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(i) Unbundle the product benefits and price based on value for target market
This alternative is likely to alter both the cost and benefit of the product by dividing the product in terms of sub-products. One key weakness of TiVo is that it seeks to provide too many benefits. Some of these benefits may be deemed unimportant by specific customer segments. If the cost (and therefore the price) can be reduced by eliminating these marginal benefits, then the value proposition will increase and also will be clear. The three different core benefits of TiVo are (i) recording (ii) reviewing (like replay, pause, etc.) and (iii) optimizing, which can be satisfied by three different products. The ‘recording’ TiVo can be targeted towards the “couch potato” customers. The “reviewing” product can be targeted towards the sports fans, while the “optimizing” product can be targeted towards the busy professional (More details of this number potential for each of these segments can enrich the discussion). The downside of this alternative is that there will be multiple versions of the product with different marketing strategies that may lead to further confusion regarding the brand. One possible way to minimize this problem is through brand extensions.

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