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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. David Hahn Blockbuster Delivers Mr. James Burgess. Blockbuster Inc. (Past). CURRENT BUSINESS MODEL. 4 P’s and SWOT. - PowerPoint PPT Presentation

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  • Blockbuster Inc.The Marketing Puzzle

  • The PiecesCurrent Business ModelMr. Jeffrey FeiereisenMarket SolutionMr. Jared WaksMarket ResearchMr. David HahnBlockbuster DeliversMr. James Burgess

  • CURRENT BUSINESS MODELBlockbuster Inc. (Past)

  • 4 Ps and SWOT

  • Product and Placement

  • Price

  • PromotionAd

  • SWOT Analysis

    StrengthsBrand equityCustomer Relationships from storesAdapting stores to environmentsGood relationship with studios Especially with iTunes40% share of domestic retail rentalWeaknessesFew distribution centersLow inventoryRetail locations are expensiveIneffective in attracting customersNeglected Video-On-DemandNo AppleTV competitorOpportunitiesNew Distribution ChannelsCo-marketing (with fast-food restaurant)Renovate retail locationsMovieLink (Video-On-Demand)ThreatsEconomyWal-Mart (lowest prices)Netflix (by-mail)Apple iTunes (Video-On-Demand)Studios interested in sales not relationships

  • MARKET SOLUTIONBlockbuster Inc. (Future)

  • 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 ServicePartnership with Dominos

    90.4% of rented movies are watched during dinner hours33.7% of the video rental market consumes delivered food while watching rented movies

  • Convenience

  • High ConvenienceLow Wait TimeHigh Wait TimeLow ConvenienceNearly 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.

  • ProposalPapa John Pizza = 77 points24.4% of market preference

    Dominos Pizza = 75 points20.7% of market preference75.3% would be likely to order from an establishment that delivered pizza and a movie

  • MARKET RESEARCHBlockbuster Inc. (Present)

  • Research MethodsSurvey

    -Distributed online-89 responses-Non-random, non-representative sample

  • Accuracy and DistributionAge

    Between 18 and 77Mean: 31.55Median: 22Mode: 19 (25.33%)

  • Target Market ResearchExpected delivery price as a function of ageNot significant (P = 0.2902)Likeliness to use service as a function of ageNot significant (P = 0.8045)Likeliness to order food and movies simultaneously as a function of ageSignificant, not descriptive = -0.0215r2 = 0.0964Se = 1.10

  • Profitability ResearchWillingness to payAverage: $6.7395% CI: $5.83 - $7.63

    Likeliness to use service78.67% indicated they are interested in the service

  • BLOCKBUSTER DELIVERS

    Blockbuster Inc. (Future)

  • Website Integration

  • Full Recoupment of Sunk Costs Achieved in 7th quarter

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    Recoupment

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    Studio60

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  • Cost Analysis

    Cost Per Kiosk$26,500Number of Locations5,155Total Sunk Cost$136, 607,500

    Quarterly Print$3,711,600Television Advertisement$20,000,000Total Media Cost$84,539,200

    Total$221,146,700

  • Chart1

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    Rentals per Day

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    Cumulative Profit

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  • ?s

    Movies and video games Xbox 360, playstation 3, nintendo Wii

    *****Our research:33.7% CLICK90.4% CLICK

    Greater value proposition*Market need: convenience, accessibility, speed

    *Our research:80% convenience

    Search engine optimization (image searches!)

    Positioning

    STAR:No VOD 44% no fast internet

    *With Blockbuster-Dominos to your door delivery, the customers can decide what they want to watch when they want to watch it*Dominos BECAUSE scale of operations, competitive position. 2 point difference from American customer satisfaction index

    Our research:75.3% would get movie and food*****Q1-10 q2-15q3-22q4-35q4-30q5-30q6-35q7-30q8-30*Break-even in 12th quarter. After which BBI takes $13,890,663 per quarter or $55,562,652annual(20% of $69,453,315 30UPD at 4.99 at 5155)

    Any Questions? STEP BACK TO TEAM*