TIVO
Background
As a cutting edge new product, Tivo was introduced by Jim Barton and Michael Ramsay which were the founders of the product. The primary purpose of Tivo was to make the time of customers’ favorite shows more personalized and flexible.
In the current market, launching Tivo did not capture many customers as expected. In the 14 months after launching, it only signed up 42,000 subscribers, with a current rate of 14,000 new subscribers per quarter. With 102 million TV-watching households in the US, the penetration was only around 0.04%. Although 72% of the owners had great commence about Tivo, it did not help generate more sales. The marketing team argued that lack of awareness was a key cause of this result.
Problem definition
There was no doubt that Tivo offered a new way to watch TV by its advanced tech. however, the ads (e.g. Network Executive ad)and salesman did not explain well complex functions to the customers, which occurred people thought Tivo was a product that could skip the commercials by recording the shows.
Tivo came up with a lot of amazing features and advantages which contributed to the factors that facilitate its adoption . one of the most important point was it could record the TV shows that owners wanted. In this manner, customers would not only manage the time to watch it, but also would avoid conflicts with other favorite shows. this function offered unique TV-watching experience to TV enthusiasts.
As a new product, it also had some factors that make its adoption difficult. the most serious factor was the discrepancy between the information that customers received though various medias and the entirely designed functions that Tivo had. As mentioned by the company, neither TV ads nor printed ads c...
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...ncreased a lot.
Cons: lowering the price would hurt early adaptors who paid $999 for the product, and damaged the reputation of the company indirectly in the long run.
Recommendations
The company should have a clear mind that Tivo was not for all the TV users, it could not change all the customers’ habit in such a way. Tivo was only suitable for people who did not care about ads and the people had busy daily schedules.
Meanwhile, both Advertisers and Networks wanted TIVO to prevent the cannibalization of advertisements in the use of TIVO services. So go niche market would decrease their concerns, because a small group of people did not watch the ads would not change the rules there.
So, the company should niche the Tivo, decrease the price but make it right for the early adopters. In addition, communication plans were necessary to increase the awareness of Tivo.
TiVo was one of the very first products that allowed people to do this. Advertisers were now worried about their industry. How were they supposed to advertise to people if the people refused to watch them and you could no longer force them to? Their solution was to put the advertisements within the products themselves. They could pay producers to put their products in their stories. Then they found out that their advertisements would be more effective when they put them in the product, even more powerful when the advertisement evolves and turns into a character themselves.
Marketing at the Vanguard Group. In light of an evolving market, faced with new competitors, and after a careful analysis of their current customers, the Vanguard Group (hereinafter referred to as “Vanguard”) realizes it must rethink its entire marketing strategy. However, in order to protect and leverage their competitive advantage, which is their low management fees, and to optimize the loyalty that their customers continuously demonstrate toward their organization, they must now target the most profitable segment for them, and develop the best way to serve and delight these customers. SITUATION ANALYSIS Highlighted SWOT Strengths Low fees strategy - a good idea.
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The case is about the introduction of Tivo, a new service that provides the TV viewer the flexibility to watch what they want when. The product is expected to change the way people watch TV by offering them the flexibility in programming, skipping commercials, pausing live TV and recording programmes for future viewing.
TiVo was incorporated in 1997 they intended to create an interactive television system that developed the idea of recording digital video on a hard disk. TiVo allowed consumers to watch their T.V shows when they wanted to watch them by recording, playing back, and pausing live television. TiVo has now bundled its services with many companies, but at one point Direct T.V accounted for 70% of TiVo's costumers. Effective marketing and innovation have made TiVo the best known DVR in the industry. TiVo has always considered itself as a hardware provider and a service provider and now seem to be shifting to an all service future. Despite having the strongest brand name and one of the largest customer bases TiVo has suffered millions in operating losses. In 2003 a massive transaction from analog to digital DVR's took place. TiVo has been quick to respond to changes in the market by upgrading the features and refining performance. But, the new digital technology has caused TiVo's market share to drop as competition grows quickly.
TiVo's problem rests in its inability to convince consumers to change their television consumption habits. Improper targeting and positioning have led to an ineffective product, price-point and promotion strategy that has stranded TiVo in the chasm between the early market and the early majority.
TiVo has had competitors for the first year that it was conceived which has made it difficult to thrive when fighting for market share. The two major competitors were DVR, and ReplayTV. All made their debut in 1999 and the Consumer Electronics Show in Las Vegas. Replay won the Best of Show award. (Pearce & Robinson, 2013) However years later no one remembers ReplayTV. Whereas TiVo and DVR has gone on to become household names in the market place. However in the early years of this technology TiVo thrive. Using clever marketing slogans such as, “It’s not TiVo unless it’s a TiVo”, “Simple enough you mother could do it, or “Hey if you like us, TiVo us.” Additionally, TiVo engaged in employing celebrities to endorse the TiVo brand. These are all time tested marketing strategies that work to help corporations dominate a market share and drive them to financial success. So why has TiVo dominated the market early but never turned a profit.
Maybe Tivol can’t make me what my hear desires and I’ll get less for my dollar but my wife will be able to gloat to her girlfriends that he went to Tivol’s.”
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