Case Study Write-up
University of Florida
Tivo’s new consumer electronics product has the potential to revolutionalize media consumption habits and the structure of the television industry. The key challenges include: (i)how to improve the value of the product in terms of the benefit to cost ratio and (ii)how to increase awareness of the brand as well as the many different product attributes. We recommend that
(i)TiVo improve the value of the product by unbundling it in terms of the various benefits provided and then bundling the individual components with other complementary products. (ii)So as to increase the awareness of the different TiVo products and the brand, we propose to segment the market in terms of the specific customer profile whose needs are aligned to the particular benefit provided by the product. Accordingly, we arrive at a communication plan for the different TiVo products that target different customer segments through a mix of advertising, promotion, distribution and branding strategies. In the following section, we analyze the situation that Tivo is faced with and follow it up with the logical sequence that helped us arrive at the above recommendations.
Calyx and Corolla is a new company in the fresh flowers market. They have pioneered the concept of selling fresh flowers by mail. In its short lifetime, C&C has established strong relationships with many large growers, who cut flowers when ordered, thereby increasing the life of the buds tremendously over typical florist shops whose buds may already be a week old when purchased. They have also developed a strong relationship with Federal Express, who is their primary distributor. Federal Express has a well-established brand name, known for speedy, on-time, and reliable delivery, giving C&C’s promise fro freshly delivered flowers credibility among customer who are unfamiliar with C&C’s brand.
C&C reaches customers through a catalogue, which is mailed out to repeat customers and rented mailing lists. This makes it difficult to reach new customers, and catalogue mail-out have a low response rate. Individual consumers are more familiar with competitors such as FTD, who has a national network of florists. C&C’s top executives, however, are no strangers to the mail-order business, which gives them at least somewhat of an edge.
In recent years, supermarkets have emerged as a serious competitor to traditional florists. In the last ten years alone, their flower sales on average have grown nearly fourfold, bringing them close to 18% of the floral retail market. Supermarkets are using their growth and increasing importance to form valuable and cost effective relationships with growers, distributors and importers. This will undoubtedly help save costs along their supply line. In 1990, around 65%, or approximately 11,350, national supermarket chain stores sold flowers. Nearly 35% of independent supermarket stores sold flowers as well. As these stores raise price points to be more competitive with florists, they are likely to become formidable rivals.
The major downside of the supermarkets’ flower retail operation is the employee base. These outlets lack employees with specialized floral knowledge and expertise required to handle, package and maintain the good. In comparison to florists, this lack of knowledge equates into an overall lack in service.
Calyx & Corolla also faces competition from the national network composing FTD…
Context (Industry) Analysis
Product Benefits: The core benefits of TiVo can be classified as: (i)Watch what one wants: find, group, record, and compress programs (ii)Watch when one wants: pause, replay, slow motion, flexible time (iii) Convenience: No supplies required, user-friendly and easy programming