The much anticipated launch of TIVO in Australia has been a disaster, with sales a proverbial lone firecracker in comparison to the full-on pyrotechnics display they were budgeting for. The product has been plagued with problems from the start in product composition, distribution, & Pricing. This has led to growing speculation that seven media is going to drop the once revolutionary TIVO product. So what went wrong with their marketing plan?Product composition
The main reason for purchasing TIVO is to cut out ads & record television to a hard drive...they fail to satisfy this need. The product only works on free to air television in Australia, can only record 32 hours of HD TV or 64 hours SD TV.
Distribution
A key success factor of the technology market is distribution. The purchase decision for some consumers is an impulse, for others it is a convenience and for the rest it is a luxury item. This means that by having a wide distribution (all the major distributors JB, Harvy Norman, Dick Smith), you can attract the early adopters (groups 1 & 2) with minimal effort. JB hifi refused to stock TIVO, leaving Harvey Norman to go it along. Major problems!
Pricing
First mover advantage is worth a lot in the technology market, usually price skimming tactics target early adopters and helps to fill the coffers quickly (pay off the advertising budget), yet without satisfying key success factors like distribution, price skimming restricts many from purchasing it and leaves you with no sales and in need of a clearance sale to move the stock.
TIVO came into the market prices at $699 retail. In comparison, "Nero who has been around longer than Tivo said that consumers who already have a tuner-equipped PC, can buy similar software for around $99. Buyers will also get a one-year subscription to TiVo's program guide updates. Renewal will cost $99 per year".(Smart House)
Josh Strawczynski's Opinion
Sensational flop! They really are trading off their name at this point, one that obviously does no have as much carry in Aus as in the USA. Don't forget that TIVO got big because it came with pay TV in the US, here you have to fork out your hard earned folding stuff to get it. The product will not be generating too many favorable reviews and I doubt many referals will come of it.
Sam Berringer's Opinion
I was really looking forward to TIVO being launched in Australia, but like many marketing strategies, this one has failed to deliver. I doubt that they are down and out, but if I were in that board room, I would be cutting prices and adopting a new positioning strategy ASAP!
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