Tivo Case

Analyze the situation from the consumer's standpoint.

From a consumer's standpoint, the introduction of new innovation in technology might create confusion and uncertainty to them. In many instances consumers may adopt an expectative approach of wait and see in order to obtain more information and reaction from the market prior to making a decision to purchase that particular product. It is imperative that companies must be aware of this so that it focuses its resources and efforts to ensure that the new products launched is successful.

What is TiVo?

Tivo is a digital recorder that helps viewers to take control of what they watch and create their own personal television schedule by using the regular television programs. Features of Tivo include: recording programs as per viewers' request, suggesting the programs according to viewers' habits, ability to skip commercials, pause live television programs and input users' own viewing preferences.

The system is also able to remember the consumer's favorite programs and record them.

What factors facilitate its adoption? (Strengths)

1. Recording the programs - easy to record, pause, stop, rewind, and schedule recording the shows;

2. Skip the commercials - empowering the viewers to take control of what they are watching;

3. Electronic program guide (EPG) TiVo:

* Previews for shows to schedule recording easily with one push of button;

* Season pass - by pressing a "thumbs up" and "thumbs down" button, users can specify their favorite show and then TiVo will record them automatically;

* Suggestion - TiVo can track users' preference and make suggestions.

4. Making TV Viewing Enjoyable ÐŽV the fact that everyone who owned TiVo seemed satisfied with it and 72% of the owners claimed that TiVo had made TV viewing a lot more enjoyable;

5. Better recording quality from its digital technology, easy-to-use features for setting up the recording as well as the capability to skip commercials fast.

What factors make adoption difficult? (Weaknesses & Threats)

1. 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;

2. Pricing - the price seemed too high to be accepted by customers;

3. Awareness - the degree of awareness for TiVo remained weak and consumer remained inert because it is not their priority to improve TV viewing.

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 $100,000. 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.

First of all, TiVo's set-top unit major functions such as pausing, replaying live television and flexible recording were not as easy to explain as they were to experience, it was therefore difficult to convince prospective customers, especially those who are technology shy. Also, the expensive start-up price of US$999 for a set-top box with 30-hour recording capacity was far too high, being more expensive than most television sets and over twice the price of good satellite dish.

One of the biggest challenges was for consumers to change 50 years of TV viewer habit overnight. This poses the biggest problem for TiVo's marketing was trying to get people to change their habits. Also, improving television viewing was not on the top of most people's priority list so the drive to embrace the new product was not high.

There was a lack of adequate awareness for the product because the company was not advertising and rather relied on the manufacturer's representatives who could not give TiVo the amount of support that it required to increase its sales volume. Also, the media who were supposed to help create awareness for the product about the time of its launch ended up writing review that created confusion and uncertainty in the minds of would be consumers.

The early adopters were not doing a good job of enlightening others of the benefits for TiVo despite the fact that they were very satisfied with it. And the fact that TiVo was new in its category with no reference points would discourage or delay consumers making their purchase decision.

Who is TiVo best suited for? (Opportunities)

TiVo is best suited for people who have special television programs that they may be missing because they are unavailable to watch at the time these programs are aired by the television networks and families whose members have different viewing preferences. For these households, TiVo helps reduce conflicts relating to what program is watched at a particular time and for other people it changes their daily routine because they are no longer under pressure to watch their favorite programs at the time when the networks air them, they can now watch these shows whenever they like.

(2)

Now adopt the standpoint of the networks, the advertisers, and the cable/satellite companies: what do they want TiVo to be?

The Television Networks

The television networks want TiVo to serve as a system that would complement their business rather than compete against or jeopardize it. They want TiVo to serve as a system on which they can leverage to conduct more targeted advertising and be able to market advertising slots more effectively, they also want TiVo to be an avenue through which they can monitor the viewer rates of their programs and therefore put more strategic plans in place to increase market share and gain competitive advantage.

The Advertisers

The advertisers want TiVo to be a device with which they can conduct more personalized and targeted advertising. They also want to be able to use TiVo's technology to monitor consumer preference trend analysis pertaining to different types of adverts