Name: Ayesha Anwar Tiwana
Consumer Behavior WAC # 05 TiVo in 2002: Consumer Behavior Summer 2015 Max Marks: 25
1. This WAC is due back by end of day, Friday, August 28, 2015. 2. This WAC has a word limit mentioned against each question and you are required to share how many words each of your answer is at the end of each reply. 3. You must email your attempts by the deadline to
[email protected] in PDF format. 1. According to Keast, “there is a mystery in the sharp contrast between the inertia of prospects and the evangelical zeal of TiVo users.” As an emerging expert in consumer behavior, how would you tackle that mystery? What do you think could be going on? Beyond your pet hypothesis, try to be creative and list a large number of conflicting hypotheses by taking multiple points of view. What might “evangelists” mention as a cause of their failure to sell TiVo to their friends? What might a “couch potato” say about his reluctance to buy TiVo? What would you expect a top executive at NBC to say about the situation? What explanation would the founder of TiVo love to hear? Hate to hear? (600 words; 15 Marks) List of conflicting Hypothesis Resistance to technology Fear of technology Though people have tendency to buy but willingness and ability to buy are different Pricing Survey questionnaire was not up to the mark that addresses the exact demand of people Survey was not surveyed in the proper sample population Didn’t addressed the target market Market Segmentation. Underestimated the audience. Existing Cable industry DVR and TiVo seems to be equivalent Word of mouth plays a vital role in making good or bad perception External Costs and external Benefits Relationship (Negative Externalities) In balance of knowledge between the buyer and a seller Poor timing of distribution. Key channel partners not involved effectively What is going on? A major implication is that word of mouth is the main source of information and the traditional persuasion means are not very effective. Data is subjective because it applies to innovators and not to the next wave of users. As mentioned in Exhibit 3, emphasis should not only be given on the product features but the advertisement should contain users who give their honest opinions about their positive experience. 1/6
Name: Ayesha Anwar Tiwana Just awareness is not enough, customers need to understand the product but it is difficult to achieve in a normal sales environment based on purely informational elements. Consumers need to develop a gut feeling that the product will have a positive impact on their life. Evangelists fail because: They are excited to describe their own experience. Users don’t speak much about features they primarily focus on control benefits, watching what you want, when you want. Nonusers do not seem open to being convinced. User excitement is off-putting for nonusers who are quick to deny that TV might be that important in their life. Couch Potato fails because: The product needs to be personally experienced in the context of one’s own life, but he is too lazy to do so, he does not care about commercials NBC executive would say: There are small segments of consumers who need TiVo and big segments that need it less. People start from vastly different interpretations of what TiVo actually is; a substitute VCR or a tool to enhance live TV watching. People don’t want to look like TV matters in their life, while conversations about TV shows might be frequent, few people want to brag about their TV technology investments. Current users are of a type not representative of the mainstream population. To deepen the understanding three pathways should be taken; researching current users to a fuller extent, predicting the next wave of users and researching non users. Hence root cause should be drawn out. TiVo founder would: Hate to hear: The attitude survey is an ad hoc instrument created in response to TiVo’s emerging hypothesis that the impact of TiVo in people’s lives could not be reduced to the sum of the machine’s features and that much of televisionviewing habits are so ingrained that the impact of TiVo is difficult to assess. Hence, to penetrate more they have to decrease price. Love to hear: According to exhibit 8 TiVo is not a lifestyle-enhancer whose benefits go beyond the enjoyment of TV itself. It appears that TiVo’s importance is most easily compared to that of other entertainment devices as opposed to devices of lifestyle enhancement such as cell phone or microwave. On the other hand the fact that 40 % of users might acknowledge that TiVo is more important to them than their cell phone is viewed by some as intriguing. So, marketing team will make the new marketing plan accordingly so that loyal customer’s base could be attained. (599 words)
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Name: Ayesha Anwar Tiwana 2. TiVo is a new technological company and the management’s approach to research and insight has gradually evolved over time. What have been the different stages in their exploratory journey? What conclusion is this journey converging to? If you could timetravel to the early hours of the company, what would your advice be to Keast in terms of the research they should be conducting (the type of insight they should be looking for) at the outset for a more effective launch? (400 words; 10 Marks) Approach to research: The research was not properly planned and executed but it was still informative and thought provoking. They did not expend much effort in understanding the consumer’s point of view in the consumer’s terms. They were partial when it came to understanding the current users. The research did not devote any part to understanding the resistance of consumers and how to break that. The research had the problem of being myopic. The research was focused on innovators and very little research was conducted on the rest of the adopters like early majority, late majority and laggards. Their research was product oriented not customer oriented. Exploratory journey: Their journey included surveys that found out consumer’s usage patterns regarding TiVo. Their level of satisfaction was evaluated. Attitude surveys were then performed to better understand the consumers. The reason behind the gap between intention to buy and action to buy was not reflected in the surveys. The detailed information on consumer behavior reflected that the products should not be expressed as a list of features and functions, additional symbolic meanings should also be assigned. Recommendations The research should be productive which means that the researcher’s firm hypothesis should also be disconfirmed by reality. The survey should reflect the reason behind the gap in action to buy and intention to buy and should suggest ways to bridge the gap as well. The research should reflect why the penetration was slow in the market. Research should be able to analyze customer loyalty and satisfaction and devices incentives for people who buy the product and convince others to buy it too. Research should measure consumer perception of value and develop a pricing strategy accordingly. In contrast price should also be analyzed to make sure that the potential customers can afford it. Research should include ways to understand the resistance of customers towards the product so that the resistance can be broken. Product should be rolled out in a test market and for that pre-launch survey should be conducted to understand why consumers are reluctant 3/6
Name: Ayesha Anwar Tiwana to try new technology so that efforts can be made to minimize resistance. (353 words)
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