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Blockbuster: Marketing strategies that lead to the fall of
Transcript of Blockbuster: Marketing strategies that lead to the fall of
Blockbuster Video was founded in 1985 in Dallas, TX by David Cook
Began as a data service company; was convinced by his wife to open a movie rental store
Cooks Data Service became Blockbuster Video June 1986
1987 Cook sold company (18 mil) to Scott Beck, John Melk and Wayne Huizenga
Huizenga as CEO dedicated most of the late 80's closing other rental companies
Due to the sucess of Netflix and Redbox, blockbuster extended its services to "by mail" services, online streaming efforts, and eventually kiosks. Despite
efforts Blockbuster could not compete and filed for bankruptcy.
1997 Netflix emerged as a result of a disgruntle customer with a
$40 late fee
August 2004 launches online DVD rental service in the US as a direct competition with Nextflix
December 2004 dropped late fees- 16% of total revenue- offered to
buyout competitor Hollywood Video - Hollywood Video declined
December 2009 Blockbuster tries to compete with new competitor Redbox by adding DVD kiosks
March 10 Blockbuster has a 1 billion debt and file for bankruptcy Sept 2010
Blockbuster tried to implement survival pricing objectives during the rise of major competitors Netflix and Redbox.
Blockbuster reduced prices, eliminated late fees, created movie passes, midnight releases of top movies, rewards card and gift cards in an attempt to keep customers and attract new customers while they caught up with the strategies from Netflix and the newly formed Redbox
refers to the place a brand occupies in customers minds relative
to their needs and competing brands and to the marketers
decision-making (Mullins and Walker, 2010)
Blockbuster's brand was focused on providing a movie/game rental service... fast, easy, convenient and at a low price.
They began to not only rent movies but sale movies and movie related items
Throughout its inception Blockbuster held true to that brand....until the threat of real competition
MSA 660: Marketing Strategies
Central Michigan University
April 16, 2014
Blockbuster: Marketing strategies that lead to the fall of Blockbuster Video
Blockbuster's Rise and Fall
October 1992 Blockbuster expands to music "megastores"sold Blockbuster music to
Warehouse Music in 1998
From 1994 to 1997 Blockbuster has 3 CEO changes and was sold to Viacom for $8 billion.
'96 Transforms into a "retail movie rental store" selling Movie paraphernalia, recently view movies, games...etc
Mullins, J. W., & Walker, 0. C. (2012). Marketing management: a strategic decision-making approach.. New York, NY: Mcgraw Hill Higher Educat.
Strauss, S. (2011, November 3). Brand Extension . Youtube. Retrieved April 23, 2014, from http://www.youtube.com/
Want, T. (2005, October 25). Marketing Strategies: Brand positioning . Youtube. Retrieved April 23, 2014, from http://www.youtube.com/
Poggi, J. (2014, January 1). Blockbuster's rise and fall: the long, rewinding road. The Street . Retrieved April 16, 2014, from www.thestreet.com/stock.../blockbuster-timeline.html
Although it is thought that Netflix and Redbox put Blockbuster out of business it was not just the competition that is responsible.
inconsistent leadership and services
shifting from the brand created
extending its brand too late
A business that would still be relevant today had it stuck with the brand and improved on it instead of resorting to gimmicks to attract and keep customers.
Blockbuster video will always be a source of nostalgia for those who grew up in the "VCR" era, however, it is hard to mourn a company that destroyed so many small business