Case Study – TiVo in 2002: Consumer Behavior
Group 13 – M1
1. Background of the case
The case deals with the problems faced by TiVo (a creator of the personal video recorder) in 2002. This is with respect to the amount of sales it is able to acquire along with the fact that they have been operating with losses for the last few quarters. It also highlights the different measures TiVo has undertaken in the form of surveys and consumer research projects to understand the customer’s perspective of their product. This research was aimed at seeking options as to how TiVo could increase their customer base. The below report showcases the problems faced by TiVo and the possible solutions TiVo can adapt to overcome the same.
Slower start in number of subscribers than originally forecasted
Compared to the forecasted sales, TiVo saw a surprisingly slow start. The main reason for this initially was assumed to be due to the lack of awareness.
Company facing financial problems
TiVo was also continuously losing money. This was evident from the fact that the amount of money spent on Sales and Marketing greatly exceeded the total revenues that they were getting in return. The increased expenditure also did not contribute to increasing the sales. TiVo had not made a dime in the last few years.
Profile of subscribers remain narrow
Majority of TiVo subscribers were married couples, high income families and middle aged consumers. Very small percentage of the subscribers comprised of singles, lower and middle income households, the young and elderly. This raised a question about TiVo’s universal appeal.
Disparity between customer satisfaction and growth
Post purchase attitude reflected high level of customer satisfaction but on the other hand the volume of sales was still lagging. This was contradictory to TiVo’s expectation, of increasing sales volume through their existing customers.
Perceived Risk of Purchasing