Group6 - Tivo in 2002 Case

TIVO IN 2002

CONSUMER BEHAVIOR

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 2002ISSUES 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 thatthe 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 Microsofts 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 ChannelsTIVO 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 TiVos relevance in life of the customerKEASTS 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 TiVos benefit) To reach potential customers who dont 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 TiVoCONSUMER 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 TiVos 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 dealsSUPPORT

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