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Blockbuster Inc. The Marketing Puzzle The Pieces Current Business Model –Mr. Jeffrey Feiereisen Market Solution –Mr. Jared Waks Market Research –Mr.

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Presentation on theme: "Blockbuster Inc. The Marketing Puzzle The Pieces Current Business Model –Mr. Jeffrey Feiereisen Market Solution –Mr. Jared Waks Market Research –Mr."— Presentation transcript:

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2 Blockbuster Inc. The Marketing Puzzle

3 The Pieces Current Business Model –Mr. Jeffrey Feiereisen Market Solution –Mr. Jared Waks Market Research –Mr. David Hahn Blockbuster Delivers –Mr. James Burgess

4 CURRENT BUSINESS MODEL Blockbuster Inc. (Past)

5 4 Ps and SWOT

6 Product and Placement

7 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

8 Promotion Ad

9 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

10 MARKET SOLUTION Blockbuster Inc. (Future)

11 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

12 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

13 Convenience

14 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.

15 The pizza/movie delivery option is more convenient and faster than either by-mail or retail distribution.

16 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

17 MARKET RESEARCH Blockbuster Inc. (Present)

18 Research Methods Survey -Distributed online -89 responses -Non-random, non-representative sample

19 Accuracy and Distribution Age Between 18 and 77 Mean: Median: 22 Mode: 19 (25.33%)

20 Target Market Research Expected delivery price as a function of age – Not significant (P = ) Likeliness to use service as a function of age – Not significant (P = ) Likeliness to order food and movies simultaneously as a function of age – Significant, not descriptive β = r 2 = S e = 1.10

21 Profitability Research Willingness to pay – Average: $6.73 – 95% CI: $ $7.63 Likeliness to use service – 78.67% indicated they are interested in the service

22 BLOCKBUSTER DELIVERS Blockbuster Inc. (Future)

23 Website Integration

24 Full Recoupment of Sunk Costs Achieved in 7 th quarter

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26 Cost Analysis Cost Per Kiosk$26,500 Number of Locations5,155 Total Sunk Cost$136, 607,500 Quarterly Print$3,711,600 Television Advertisement$20,000,000 Total Media Cost$84,539,200 Total$221,146,700

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