Case Study_ Tivo in Poland.doc


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Case Study_ Tivo in Poland.doc

  1. 1. Executive Summary Tivo in PolandBased on past analysis of the future economic state of Poland a few key indicators helpeddetermine our suggested product selection.The Gross Domestic Product has consistently been on the rise at a rate of 3.3% as of 2005Poland’s economy stands to further benefit from entering the European Union in 2004Women are becoming more prevalent in the workplaceEducation levels are on the increase with a stronger push for Professional occupationsPolish citizens watch a considerable amount of television and many pay for premiumchannelsAlong with other details not as key as the ones mentioned above, the research team hasexplored the idea of adding a new product genre to Poland, digital video records with Tivo.Basic changes are needed to adapt Tivo for Polish use.Voltage needs to be changed to 220 volts to accommodate European outlets.Tivo boxes are large in the United States, due to smaller residences (often apartments) theunit needs to be smaller.Tivo programming guides need to have several points of entry, due to the low availability oftraditional land line phone service.The initial marketing campaign will be catered towards innovators with cable only upon initiallaunch. Product will be catered towards all television users within the first year. Marketpenetration is based on United States forecasting goals from the original Tivo product launch.Year 1: 2% of all Television users Year 2: 3% (5% total adoption rate by end of year 2)Tivo marketing campaign will be based on two core messages.“Tivo… so simple ANYONE can use it” – to eliminate the fear of new technology and to showthe ease of adapting Tivo into current lifestyleThe other marketing campaign will focus on the Tivo benefits. Which include but not limitedto:Keep your programs foreverDigital quality picture and soundMultiple points of accessibility to chose Tivo recordingDownloadable formatsSeason Pass Tivo will be priced based on adjustment comparisons between the United States and Poland. Prices will be based off of original Tivo pricing in the United States.Free unit with lifetime subscription at $194.25 (USD)
  2. 2. $7.75 monthly service fee with no contractUnit box: $74.99 with no contractDVD unit $199.99 (regardless of contract status)Marketing Goals would have a strong presence in consumer electronic stores. This wouldinclude:Marketing Field Representatives – educate store employees on TivoIn Store Demonstration stands – “try before you buy”Point of Purchase (POP) materials – pocket cards and literatureMarketing funds will be heavily allocated to Television. Television is a necessary complementproduct for Tivo. The marketing budget will be:50% Television Ads25% Marketing Field Staff10% POP5% Newspaper/Radio5% MiscellaneousOur target market will be drawn from the strongest television viewing audience, TVN.16-49 year oldsInnovators (initially)Urban population (i.e. Warsaw and other large cities)Above average incomeFamilies with childrenWith a strong marketing push that emphases brand awareness, user friendliness, andcompetitive advantage of alternatives it is our recommendation that the Tivo product belaunched in Poland. Johnny Schaefer Leah Burdette Jamie Harding Tivo in Poland Research and AnalysisThe focus of this study is to research the idea of adding an entirely new product into Poland.The product in question is Tivo, the original digital video recorder (DVR). Research wasconducted through a variety of sources including personal interviews. This research report willbriefly discuss a snap shot of Poland and its economy, as well as information about theproduct Tivo, and the strategy for implementation. The goal of the Tivo product launch will beto show the strong positive attributes over its outdated competition.
