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Tivo Case Analysis

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Marketing Management Assignment –Case Analysis #1- TiVo 1. What is TiVo?
Tivo is a digital recorder that helps viewers to take control of what they watch. The features of Tivo are recording programs as per viewers’ request, suggesting the programs according to viewers’ habits, ability to skip commercials, and so on.
What factors facilitate its adoption? a. Recording the programs – easy to record, stop, rewind, and schedule recording the shows. b. Skip the commercials – empowering the viewers to take control of what they are watching. c. Electronic program guide (EPG) TiVo applies i) Previews for shows to schedule recording easily with one push of button. ii) Season pass- by pressing a “thumbs up” and “thumbs down” button, users can specify their favorite show and then TiVo will record them automatically. iii) Suggestion- TiVo can track users’ preference and make suggestions.
What factors made adoption difficult? a. Retail execution- Salesmen in distributors turned over fast which made it hard to train them explaining to customers properly. In addition, there were various ways for salesmen to sell TiVo. b. Pricing- the price seemed too high to be accepted by customers. c. Awareness- the degree of awareness for TiVo remained weak and consumer remained inert because it is not their priority to improve TV viewing.
Who is TiVo best suited for?
According to the research, TiVo users mostly consisted of members who were married, between the ages of 25 and 45, and had an annual income of $70,000 to $10,000. In this regard, members with this kind of features are best suited for TiVo. We can also imply that people who have a college education, household greater income, and are heavy Internet users can be the target segment suitable for TiVo as well, because these are the features DVR users revealed according to the study in 2006.
Would you buy a TiVo? Why or Why not?
I would not because of following reasons: a. The price is too high. b. Internet is quite convenient to let me watch the programs I like anytime I want (ex: Youtube) without bothering to schedule recording. 2. Standpoint d. Networks- Networks want TiVo to assist them tracking audience response and recording loyalty so that they can adjust their campaigns. e. Advertisers- by using the data collected by TiVo, advertisers can deliver more personalized and targeted advertisement. Moreover, they can also track the response to the commercials from the audience. f. Cable/Satellite- Cable use TiVo to help reduce subscriber chum and also serve as a competitive edge against satellite providers.
Microsoft’s potential strengths a. Existing WebTV – Microsoft can promote Ultimate TVits own existing customers. Moreover, the existing services provided by WebTV would make the service more attractive to customers. b. Bundled with satellite television- provide viewers more options of TV programs. c. Technologically advanced features- watching or recording two shows simultaneously, recording pay-per-view movies, 30-second skip, etc.
Microsoft’s potential weakness a. TiVo’s current adoption – it might be hard for Microsoft to enter the market because consumers are used to TiVo. b. TiVo’s partnership with other industries- compared to Microsoft’s cooperation with satellite television, TiVo has Amazon, Comcast, and so on to enrich its features. 3. Evaluate the campaign | Pros | Cons | ProductPartnership with DirectTV and AOL | * More options- provide consumers more options of entertainment, which make the bundle more attractive | * Competitors- Microsoft’s partnership with DirectTV is a threat to TiVo because consumers will have alternatives. * Uncertainty- the product implications cooperated with AOL is not clear. | PriceCutting the price from $999 to $399 and free give away | * Cutting the price is an effective way to attract more consumers. | * Cutting price and free give away will hurt the company’s revenue. * Consumers who buy TiVo before will not be happy about the cutting price and free give away and then in the future, consumers will expect price decrease and be reluctant to buy the product at the beginning. | CommunicationTV ads - notion print ads – some features and detailsInternet – details | * Consumers can easily receive the notion and be aware of this product in a short time * Consumers will focus on the most important thing without being confused by too many details. | * Consumers may not understand TiVo by receiving information within only few seconds, even misinterpret TiVo’s features. * Consumers may not be willing to spend time checking the details online. |

In my opinion, TiVo should change their plan with regard to product. Instead of cooperating with DirectTV and AOL with uncertainty, TiVo can seek other industries to target niche market. For instance, having a partnership with Youtube will be a very special adding to its feature. Not only TiVo can attract consumers who are heavy Internet users, TiVo can also make Youtube from a competitor to a partner, a win-win situation. Furthermore, with exceptional features by partners, TiVo has no need to cut the price to attract customers. Instead, customers will be willing to pay more for better features. With regard to using different media for different purposes, I think this communication is reasonable. However, to decrease the impact of its drawbacks showing in above table, providing bonus for consumers who check the details online and strengthening the notion of TiVo precisely will be a plus. 4. Option Grid-TiVo case | Option 1 | Option 2 | Option 3 | Option 4 | Description of Option | Stay the Course. Pursue all current businesses, including both mass distribution and stand-alone DVR sales. | Quit the stand-alone business: Focus on developing the best possible interactive-TV software platform(Microsoft of DVR’s) | Focus on the advertising platform: Develop a full range of products-Showcases, tagging, and so forth-and make the TiVo platform a standard(Google of TV) | Focus on audience research and measurement. Develop and market viewing data products, and make TiVo the “currency” of this industry.(Nielsen) | Overall Assessment | Do not recommend because of increasing cost and potential competition. | Do not recommend because of no market power in DVR market. | Recommend because of increase in revenue and familiar with the ads market. | Do not recommend because of competition and unknown market. | Strategic Fit (Core Competencies) | ●Existing stand-alone sales with no further cost.●Experiences in current features and distribution. | ●Existing “Electronic program guide” provide a strong base.●Move away from competition of DVR sales. | ●Existing users make advertisers be willing to devote. ●Ability to personalize commercials to target market efficiently. | ●Existing users provide a strong base for researchers to collect data.●Ability to identify group researched precisely. | Financial Attractiveness | Revenue from existing customers. | Decrease the cost for stand-alone sales. | Increase revenue by receiving the service fees from advertisers. | Increase revenue by receiving service fees from those who need data. | Noteworthy Risks | ●Need to have a solid relationship with partners to distribute DVR.●Competitors include new features to draw its existing customers. | ●Lose the control of the DVR market and then is unable to implement the platform.●Need partners to develop satisfying interactive programs. | ●Customers’ unwillingness to watch ads. | ●Compete with Nielsen.●Unfamiliar with research market.●Unknown market for data research. |

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