Marketing Failure of ITV
... 0 Objectives The aims of this report are to: Identify the reasons why ITV Digital failed. ... 0 Why Did ITV Digital Fail There are numerous reasons why ITV Digital collapsed. Essentially the main causes revolve around three key areas: Product, Management and Marketing. ... 1 Product Technology ITV faced major technological problems throughout their short lifespan. ... ITV had to launch their product one month after Sky Digital, this was the first indication that their revolutionary service may not run smoothly. ITV marketed themselves as the first “digital terrestrial service provider”, unfortunately due to doubts about the availability of the set-top decoder boxes they delayed their launch and Sky Digital launched one month before them. ... As a result Sky Digital tapped into ITV’s Marketing of the “digital” product. When customers went to purchase ITV boxes from distributors, they were often offered Sky digital as an alternative. This was this scenario continued even after the launch as ITV failed to supply enough boxes to meet market demand, again leading to Sky being offered as an alternative. Knowing your market and being able to assess accurately supply and demand is crucial to any organisation, failure to do so was of severe detriment to their survival (Kotler 1994). In addition to the issues surrounding the set-top boxes ITV’s product suffered in other technological areas. ITV’s service was dogged by poor reception issues, which often required users to purchase an aerial upgrade. This again contradicted ITV’s marketing concept/theory of plug and play. Despite claims that broadcast chief had mislead ITV over signals that were transmitted the problems again had a huge impact on ITV’s marketing and customer base as customers left to move to Sky. Furthermore the technology that ITV used to encrypt set-top boxes had poor security leading to substantial card fraud. ITV’s valiant attempt to “change the way the country watches TV” was certainly the case as customers either had poor reception or had hundreds of free premium channels. ... ITV tried to do this. ... As a result they immediately had a poor profit margin as Sky charged ITV full market price for their channels. In terms of the channels ITV provided they were claimed to be “low budget rip-offs” of Sky channels such as “Breeze” and “Taste”. ... An unusual approach to increasing their customer base was ITV’s decision to invest in Nationwide football. ... Firstly, after losing out to Sky on Premiership rights (a premier league product) ITV paid over £300 million more than the asking price for Nationwide league (a third division product) rights. ... By investing heavily in these television rights ITV were obliged to promote this fact, spending millions on additional marketing for a third division product. As a result ITV spent a huge amount of time target a niche customer segment of nationwide division football fans that might have supported for example Hull, but lived in Plymouth, but were prepared to pay-per-view to watch there beloved team. The number of people that fell into this category was greatly over estimated by ITV.