  3. 3. Poland is a republic located in central Europe. Recently as of 2004 a member of theEuropean Union, Poland’s economy has been consistently growing at a rate of 3.3%.i Socialstructures are evolving in Poland as well, with more women entering the workforce. Dualdecision making attributes are also being more widely accepted throughout the region. With acompetitive job market at times, the push for higher education is ensuring many Polishcitizens a more lucrative career, and a better way of life. There are 38.6 million Polish at theend of 2005, with the average salary (in USD) being approximately $12,700.iiSince Television is a necessary complement of Tivo. Our exploration begins with theTelevision market. In Poland electronic consumer spending is booming. There is an estimated13 million television sets currently in use in Poland. It is estimated that regional televisionreaches 63% of the population.iii A growing percent of Poles recreational time is now spentwatching TV, as currently the average Pole watches around four hours of television per day.This has led to a large demand for a wide variety of channel availability in Poland. This is alsolargely due to the fact that over half of all households in Poland watch television via cable(around 4 million subscribers) or satellite dish (around 600,000 subscribers). According, Polish viewers have a real choice when it comes to television as competition issharp between stations.Shopping Habits for Poles are somewhat similar to those in the US, as the majority of menand women share shopping responsibilities.iv Indeed, there are a growing number ofpartnership-based families in Poland, which leads to a growing number of families that sharehousehold responsibilities and shopping habits. As the income level and education levelincreases per household, so does the level of shopping responsibilities shared between bothmen and women. As for where Poles shop, in recent years, visiting shopping malls has grownto be one of the most popular pastimes. However, despite the dynamic development of bigshopping centers, local shops in residential areas remain the most popular. Research foundthat most Poles shop no more than five minutes away from where they live. v Studies alsofound that most Poles shop on Fridays and Saturdays at any particular time of day.Tivo, or any DVR for that matter, would be at the very introductory stage of the productlifecycle for Poland. This product is extremely difficult to find available anywhere. The onlycompetitors that we were able to find were that of There was a variety ofinformation available about their DVR’s however these products are so new there, it wasimpossible to find where they were available or how much they were sold for.Target Market for Tivo in Poland would be the individuals that own the 13 million televisionsets currently in use in Poland. We would base our target market largely on what TVN, themost popular television station in Poland, bases theirs on. They look for a target demographicgroup made up of 16-49 year olds, of urban population, with above average income andeducation.vii TVN proudly announces that their success is based on their innovativeentertainment formats, popular shows and the reliable news, which is what a Tivo customer islikely to be looking for in television programming.The marketing objectives for launching Tivo in Poland would be to create awareness anddemand by being the first to provide this type of service. We want to become the iPod of thisindustry in Poland and we want Poles to instantly equate Tivo as the only reputable choice forDVR’s in their country. The rate plans to be discussed later will also help encourage “longterm” commitment to the Tivo product. Market penetration for the product will be comparable
  4. 4. to that of the Tivo launch in the United States goals; 2% of all television in the first year, and3% additional growth in the following year.viiiWith the growing number of employed workers in Poland, along with a variety of televisionsshows available. Tivo would be considered an asset too many working families. Polishfamilies currently use VCRs to record television programs similar to those in the UnitedStates. The advantages of Tivo are as follows:ixRecord any program available on your television unit at any timeSet up “season passes” to ensure that you never miss your program. Season passes allowthe Tivo subscriber to program their unit to tape any given program every time it’s on. There isno need to remember to Tivo the product every day or weekly. Tivo will remember to record itfor you.Pause live TV at any time. Whether it is checking on food in the oven, or merely taking abathroom break, you’d never miss a second.Unlike VHS tapes, the qualities of the programs are recorded digitally. The sound and picturequality will be substantially improved. Unlike VCR tapes, you can watch the programs againand again with out continuing picture loss. Weather related elements are also unaffected byTivo (ex: Hot weather has been known to ruin VHS tapes).The ability to record the program at any point while you’re watching it. Unlike VCRs, you canwatch nearly all of a program, and at any time decide to record the entire program. Tivo willstore the entire program