Marketing Plan Time Warner Cable free essay sample

Running head: Marketing Plan – Time Warner Cable Marketing Plan – Cable – Time Warner Cable Bonnie Bagby BUS 620 – Managerial Marketing Dr. Uchenna Nwabueze August 30, 2010 Abstract The marketing plan for Time Warner Cable reviews the market conditions, including emerging technologies and competitors and provides a marketing plan with focus on maintaining current customers and adding new commercial customers by focusing on cloud offerings, teleconferencing and telemedicine. Marketing Plan – Time Warner Cable Executive Summary Time Warner Cable (Time Warner Cable), the second largest cable provider in the United States, continues to face stiff completion from the number one cable company Comcast and satellite pay-for-TV providers DishNet and DIRECTV. New competitors may be a bigger challenge to Time Warner Cable’s survival, than the existing pay-for-TV companies previously mentioned. New competitors include: telephone or telco communication companies utilizing internet protocol television (IPTV), Netflix with on demand video, Hulu with free video of top shows and video game machines that can stream free video to a larger screen. Pay-for-TV provider customer service levels have never been satisfactory and recent price increases have left consumers looking for alternative options (Goldman, 2010). Time Warner will introduce ala-carte cable pricing, allowing the consumer to choose specific stations based on their personal preferences. Time Warner will replace the reduced profits of ala-carte cable pricing by backhauling, for commercial applications including, teleconferencing, telemedicine and cloud computing. Time Warner Cable will also focus on improving customer service levels by narrowing service windows and offering a bonus plan for technicians, based on first time repair yield and customer feedback. Time Warner Cable’s investment in advanced fiber optic technologies has them well poised to lower consumer television, phone and internet service expenses, while replacing profits by focusing on commercial applications. Company Overview Time Warner Cable is the second largest cable provider and fourth largest television communications supplier traded on the New York Stock exchange as TWC. Time Warner has invested heavily to create robust, technologically sound high definition transmission networks strategically focused on five geographic regions within the United States. Time Warner Cable offers consumer pay-for-TV options including; Home Box Office, cable telephone service and internet broadband service. TWC serves more than fourteen million customers with video, high-speed internet and home phone services. Time Warner Cable also offers phone, internet, ethernet and cable television to businesses of varying sizes. Market Overview The cable television market is one sector of the pay-for-TV market. Pay-for-TV is found in ninety percent of homes, in the United States, costing an average of seventy-one dollars monthly (Goldman, 2010). The cable television market is experiencing fierce competition from satellite carriers, fiber optic providers and emerging technologies. Cable has enjoyed more longevity than fiber optic or satellite, but customers remember the days when outages were a common occurrence. Cable service levels are extremely low with an overall customer satisfaction of fifty-nine on a scale of one hundred, lower than even the airline industry (Yao, 2010, p. E2). Cable service stories are riddled with complaints of technicians unable to complete repairs, extremely wide service appointment windows, technicians who never show and technicians with bad attitudes. David Goldman of CNNMoney. com shared survey results, which indicated one in eight consumers will eliminate or scale back on their pay-for-TV service in 2010. Consumers indicate the rising cost of pay-for-TV options, the emerging on-demand internet video options, and the current overall economic situation as the reason for the expected shift from pay-for-TV services. The Competition The pay-for-TV market has four major players which include: Comcast Communications, Time Warner Cable, Cox Communications and Charter Communications servicing approximately forty-seven million customers. The overall cable industry has lost five million customers between 2006 and 2009 to fiber optic and satellite solutions (Yao, 2010, p. E2). Satellite carriers DishNetwork and DirectTV service thirty-three million customers. Both satellite and cable providers have been targeted, by fiber optic providers, like ATT and Verizon communications. The emerging technology of internet protocol technology (IPTV) is the most recent competitor, targeting the pay-for-TV customer base. Phone companies or telcos have entered the competition using fiber optics and IPTV to allow video streaming. Telephone companies, now called telcos, are spending billions on fiber optic installations to support IPTV technology. The technology will offer remote areas, currently untouched by cablevision, but penetrated by satellite, a pay-for-TV option. GenosTV is currently beta testing IPTV with a planned release date of January, 2011 (Entertainment Travel, 2010). While the cable industry certainly has a customer service challenge, satellite providers do not fare well in satisfying customers either. Satellite suppliers DISH Network and Direct TV had fifty-two thousand complaints made to the Better Business Bureau between 2007 and 2010 (The Patriot Ledger, August 7, 2010, p. 24). Customer complaints generally focused on extremely high cancellation fees, promotional rates that skyrocket, after an introductory period, and quality or service levels of third party satellite vendors. Satellite dishes are also banned by some housing associations for aesthetic reasons. Description of Product or Service Time Warner offers exceptional