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TiVo in 2002: Consumer

Behavior
Abha Bhuskute
Vijaya Suryavanshi
Kaniz Aeliya
Sahil Agarwal

10P133
10P179
10P205
10P228

Group 8

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Case background
• TiVo, Inc. was incorporated in 1997 - Creator and pioneer of the
also known as PVR

DVR

• TiVo’s appeal - Innovation in features and product
• Early on, TiVo had some success among young single men, and
enjoys the same success with higher income families

now

• TiVo partnered with the satellite service provider, DirecTV, and
exclusive retailer Best Buy, a nationwide electronic store
• Slow growth in subscriber addition (380,000 in March, 2002) as
compared to initial forecasts
• TiVo has been losing money for the past 3 years
• Huge cost of sales and marketing have little to show for it
Consumer Behaviour

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Issue
• Precarious financial position
• Number of subscribers to TiVo is substantially
lower than previously forecasted
• Subscriber profiles are narrow, indicating a
small target market
• Promotion of the TiVo category, including PVR
and DVR, relatively low
Consumer Behaviour

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Narrow consumer profiles
• Saturation of TiVo within specific consumer segments - family
households and single men with higher annual incomes, and welleducated
• Singles (female), low and middle income households (<50K), the
young (<25 yrs) and the elderly consumer (>54 yrs) remain a
small percentage of TiVo subscribers
• 7% are single women
• Only 3% are between 18 and 25 years old
• People with annual incomes below $50K are less than 25% of the
subscriber base

Consumer Behaviour

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High customer satisfaction, but poor
growth
• 90% of customers are satisfied
• > 95% would recommend the product
• > 80% enjoy TV more after purchasing TiVo

• Satisfaction level over 90% proving the products quality and
usability, but subscriber growth has been below expectations

Consumer Behaviour

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Consumer Behaviour
• Positioning based on consumer behavior within a certain
segment only, so marketing efforts end up being focused on an
already existing and well-penetrated segment
• No recent research conducted in other niches such as lowincome households or people under 25 years old
• Big influence of friends & family in purchase decision
• Qualities are not “tasted” until it is personally experienced
• Good post purchase Behavior – survey suggests that existing
customer will most likely recommend it to others
• Fascinated by TiVo , trying to apply same functions in nonTiVo situations
Consumer Behaviour

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“Breaking Through the Inertia”

Consumer Behaviour

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“Breaking Through the Inertia”
• TiVo customers are fiercely loyal to their TiVo, and can
greatly influence future purchases among family members
and friends
• Leverage this high customer satisfaction and influence by
offering “referral discounts” in the form of discounts off of
monthly subscription rates
• Quickest way to improve financials is to increase
sales/subscriptions
• Reposition TiVo in terms of pricing and product offering to
make it more acceptable to different customer segments
Consumer Behaviour

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Recommendations

Customers like to maximize benefits from resources they
spend

Provide free subscription for 3 months to tie the
customers to their products

Provide Referral benefits to its existing customers.
Existing customers referring new customers will get
referral money




Repositioning TiVo’s Value Proposition
Upfront Discount in prices
Indirect reduction in prices by reducing ownership costs
Special time-bound discounts for lean periods
Discounted Gift packs (subscription pre-paid) for
Christmas/New years etc
Consumer Behaviour

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Recommendations
• Make use of Super bowl experiment findings to convince
advertisers and network operators how TiVo can be beneficial
to them as well
• Improve distribution system, use more cable providers and
retailers
▫ Provide retailer support in the way of retail demonstrations
and sales person training

Consumer Behaviour

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Thank you!