can only be watched with the use of the digital converter.

The variety of channels can satisfy consumer but the inefficient hotline dissatisfies consumers as it is very difficult to have direct connection to the customer service representative.

Price

Cable-TV offers a special monthly price for users if they prepaid one-year fee. And it offers discount to the Basic Package users to acquire other packages and premium channels. Larger discount is offered for first time users to attract them to try. For example, new users only pay $198 instead of $298 for the Basic Package in the first year of service.

For different packages, they are with different prices. (Exhibit 3)However, the price of the packages is too high and this will discourage lower income group to install Cable TV.

Besides the package fee, new customers need to pay rental fee of $30 for the converter.  Customers can pay extra to watch the premium channels. If customers want to have one more ‘Cable TV’ in their home, they need to pay extra fee for this additional outlet. The amounts of charges paid depend on the package used by customers. They need to pay extra half of the original price if they are using Basic Pack, Zee Pack, International Pack and all premium channels. They need to pay double if they use other packages.

If customers want to terminate the service, Cable TV will offer a discount to attract them not to do so. This is useful as many consumers are concern with price.

Promotion

Booths

Cable TV sets up a lot of temporary booths on new residential area to attract new customers. Very often, plans promoted from the booths are with a promotional discount, as an attraction.

Owing to the large promotion coverage of the booths in Hong Kong, this promotion channel could impress consumer most. Unlike promotions on media, booths could actively reach consumers and won’t be bound by media constraints.

The performance of booths is fair. Although some consumers are attracted to the promotion or discount provided by these booths and initiate them to acquire Cable TV, some consumers have negative feelings toward them. Sometimes consumer may think that salesperson is annoying, as there are too much salespersons approach them in a short distance. Some say that the salespersons are immoral, they boost sales by providing untrue information induce consumer to purchase which in turn avoid consumers from renewing the contract.

Door to door Promotion

It is an active promotion launched occasionally in residential area, especially before big events like World Cup and Olympics. Each successful visit last around 15 to 30 minutes. It allows salesperson to have a better communication and contact with consumers, enable them to understand consumer better and take appropriate promotion words.  It also enables cable TV to target those families who are not using cable TV according to the customer record. This is more cost and time effective, as only people who are interested would let salesperson to have a further conversation with them. Door to door promotion also allows information approach and stimulates consumers’ need at the right time. Before World Cup and Olympic, many consumers have the short-term need of getting cable TV.

In addition, in home, consumer would have a better sense of security and would be more open and comfortable which constitutes a good environment for them to listen and talk to the salespersons.

However, the coverage of this method is rather small, and the time cost is very high.

Advertisement on Media

Advertisement on media is a passive promotion. Consumers could select what they want to pay attention to and what they want to avoid.

Several creative TV ads could successfully impress consumers. One interviewee could memorize the TV ads with a man singing “Free Super Offer” which is one year ago.

Distribution Channel

The distribute procedure is the consumer register first. Then salespersons will help consumer to call for installation and delivery of necessary devices. There are four ways of acquiring the service:

Phone

More than half of the interviewees acquire Cable TV actively by phone. Consumers reflect that the procedure is generally smooth, except they could not be directed to customer service officer when they make the call.

Online download of form

In Cable TV website, application form is in PDF form. Consumers could only print out the form and sent or fax back to Cable TV. This is not a user-friendly channel.

Booths

Except promotion, booths on street are also act as a distribution channel. As mentioned in the promotion, quality and quantity of booths should be controlled and adjusted.

Door-to-door promotion

Like booths on street, if the salesperson could successfully initiate consumer to acquire service through visiting their homes, they distribute the product.

Recommendations

Immediate actions:

To increase its market shares in the industry, some strategies are applied in order to attract potential customers.

Potential customers:

Online Application

This kind of application is very convenient and easy for the customers to use which would increase the sale by attracting more customers to apply for the services. In addition, the cost of this kind of distribution channel is also very low.

But the problem is that, some strategies should be used to motivate the customers to apply Cable TV online.

