CONSUMER BEHAVIOUR.

TIVO CASE STUDY.

KISHMAL NAQVI.
F2017-137.
 Executive Summary.

 Background of the case:

The case deals the issues faced by TiVo (a maker of the individual video recorder) in

2002. This is concerning the measure of deals it can get alongside the way that they

have been working with misfortunes for the last couple of quarters. It additionally

features the various measures TiVo has attempted as overviews and buyer research

ventures to comprehend the client's point of view of their item. This examination was

pointed toward looking for choices with regards to how TiVo could build their client

base. The underneath report exhibits the issues looked by TiVo and the potential

arrangements TiVo can adjust to defeat the equivalent.

 Problems faced by TIVo:

1. Slower start in number of subscribers than originally forecasted:

Contrasted with the anticipated deals, TiVo saw a shockingly moderate beginning.

The fundamental explanation behind this at first was thought to be because of the

absence of mindfulness.

2. Company facing financial problems

TiVo was likewise ceaselessly losing cash. This was clear from the way that the

measure of cash spent on Sales and Marketing significantly surpassed the absolute

incomes that they were receiving consequently. The expanded consumption

additionally didn't add to expanding the deals. TiVo had not made a dime over the

most recent couple of years.

3. Profile of subscribers remain narrow

Lion's share of TiVo supporters were hitched couples, big league salary families

and moderately aged purchasers. Small level of the supporters contained singles,
 lower and center pay families, the youthful and older. This brought up an issue

about TiVo's all-inclusive allure.

4. Disparity between customer satisfaction and growth

Post buy demeanor reflected significant level of consumer loyalty yet then again

the volume of deals was all the while slacking. This was opposing to TiVo's

desire, of expanding deals volume through their current clients.

5. Perceived Risk of Purchasing

A little level of the buyers were from the center and low pay gatherings. This was

on the grounds that, despite the fact that the mindfulness and goal to purchase was

rising, it didn't convert vigorously. The primary explanation behind this was that

clients look for references from their companions and colleagues preceding

creation any buys.

6. Company’s focus on sales, not evangelism

Deals are useful for an organization however evangelism is useful for clients.

TiVo's higher perspective advertising zeroed in on special deals strategies instead

of grasping excitedly blunt clients who could impact deals for client's sake.

7. Pricing Issues

In addition to the prices of the recorder which the customer had to pay, TiVo also

increased the subscription fee to $12.95. This would make already-expensive

monthly cable bills even more daunting. The exhibit 5 also supports my

conflicting hypotheses.

 SOLUTIONS:

1. Pricing options:

It includes following options,

 Reduction of prices
 In view of the high passage cost, numerous buyers were not ready to

purchase TiVo. By lessening the costs, TiVo could draw in more

purchasers in this manner expanding its client base. It would likewise build

the income for them. The transient misfortune in benefits would constantly

prompt more noteworthy development and occasion to look after clients.

 Financing

One more option can also be to offer the product to the customers through

installments. This will help TiVo increase its sales among the low and

middle income households.

 Rebates:

Special schemes which would give rebates in the form of “a year’s

subscription for free in return for 3 years fees in advance” could also be

provided by TiVo. This could be done during the festival seasons like

Christmas, Easter etc. They can also provide limited time offers (10-15%

reduction for one quarter).

2. Promotional Options:

It includes the following aspects,

 Free Trials

TiVo could look at providing free trials which would help to promote the awareness and

also at the same time would provide an experience to the customers and help to eliminate

the perceived risk.

 Refer a friend awards

From the case facts, we see that most of the customers bought once they were influenced

by their friends. TiVo should increase their focus on embracing this customer community.
For a product with such fervent customer evangelism, a unified and concentrated focus on

word of mouth would surely increase the sales. Customer evangelism is driver of all

strategies and tactics. To promote this further, they could offer rewards to customers who

refer TiVo to their friends and relatives and influence them to buy the same. This would

act as an incentive.

 Money back guarantee

To increase the customer confidence on the quality of the product, TiVo can look at using

a scheme of money back. This would encourage the customers to buy and test with the

product and given that the quality is good, this would increase the sales.

 Forging relationships with cafes and sports bars

Given that games like the Super Bowl was watched by most of the customers, TiVo could

look at forging strategic alliances/tie-ups where such games were broadcasted. This

would help to increase the awareness among the potential customers at a dramatic pace.

 Costumer Plus Delta

In addition to their core product, TiVo should aim at creating an online community

feedback system. This would help to solicit customer inputs and use it to make company

decisions. Also the same could be used by TiVo to address any concerns that customers

had which would in turn strengthen the relations with the customers.

3. Evalute their distribution Chain:

 They must evaluate their distribution chain , they need to educate the distributors

how to sell the products. Distribution and accessibility should be addressed

properly.

 Research Approach:

I will discuss the research approach in detail that it was not focused how to break through

resistance in consumer behaviour. Concept of myopia deems to be the problem here. It only

addresses to innovators but less focus on rest of the consumers i.e early majority, late

majority and laggards. They put more focus on product and less focus on the how consumer

behave towards the product. Surveys were performed that how consumers are using the

product , to evaluate their level of satisfaction. Attitude survey was performed to know their

customers but none of the surveys were able to find the gap between intention to buy and

action to buy.

o Conclusion:

After studying the case facts and detail analysis of surveys I would suggest Keast to conduct

the surveys that help in bridging the gap between customer intention and actions to buy

TIVO. Keast should address the reason for slow penetration in the market. Price analysis

should be done again so that it can be in reach of everyone. Keast should must adopt the

some strategy to break the resistance of customers towards new product. Pre – launch survey

should be done because it has been observed that people show some reluctance in adopting

new technology no matter how good the technology is , some some efforts must be done to

minimize the resistance. We believe the best way for TiVo to solve their problems would be

to use a combination of a pricing and a promotion option. The ones we consider which would

work the best in conjunction are “Rebates & Financing” and “Refer a friend award”. By
using the pricing option, TiVo would be able to attract more customers from the low and

middle income groups etc which would help to increase their customer base. This would in

turn increase their sales thereby providing a solution to their low sales and net loss problem.

On the other hand, with the promotion option, they would be able to attract more customers

through their existing customers. This would solve the remaining problems they are facing

like perceived risk, disparity between customer satisfaction and sales. In the long term, the

best option we believe would be for TiVo to create partnerships with cable companies. By

doing this they can promote package deals which would act as an incentive as well for

customers. At the same time they have to make a strong effort to maintain good relationships

with subscribers who would in turn market the company by word of mouth.