Essay on TiVo Case Analysis

Submitted By wheebs
Words: 1256
Pages: 6

The idea of TiVo was novel, and revolutionary. A device that could pause live TV and record any shows you wanted, without the use of cassette tapes. It seemed that such a device would sell like hot cakes. But as a market pioneer, TiVo faced a few issues that needed resolving in order to gain extensive market share before competitors took over.
First, TiVo was unable to create awareness of the product. Pioneers to a market must be able to create awareness of their new product. In addition to creating awareness, a pioneer must convince a customer to adopt the new system. While general marketing wisdom advised a small targeted approach to marketing new products, the existence of 102 million television-watching households would suggest a different approach. TiVo utilized an early adopter targeted approach rather than a mass-media campaign.
Part of the problem with the targeted approach was the price point set for the device and subscription services. An already small market of early adopters was winnowed even further through a $500-$1,000 price point, not including subscription fees. TiVo realized the downfalls to its pricing structure and later proposed a change, reducing the cost of the highest priced device from $1,000 to only $400. To take it a step further, I would recommend TiVo consider rolling subscription fees into the cost of the unit. It might be easier for a consumer to justify the purchase of a fairly expensive unit, if they don’t have to pay subscription fees on top of it. Promotional offers- another mass-media strategy - to get the units moving and gain market share might also pay off in the long run. Perhaps discounting the lifetime subscription service if the higher end model were purchased would be a viable promotion.
TiVo has another opportunity to serve price-conscious consumers. Rather than a one-device-fits-all mentality, it might be beneficial for TiVo to expand their product line before competitors do. A choice of options with various features at different price points would encourage device sales. If a consumer was mainly concerned with being able to record TV for viewing at a later time, they might not need the function to pause live TV. Simpler versions at low cost might allow TiVo larger market share by having appeal to multiple segments.
TiVo also encountered issues with the number of features the device contained. Consumers could easily find them to be confusing to keep straight and understand, even after purchasing. Also, because of the vast features, sales people often touted varying features rather than focusing on the same one. TiVo did have a guide set up on its website, however even they mentioned that it was harder to learn from teaching and showing than experience. To combat this, it would be beneficial for TiVo to offer in-store trials of the equipment with trained professionals to offer set-up and hands on training. TiVo could also benefit from standardized salesperson training. This would eliminate the salesperson guessing or picking their favorite feature to sell. They would have a platform to start with from the beginning. Since turnover in sales is quite high, this would ensure uniformity of the promotion and would allow a focus on the features TiVo wants to highlight, which is changing the way people consumed television and allowing them to record and re-watch as they pleased.
Another issue TiVo encountered was not just selling consumers on a new device to make television viewing better, but to change the way people viewed TV altogether. This should have been the focus of their mass-media approach. Rather than being bound by when a TV show was on, as dictated by a network, TiVo would allow viewers to watch what they wanted when they wanted. Not only was the concept of pausing live TV novel, the idea that a consumer would be in complete control of when and how they watched television was too. After initial roll-out of the device, it was found that it was the complete control, not…