Promotions which can initiate consumption decision

According to the survey, most of the users consider the variety of programs offered and price are the most important factors for their buying decision. As a result, it can stress on these aspects when launching promotions. Moreover, special discount period should be provided to an extent that above Just Noticeable Difference so that potential customers’ intention to acquire Cable TV will be increased.

However, providing discounts will lead to decrease in profits and so it cannot be used as long-term strategies.

Upgrade to digital converter

This can help Cable TV prevent unauthorized user to free ride the pay TV service. There are some unlicensed TV converters that enable to watch Cable TV illegally. It is because the use of unlicensed TV converter will decrease current user or decrease customer intention to acquire Cable TV service.

    Current customers

It is far more easy and profitable to retain current customers than attracting new customers. As a result, achieving customer satisfaction is very important. To achieve this, react to customer needs and so following recommendations are advised.

Improve customer service

As the majority of the customers dissatisfy with the customer service according to the findings. It is suggested that the number of staffs answering for phones should be increased and more training should be provided to staff to fasten the serving time and be consumer friendly.

Introduce paid local film channel

The findings show that the local movie channels are criticized as out-dated and repeated too frequently. However, providing latest film is costly, so it is suggested to introduce paid channel to satisfy consumer need and balance the costs.

However, it has the direct competitors such as cinemas, which can give the audience better atmosphere. In addition, VCD is also anther competitor and it is very cheap and the latest films are also available.

Yet, by introducing local film channel, it has the competitive advantages of convenience as the audience can just stay at home and enjoy the movie. The time and cost of searching information of customers reduces.

Change to digital converter

Analogue converters cannot watch some of the programs in basic plan nowadays which will dissatisfy current customers. Nevertheless, changing all converters is quite expensive and not all the users are willing to pay for the charge.

Quantity of advertisements

From the survey, most of the users thought that one of the advantages of Cable TV less advertisements. However, the amount of advertisements about Cable TV is increasing within the channels. It should pay attention to the quantity of advertisements to retain the customers.

Launch female-favored channel

Cable TV should launch a new channel targeting on the female. Programs that suit female include local shopping discount guidelines, or beauty news should be broadcasted.

Long term Directions:

In long run, Cable TV should improve its overall service include:

Provide video-on-demand (VOD) service

Video-on-demand service is a system based service that audiences can select watching any programs in any time. The new service can allow customers to enjoy a variety of programs on the interactive platform by offering more interactive application channels.

The advantage of this service is that it can eliminate the restriction on the time schedule of different programs, thus it can satisfy audience instant gratification of specific TV program and they need not to wait for any time slot. In Hong Kong, people have an “instant- need noodle” culture which means that they demand instant food fulfillment with minimum cooking time. As the rhythm of their lifestyle is very fast, they are impatient to wait for a TV program on schedule.

The disadvantage of this action is that it requires a higher cost to develop and apply this technology and Cable TV also need the technical support by other countries such as Japan and US.

Channel based selection plan

Consumers can acquire particular channels instead of paying a lump sum fee for a basic plan which included many channels. Base on the research, as many current basic plan users only watch a few channels and hence they would like to complain for pay the lump-sum fee. If Cable TV charges their price by the number of channels watched, people from lower income group would also apply for pay TV service due to the lower fee charged. As there are more combinations of customer to choose, Cable TV consumption plan become more flexible and consequently their market share in the pay TV service would be enlarged. However, as Cable TV provide many channels with different TV programs; consumer may not have a better understand of the nature content of that channel. So it requires more promotion effort to introduce to customer. For example, they can adopt a trail one time policy to let the potential consumer to try Cable TV service.

Develop High Definition TV (HDTV)

High Definition TV (HDTV) provides high quality TV picture. Now, the picture of Cable TV is restricted to 480I resolution. They can increase to 1080I resolution which is just the standard of TV resolution in Japan.

