Sumantra
Dutta
Former Executive Vice-President, Advertising Sales & Marketing,
STAR TV India Ltd, Mumbai. |
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Television
in India has been in existence for three decades. For
the first 15 years, it spread haltingly, and transmission
was mainly in black and white. It has come to the forefront
only in the past 10 years. There have been two ignition
points: the first in the eighties when colour TV was introduced
during the 1982 Asian Games. The second spark came in
the early nineties with the broadcast of satellite TV
by foreign programmers like CNN followed by Zee, Star
TV and Sun TV, into Indian homes. Prior to this, Indian
viewers had to make do with DD’s chosen fare which was
dull, non-commercial in nature and directed towards education
and socio-economic development. |
Entertainment
programmes were few and far between. And when the few
soaps like Hum Log, Buniyaad, and mythological dramas
Ramayan and Mahabharat were televised, millions of viewers
stayed glued to their sets. Satellite TV came to India
10 years ago when STAR TV launched in 1991 with four channels.
However, the market was not readyto accept them wholeheartedly
as the channels were all in English. On the other hand,
Zee TV, the Hindi channel on the same platform, drove
the market wild. In the years that followed, the Indian
cable and satellite environment became more crowded, with
many players in the market. All the TV players attempted
to offer enjoyable and unparalleled entertainment. The
power of the individual brands and the influence it exerted
could only be matched by profitability and a desire to
be at the top. In 2000, Star’s Kaun Banega Crorepati redefined
television viewing in the country - the parameters being
not just what people watched but when they watched and
how intense the involvement was. Such has been the intensity
of viewer involvement that Indian television has now seen
the emergence of an entirely new segment within prime
time — super-prime time. A basic indicator of loyalty
is the amount a customer will pay for the brand in comparison
with another brand offering similar or fewer benefits.
The price of a commodity is related to the benefit that
the commodity provides.
To give an example
of the progress that cable and satellite TV has made since
the launch of Kaun Banega Crorepati, the picture that
emerges is that in a span of just four weeks from the
launch, nine out of every 10 cable and satellite viewers
were exposed to KBC in the approximately 40 million homes
in a cable and satellite universe. Audience share and
viewership ratings started to look stronger every week.
Within a month’s time from the date of launch, C&S TV
attempted to break the stranglehold of the national network
in terms of pricing on television by taking the rate up
to INR 4 lakh per 10 seconds. Previously, the highest
rate was in the region of Rs 1.5 lakh per 10 seconds for
a stand-alone spot devoid of any bonusing. Media planners
were debating whether they were getting the best deal.
The criteria was set by number-crunching the competitors’
exposures (as if that was the right thing) and buying
exposure in a commodity fashion.
Is there a need
to look beyond CPRPs and base selection to more empirical
and behavioural product linkage? If that were the way,
there would be solid ground to negotiate on the cost-benefit
analysis, the customers lost, loyalty and so on. The question
in everyone’s mind at this point was: why should I pay
the price? The justification — audiences like never before,
a twofold growth in the number of individuals tuning in
to television and, last but not the least, the advertising
environment provided. C&S TV, through quality programming,
achieved many an impossible feat. The biggest of them
being that inspite of super deliveries from an audience
point of view, it continued to hold on to its earlier
acquired brand characteristics of gloss, sheen, great
image and premium perception. And perception is reality
in the consumer’s mind. In all my 30-odd years, I have
never heard about categories in the market such as shampoos,
toilet soaps, toothpastes, cars, fuel costs, transportation
costs and so on dropping their prices year after year.
But there seems to be a general feeling in people accessing
TV time that the latter must keep pricing itself lower
every consecutive year. Where is the logic? In every other
television-evolved market, the costing of TV time, especially
the top few channels, is prohibitive
— and like other
product groups in the industry sees a year-on-year growth.
In the face of increased globalisation and liberalisation,
we have seen a plethora of brands, products and services
being launched in the market. In order to build these
brands, there is an imperative requirement for prime airtime,
which is on the decline. In such a situation, it wasn’t
too long before the channels decided that they had to
get their pound of flesh. It was a time when audiences
were flocking to cable and satellite channels like never
before because of the magic created around their programming.
Media planning deals with the allocation of a budget.
The question is how to spend the money to make the most
effective sales and not how to spend the money to make
every sale. Sales will be lost because of too little frequency
but more sales will be lost because of no frequency at
all. One always leads from the front. With such ensured
deliveries, it was high time that prime television airtime
was costed at prime rates.
This saw STAR Plus taking the initiative in formulating
prime rates which started taking shape and being accepted
by the market because of a number of factors — ensured
deliveries, maximum reach, high profile, high image, high
perception and a clutterless environment. In the television
scenario, this was akin to an ideal world as it presented
the opportunity of a high brand recall for products advertised
on such programmes. Surely one should quantify and determine
the price on certain basic price determinants that are
being practiced currently:
EXTERNAL
1) Choices available
to the consumer
2) The perception
of the competitive set of alternatives and the perception
gap that exists.
3) The buzz
that programmes on the channel enjoy helps it get a disproportionately
higher return or yield than the intrinsic fundamentals
as formulated by rating numbers (Kaun Banega Crorepati,
Kyunki Saans Bhi Kabhi Bahu Thi, Kahani Ghar Ghar Ki,
Junior KBC, Ji Mantriji etc).
4) Demand and
Supply
INTERNAL
1) Inventory
Levels
2) Revenue Targets
3) Buzz marketing
4) Packaging
and Pricing policy
5) Service
6) Scientific
selling Abilities
7) Marketing
The interplay of the internal and external factors plays
a very crucial role in the determination of cost. |
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