World Space satellite radio service shut its shop in India on 31st December 2009 and with that country’s first satellite radio service went out of market.
The brand came in India in 2001 but at that time they didn’t become popular among masses because of their very high prices. They came back in 2005 with reasonable price-value preposition and this helped them earn 4.5 lakh customers who paid up to Rs 1800 per annum for music which is a huge number in a market like India where paying for radio for was a new concept altogether.
The company failed in India because its parent company filed for bankruptcy in the USA in 2009. But nonetheless, there are certain lessons that can be learnt from its story.
Firstly, company launched itself with over the top pricing and didn’t correct it for 2-3 years. By that time a perception had already been created among the consumers about the brand being expensive.
Secondly, they made a mistake in pricing the receiver. World space didn’t focus on lowering the cost of receivers and kept pushing the sale of its subscription. (Remember the case of mobile services which penetrated so deep only because the handsets were available at prices as low as Rs 1500).
Thirdly, the marketing strategy was inappropriate for the kind of offering they provided. They rightly roped in AR Rehman as brand ambassador but at the field level the marketing approach was again inappropriate. They should have adopted direct marketing approach and set some sales targets for sales force. Once they had achieved a customer base then they could have tried to up-sell premium subscriptions to them. But they instead seemed waiting for customers to make first contact.
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