Include more exclusive programs

Cable TV should buy more patent from foreign TV channels and productions. To remain their high competitiveness and uniqueness, they need to provide more exclusive channels and productions which can not be broadcasted by their other direct competitors.

Conclusion

Cable TV, having the largest market share of pay TV service in Hong Kong, is facing increasingly keen competition since the introduction of Now Broadband TV.  The main competitors changed from free TV service in the past to the broadband and other pay-TV services now.

By our in-depth interview and literature review, pay TV users has an interesting characteristics and behaviours which enable us to base on the findings to suggest recommendations to help Cable TV fight against other pay TV service companies.

Many competitors build up their marketing strategies from the aspects that Cable TV underperformed. Therefore, Cable TV has to revise its current marketing strategies and implements short term and long term actions that are recommended in order to maintain the market share and to the industry leader.

       

Appendix

Appendix 1

Depth Interview Questions

Introductory

Pre-acquisition

Acquisition

Consumption

Disposal

Personal Information

Appendix 2

The Most Representative Individual Depth Interview Scripts

Script 1

Introductory

1. Cable TV
2. 3 hours
3. $238

Pre-acquisition

1. quality of the program, price
2. better quality
3. pay TV has more choices, pay TV has to pay
4. cable only
5. road show, TV advertisement, magazines, newspaper/ No, because purchase decision not made by her.
6. more or less the same with cable TV

Acquisition

1. No, father
2. telephone
3. quite efficient

Consumption

1. Yes
2. news, about 4 hours
3. all channels except news and MTV / no opinion
4. No
5. father, elder brother
6. football, news/ bank ,student

Disposal

1.No, because father like to watch cable TV

Personal Information

1. Female
2. 18
3. secondary
4. 3
5. $5001~$10000
6. $20001~$30000
7. Monday, East Touch
8. Music, Band, fashion
9. band, music, fashion

Script 2

Introductory

1. cable TV
2. 1 min
3. $238

Pre-acquisition

1. price, quality of program, family influences
2. if there ‘s discount
3. more choices, specify channels showing specify program
4. cable TV
5. road show TV advertisements e.g. European 4 football League
6. should be cheaper, quality similar to that of Cable TV, better customers service

Acquisition

1. No, parents
2. through phone, quite easy
3. satisfactory

Consumption

1. Yes
2. movies, 30 hours
3. , Preview, Macao Cultural Channel*, ETTV Asia, 
4. Yes, it’s poor can’t contact through the customer service hotline
5. father
6. CCTV 4

Disposal

1. Past user, terminate as his sister has to sit for HKCEE
2. yes, as his father felt boring without cable TV
3. No

Personal Information

1. Male
2. 19~25
3. Tertiary or above
4. 3
5. none
6. $10001 - $20000
7. apple daily
8. staying at hall
9. music

Script 3

Introduction

1. Cable TV
2. 2hrs
3. $198 (basic)

Pre-acquisition

1. Diversity of programs
2. Diversity of programs
3. Cable TV has less advertisement and there are specific channels for different people.
4. Now-broadband, Galaxy Satellite Broadcasting
5. It is an advertisement of free-TV channel.

Other advertisements can be found in some newspapers and magazines.

6. It should suit the need of different people, especially suit for each family member.

Acquisition

1. I involved in making the decision and discuss with them. We considered if there were enough channels and if the price was reasonable.
2. We called the hotline.
3. It is fast and efficient.

Consumption

1. It can meet my expectation because of its various programs.
2. Movie channels. I spent 5 hrs each week because I like watching movie.

Besides, I like those sports channels and use about 2 hrs per week.

3. I don’t like Channel 18 as I don’t like horse racing. Also, I don’t like entertainment channel (channel 12), as the TV series is too old. It doesn’t have the new one.
4. I haven’t used it and I hope it can solve my problem and respond immediately.
5. I am.

Disposal

1. No.

Personal information

1. Male
2. 19-25
3. Tertiary
4. 3, including me.
5. below $5000
6. $20001 - $30000
7. Ming Po and Cup
8. reading
9. Sports and current affairs.

