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TiVo  Positioning  Statement   Nancy  Sagar  ~  Management  472A  ~  Friday  October  2,  2009    

RECOMMENDED  POSITIONING  STATEMENT   For  tech-­‐savvy  TV-­‐loving  households  who  are  sick  of  missing  favorite  shows,  dealing  with  constant   interruptions,  and  figuring  out  the  VCR,  TiVo  is  the  world’s  first  Digital  Video  Recorder,  a  sleek  set-­‐ top  box  that  automatically  records  their  favorite  entertainment,  giving  them  complete  freedom  to   enjoy  sports,  movies,  network  and  cable  programming,  even  news  on  their  own  schedule.  Unlike  a   VCR  or  DVD  player,  TiVo  recommends  programs  that  they’ll  love  while  storing  up  to  60  hours  of   material  so  they  can  watch,  delete,  fast  forward,  and  replay  their  collection  at  whim  …  even  pause   and  rewind  live  TV  when  the  phone  rings.    

RATIONALE   This  positioning  statement  focuses  on  the  11.7  million  “new  enthusiast”  households  that  TiVo  should   target  at  launch  (see  Exhibit  A).    Described  as  “tech-­‐savvy  early  adopters,”  these  educated,  “time-­‐ famined”  professionals  enjoy  the  highest  income  ($55,000)  of  the  four  segments  of  TV-­‐involved   households  TiVo  identified.    These  households  are  also  willing  to  spend  $700  on  average  for   consumer  electronics  products  –  40%  more  than  the  next  most  affluent  segment,  a  crucial  behavior   given  TiVo’s  price  point  of  $499-­‐$999  plus  service  fees.    The  new  enthusiasts  also  provide  the  critical   case  studies  and  word-­‐of-­‐mouth  the  company  will  need  to  cross  the  chasm  and  cost-­‐effectively   market  to  the  next  logical  segment,  the  13.7  million  “faithfuls”  (Exhibit  A),  a  segment  of  more   conservative,  “Middle  America”  families  who  are  heavily  influenced  by  family  and  friends  in  their   consumer  electronics  purchases.         Nancy  Sagar  –  TiVo  Positioning  Statement    

 

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The  Kellogg  case  clearly  identified  three  major  pains  that  TV-­‐watching  consumers  experience:   inconvenient  scheduling,  interruptions,  and  difficulty  programming  the  VCR,  so  this  statement  calls   out  those  problems  with  gusto.    It  goes  on  to  herald  TiVo  as  “the  world’s  first  Digital  Video   Recorder.”    Since  TiVo  is  beating  their  competitors  to  launch,  they  need  to  trumpet  that  first  position   to  have  a  chance  at  owning  this  new  category  in  the  mind  of  its  target  segment.       They  also  need  to  clearly  define  this  new  category.    While  “DVR”  isn’t  as  sexy  a  category  name  as   “Personal  TV,”  it  helps  alleviate  one  of  the  product’s  major  issues:    it’s  difficult  and  expensive  to   explain.    For  example,  even  after  a  10-­‐minute  demo  with  a  focus  group,  a  moderator  still  had  to   spend  another  ten  minutes  explaining  the  unit.    By  using  a  descriptive  category  name  like  DVR,  the   company  provides  an  important  data  point  that  can  help  translate  the  product,  engage  potential   customers,  and  inextricably  link  the  TiVo  brand  name  to  the  most  anticipated  new  technology   product  category  in  history.     Finally,  the  positioning  statement  needs  to  hone  in  on  the  specific  problem-­‐solving  capabilities  TiVo   offers  to  new  enthusiasts.    Since  these  households  most  appreciate  the  “cool  gadget  &  schedule   control  /  time-­‐shifting”  (Exhibit  A)  features,  the  first  and  second  sentences  highlight  those  features   and  illustrate  the  benefits  using  copy  that  brings  the  TiVo  lifestyle  to  life.   •

“Sleek  set-­‐top  box”  alludes  to  the  product’s  cool,  “it-­‐product”  wow  factor.  

“Automatically  records”  refers  to  the  season  pass  functionality,  one  of  the  most  popular   product  features  and  differentiates  from  older  technologies  (VCR,  DVD).  

 “Giving  them  complete  freedom  to  enjoy  sports,  movies,  network  and  cable  programming,   even  news  on  their  own  schedule”  highlights  the  benefits  of  the  schedule  control  /  time-­‐ shifting  features.  

“Watch,  fast-­‐forward,  and  replay  at  whim  …  even  pause  and  rewind  live  TV  when  the  phone   rings”  helps  readers  visualize  –  even  experience  -­‐-­‐  how  the  product  works.  

Nancy  Sagar  –  TiVo  Positioning  Statement    

 

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EXHIBIT  A:    Segmentation  of  TV-­‐Involved  Customers  (as  presented  in  the  case)   Total  US  TV-­‐owning  households:  98  MM   TV-­‐involved  (70%  of  TV-­‐owning):    68.6  MM     (Green  =  recommended  targeting)       Size  (%  of  TV-­‐ involved   households)   Number   Average  Income   Description    

Most  appealing   feature/benefit  of   TiVo  

New  Enthusiasts   17%  

11.7  MM   $55,000   Tech  savvy,  early   adopters;  affluent,   active,  time  famine   professionals;   educated,  skews   male,  but  decision  is   a  “family  purchase”   Cool  gadget  &   schedule  control  –   time  shifting  

Stores  shopped  for   Specialty  Electronics   electronics   Stores  &  Mass   Consumer  Electronics   Average  consumer   $700   electronics   purchase  

Faithfuls   20%  

Surfers   13%  

Hopefuls   50%  

13.7  MM   $48,000   Middle  America  –   above  average   income.    TV  is  the   center  of  the   household.   Families.  

8.9  MM   $30,000   Tech  savyy,  lower   income;  just  starting  out   in  life,  but  grew  up  with   technology.  Skews   single.  

Saving  favorite   shows  for  the   whole  family  to   watch  together   Mass  Consumer   Electronics  

Show  off  to  friends;   Programming/interactive   features  

34.3  MM   $30,000   Aspire  to  be  like   new  enthusiasts,   but  unlikely   because  lower   income  &   education.   Primarily  families.   Status  

Discount;  Web  (including   Discount  &  Retail   eBay)  

%400  

$400  

$200  

 

Exhibit  B:    Key  comments  from  “Inside  the  Tornado”  chapter  2,  p.  15-­‐16     Early  Adopters  =  Visionaries.    Visionaries  have  an  extraordinary  influence  on  high  tech  because  they   are  the  first  constituency  to  bring  real  money  to  the  table.  …      And  because  they  tend  to  love  the  limelight,  they  also  help  publicize  the  new  innovation,  giving  it  a   necessary  boost  to  succeed  in  the  early  market.    …       No  one  else  in  the  Technology  Adoption  Life  Cycle  has  any  interest  in  being  first.     Nancy  Sagar  –  TiVo  Positioning  Statement    

 

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Better Positioning for TiVo