TiVo Changes Marketing Strategy

A marketing strategy is a process that is used by an organization to concentrate the limited resources on the greatest opportunities availed in order to increase its sales. Marketing strategy mainly aims at helping the company to achieve a sustained competitive advantage in the market. It is mainly centered on importance concepts that lead to customer satisfaction.  Therefore a marketing strategy is aligned with organization overall strategy and helps the organization to achieve goals laid down in strategic planning.  A marketing strategy will mainly focus on development of products, promotion, distribution, pricing and customer relationship (Laermer andMark, 2007).  It defines marketing goals and how they will be achieved. From time to time, organizations tend to change their marketing strategy depending on changes taking place in the market. Marketing strategy can also be elicited by changes in internal environment.  To understand this well, this paper will look into how TIVO, makers of TIVO hard drive and digital video recorder (DVR) changed its marketing strategy and the factors that elicited that change.

Background to the company

TIVO is one of the leading companies in the entertainment industry.  Since it was formed, the company has been recognized as one of the most innovative companies providing a wide range of products in the entertainment industry. The company was established in 1997 making it a pioneer in the home entertainment.  The company offered brand-new products and services and was credited with developing the world’s first digital video recorded.  TIVO is renowned maker of hard drive based Digital Video Recorder (DVR) but it also produces a wide rang of products including Wireless Adapter, web videos,  and many others. The company has not lost its vision and continues to revolutionize how consumers watch and access home entertainment. The mission of the company is to create and continually enhance a new, easy and much better way to watch television.

Earlier marketing strategy and why the company changed it

To take the advantage of it entry into the uncompetitive market, TiVo had strategies to use the best marketing strategy that will assist it to reap the maximum. TiVo become t one the innovation that were to change the television market in the 21st century as it enable individuals to watch record television programs. This means that individuals could record television programs and watch them later (Silva, 1998).  Like any other innovators, the company had strategy to capitalize on their unique products and therefore the sold their units to consumers and also required them to subscribe to get their TV services.

This marketing strategy was aimed at helping the company not only to sell more units but also to get more customers (Laermer andMark, 2007).  It just operated like the common electorni companies that just sell their products as a unit.  DVRs were new sensation in the market and the company aimed at utilizing this new invention. (Silva, 1998)

This marketing strategy produced positive results for the company as it was able to acquire a large market share. In 2001, company revenues had grown by more than 43% and the number of subscribers had increased to 280, 000. TiVo Series2 DVR was priced at $399 and also attracted a monthly subscription fee of $12.95 (Group Project, 2002).   Market research data in 2001 showed that TiVo had a large market share in this industrial segment as shown below: (Group Project, 2002)

TiVo – 47%

ReplayTV – 35%

Philips – 7%

Sony – 6%

UltimateTV – 4%

Satellite – 1%

This data also showed that consumers were also buying TiVo DVRs and using them on other companies. The data had revealed that by 2001, 60% of the DVR owners had TiVo DVR.  This research also revealed that among the consumers interviewed, 1 out 10 had hoped to purchase a DVR by the summer of 2001 (Group Project, 2002).  It is in light to the above data and the changes taking place in the market that TiVo decided to changes its marketing strategy.

Although the company had a large market share compared to competitors, the emergence of cable and satellite providers posed a new challenge to the company (Silva, 1998). The level of competition has increased over the years forcing the company to rethink of its marketing strategy. Most of the cable and satellite providers required their customers to purchase a digital decoder and paid a monthly subscription. Consumers found this option cheaper since it did not attract a higher monthly subscription unlike in TiVo where they were required to purchase a DVR $399 and pay monthly subscription of $12.95(Group Project, 2002). It changed its marketing strategy to come on top of its competitors.

Current marketing strategy

TiVo had started losing out to the new cable and satellite entrants and it had to rethink its marketing strategy. The company has realized that there has been a drastic a change in t he market due to the emergence of cable and satellite providers who have pushed their set-top DVRs edging away TiVo. Although the company had used the same marketing strategy as its competitors, it found at that it did not have any competitive edge over them.  The new marketing strategy was therefore aimed at creating a competitive advantage over competitors (Laermer andMark, 2007).

Source by Forest

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