Script 4

Introductory

1. cable TV
2. 3 hours
3. cable TV only

Pre-acquisition

1. varieties and qualities of program, price
2. discount promotion
3. pay TV has more choices, and there is specific channels for specific type of program, 24 hours (especially 24 hours news)
4. cable TV
5. Yes, TV advertisements such as European 4 Football League, also road show, newspaper, magazines
6. More or less the same as Cable TV, but the customer service should be better

Acquisition

1. Yes, he made the decision and it is made after discussion wit family member,

choices of program is discussed mainly.

2. through telephone

3. Quite efficient

Consumption

1. yes
2. news, football matches, CCTV 4/ about 30 hours
3. National Geographic, because of no interests towards this kind of program
4. Yes, it’s quite poor as he couldn’t contact the firm through the customer service hotline. Also, there is no service at all
5. me

Disposal

1. No, won’t terminate

Personal Information

1. Male
2. 36 or above
3. tertiary
4. 3
5. $15001 - $20000
6. $20000-$30000
7. apple daily
8. watching TV, tennis, squash
9. news, sports

Script 5

Introduction

1. Cable TV
2. 2hrs
3. $198 (basic)

Pre-acquisition

1. Diversity of programs
2. Diversity of programs
3. Cable TV has less advertisement and there are specific channels for different people.
4. Now-broadband, Galaxy Satellite Broadcasting
5. It is an advertisement of free-TV channel.

It is an advertisement shown in Cable TV.

Other advertisements can be found in some newspapers and magazines.

6. It should suit the need of different people, especially suit for each family member.

Acquisition

1. I involved in making the decision and discuss with them. We considered if there were enough channels and if the price was reasonable.
2. We called the hotline.
3. It is fast and efficient.

Consumption

1. It can meet my expectation because of its various program.
2. movie channels. I spent 5 hrs each week because I like watching movie.

Besides, I like those sports channels and use about 2 hrs per week.

3. I don’t like Channel 18 as I don’t like horse racing. Also, I don’t like entertainment channel ( channel 12), as the TV series is too old. It doesn’t have the new one.
4. I haven’t used it and I hope it can solve my problem and respond immediately.
5. I am.

Disposal

1. No.

Personal information

1.  Male
2. 19-25
3. Tertiary
4. 3, including me.
5. below $5000
6. $20001 - $30000
7. Ming Po and Cup
8. reading
9. Sports and current affairs.

Script 6-10

Introductory

Pre-acquisition

Acquisition

Consumption

Disposal

Personal Information

Script11

Introductory:

1. I have used the cable TV.

2. I would spend 3 1/2 hours on spending TV per week.

3. I am using the plan of $198 per month.

Pre-acquisition:

1. I would consider the variety of program offered, the price, the reputation of the company that provides the pay TV service.
2. I would like to acquire the pay TV service because of their exclusive right to broadcast the live sport programs and more choices of programs are offered than the pay TV service.
3. Firstly, there are more choices of programs offered by the pay TV than the free TV. Besides, only the pay TV company rather than the free TV company have the right to broadcast the live sport programs. Moreover, there is less advertisement time for the pay TV rather than the free TV.
4. The Cable TV and ITV.
5. Yes, I remember an advertisement broadcasted by the TV, But it didn’t initiate me to make the purchase decision as I don’t think that it is attractive.

6.  I think that an ideal pay TV service should separate the advertisement time with the programs and more live sport programs should be broadcast

Acquisition

1. No, my parents make the consumption decision.
2. I acquire it my phone and I find that it is very easy to reach.
3. It is very simple.

Consumption

1. Yes, my expectation is met.
2. I watch the sport channel most frequently and I spend nearly 2 hours per week on this channel.
3. I dislike the children channel most as the programs are very boring.
4. Yes, and I find that the service quality is not so satisfactory as the hotline is always disconnected.
5. My sister is the most frequent user.
6. She loves the M Channel most and she is a secondary student.

