Tivo Group 6

TIVO IN 2002…

CONSUMER BEHAVIOR

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SUBMISSION BY: GROUP 6

• Diptej Amerkar                (804)
• Abhinav Bhatia                (806)
• R. Krishna                (826)
• Neelam Mayenkar        (833)
• Vaibhav Powar                (849)
• Akshata Virgincar        (861)

ANALYSIS of “TIVO IN 2002”

ISSUES INVOLVED:

• Surprisingly slower start (number of subscribers lower than originally estimated)

• From ‘Exhibit2: Financials’ we can conclude that the Marketing and Sales costs have shown little significance in increasing revenues for TiVo

• Lack of awareness about TiVo: Poor Marketing! 
• Profiles of subscribers were lower: No Mass Appeal

• From ‘Exhibit5: Demographic Data’ we get to know that…the higher percentage of TiVo subscribers are formed by

• Age Groups: Above 24 years and Below 55 years
• Married Couples
• High Income Families ($51K and above)

•  Failure of Microsoft’s ‘Ultimate TV’:

• Could not create an impact on people, which lead to its withdrawal from the industry.
• No promotional campaign from Microsoft after failure

• Disparity between customer satisfaction and growth

• Post purchase attitude reflects high level of customer satisfaction

• Perceived Risk

• Middle and low income households small % of purchasers
• Awareness and intention to buy are rising, action is not following
• Customers seek reinforcement from friends prior to purchase

• Best Buy was considered the exclusive retailer of TiVo: Poor Distribution Channels

TIVO OBJECTIVES:

• Generating positive cash flow even under slow growth rate condition
• Identifying potential customers and understanding their needs
• Using advertisers, television networks, content owners and service operators to play a role in TiVo’s relevance in life of the customer

KEAST’S OBSERVATION AND OBJECTIVES:

• New users consist of affluent families, they watch TV but are busy at the same time, TiVo helps them organize time
• Customers are emotionally attached to TiVo (could add to TiVo’s benefit)
• To reach potential customers who don’t see TV as a problem and to make them understand how TiVo can improve their experience
• To use customer surveys, customer responses to decide how to convince customers to buy TiVo

CONSUMER BEHAVIOR

• Satisfied Needs: Facilitates watching of the programs at any time of the day or night (by using Trick Play)
• Better Utilization of Money spent
• Strengthens Interpersonal Relationships: Can devote more time towards spouse and children and have some time for yourself too (self management)
• Improves Social Life: Does not force one to leave a function unattended only to watch a particular program.
• Patronage: Possibility that the existing customers will most likely recommend it to others
• Appeal Factor: Customers find TiVo’s features more attractive than most of the other Electronic gadgets.

RECOMMENDATIONS (Plan of Action):

• Need Arousal and Awareness: Make the networks and advertisers use the result from the Super Bowl experiment to convince people to buy TiVo.
• Maximize Customers Benefits & Strengthen Relationships:

• Provide free subscription for 3 months to tie the customers to their products
• Provide Referral benefits to its existing customers.

• Risk Factor : Use survey results to show how TiVo can change their lives

• People buy products based on the risks attached to them - Lesser the risk more they buy

• Level of Interest : Target people between 18-24 years of age

• They are more likely to spend on entertainment and would prefer technology
• Promotion of TiVo in Universities

• Product Distribution & Promotion:

• Do not limit to Best Buy only;  improve the distribution system by involving more cable providers and retailers
• Create partnerships with cable providers and retailers, use them to educate people about TiVo, promote package deals

SUPPORT

• “Bridging the gap” requires provision of the “TiVo experience”

• The “TiVo experience” cannot occur at a retail demo
• One month trial provides true “TiVo experience” for consumer
• Use high level of customer satisfaction to advantage

• Price cuts will:

• Increase sales volume and penetrate broader consumer market
• Increase market share, Increase cash flow
• Position TiVo to build and continue relationship with subscribers
• Observe demand at lower prices
• Short term loss in profits will lead to greater growth and opportunity to maintain subscribers

• Future of the industry
• Use cable companies as a distributor
• Consumers are looking to combine TV, internet, and phone lines