Cable Based Television – Retaining Customers

The industry of communications has grown exponentially during the past years allowing cable and satellite television companies to capture a large piece of the market. According to the National Cable & Telecommunications Association cable television was introduced since the late 1940’s in the USA while satellite TV was introduced in the early 90’s. According to the Television Bureau of Advertising (tvb.org) Cable television has lost significantly part of its market share to the newly introduced Satellite TV providers. According to research by Nielsen Company reported by tvb.org in February of 1999 the percentage of TV per household receiving cable television was at 70% while 9.1% came from any form of Satellite receivers while in July of 2009 only 62.2 % belonged to cable transmission while 28.6% to satellite receivers.

This data is somehow alarming to cable companies all around. Even though they still remain as a top provider they have lost a significantly share of the market over a rather short period of time. This calls for action from the cable companies to analyze and evaluate new strategies to retain customers and eventually gain back the customers lost.

This situation might change depending on the providers of the services, also affecting other things such as quality of the service, installation processes, prices and even customer services. While Satellite providers started appealing to a higher income percentage of the population now they are working their way down the income latter to appeal with better prices and bundles.

The present marketing plan aims to draw a clear strategy that will start locally in the area of Tampa and surrounding cities. If the implementation is effective then it shall be replicated to all the other states and cities were the company in question, Bright house Networks, works as a Cable provider.

Having in mind that cable is something that people can definitely live without, it is a harder task to preserve the need especially during rough times as perceived by the public in general. With the introduction of technology the addition of internet service provider to the cable companies has been a very smart way to create an increased need for the services and the effect of this shall be explored within the marketing plan, including the differences between the different services offered by the satellite TV and Cable TV providers which are often a deal breaker when deciding to stay or change companies.

Company Overview

Bright house Networks is a cable provider company established in 1994, it was merged with Warner Cable and other local cable providers to form the new company with new goals in mind and definitely different managerial styles. According to Bright House Networks, LLC Company Profile on Yahoo Finance it has over 2 million subscribers in the areas of Alabama, California, Florida, Indiana, and Michigan.

Recently, Bright House Networks ranked highest in customer satisfaction for the fourth year in a row by J.D. Power and Associates for Home Phone and for the delivery of High Speed Internet in the South Region. (Brighthouse.com/company overview)

The company has a very important presence in Tampa and surrounding cities. It is the main cable provider in the area offering also other services such as high speed internet and telephone services which they cater to both households and business alike.

Executive Summary of Marketing Plan

Cable TV providers have lost over 20% of their market share to satellite TV providers during the last decade. Locally Bright house networks still ranks at the top of cable providers however it is of great importance to retain customers and keep constant growth in the industry. Besides price, the company should focus on quality, flexibility and customer service to remain their customers happy.

Designing new plans to save money shall be discussed, flexibility in agreement terms and extremely user friendly features are a key factor to retain current customers. It has been of personal experiences, and common human nature that people often feel uncomfortable with signing contracts for “x” amount of time. A great alternative to this is to offer month-to month services for these kinds of people that often shy away from switching over or feel pressured with a contract. A good example to this success Wireless Company Metro PCS which offers wireless plans month to month basis. It has restricted coverage but has gained a great share of the market share from 14 of the top 25 US markets, with more than 6 million of subscribers in only 7 years since its inception.

The strategies will be developed after analyzing the benefits and disadvantages of the competitors creating packages that make up for quality with price and price with quality while keeping up and improving their award winning customer services department. The parameters for success will be measured by a steady growth in subscribers and a steady mark on the ongoing customers satisfied by the end of the year.

Description of the Target Market

As stated before we will be focusing first on the Tampa area corresponding to the Pinellas, Pasco, Hernando and Hillsborough counties which are comprised of approximately 1,374,277 people according to the U.S Census Bureau, 2006-2008 American Community Survey. The median income per household is $45622 and according to Nielsen Media Research 99% of American households have a TV set. The data shown is an average of the 4 counties comprising the area.

Rather than segmentation we are looking to keep the existing customers while keeping constant growth. The description of the target market refers to every household with a TV set within the 4-county area.

Description of Competitors

The major competitors are Dish Networks and Direct TV. Both companies offer High Definition programming with similar price ranges and programming. The appeal to new customers is the convenience of set up and often customer service as well. As well as other perks such as discount prices for a year in a premium channel package, and the introduction of DVR to record programs to see it later on. The revolution has started now that people can remotely activate their DVR to record a show without being present from the internet or from their mobile device. This kind of interaction and channel availability has driven customer to switch to these kinds of providers in the last decade.

The competition also offers High Definition receiver as well as a great variety of international programming content. Also the installation essential equipment is free for up to 4 different rooms. And the DVR or HD Box has an extra monthly fee. Unlike cable, satellite TV does not need an internal installation of the cable which if it is not available can take a long time until they are available in the area. It seems as prices are more available when customer’s commit to a long term contract for the service. Also, with satellite there are no franchise, broadcasting and other fees associated with cable.

Description of Product or Service

The products that Bright house is offering fall within 4 categories including basic cable, digital cable, telephone service and internet service. Basic cable includes very few analog channels while the Digital Cable service is the one that can compete hand to hand with the satellite TV providers. Besides it has as an advantage that more channels are available in High Definition and the image is less likely to be affected due to bad weather as it is the case for Satellite equipment.