Disposal

Current user

1. NO.
2. Yes.

Personal Information

1. Male
2. 18 or below
3. Secondary
4. Four
5. $5000-below
6. $20001-$30000
7. I usually read apple daily and Monday.
8. I love playing basketball and I am most interested in the news of the sports (esp. about basketball)

Script 12

Introductory:

1. I have used the cable TV.

2. I would spend 21 hours on spending TV per week.

3. I am using the plan of $298 per month.

Pre-acquisition:

1. I would consider the variety of program offered, the need of my family members and the price.
2. I would like to acquire the pay TV service because of their 24 hours non-stop provision service, which allows me to watch TV whenever I want.
3. First, there is more choices of channels offered by the pay TV than the free TV. Besides, only pay TV could broadcast programs in 24 hours rather than the free TV. Yet, the artist of the free TV is more well-known than the pay TV.
4. The Cable TV.
5. Yes, via the leaflet. I was initiated to buy as it give me lots of interested information about pay TV company.
6. My ideal pay TV service is just like that provided by the cable TV, but the price

should be lower.

Acquisition

1. No, my husband makes the decision.
2. I acquire it my phone and I find that it is very easy to reach.
3. It is very simple.

Consumption

1. Yes, my expectation is met.
2. I watch the movie channel most frequently and I spend nearly 15 hours in his channel per week.
3. I think that the children channel should broadcast more educational programs.
4. Yes, and I find that the staff is very helpful.
5. I am the most frequent user. And I love the movie channel most. I am a housewife

Disposal

Current user

1.  No.

2. Yes.

Personal Information

1.  Female

2.  36 or above

3. Secondary
4. Four
5. $5000-below

6.  $20000-$30000

7.  I usually read Jessica and Oriental Daily News.

7.  I love shopping.
8. I am most interested in the information of the local fashion.

Script 13

Introductory:

1. I have used the cable TV and the Now board band.

2. I would spend 5 hours on spending TV per week.

3. I am using the plan of $298 per month.

Pre-acquisition:

1. I would consider the choices and the quality of the programs offered and the price.
2. I would like to pay extra for TV service because of the 24 hours provision of the latest financial analysis.
3. First, there are more choices of channels offered by the pay TV than the free TV.

In addition, the quality of the programs offered by the pay TV is also higher; for example, there is a better analysis for the sport programs by the pay TV. Moreover, only the pay TV has the exclusive right to broadcast some live sport programs.

4. The Cable TV, PCCW
5. Yes, via the TV, but I was not initiate to buy it.
6. An idea TV service should possess broadcast the most update information and news from all over the world to the audience.

Acquisition

1. Yes, and I didn’t discuss with anyone as I am living alone.
2. I acquire the TV service by phone.
3. The installation procedure is simple and not time-consuming.

Consumption

1. Yes, my expectation is met.
2. I watch the financial and discovery channel most frequently and I spend nearly 3-4 hours in these channel per week.

6. I think that the movie should not repeatedly broadcasting the same firm for more than 3 times.
7. Yes, and I find that the staff is very helpful.
8. I am the most frequent user. And I love the financial channel most. I am a businessman.

Disposal

Current user

1.  No.

3. Yes.

Personal Information

1.  Male

2.  26-35

4. Tertiary
5. 1

6.  $25001-$30000

7.  $30000-$40000

8.  I usually read the times and the Asian week.

9.  I am most interested in the latest news and information of the financial market.

Script 14

Introductory:

1. I have used the cable TV and the Fung Wong TV.

2. I would spend 2 hours on spending TV per week.

3. I am using the plan of $298 per month.

Pre-acquisition:

1. I would consider the variety of program offered, the price, the popularity of the company that provides the pay TV service.
2. I pay extra for TV service due to it’s provision of some live sport programs e.g. NBA, Soccer.
3. First, there is a longer advertisement time for the free TV than the pay TV. Besides, only pay TV possesses the exclusive right to broadcast some live-sport programs. Moreover, the programs offered by the pay TV is more update and with higher quality.
4. The Cable TV and PCCW.
5. Yes, I remember an advertisement broadcasted by the TV, But it didn’t initiate me to make the purchase decision as I don’t think that it is attractive.

