TiVo was an innovative product that aimed to change how people watch television by allowing them to pause live TV, record shows digitally, and skip commercials. However, it faced several challenges in convincing consumers to purchase the expensive new product and change their TV watching behaviors. While early adopters loved TiVo, it struggled to gain traction among the broader consumer base. TiVo's market penetration remained very low at 0.04% despite high satisfaction rates among existing users. To overcome challenges, TiVo needed to better educate consumers about its functionality, lower prices, improve advertising, and focus on reaching the early majority consumer segment.

1. Tivo
Manish Modi
Jaymin Yadav
Ashish Ranjan Parida
Akshun Kant
Pooja Chavan

2. Guy Kawasaki at TEDX Berkeley
“Great Products Polarizes People”

3. TiVo
A true
discontinuous
innovation
Meant to change the
way T.V is watched
Empowering the
Consumer.
Requires change
in behavior
promise of gaining equally dramatic
new benefits
Main Challenge : convincing the consumer to buy an
expensive product in a new product category

4. Problems Tivo faced
• Category Membership
• Networks and Ad agencies
• Inability to Convince consumers to
change their television consumption
behavior.
• Improper Targeting and positioning
• Pricing
• Competitions
• Digital VCR
• Pause/record Live
TV
• Programming the TV
• Cures road rage
• Fast- forwards Ads
PVR, DVR, PDR, IVR,
on-demand TV???
“Super VCR”

5. More Problems
TiVo has had little success convincing the Early Majority segment, that
the risk of change is worth the reward of their groundbreaking
technology. This is evidenced by TiVo's current overall market
penetration level of .04%.
42000 Tivo Subscribers out of 102 million TV Watching households
BUT…
72% of owners claimed TiVo made TV viewing “a lot more enjoyable”.
90% said they would recommend to family and friends.
Early adopters were writing crazily in the online forums of TiVo website.

6. Decision problem faced by Tivo
1. What could be good target segments
(people with disposable income using
VCRs)
2. How to reach out to these segments.
3. What are the competitors and substitute
products (e.g. Video on demand, WinTV)
4. How much are people willing to pay for
TiVo?

7. Company’s Approach
• Personal Selling
• Positioning as an Entertainment
• Focus on corporate side
• Problems:
– Lack of Awareness
– Targeting Early Adopters/Innovators
– Advertising Agency

8. Solution
• Educating Consumer on TiVo's Functionality
• Pricing: Lower down the pricing
• Advertisement: Focus on making people aware of the functionalities
• Sales support: After Sales Service
• Focus on Early majority
• Print Ads: Detailed Benefits
• Customer interface in form of 24*7 Support
• Initial 3 month’s free subscription(Initiate purchase)
• Kiosk setup at malls (Demonstration)
• Free with T.V.
• Brand Evangelism

9. Porter`s Five force Analysis
Threat of New Entrants– Medium to High
• Capital requirements high for brand new hardware
• For software, capital requirements are low, hence threat higher than for
hardware
• Cost disadvantage is independent of scale
• Thus easier for small companies to jump into the mix and for broadcast
companies to produce their own equipment and compete directly
Bargaining Power of Buyers – High
• Switching inconvenient for consumers
• Increase in competitors since company inception
• Majority unable to differentiate product because of poor marketing efforts
• Consumers don’t emphasize on high quality for this product
• The extra features valued by a small niche market within their consumer
base

10. Power of Suppliers – Medium
• Many suppliers in the foreign market to give hardware
• High competition among suppliers
• Low concentration of suppliers
Threat of Substitutes – High
• Competitor environment highly fragmented with slight product differentiation
• The home computers, with decreasing prices, can be turned into DVR. Thus
no evident product differentiation
• Competition from the PVR, DVR, PC segment high
• Customers prefer products at lower prices and requiring no additional steps
Porter`s Five force Analysis (contd.)

11. Competitive Rivalry – High
• New industry
• Two major competitors: ReplayTV, UltimateTV
• ReplayTV: Initial distribution very limited
• Comparable features, Priced $200 higher than TiVo
• Higher commission to sales representatives, better salespeople education
• UltimateTV: Combination of electronic mail, internet surfing, interactive TV,
personal video recording
• Technologically advanced features
• Launch in fall 2000
• New competitors: Personal TV hardware in the TV set, free service by Jovio
Porter`s Five force Analysis (contd.)

12. Evaluating Communication effectiveness
Key Observations:
• According to AIDA model, the objective is to get high personal selling while incurring
moderate increase in sales promotion.
• In TiVo's case, the expenditure on sales and promotion is too high, while the sales
return is too low in May, 2000.
0
5000
10000
15000
20000
25000
30000
Sales and Marketing Expenses (in $ 1000)
Sales (in $1000)
Sales and marketing
Unplanned spending on Sales and Marketing leading to low returns

13. Evaluating Communication Effectiveness
Points of Parity(PoPs) & Points of Differentiation(PoDs) did not match
Points of Parity:
• Similar to VCR in terms of
watching videos at own will
• Similar to VCR in terms of
recording video
Points of Differentiation:
• Pause live TV
• Record digital video of better quality
• Skip commercials
Key Observations:
1. All the ads were focused on humor but were not conveying same PoDs.
2. Due to this, there was confusion among consumers as to what exactly was
Tivo.

14. TiVo's Capability in overcoming competitions
By leveraging on partnerships and right pricing Tivo can overcome competition
Partnerships Tivo can Leverage:
• DirecTv has genuine interest in Tivo and
hence should be made a partner.
• Issue of consumer facing choice:
Depending upon consumer needs
they may select DirecTv-Microsoft or
DirecTv-Tivo bundle.
• Tivo can form advertising formulas with
P&G and General Motors can increase its
revenue.
TiVo's Capabilities:
1. Capture information about viewer
preference for shows.
2. Capture information about people who view
commercials and who skip commercials.
3. Make TV viewing a convenient experience
for viewers.
• Providing suggestions to viewers on
featured topics and actors.
A key point to overcome competition is PRICING. Using the customer perception of
existing products, Tivo can price its products so as to provide greater value to
customers.

15. Thank You!