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Adam White

on 29 November 2012

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Transcript of BLOCKBUSTER

Questions? Natalie Christopher
Marco Lara
Kelsey Pobar
Adam White Company History Filed for Bankruptcy in 2010

Primary Competitors Background - Market Challenges Current Big Picture Traditional Focus Current Big Picture - 4 B's Proposed Big Picture Detailed Proposed Targeting Proposed Strategy: Positioning Summary and Key Takeaways Questions? Blockbuster started in Dallas, Texas in 1985.

Early success is linked to state of the art logistics and supply chain. Utilization of sophisticated market analysis and database.

Filed for bankruptcy in 2010, purchased by Dish Network the same year

Has struggled since mid 2000's to compete with Redbox and Netflix Business
Objectives Source of
Volume Marketing
Objectives Product/service
Promotion Segment
Position Evaluate Fundamental Entity:
Blockbuster Goal:
Maintain Current
Customer Basis Core Competency:
Widest Variety of
Entertainment Selection Retention Stimulate
Demand Segment Main:
Video Entertainment
Rental Provider Dynamic:
Brick and Mortar
Stores Target:
Lower income/ Middle
Class Families Business
Objective Marketing
Objective Source of
Volume Segment
Position Product
Promotion Evaluate Fundamental Entity:
Blockbuster Goal: To steal share 5% of competitor's customers (1,412,500 customers)

Produces: $169,500,000 Gross Revenue - See 4 B's Acquisition Steal Share Main Variable: Video entertainment rental provider Dynamic Variable: Greater Variety Target: Upper Middle/Upper class Families, Parents Current Belief Current Do Consumer Proposition Desired Belief Desired Do Blockbuster has a large
variety of videos I rent from Blockbuster,
only if it is closer than Redbox and I
do not have Netflix Enjoy the latest movies, easier and more conveniently with Blockbuster Blockbuster has the largest selection
of movies and games and is the most convenient I always rent from Blockbuster for my entertainment needs Bodies Bucks Behaviors Beliefs No strong target market any longer. Blockbuster has adequate selection
but does not provide service options
or prices consumers want customers are leaning to low price rentals
and online streaming subscriptions that
Blockbuster does not offer Previous target market, 18-36 year olds, with some college experience. 49,616,000 people. 2010
Net income: -$268 Million

Net income growth: -20% Video entertainment provider Core Competency: Widest variety and easiest access Product: Streaming in addition to On Demand.

Add Blockbuster specific device Price: Match NetFlix Place: Reduce number of stores, improve them Promotion: Re-educate consumers about benefits of Blockbuster Product: In-store rentals
Mail Rentals
On-Demand Price: competitive pricing for by mail service
On-Demand competitive with Redbox
In-Store non-competitive premium Place: mail, online, in-store Promotion: nothing Bodies Beliefs Bucks Behavior Proposed 4 B's Steal Share:
Netflix: 26,300,00
Redbox: 3,000,000
Gamefly: 450,000

28,250,000 Blockbuster provides greater variety of dependable services
at a competitive price

10% belief change
2,825,000 people Switch to Blockbuster for all their video rental needs
50% - 1,412,000
5% total 1,412,000 people
1,412,500 X $120 ($10 fee x12 months) =$169,500,000 Problem Statement Educate customers on product benefits
Through renewed advertising efforts Update product availability
Provide streaming subscriptions in addition to On-Demand movies On-site vending machines for after hours renting Blockbuster branded internet device, increase Blockbuster accessible devices Blockbuster continues to lose market share, due to consumer's perception that Blockbuster is an antiquated provider for video entertainment Recommendations Blockbuster is losing market share quickly Additional Recommendations Reduce number of brick and mortar locations Improve quality of brick and mortar stores Gamefly Aaron Gonzalez

36 years old

Has wife and daughter

Makes $70,000 a year

Participates in beer league softball Blockbuster's Current Big Picture is not aligned with their core competencies. Blockbuster should focus on educating consumers on the benefits of their services Blockbuster should incorporate new ways of accessing their services
Streaming subscriptions
Additional web enabled devices
Blockbuster branded web enabled device
Full transcript