Price StoreSale PriceRental Price Distribution In-Store Blockbuster$19.99 to $24.99$3.99 to $9.99 Hastings Entertainment$19.99 to $29.99$4.99 to $9.99 Wal-Mart$14.99N/A By-Mail Blockbuster N/A $9.99 to $19.99 Netflix N/A $4.99 to $16.99 Video-On-Demand Blockbuster$9.99 to $24.99$2.99 to $3.99 NetflixIncluded in By-Mail Cinema Now$9.99 to $14.99$2.99 to $3.99 Apple iTunes$9.99 to $14.99$2.99 to $3.99
Strengths Brand equity Customer Relationships from stores Adapting stores to environments Good relationship with studios Especially with iTunes 40% share of domestic retail rental Weaknesses Few distribution centers Low inventory Retail locations are expensive Ineffective in attracting customers Neglected Video-On-Demand No AppleTV competitor Opportunities New Distribution Channels Co-marketing (with fast-food restaurant) Renovate retail locations MovieLink (Video-On-Demand) Threats Economy Wal-Mart (lowest prices) Netflix (by-mail) Apple iTunes (Video-On-Demand) Studios interested in sales not relationships SWOT Analysis
Place kiosks in the stores of a fast food delivery chain to facilitate the opening of a new distribution channel for our product: Mission Delivery
Dinner and a Movie Delivery Service Partnership with Dominos 90.4% of rented movies are watched during dinner hours 33.7% of the video rental market consumes delivered food while watching rented movies
High Convenience Low Wait Time High Wait Time Low Convenience Nearly 80% of our respondents selected Convenience as a main factor in choosing a rental service.
The pizza/movie delivery option is more convenient and faster than either by-mail or retail distribution.
Proposal Papa John Pizza = 77 points 24.4% of market preference Dominos Pizza = 75 points 20.7% of market preference 75.3% would be likely to order from an establishment that delivered pizza and a movie
Accuracy and Distribution Age Between 18 and 77 Mean: 31.55 Median: 22 Mode: 19 (25.33%)
Target Market Research Expected delivery price as a function of age – Not significant (P = 0.2902) Likeliness to use service as a function of age – Not significant (P = 0.8045) Likeliness to order food and movies simultaneously as a function of age – Significant, not descriptive β = -0.0215 r 2 = 0.0964 S e = 1.10
Profitability Research Willingness to pay – Average: $6.73 – 95% CI: $5.83 - $7.63 Likeliness to use service – 78.67% indicated they are interested in the service