broadband, internet and phone service with extremely limited service interruptions thanks to recent investments in technology and fiber optic networks. Time Warner offers access to Disney, Cartoon Network, PGA golf, NASCAR racing, Lifetime, Home Box Office, On Demand Home Box Office and a host of other high-profile popular network options. Access to popular networks like Disney has created tension between Time Warner Cable and the consumer during contract negotiations. The popular networks are beginning to negotiate charges if Time Warner Cable wants to continue showing their product. The consumer loses, because rates increase to cover this increased operating expense. Time Warner Cable Media Sales offers national, regional and local companies affordable advertising solutions targeted to specific regions. The advertising dollars may be used to offset the usage fees from networks like Disney. Time Warner strengths include: ethnic show offerings (Gibbons, 2010), multi-room digital recorders, remote programming of digital recorders, the start-over viewing option, and day/date on demand movies. The start-over viewing option allows viewers who missed part of a show to press select and start the show over! In regions with a large Spanish speaking population, option packages consisting of Spanish speaking movies or television programs to appeal to a larger demographic audience. Time Warner has made it easy to digitally record multiple shows simultaneously, for viewing whenever the consumer wants. The Time Warner consumer also has the option to remotely program the recording option if plans change and they are going to miss a favorite show! The convenience of digitally recording, without concern about a tape or disc running out before the show is over, makes the recording process more enjoyable. Marketing Budget Time Warner Cables marketing budget is $1,027,468 or 5. 75 percent of the 2009 total revenue. The budget will be distributed in the following percentages: five percent for home consumers, five percent for community goodwill services, forty-five percent for telemedicine and forty-five percent for cloud computing efforts. Description of Location Time Warner Cable, employees 48,000 employees with locations in 28 states and corporate offices in New York, NY, Stamford, CT, Charlotte, NC, Herndon, VA and Westminster, CO. Time Warner Cable has regionalized their service locations to five regions, within the United States, including the West coast region, the East coast region, the Midwest region, the Texas region and the New York region. Segmenting the business into regions allows Time Warner Cable to offer region specific advertising and options, based on the demands of the specific region. Pricing Strategy Time Warner will offer consumers personalized service bundles. The consumer will be allowed to pick and choose networks based on their personal taste. Time Warner will provide historical data to aid the consumer in choosing networks. The pricing will be tiered by the number of channels chosen with a minimum twenty-five dollar package, which includes ten channels. Time Warner will also offer tiered pricing based on broadband usage. Similar to phone companies, Time Warner Cable will offer limited and unlimited broadband usage rates. The consumer will set their price based on personal preference and usage. Allowing the consumer to choose how much they want to spend for television and cable will allow Time Warner to continue generating revenue, instead of being disconnected, because consumers feel the price is too high. Time Warner pricing in the commercial markets will be at premium rates. The commercial market will overload network capacity, as more companies participate in teleconferencing, hospitals in telemedicine, and cloud computing opportunities. Time Warner will tap into government incentives to offset infrastructure costs, while offering the most technologically advanced network services in the industry. Time Warner will reinvest ten percent of the profits gained via the commercial markets in infrastructure growth. Summary and Implementation Plan Time Warner will focus on cloud computing for new revenues. Cloud computing is a sharing of resources on-demand, twenty-four hours a day, seven days a week. Cloud computing can be software sharing, data storage or data backups done over the internet. Small and large companies see benefits in cloud computing because it allows the usage of a variety of software and hardware without making an actual purchase. For the small business person, it allows them state-of-the-art technology without the state-of-the-art pricing. For the large business, it allows operations support to be minimized, therefore, reducing their employee overhead. Information technology personnel and equipment have traditionally been leased or out-sourced at many businesses. The cloud computing option allows the business to focus on their primary competency while allowing the cloud provider to concentrate on the information technology issues. Time Warner Cable will strategically align themselves with data companies offering cloud services. Time Warner Cable is poised to enter the telemedicine field both with their advanced fiber optic networks and their proximity to one of the world’s leading hospitals, the Cleveland Clinic. The Cleveland Clinic is offering patients the option of meeting with doctors via a teleconference for follow-up visits after orthopedic surgeries. Time Warner Cable will aggressively collaborate with hospitals, to offer telemedicine services making it easier for both doctors and patients to interact. Profits from the telemedicine field will replace profits lost in the consumer cable market. Time Warner will begin offering home consumers personalized packages based on the individual consumers needs, ethnic choices and usage levels in January, 2011.