Essay Preview: Tivo
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1.i) The existing sound research provides the following findings: first the existence of very specific “types” of customers (which could be representative of target segments) such as single males and more recently the growing number of families with young children. Secondly TiVo customers are highly educated and affluent. Another finding is that a majority of the new customers are continuously recruited by “word of mouth” referrals rather than television advertising. Lastly, around 90% of TiVo customers are highly satisfied with the product. These findings are based on sound research practice and can be used to improve TiVos marketing strategy.
The results from existing research suggests the challenges we are faced with today can be summarized simply as “lost sense of positioning – no clear target segment – no clear message”. In regards to positioning, we have uncovered that the general market does not really understand what TiVo is or what the real benefits are: how does TiVo change my entertainment experience and was it really just a super VCR with a hefty price tag? When the product was first introduced, TiVo wanted to position it as a revolutionary tool that would empower its customer into becoming a “Network Executive” for their household by being in control of the programs they wanted to watch, and deciding when they would watch them. However as with most technology products, we found that the TiVo experience and concept was difficult to convey to its target segment Ð- evident in TiVos lack of sales. Adding to this challenge, was the fact that there was no uniform way that TiVo was being presented or sold in retail stores like Best Buy; existing research showed that some sales representatives said that TiVo was a super VCR, however they were not able to give live demonstrations in the store to show what the product was capable of doing.
1.ii) Research has uncovered meaningful findings that we feel will be significant in helping TiVo improve its marketing strategy. First, we know that TiVo has never had a problem with generating satisfaction over the years and results from our User Experience Group survey states that as many as 90% of our customers were satisfied with their TiVo and would highly recommend it . Having this data will aid us in changing the focus of TiVos marketing campaign from television ads (that can sometimes make the benefits of TiVo complex to grasp in thirty seconds) and build on the “word of mouth” testimonials from satisfied customers (which research has shown to be the most effective way TiVo has been able to gain new customers). Part of TiVos improved marketing strategy should be to create incentives for referrals, such as cash rewards or a few free months of TiVo service for signing up family and friends, to encourage this kind of grass roots advertising. Our research findings reinforce this approach we are undertaking.
TiVo needs to understand who their target segment is and have an articulate message for these segments. The research results uncovered that TiVo launched an ad campaign that did not specifically explain what benefits the product would deliver to the target customers. The results also indicated that the early adopters, a group comprised mostly of young males, were TiVos main segment but it was never explicit TiVo was targeting them. We now realize that not only should TiVo want to continue to have them in its target segment, but they need to penetrate the market of a segment that has grown considerably since TiVo was first introduced. This would be the audience comprised of affluent, busy families with young children . Since the surveys were aimed mainly at the early adopters, we need to approach this group differently.
Additional research has shown that the product has been purchased mainly by high-income segments. This is an indication that TiVo is priced too high and for TiVo to make its product attractive to a larger audience, they need to lower the price.
2.i) TiVos main marketing problem is that it did not specifically target any market segment. As a result TiVo is not clearly positioned and advertising is communicating mixed messages (throwing managers out of the window, cops wanting to use TiVo), failing to make clear what TiVo offers to a specific target segment. Clear promotion and communication are even more important since TiVo represents a whole new product category, which aims to change traditional TV viewing patterns; this needs explanation. The second problem is that there is no good pricing strategy in place. While early adopters are usually willing to pay a premium, TiVo needs to understand at which price level it can win over the early majority of TV viewers who will not pay premiums anymore. The price issue will not be the focus of our research project since it cannot be resolved only through primary research.
Thorough research shows that young professionals and young families, especially those with high incomes, are market segments that TiVo can specifically target. Further research can provide information on which TiVo features these segments value most and how TiVo can communicate to these groups.
2.ii) The research needs to answer the question, which of the many features TiVo offers are most critical to our target segments and could make people want to buy one. In addition, TiVo should find out where it can reach the target group through TV advertising and whether a possible referral program is worth launching. With this information, an advertising campaign that has a targeted, clear message and focused channels will be possible.
2.iii) The research to be conducted is in the form of descriptive research, focusing on the target segments. It is necessary to find out what the target segments think and want (unlike former research that focused on all users and did not check results against the opinions of non-respondents). Descriptive research helps to explore and understand consumer motivations. Therefore, it is appropriate in this case and we will proceed as follows:
1.0 5,000 TiVo users (users that have been TiVo users for at least 6 months) will receive a questionnaire (see attachment) with 10 questions aimed to understand the relative importance of different TiVo features. One question (number 10) is designed to discriminate between two segments, young professionals and families. The sample size has been chosen in order to assure statistical relevance in the event there is a low response rate.
1.1 Before sending out the questionnaire, it will be pre-tested by several independent individuals, who will check it for consistency. This is done so that the possibility of flaws, that could affect the integrity of answers, is discovered before questionnaires are mailed out.
1.2 The questionnaire