Tivo Case

Key Issues:

TiVo’s dilemma lies in their failure to shift the paradigm of their consumer’s habit of television usage such as their typical viewing consumption. Though TiVo seemed to satisfy their early customers but they fail to extend to their majority customers. Attributed to the problem is TiVo’s ineffective promotion, poor price strategy and inept market segmentation.

Diagnosis:

TiVo’s innovative product, Personal Video Recorder (PVR) requires their consumer to change their behavior in television consumption with the promise of gaining quality of life by saving time and no rushing to watch a program. Basically, the consumer takes control of the network programming to their hands. This comes a challenge to TiVo since the consumer are used to the old basic viewing habit that was ingrained over a period of 50 years.

There are several investors, CBS, NBC, Discovery and Walt Disney, which supported TiVo in a way that they see an opportunity that they can leverage TiVo so they can be featured in all services that TiVo offers. A negative connotation in using the product may skip commercials altogether and impact the advertising airtime of some networks.

They also partnered with consumer electronics giants, Sony and Philips, to ensure product reliability and effective distribution. This advantage paved the way to have big electronic chains, Best Buy, Circuit City and Sears to partner with TiVo to ship and distribute their product and promote to their retailers nationally. However, this left TiVo’s promotional activities restricted to their own website and a very limited mass media promotion and brought confusion to the product identity. The outsourcing of retail distribution and in-store communication led to some incompetent sales person thus suffers the sales of the product. The price strategy is also expensive