The other products that are available are Digital Phone which can include unlimited plans by region and nationwide with standard features such as enhanced 911, call waiting, caller id, call waiting id, call forward, speed dial, and voice mail at an extra rate per month. The price it is somewhat competitive with traditional phone companies however is not lowered by far and it might not be a strong product to attract customer by.

The final product is the internet connection which is Cable based and it is way faster than DSL. The prices are very affordable and the need for internet within a household has become almost a given especially for young professionals and families with children. The price on the internet packages is very competitive and I it is one of the best offers to attract more customers if the company is able to prepare very good packages with everything included.

Marketing Budget

The goal is to keep the marketing budget below 3% of total revenues within the area. It will focus mainly on targeting smaller areas with certain income that can benefit from the diverse options of having the services by Bright house.

Description of Location

As described at the beginning, the location is the 4-county area of Hillsborough, Pasco, Hernando and Pinellas counties. The area is approximately of 3331 square miles according to the Census bureau out of which 2554 square miles are made up of water. It is a rather middle income to high community located close to one of Florida’s busiest cities.

Pricing Strategy

The pricing will have to be strategically appealing to several segments of the population. Thinking from the family of four to the college student to the retired couple, such prices must be flexible and appealing both by themselves and in a package.

Basic Cable should be able to be put way under 15% – 20% than any of the basic packages from Satellite TV because otherwise there is no space to compete with the lack of features offered by the Satellite providers.

To attract people to sign up for the digital service, the receiver box shall be charged at a discount price for 6 months and with the possibility to have it in up to 3 rooms at no extra charge. While the DVR option shall remain the same for we still want it to be a toping and not a need, at least for now.

From the side of Internet services there should be affordable compared to DSL starting at $19.99 for the simplest connection and increasing in increments of $10 for higher speed and specs such as e-mail addresses etc… Having a special upgrade packages if customer hires 2 or more of Bright House services

Summary and Implementation Plan

The way this plan should be executed is in several stages:

Target primarily the areas and communities where cable installation is ready. To get immediate response.

Make deals with up and coming house or rental communities to include install bright house cable in their Community this way the tenants already have Bright House as a first choice.

Target the territories by population density to start new cable installation projects within the next 6 month.

Eliminating contracts. This will not be done completely but it might be good to have it as an option so people feel good about their decision or establish a 3 month window to cancel the contract without penalty. This will give the customer a lot of freedom.

Creating packages: The strongest side to Bright house is their combination of services. Both of the other 2 major Satallite Networks have this option and if they do, it is way more expensive. By getting the packages in a competitive price or with incentives to add an extra service such as:

One month of Digital Cable for free when you sign up for the Digital telephone service

Any movie in demand for 60 days when you upgrade from basic cable to digital cable

Add the Nationwide digital telephone service at the Regional price for 3 months

Get Regional Telephone service and get unlimited calls nationwide for 1 month

The packages should also be able to custom made them for the needs of the customers. And emphasize the peace of mind from paying only one bill instead of three separate on different days of the week etc…

Update the website so you can see prices without having to enter a whole address and maybe only with a zip code. This may lose a lot of people that want to compare prices and do not want to talk to a sales representative

In short I strongly see Bright house as a competitor and he will be able to retain customers within the next 9 months results should be noticeable by the amount of new subscriptions per month and the amount of withdrawals per month as well. If this works within the region the plan should be implemented in the following cities always leaving way for improvement.

Resources

Applebaum, S. (2006, December 18). System Of The Year: Bright House Networks Tampa Bay [Online Article]. Retrieved December 9, 2009, from Find articles.com website: http://findarticles.com/‌p/‌articles/‌mi_m0DIZ/‌is_26_18/‌ai_n27098955/‌?tag=content;col1

Bright House Networks [About Us and Products]. (n.d.). Retrieved December 10, 2009, from http://www.brighthouse.com/‌about_us/‌company_overview.aspx

Direct TV [About our Company]. (n.d.). Retrieved December 10, 2009, from http://www.directv.com/‌DTVAPP/‌global/‌contentPage.jsp?assetId=1400010

Dish Network [About Us and Packages]. (n.d.). Retrieved December 10, 2009, from http://www.dishnetwork.com/

Fact Sheet. (n.d.). Federal Communications Comission. Retrieved December 9, 2009, from http://www.fcc.gov/‌Bureaus/‌Mass_Media/‌Factsheets/‌factvchip.html

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History of Cable. (n.d.). Retrieved December 9, 2009, from National Cable and Telecommunications Association website: http://www.ncta.com/‌About/‌About/‌HistoryofCableTelevision.aspx

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Media Trends Track [Fact Sheet]. (n.d.). Retrieved December 9, 2009, from Television Bureau of Advertising website: http://www.tvb.org/‌rcentral/‌MediaTrendsTrack/‌tvbasics/‌12_ADS-Natl.asp

Metro PCS. (n.d.). Retrieved December 10, 2009, from http://www.metropcs.com/‌about/‌about.aspx

The U.S Census Bureau. (2008). Fact Sheet by County. Retrieved December 10, 2009, from American Fact Finder database.