Blockbuster Advertising Campaign By Cara Smith, Chi Kalu, Bill Citro, Tomoka Aono I. Summary of Marketing Plan Client/Product Blockbuster is a DVD and video game rental chain. The company started in Dallas, Texas, and today it is one of the most dominant rental chains in the United States. Blockbuster offers not only in-store rental, sale and trade of DVDs and video games but also online services. One of the online services that Blockbuster offers is Total Access Online program. This program allows customers to choose DVDs from wide variety of titles and to rent them by mail. In addition, customers can exchange their DVDs through mail or return them to a local Blockbuster store in-exchange for free in-store movie rentals. It is more efficient for some customers who live near a Blockbuster store because dropping their DVDs off at the store is faster than mailing them. This is beneficial for both Blockbuster and its customers because Blockbuster can make more money when the circulation of DVDs is faster and the customers can get their next movie faster. Although the company is established and well-known brand, it is true that Online DVD rental services such as Netflix has started to take over the industry. Therefore, Blockbuster needs more promotion especially on its online services including Total Access Online program. Competition Three main direct competitions of Blockbuster are Netflix, Inc., Movies On Demand, and Wal-Mart Store, Inc. First, Netflix offers online DVD rental service. The customers choose a plan and pay monthly fee, and they can get the movies they want by mail. After they watched the movie, they can just drop the DVD in a post to return it. This easy step and affordable prices attract a lot of customers. Second, Movies On Demand offers movie downloading service. Customers pay yearly fee, and they can download as many movies as they want without any extra fee. This is very attractive for customers because they can download and watch movies anytime they want, and they do not have to worry about late fee. Third, Wal-Mart Store sells discounted DVDs. Customers can stop by DVD section and get some inexpensive DVDs when they go grocery shopping. Once they buy the DVDs, they can watch them whenever they want to without thinking about returning. Two indirect competitions are the Internet and movie theaters. First, Internet is a huge competition in terms of entertainment. People spend more and more free time surfing the Internet instead of watching movies on TV. They can sometimes watch movies online or download them for free on the websites such as YouTube. Internet is becoming a major leisure activity especially for young people. Second, movie theaters are also competing with rental DVD service. Movie theaters give customers more excitement with a huge screen and good sound systems. People go to movie theaters when they want to watch new movies that are not available for rental DVD stores.
Target Audience Our target audience is young adults from age 18 to 34 with college or higher education, including college students. The adults from age 18 to 34 have the highest index number (Index 134) for Blockbuster Video Store In last 30 days Rented of all the age groups. In addition, those who have college education have higher index number (Index 118) compared with no college education (Index 74). The reason people with college education go to Blockbuster more than people without college education is that those who attended college are likely to get better-paid jobs and therefore, they can spend more money on entertainment. According to our survey, Action&Adventure, Comedy and Drama are popular categories of DVDs among college students. From this result, it can be said that many young adults are energetic and fun-loving. In other worlds, they are Experiencers on VALS. Experiencers are willing to try new products and services, so they will show interest in Blockbuster s Total Access program and other online services. Additionally, they are likely to spend more money on entertainment. They like socializing and talking with friends, so they may spread information of Total Access program and other convenient services offered by Blockbuster to their friends by word-of-mouth. Marketing/Communications Goals/Objectives Continue to increase awareness about Blockbuster s Total Access program. Create more incentives for customers to make in-store rentals. Continue to reward returning customers. Develop further into the gaming world. A. Short Term (next fiscal 12 months) 1. Increase revenue by 3.5% or 193.3 million: recoup lost ground since 2005 2. Increase awareness of Total Access online program by 30% or 20.3 million adults 18-34 (amongst our target audience). 3. Create more incentive for in-store rentals. Break even for paid in-store rentals of the previous year. B. Long Term Move resources into the development of the online arena. Make PC games rentable online. Regain former status in the consumer mind as THE place to go for nightly entertainment within the home. Positioning Strategy The strength of Blockbuster is that it has both in-store and online service. The customers can take advantage of this strength through Total Access program. Thus, it is important to tell them this advantage. Moreover, to draw the attention of our target audience, Experiencers, we need to tell them that Blockbuster offers a great experience to customers and each rental will provide entertainment in the experience. Positioning Statement: For your convenience, Blockbuster lets you to have a choice of going to a store or ordering online when you want to experience an adventure through DVDs and games. Creative Strategy First, we need to address the strength of Blockbuster in our creative works that Blockbuster offers both instore and online service. In addition, watching a movie or playing video game is like experiencing adventure. Thus, our message should convey that Blockbuster connects customers with the exciting adventure. Since our target audience is young generation, friendly tone is appropriate. Tagline: Click or Pick up Your Next Adventure
