DIAGNOSIS OF THE PROBLEM: TiVo was launched in March 99 and aimed at transferring control from TELEVISION networks to consumers. At present (May 2000) TiVo contains a low industry penetration (0. 04%) yet current customers highly pleased. Experts expected that the customer base would reach 35000- 80000 by 2150 yearend. ISSUE IDENTIFICATION: To enhance product understanding, customer buy and revenue by adjusting the current web marketing strategy and also address the growing competition. SCENARIO ANALYSIS: Value:? There are two variants of TiVo, “14hour box ($499) and “30 hour box ($999). Also there are services charges with three distinct rental ideas ($9. 95 per month, 99 dollars per year, $199 for life time).? Price of the product is substantial than most existing TV sets and extremely meagre proportion of consumers are prepared to pay this high, an amount. Product: The merchandise provides various features including:? Pausing LIVE TV (“wow! Factor)? EPG(Electronic System Guide)- Interface available with the unit? Thumbs up and Thumbs down feature, which allows the user to established their personal preferences based on which in turn a particular plan will be recorded proactively by TiVo package.
These choices are also used simply by TiVo pertaining to suggesting programs to users.? Season Pass- automatically documents all the attacks of end user specified displays. Promotion:? Confusion around the TiVo product placement in the press ( PVR, DVR, EDR, IVR, About Demand TV)? Focus on early on adopters within their initial marketing strategy.? Very limited mass media campaign. Place:? TiVo worked with with Gadgets Superstars SONY and PHILIPS and TiVo subsidised both the companies so they would manufacture the dark box spread it and promote it to retailers. TiVo became country wide available through Best Buy, Routine city and Sears ALTERNATIVES:? Reduce the value of 40 hour unit to $399 and stop creation of 13 hour model while releasing the existing share of 14 hour version for free.? Streamline the user program to make TiVo more user friendly.? To present a feature similar to the 35 second quick skip key available with Re-run TV.? Give incentives to existing buyers for endorsing the product.? Change in the promoting strategy from early essayer based to mass media campaign while centering on the desired portion of the industry (couch potatoes and organization executives). Alliance with DirecTV to be offered as a package deal offer.? Coordinate events/kiosks to enhance awareness regarding the product. EVALUATION OF ALTERNATIVES:? Reduction of Price: Lowering the price of TiVo will enhance sales however the loss received will have to be taken into consideration while choosing a price slice.? The production of “14-hour recorders can be ended and the models in products on hand can be provided for free. Salesman can be provided an option to consider the “14-hour recorder free of charge and indication an agreement of serving for at least 6 months.
This may decrease the yield rate and increase the comprehension of the product among sales force that could, in turn, increase the sales.? Simplification of Interface:? The only characteristic that TiVo lacks when compared to Replay TV is30 second skip press button ” “Quickskip. So the RnD department ought to work towards including the same on the earliest.? Introduction of a recommendation programme wherever incentives would be offered to people whose friends or relatives buy an extra TiVo. This would increase the purchase rate substantially. Shifting to mass media marketing campaign would require a huge capital induction and prior identification of market segments in addition targeting the specified segment (couch potatoes and business executives) with suitable print and audio-visual adverts.? Partnership with DirecTV will bring it in to direct competition with Ms as it is also going to type in a partnership with DirecTV giving your customers option to choose from either bundle.? In the under mentioned table, data until Jun 2k has been obtained from Company file and expected thereafter.
Progress rate from Jun-00 to Sep-00 has been taken to become the same as Jun-99 to Sep-99. TiVo will have to concentrate majorly in the third quarter 2000 and spend most of their particular allotted advertising sales expenditures in these 3 months. Growth price from Sep-00 to Dec-00 has been taken up be 50 % of Sep-99 to Dec-99 because of expected competition from Microsoft’s Ultimate TELEVISION SET. If TiVo is able to attain the expected subscribership then it will be in accordance with industry experts’ predictions intended for year-end 2000. Jun-99Sep-99Dec-99Mar-00Jun-00Sep-00Dec-00
Number of members (‘000)1. 02. 518. 032. 048. 0120. 0492. zero Quarterly progress rate 150%620%78%50%150%310% ACTION PLAN:? TiVo to be included with DirecTV receiver just before a similar offer strikes between DirecTV and Microsoft.? Range from the quick by pass feature inside the product at the earliest.? End producing 14 hour recorders and reduce the buying price of 30 hour recorder.? Maximum marketing and product sales efforts should be put in just before Christmas time of year including improved advertising approaches, incentives to existing buyers for product promotion.
BACKUP PLAN:? In case the loss as a result of price cut is actually alarming then partnerships with networks can be sought (ABC, CBS and NBC).? In case the media campaign is not able to show the customers what features is usually TiVo specifically providing then this campaign has to be revamped in order to more appropriately define the characteristics of TiVo.? Competition by Microsoft’s Ultimate TV container may force TiVo to into relationships with on-line providers just like AOL to the online industry.