for you to record or until another program come on.Set up your Tivo recording programs from any P.C. through the Tivo website. You don’t haveto be home to record your favorite program.Download your recorded Tivo programs onto a Playstation Portable and IPOD Video. Watchyour favorite tivo’ed programs anywhere!Compatibility will need a few modifications. The voltage in Europe as a whole is different thanthat of the United States, currently Tivo boxes run of 120 volts for United States outlets. NewEuropean Tivo boxes will have to be created with the 220 voltage that is applicable.x Also Tivounits update the program catalog through phone lines, since phone lines are “hit and miss” soto speak in Polandxi, they could perhaps try developing a Tivo unit that could be updatedthrough a wireless cellular connection or through an Internet connection. Although internetusage is considered costly per some, nearly 30% of the populations are on line.xiiTivo is simple to use. The remote control and program guides are very users friendly. Theinterface and buttons are very similar to that of a VCR; users coming from a VCR to Tivo willfind the process very easy. Users having a first time recording device may have to read themanual or the “help” option which is available through the Tivo programming guide.Tivo units should be put on display at any major electronic retailer, and ideally anywhere thatsells Televisions and VCRs. There should be an in store display available for users to “trybefore they buy” the unit. This will allow them to see the relative advantage of Tivo right in thestore. Despite the expansion of international chains of supermarkets, hypermarkets, and largespecialty stores, the retail market in Poland continues to be fragmented. The top ten retailchains in Poland are foreign, and some of them we could consider working with are Macro,Geant Casino, Auchan, Jeronimo Martins, IKEA, Carrefour, HIT, Castorama, OBI, Leclerc andTesco.xiii According to an interview with Wieslawa Marzena Chalimoniuk, Polish internetusage is minimal because computers are very expensive.xiv This will also eliminates any fears
  5. 5. that the unit is too complex to use in their homes. The Tivo box is clearly observable generallybeing a black or gray unit with the Tivo unit located on the front. Polish families visiting friendswith Tivo will be able to spark conversation starters by asking, “What’s that box on top of yourTV?” This will allow a word of mouth advertising to continue to increase the product’sawareness.Tivo units will offer a 30-day trial period. The unit and the service may be canceled andreturned anytime within 30 days. This allows the customer to try the product and decide if it isright for them. With so many advantages listed above, we are confident are rate of return willbe very low. Tivo subscriptions can be canceled at anytime, although the box is theirs to ownafter 30 days.Product packages and the physical box should be very small. Many Polish families andindividuals live in apartments where space is limited.xv The box will be sized at approximately4 inches deep, 6 inches long and 4 inches tall. This will allow the unit to sit comfortably on ornear the television unit. The packaging itself will be slightly larger to include the remotecontrol, instruction manual, and applicable cables. The package will be very bright with TIVO!written very clearly on the box. There will be a picture of a Polish family gathered around thetelevision. The slogan on the box will read, “never miss your favorite program…ever and keepit…. forever!” (Appendix 1) On the backside of the product it will list a few of the productbenefits mentioned above such as; “The ability to record any program any time, and watch itat your convenience.” “30 day trial” will also be on the front of the package. Although in theexample of the product box is written in English, the product will be written in Polish uponproduct launch. All Tivo services online, programming, and guide will be all available inPolish.The biggest problem with marketing this product in our country is that brand awareness andrecognition is non existent. Many Polish residents will be unfamiliar with the concept of Tivoand exactly what it does. The risk of those fearing the technological complications of the unitcan be difficult to overcome. An aggressive television ad campaign should be implementedupon Tivo’s launch. With the slogan “anyone can do it!” Perhaps showing a Baby Tivo’ing achildren’s program and the slogan “anyone can do it!” coming at the end. Also the family petsetting up a Tivo program with the same slogan… “Tivo….anyone can do it!”Also with the 30-day trial we are overcoming the potential for buyer remorse on the product.Also being able to “put the product in your hand” in retail store outlets will give furtherexplanation to the users about the product. An aggressive education program should beimplemented to ensure that all retail store employees know all the benefits of the Tivo unit.We will mainly want to focus on the ones that have cable or dish, which is over six million.There are over 100 channels on polish cable/dish.xvi This means that there can be a demandfor Tivo to record the people’s favorite shows. They also offer movie stations and packageslike they do in the US through cable. Some popular stations in Poland are TVN, ATNV, ITV,and Telewizja Trwam, TV Polania, and Viva Polaka.xvii We want to aim for the popular ones soeveryone can see our product. These are the stations that our customers are going to berecording their favorite shows. Some popular TV shows we may want to put our commercialsin are The Mole, and Big Brother Poland.Specific allocation of marketing funds will be broke down as follows:
  6. 6. 50% Television advertising – with so many Poles watching Television, those who watchtelevision more frequently, thus seeing our ads more frequently will be more included to seethe Tivo advantage.25% Marketing Field Staff – these Tivo troops on the ground will ensure that all electronicstore employees will become experts on the product, to help eliminate the fear of the newtechnology.15% Store Point of Purchase materials (POP) – Fancy in store displays, pocket cards for thestore employees, literature for customers, etc. to help promote the “Tivo experience”5% Radio and Newspaper – To help establish brand name recognition, and consistency ofthe product being mentioned. Helps great the “buzz” about Tivo.5% miscellaneous expensive – Tivo booths at fairs or trade shows, special holiday promotion“give-a-ways”, and other small one time expenditures (appendix 2)We aim to price this product to Poland as an affordable price for this new technology. Wewant the “common man” to be able to afford this product, so we cannot make it a prestigeitem. We want to appeal to the whole 63% of the country who own a television. Cable inPoland costs around $30 USDxviii, so we don’t want to price it as much as the cable they arealready paying for, we want to make it quite a bit lower in price and look at is as an add one toyour personal home entertainment system. If we compare this to the US average salary of$12,700, we find that is only about 1/3 of what the average salary is in the US. Poland uses acurrency called the Zloty, which is 0.312373 of a US dollar. We propose that a lifetimemembership in Poland will cost around $194.25, box included. In the US, Tivo sells for$16.95/month with a three-year contract in the United States.xix We suggest we could offer aslight lower price of monthly service for $7.75. We will also sell the individual unit for $74.99and the DVD unit for $199.99. (appendix 3) We don’t want this product to come close to the$30/month cable fee people in Poland are already paying for fear of lower adoption rate.The top five populated counties in Poland are Warsaw, Lodz, Krakow, Wroclaw, andPoznan.xx From our interview, we found that the most technical savvy counties are actuallythe top 3. We want to focus on these counties because of course; they are the larger morepopulated cities. There are also cable companies that have products very similar to Tivo, suchas Dish Networks, Divo. These companies sell their product with their cable services. Sincedigital recording technology isn’t apparent in Poland, we could sell Tivo the same way.Partnering with a cable company that is already established gives Tivo’s brand more validity,as well as eliminates the risk of a future competitor on the market. With over 4 million cablesubscribers in Poland this market is ripe. Originally Direct TV had a partnership with Tivo, untilthey elected to use their own DVR service.Based on this strategy we fill that our goals are reasonable and obtainable for a productlaunch for Tivo in Poland. Poles currently use VCRs so they are familiar with the concept of“taping” programs, and with dual incomes many families have a higher degree of flexibleincome. In order for the marketing campaign to be successful three elements are required.Conveying the Tivo advantage and showing the value of Tivo over a conventional VCR.Explaining the user friendliness to eliminate fear that Tivo is difficult to operate and use, andfinally, pricing it accordingly to show the value in the product.i Economic Global Prospects: 2005
  7. 7. ii CIA World Factbook – Poland: 2005iii CIA World Factbook – Poland: 2005iv Personal Interview: Wieslawa Marzena Chalimoniuk 3/07/2006v Polish News: Economy 2006vi Samsung Product Guide: 2006vii Polish Television:,in,Poland,518.html 2006viii Personal Interview conducted with Tivo employee 4/04/2006 (name omitted)ix Tivo! 2006x Enjoy Europe- Electricity: 2006xi CIA World Factbook – Poland: 2005xii International Statistics – Poland 2006xiii Strategis Canada – International: 2006xiv Personal Interview: Wieslawa Marzena Chalimoniuk 3/07/2006xv Personal Interview: Wieslawa Marzena Chalimoniuk 3/07/2006xvi International Statistics – Poland 2006xvii Poland’s Television List: 2006xviii Personal Interview conducted with Tivo employee 4/04/2006 (name omitted)xix Tivo – Buy Tivo!: 2006xx CIA World Factbook – Poland: 2005
  8. 8. 40 hour recorderThis unit will run at $74.99 (USD) with no obligation of service.Users can cancel at anytime.Unit is free with lifetime subscription 40 hour recorder w/ DVD burner$199.99 USD with no
  9. 9. contract, cancel at any time.$199.99 with lifetime subscription. Marketed initially at high endinnovators.TIVO UNITS AVAILABLE UPON PRODUCT LAUNCH$7.75 month svc fee $194.25 lifetimeAppendix 3