6.  I think that an ideal pay TV service should provide some programs that contain some latest game’s description.

Acquisition

1. NO, my elder brother makes the consumption decision.

2.  Apply via the promotion counters located in the street and I found that it is east to reach.

3.  The procedure is simple.

Consumption

1. Yes, my expectation is met.
2. I watch the ESPN channel most frequently and I spend nearly 1/2 hours per week on this channel.
3. I dislike the children channel most as the programs are very boring.
4. No, and I expected the staff would answer all my inquiries about their service politely and patiently.
5. My mother is the most frequent user.
6. She loves the News Channel most and she is teacher.

Disposal

Current user

1. NO.
2. Yes.

Personal Information

1. Male
2. 19-25
3. Tertiary of above
4. 4
5. $5000-or below
6. $30001-$40000
7. Oriental News and Exam
8. Playing On-line game
9. Information of the latest games.

Script 15

Introductory:

1. I have used the cable TV.

2. I would spend 21/2 hours on spending TV per week.

3. I am using the plan of $298 per month.

Pre-acquisition:

1. I would consider the variety of program offered, the price, the popularity of the company that provides the pay TV service.
2. I pay extra for TV service due to it’s provision of some higher quality programs, more variety in types of it’s choice.
3. First, there is a longer advertisement time for the free TV than the pay TV. Besides, only pay TV possesses the exclusive right to broadcast some live-sport programs. Moreover, the programs offered by the pay TV is more update and with higher quality.
4. The Cable TV, Now Broadband TV and PCCW.
5. Yes, I remember an on street promotion. But it didn’t initiate me to make the purchase decision as I think that it is very annoying.
6. I think that an ideal pay TV service should contain lots of movies (different types) and cooking programs. In addition, the programs offered should not be repeating all the time.  

Acquisition

1.  NO, our whole family makes the consumption decision.

2.  Apply via the promotion counters located in the street and I found that it is east to reach.

3.  The procedure is simple.

Consumption

1. Yes, my expectation is met.
2. I watch the movie and news channel most frequently and I spend nearly 1 1/2 hours per week on this channel.
3. I dislike the new world channel as the programs is very boaring.
4. No, and I expected the staff would answer all my inquiries about their service politely and patiently.
5. My son is the most frequent user.
6. She loves the children Channel most and he is a primary student

Disposal

Current user

1. NO.
2. Yes.

Personal Information

1. Female
2. 26-35
3. Tertiary of above
4. 4
5. $20001-$25000
6. $30001-$40000
7. Oriental News and Jessica
8. Cooking
9. Information of cooking

Exhibit 1 (the broadcast industry in HK)

Exhibit 2 (channels of Cable TV)

Sports (7 channels)

News (9 channels)

Movies (7 channels)

Entertainment program (6 channels)

Documentary (8 channels)

Adventure program (2 channels)

Adult program (10 channels)

Composite program from different countries (18 channels)

Exhibit 3 (Packages of Cable TV)

References

1. Cable TV and beyond, Jones Education Media; producer, David P. Stone ; produced in cooperation with the College Division of the McGraw-Hill Companies, Inc. and Knowledge TV. Olathe, Kan.: RMI Media Productions, c1997

2. Cable TV & modem systems and technology, Regis J. Bates. Boulder, Colo.: netLibrary, 2002.

3. Cable T.V. and new media law & finance, Miamisburg, OH: LEXIS-NEXIS, Division of Reed Elsevier

4. PAY TV IN THE YEAR 2002: TIME FOR A REALITY CHECK?, Bloomberg Television and produced by Howorth Communications, December 2002

5. PAY TV IN ASIA PACIFIC, MAPPING THE ROAD AHEAD, Howorth Communications & Bloomberg Television, November 2001