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Blockbuster Marketing Strategy

Posted by Josef Katz on 6/29/2007 at 7:27 AM
Posted in Marketing

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Or not. Time will tell. 

As you probably know Blockbuster has been spending millions of dollars on advertising and marketing trying to win back business they lost to Netflix. Their key differentiator has been that you can return your DVDs to a local store and get new DVDs the same day. Last night I heard blockbuster was closing 282 stores and using the money to focus on their online business. OK that makes sense but why spend all that time and money advertising the fact you have stores? Seems like someone at Blockbuster needs to take a step back and rethink their USP  and marketing strategy.

At first I thought Blockbuster was going to give Netflix a run for their money (cliché intentionally added for Cybelle) with their offer to return movies to a store. After thinking about why people rent DVDs online, I changed my thinking. Online you have no lines, larger selections, and no need to get in a car etc. You just order what you want and in the next day or two you have your movies. Netflix understood the convenience factor and in my opinion created a great offer to combat the store as convenience. Just get more then one movie and keep it as long as you want. They are the innovators in this commoditized business. Did you know they now offer movies on your PC? 

Who do you think will come out on top in the DVD rental business? How much longer will the DVD movie rental business last?

If all this movie talk put you in the mood for a movie go rent one of my old time favorites, Airplane. 

Roger over...
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2 Comments

[-] Posted by member1619539 on 07/09/2007 12:30 AM
You must be reading our Monday Morning AH-ha!. Good points. I think it's a crapshoot right now. Blockbuster has the advantage with the B & M component and I like the idea of being able to drop off my viewed DVDs if I want. That gives the customer one more choice. And if I see something I want I can always pick it up.

Netflix has the on-line advantage and better experience. Blockbuster is trying to play catch-up and that's tough. They do have a highly recognized name but so does Netflix.

It will boil down to service. Blockbuster is trying a price cut to attract Netflix users but if they are satisfied with the Netflix service an dollar won't mean much. they will only canabilize their own customer base.

Bart Foreman
Group 3 Marketing
[-] Posted by Josef Katz on 07/09/2007 9:52 AM
Bart,
Yes I am reading the Monday Morning AH-ha.

Everyone else,
If you are not already subscribed I would recommend adding the AH-ha newsletter to your weekly reading.

If you want to subscribe just email info@group3marketing.com and include Monday Morning Ah-ha Signup in the header.

Josef
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