...thousands units. This new technology was TiVo and it should have been a hit. It was founded in 1997 by Jim Barton and Michael Ramsay. Lagging TiVo Sales in Early 2000 Sales of TiVo’s digital video recorder (“DVR”) lagged in sales in early 2000 due to lack of retail execution, improper pricing, and lack of awareness. Lack of Retail Execution Marketing for TiVo’s DVR at the point of purchase failed in early 2000 because its product: * required extensive explanation and physical store demonstrations, * the manufacturer representatives did not give the amount of support required to market the product, * distribution partners did not have a proper appreciation for its sense of urgency, and * 50% turnover in electronic stores’ sales force made training a challenge. For example, inadequately trained sales employees pitched TiVo as a “high-end” VCR while the press called it, in part, a personal video recorder (PVR), personal digital recorder (PDR), and intelligent video recorder (IVR) collectively resulting in consumer confusion of the product. Improper Pricing Initial pricing for the product was around $1000 USD which TiVo reasoned was reasonable for those early adopters of the DVR technology. However, the price point was twice as much as most satellite systems and more expensive than most television sets. Without being made aware of the benefits of the product (as discussed above) coupled with a high price point, TiVo initially failed to develop a strong following...
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...ALICE M. TYBOUT AND JULIE HENNESSY TiVo As Brody Keast, TiVo’s senior vice president of marketing, pored over research reports and market forecasts, his excitement grew. In one report Odyssey Research concluded, “We have never seen a product test better in terms of consumer intent to purchase.” A report from AC Nielsen Vantis was equally enthusiastic, noting, “Of forty-four consumer electronics concepts we have tested, we’ve never had a product test as high in what we call the trifecta: intensity of liking, new and different, and need fulfillment.” TiVo’s market prospects seemed even brighter than Keast had dared to hope. At the same time, Keast recognized that the TiVo launch would need to be managed carefully. The company’s goal was extremely ambitious: it hoped to revolutionize how Americans watch television and become a central player in the emerging interactive TV industry. Competitors such as ReplayTV had similar products and designs on the future, so TiVo’s success was far from guaranteed. Keast believed that the product positioning at launch would play a key role in determining who would win the race to personalize television viewing. The Vision Americans have a love/hate relationship with television. In all, 98 percent of the country’s 100 million households own at least one TV. On average, each household has 2.4 TVs and spends seven hours and fifteen minutes per day viewing television. In 1999, 78.1 million households spent $34.4 billion to receive cable TV service...
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...Thetj decide what we watch and when we watch it. ..." "Network programmers-who needs them? Program your own network. TiVo. TV your way." Between these two lines, the TiVo commercial showed a pair of burly men throwing a TV network's chief programmer out of the window of a tall office building. Brodie Keast, TiVo's vice president of marketing and sales, had replayed the ad a dozen times on that morning of May 2000, and he still found it to be as hilarious as the first time he saw it. The TiVo digital video recorder, beyond its many advanced features, made a big idea real-if you owned the TiVo black box and subscribed to the TiVo service, you could really control what you watched and when you watched it. TiVo's marketing team intended to get that big idea across through a catchy communications campaign, with a boldly humorous tone that would help consumers envision how TiVo restored the fun of television. Fourteen months into the launch, TiVo had signed up 42,000 subscribers, with a current rate of 14,000 new subscribers per quarter. With 102 million TV-watching households in the U.S., that was only about .04% penetration, despite availability in most major consumer electronics stores across the nation. Yet everyone who owned TiVo seemed satisfied with it, with 72% of owners even claiming that TiVo had made TV viewing "a lot more enjoyable." Ninety percent said they would recommend it to family and friends. Early...
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