Our MBA Pricing Strategy final project analyzed the Internet TV set top box market We surveyed 50 consumers and segmenting the respondents based on their utility values for a series of features for Apple and Google TV devices. From these results we projected each vendors market share and recommending product and pricing strategies.
5. Five Forces Internet TV Set Top Box Pricing Strategy, Fall 2010 Internal Rivalry – HIGH Aggressive Price Cuts Large key players Limited product differentiation Entry - HIGH Low barriers to entry for existing TV/ DVD / game console manufacturers Substitutes & Complements - HIGH TV Manufacturers expanded into space High availability of substitutes Supplier - HIGH Software and App programmers Hardware components Vertical Integration Buyer – MEDIUM HIGH Direct - MEDIUM Via Resellers/ Service Providers - HIGH
7. Attributes for Conjoint Analysis Pricing Strategy, Fall 2010 Brand Logitech Google TV Sony Google TV Apple TV Price $99 $199 $299 $399 Picture Quality 720p 1080p Download-able Apps Yes No Seamless Search Yes No DVR Yes No HD Video Calling Yes No Full Web Browser Yes No
8. Current Product Comparison Pricing Strategy, Fall 2010 DVR Search App Market Browser 1080P Support HD Video Calling Price $299 $199* $99
Market Attractiveness: Medium Low Market not mature yet Internal Rivalry High Threat Aggressive Price Cuts – Sony reduced from 399 to 299 Players are large companies with resource availability Product differentiation is relatively low Entry High Threat Low Barriers to Entry for existing tv/dvd/game console manufacturers Low cost advantage, low product differentiation Substitutes & Complements High Threat DVDs & Movie Theaters & Media PCs Complements -> TV, which already expanded into web enabled space. Supplier Power Dependent on software and app programmers to make product attractive Hardware component manufacturers Some opportunity for supplier to vertically integrate Buyer Power Medium Threat Direct to Consumers – Medium – Consumers, depending on the segments, can be price sensitive or are after feature set Via Resellers/ Service Providers - High
Added a V2. Because we have 8 attributes, this layout does not seem to work too well…
Rajeev to discuss
To confirm – reasons for dropping 4 samples
Phil – 16 - http://blogs.barrons.com/techtraderdaily/2010/11/29/logitechs-revue-a-black-friday-casualty/