TiVo case analysis

A. SWOT analysis
 Strength
 Pioneer in the digital video recorder category
 High customer growth rates
 Easy to use and equipped with numerous innovative and advanced features
 High level of customer satisfaction
 Friendly-sounding name: a cute brand identity would give a gracious face to the machinery
 Brand recognition and loyal customer strength
 Partnership of consumer electronics superstar brands Sony and Philips for quick entry and development and it
brought an image of reliability
 Nationally available through electronic chains like Best Buy
 Multiple potential revenue streams: opportunities for advertisers and networks

 Weakness
 A lack of category and brand awareness is the key cause of TiVo’s lackluster sales because it’s the first in digital
video recorder category.
 Functions were difficult and confusing to explain to customers.
 It separated from customers by partners, resulting in ineffective communication with its consumers.
 The manufacturers’ reps couldn’t give TiVo the amount of support it required. It was hard to convey a sense of
urgency to TiVo’s distribution partners.
 High salesperson turnover rate in consumer electronic stores made training efforts ineffective.
 It dependents on only a few suppliers.
 Expensive product with additional service fee for recording and no reference point
 Restricted promotional activities to public relations, animating its website, and a very limited mass media
campaign

 Opportunity
 High market growth
 Sponsored content: DirecTV-TiVo bundle, AOL
 Valuable market research data
 Electronic commerce
 Both ReplayTV and UltimateTV were taking another path, emphasizing the amazing features of the digital video
recorder.

 Threat
 Established players in traditional markets are entrenched and will implement defensive strategies to protect their
market share (eroding traditional strategic segment barriers)
 Legal challenges
 Legislative agenda could restrict opportunities
 Low barriers to entry for technology is easy to replicate
 Many competitors – many are heavy weights

B. 4 Ps Marketing Mix
1) Product
 Advanced features:
TiVo made a big idea real—you could really control what you watched and when you watched it.
  Pausing and replaying live TV
 Recording without DVD, VCD or video cassettes
 Electronic Program Guide (EPG)
 "Thumbs up" and "thumbs down" buttons for rating user's favorite shows
 The season pass feature
 Fast forwarding feature, up to 60 times the normal speed
 Suggesting users, the shows they would want to watch
 Downloadable feature upgrades and update of programming schedules
 High level of customer satisfaction:
Everyone who owned TiVo seemed satisfied with it, with 72%of owners even claiming that TiVo had made TV
viewing “a lot more enjoyable”.
 Brand name: a friendly-sounding yet all comprising name—TiVo (TV your way). A cute brand identity would give
a gracious face to the machinery.
 Product variety and packaging:
Two different models and three service packages available to attract different consumer markets
 Confusion in introduction:
Its functions were difficult and confusing to explain to customers. There was some confusion in the press as to
how the new product category should be introduced. Oftentimes the press discussed the features of the device,
but it wasn’t always to the advantages of the company, as the first generation product was no free of problems.

2) Price
 High Price:
A $1,000 ticket meant TiVo was more expensive than most TV sets, and more than twice the price of a good
satellite system.
 No reference point: With this service being so new there was no reference pricing point.

3) Place(Distribution)
 Partnership:
TiVo built a partnership of consumer electronics superstar brands Sony and Philips for quick entry and
development. The two companies manufacture the black box, distribute it, and promote it to retailers. Thus,
TiVo is separated from customers by partners.
 National distribution:
TiVo became nationally available through electronic chains like Best Buy in September 1999. In October 1999,
Circuit City and Sears were added; a national distribution was in place.

4) Promotion
 Promotional restrictions:
While the hardware manufacturers took control of retail distribution and in-store communications, TiVo’s
promotional activities were restricted promotional activities to public relations, animating its website, and a very
limited mass media campaign.
 Ineffective role of early adopters as advertisers of TiVo
 A catchy communication campaign with a boldly humorous tone that helps consumers envision how TiVo
restored the fun of television.

C. Market Segmentation
D. Six elements in Brand Positioning
1) Target consumer
 In the relatively young DVR market, the initial customer base is made up of "early adopters", niche consumers
who purchase the product early in its lifetime. As the product matures, the target customer shifts away from
early adopters toward a more mainstream market. The cost of gaining additional customers increases with the
need for greater marketing spending to lure more customers.
 Young professionals (23--37 years old)
 Males
 Middle--income households
2) Brand name
 A friendly-sounding yet all comprising name—TiVo (TV your way)
3) Brand personality
 Initial, unrestricted, functional and considerate (friendly)
4) Product/competitive frame
 Digital Video Recorder
 ReplayTV emerged as a strong competition.
 Software leader Microsoft launched UltimateTV.
 Jovio, a start-up in Personal TV category, intend to launch a free service that would be similar to TiVo’s.
 Conventional VHS video recorders continued to sell well.
5) End-benefit
 really control what you watched and when you watched it
 personal home TV network
6) Rational support
 Pausing and replaying live TV
 Season pass feature

E. How to re-launch TiVo?

 For Product: DirecTV--TiVo bundle, AOL
 For Price: New Pricing Strategy
 Drop the price of the 30 hour recorder from $999 to $399
 Sign a three-year contract and pay only $24.95 monthly for service and hardware
 After three year contract is up, pay $12.95 monthly or pay reduced price ($149) lifetime subscription
 For distribution channel: Online retailer, e.g. Amazon.com
 For Advertising and communications: Different media for different purposes.
 Use TV ads to raise awareness, interest, curiosity, and to promote the TiVo brand identity. TV ads introduce the
notion that you can have your own personal TV network and you don’t need to rely on the networks in terms of
deciding what you watch, and when you are going to watch it.
 Print ads describe some benefits and benefits in a different way than technology.
 The website offers a deeper educational experience.

Improvements
 keep accelerating pace of change, and supply better services
 Continue to revolutionize the way consumers watch and access home entertainment, by making the TiVo DVR
the focal point of the digital living room.
 Combine TiVo and Internet Searching tools(ex. Google)
1. to offer unequaled search capability
2. to aggregate content
3. To connect advertisers and consumers