Tivo Case Analysis

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1.Analyze the situation from the consumer’s standpoint? What is TiVo? What factors facilitate adoption? Who is TiVo best suited for (Target audience)? TiVo is an innovative personal digital video recording device introduced in 1999. TiVo makes it possible to save TV programs on hard drive and replay them if required. TiVo possesses several advanced features such as, pausing and replaying live TV, recording without DVD, VCD or video cassettes, Electronic Program Guide (interface), “thumbs up”; “thumbs down” buttons for rating favorite shows, season pass feature (system which learns viewing preferences of watchers), fast forwarding up to 60 times the normal speed, suggesting shows for users they would want to watch etc. Basically, TiVo enables user to watch what they want and when they want it . You can be your own networker and customize the way you watch TV. Due to the overall mass customization trend TiVo hits the nerve. Every customer who owns a TiVo seems to be satisfied, with 72% people stating TiVo had made TV viewing a lot more enjoyable . The TiVo receiver is available at $999 for the 30h recording box and $499 for 14h recording. Additionally, the service fee costs $9.99 a month, $99 a year or $199 for the lifetime of a product. To produce and distribute the product, TiVo Inc. established a major partnership with consumer electronic brands Sony and Philips. Further, TiVo became nationally available through agreements with chains like Best Buy, Circuit City and Sears. The promotional activities were restricted to public relations, their own website and very restricted mass media campaigns. From the beginning on TiVo focused on early adopters as the main target audience. According to theory early adopters are expected to function as opinion leaders and attract new customers with the help of word of mouth. As the costs are lower to address only a small, niche group of people with a homogenous character and the hope for a viral effect confirmed TiVo’s strategy to address early adopters. After some research they found out that even early adopters, normally standing for purchases in early lifetime phases of products, were hard to convince and needed a high amount of media exposure to finally come to a purchase decision. Further, early adopters didn’t show consistency in retelling TiVo’s features and advantages. The only constant topic was that TiVo was liberating their daily life. Since this target group didn’t show the expected results I would suggest to focus on a different kind of customer. On one hand, the targeted audience has to have the necessary capability to afford such a high priced product. Hence, young people can’t be the major target group. On the other hand, TiVo requires a certain amount of technical knowledge which sets restrictions on elderly people (60+). For this reasons I would suggest to address young professionals (23-40 years old), living in a middle-income household and male (due to tech affinity). As we found out from the case most watched programs were children’s programs, dramas and situation comedies. Hence, families offer great potential as well. Later on in this case analysis we will learn other reasons besides targeting why TiVo is confronted with a lackluster in sales.

2.Analyze the case from the Networks/Advertisers and satellite/cable point of view. What do they want TiVo to be? Think about competition – What are Microsoft’s potential strengths and weaknesses as a brand in this category? Due to the fact that TiVo enables fast forwarding through advertising and makes networker’s task “redundant”, networkers and advertisers need to be included in this case analysis. Advertisers see the threat that TiVo’s consumers can skip commercials. Actually, TiVo offers a lot of opportunities for a new kind of advertising as well. One opportunity is that advertisers can see the viewing pattern of the customers and react accordingly. Since TiVo is able to document when, what and how often a...
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