Plan A TiVo

• Product: bundle with DirecTV.

• Price: price reduction to $399 for the 30-hour recorder, with a monthly fee.
• Place: same channels, most likely with an improved salesmen education.
• Promotion:
– Integrated campaign featuring “lifestyle” commercials and print ads (as opposed to
“features”)
– focused on raising “awareness, interest, curiosity, and promotion of the TiVo brand identity.”
– The ads were supplemented with extensive product descriptions and demos on the web.
 Plan B

• Target: The couch potatoes who never mastered their VCR and the VCR geeks.
• Concept: Maximize your TV experience.
• Product: Increase the memory size, don’t bundle with DirecTV, but rather introduce
this as a revolutionary recording function (the movie player function of the VCR is
already replaced by the DVD).
• Price: No monthly fee.
• Place: Push through specialty consumer electronics stores.
• Promotion: Communication emphasizing the season pass and pause live TV.
Campaigns of demonstration.
 What happened
• During Fall 2000, TiVo executed plan A. CBS in fact refused to show TiVo’s “Network Executive”
spot. TiVo also supplemented their campaign with the following elements:
– Promotional price discounting, e.g., $100 rebate on the service (in response to price reductions
from ReplayTV).
– A TiVo unit was given to celebrities who might endorse it (e.g., Rosie O’Donnell, Howard Stern).
– A 20-hour and a 60-hour recorder were added to the existing product line. The 20-hour unit
was developed as a replacement for the 14-hour recorder; TiVo held promotional giveaways to
exhaust the inventory of 14-hour recorders.
– In early December 2000, TiVo offered existing subscribers $50 if they could convert two other
consumers into adopting the TiVo service.
• This marketing effort led to a total of 73,000 subscribers by the end of September, and a total of
154,000 by the end of January 2001 (up from 48,000 in June 2000):
TiVo Subscription
Creating
Customer Value
 How Indra Nooyi Turned AN OBSERVATION
Into marketing Strategy
• https://hbr.org/2015/09/how-indra-nooyi-turned-design
-thinking-into-strategy
https://www.designhill.com/design-blog/evolution-pepsi-l
ogo-design-hundred-years/
Maslow’s hierarchy of needs (1943)

Image by J.
Finkelstein, 2006.

8
THE VALUE
PYRAMID
 Maximizing Customer Lifetime Value

• Customer lifetime value (CLV)

– The net present value of the stream of future profits expected over the customer’s
lifetime purchases
Maximizing Customer Lifetime Value
Maximizing Customer Lifetime Value
The Consumer’s Journey??
 Key Psychological Processes

• Perception
– The process by which we
select, organize, and
interpret information inputs
to create a meaningful
picture of the world
 Perception

Selective attention

Selective distortion

Selective retention

Subliminal perception