If distribution is really the key to success in the Australian home entertainment market, then Tivo is one step closer to achieving a win. Off the back of a dismal launch in which Harvey Norman was the only retailer to give them a shot, the American 'super-device' went back to the blackboard and redesigned their offer. Since returning to the market, Tivo has penned an important deal with JB Hi-FI which will stock their product over Christmas in 100 stores nationally. The acid test is now on, will their marketing strategy hold up?
The pricing strategy is taking advantage of their first mover advantage beginning with a price skimming $699 per unit. Is this sustainable in the future? The price certainly is not, so I would hope that their profit margins are enormous. Given that JB Hi-Fi have finally agreed to terms, I am assuming that Tivo offered them the proverbial golden goose of sales deals. This could complicate things when competition comes into the market, the price will need to fall to maintain competitive.
The branding is excellent and I think this will be the cornerstone of their campaign. You can't turn on American television shows without a Tivo reference, so brand awareness and brand recall are metrics they can leverage. However, contra to this, is a Tivo unit an aspirational product? I can't see why consumers would buy it when the better, cheaper competitors come into the market.
Josh Strawczynski's Opinion Tivo will record some reasonable sales this year, but only because they are the first ones in the Australian market. As with any technology, the early adopters will make up the main component of their sales, but I can see the checkered flag appearing already. If Tivo want to expand their life cycle, their marketing mix will need to change.
Sam Berringer's Opinion The price is way to high, it should be somewhere around $500, their advertising needs to start pumping now to build for Christmas and they need to expand their distribution points to Dick Smith and much much more.
The Acid Test For Tivo's Strategy
If distribution is really the key to success in the Australian home entertainment market, then Tivo is one step closer to achieving a win. Off the back of a dismal launch in which Harvey Norman was the only retailer to give them a shot, the American 'super-device' went back to the blackboard and redesigned their offer. Since returning to the market, Tivo has penned an important deal with JB Hi-FI which will stock their product over Christmas in 100 stores nationally. The acid test is now on, will their marketing strategy hold up?
The pricing strategy is taking advantage of their first mover advantage beginning with a price skimming $699 per unit. Is this sustainable in the future? The price certainly is not, so I would hope that their profit margins are enormous. Given that JB Hi-Fi have finally agreed to terms, I am assuming that Tivo offered them the proverbial golden goose of sales deals. This could complicate things when competition comes into the market, the price will need to fall to maintain competitive.
The branding is excellent and I think this will be the cornerstone of their campaign. You can't turn on American television shows without a Tivo reference, so brand awareness and brand recall are metrics they can leverage. However, contra to this, is a Tivo unit an aspirational product? I can't see why consumers would buy it when the better, cheaper competitors come into the market.
Josh Strawczynski's Opinion Tivo will record some reasonable sales this year, but only because they are the first ones in the Australian market. As with any technology, the early adopters will make up the main component of their sales, but I can see the checkered flag appearing already. If Tivo want to expand their life cycle, their marketing mix will need to change.
Sam Berringer's Opinion The price is way to high, it should be somewhere around $500, their advertising needs to start pumping now to build for Christmas and they need to expand their distribution points to Dick Smith and much much more.
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