Marketing Case Study: Tivo

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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.

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