II. Media Objectives & Strategies Media Objectives A. National Goals Through February to October, achieve 70.0 Reach/ 2.6 Frequency (GRP 182) Through November to January, achieve 85.0 Reach/ 4.0 Frequency (GRP 340) B. Spot Goals Through November to January, achieve 90.0 Reach/ 4.5 Frequency (AD-GRP 65) Since Blockbuster is a strong, established brand and has high market share in terms of in-store service, reach should be optimized. Moreover, our tagline is direct and easily understood, so it does not have to be repeated for the customers to understand, which means we do not need high frequency. However, at least 2.6 frequency is determined to be needed based on the Ostrow Model. Media Strategies A. Recommended Media Internet While Blockbuster is established brand for in-store rental DVD service, its online service is not wellknown. Our objective is to promote that Blockbuster has both in-store and online services, so online service should be promoted more. And obviously the online service is the best advertised on the Internet. Moreover, our long term objective is to move resources into the development of the online arena, so the promotion of online service is important. Another reason to choose Internet is that frequent Blockbuster users use Internet a lot (Index 142 for Quintile I) according to MRI+. Our target audience is young adults, and generally they are Internet savvy. For these reasons, Internet is the most appropriate medium for our campaign. Magazine Magazine is the second strongest medium for our campaign. MRI+ shows that Blockbuster users tend to read magazines (Index 128 for Quintile I). The use of magazines is very efficient because of selectivity (Scissors, p226). Magazines for young people or for business people would work for our target audience. Magazines about movies are effective as well. Moreover, people may pass their magazines around to their friends, so there are expected to be more audience. This is likely to happen especially because our target audience is Experiencers and they like socializing. They would share information passing magazines around. Radio Radio is the third choice. According to MRI+, radio has a pretty high index number (Index 104 for Quintile I). Our target audience may listen to the radio when they drive to school or work and when they drive home. Many Blockbuster users listen to the radio after midnight (Index 124). In addition, radio is cost-efficient medium because it is inexpensive and has selectivity (Scissors, p226), so it is good for our year-long campaign. Outdoor Outdoor is another good medium for our campaign. MRI+ shows Outdoor is effective (Index 113 for Quintile I). Blue and yellow colors of Blockbuster will be eye-catching. Advertising in subways and streets of metropolitan areas would work well. Many people in the metropolitan area go to school or work using public transportation. Thus, this medium is used for Spot areas.
B. Not Recommended Media TV TV is not a good choice for our campaign according to MRI+ (Index 77 for Quintile I). TV spots are expensive, and the budget is not enough to purchase enough spots to achieve the year-round objectives. In addition, people do not pay much attention to TV commercials (Scissors, p226), so it is not very effective for our campaign. In spite of all these facts, there are some cable channels that are watched by a lot of Blockbuster customers. These cable channels might be ok to use. Newspaper Newspaper would not work for our campaign. First, our target audience is young and many of them may not read newspaper or may read online newspaper. Second, MRI+ shows not so high index number for newspaper (Index 100 for Quintile I, but Index 87 for Quintile II). Lastly, the audience of newspaper is too broad. It does not have target audience selectivity, so it is not efficient (Scissors, p226). Geography Objective & Strategies Our campaign will be done with national and spot scope. Blockbuster has branches all over the country, so it is reasonable to have a national campaign. Blockbuster was born in Dallas, Texas, and it is popular especially in South (Index 105) and West (Index 103) compared with other regions such as North East (Index 97) and Midwest (Index 91). Therefore, the most populated cities in South and West were chosen for spot market: Atlanta, GA Dallas-Ft. Worth, TX Houston, TX Los Angeles, CA Miami-Ft. Lauderdale, FL Phoenix, AZ Seattle-Tacoma, WA These areas contain 14.4% of U.S. population. Media Budget Objective & Strategies Budget: $30,000,000 National: 85% ($25,500,000) Spot: 15% ($4,500,000) 15% of the budget will be spent in spot markets. The spot markets are important because these cities are where many of current and future customers live. However, the additional promotion for spot markets will be done just for four months. Thus, 15% seems enough. The rest of the budget will be spent nationally. Network TV 0 Net Cable TV 0 Netwk Radio 6699.8 Magazines 15737.2 Natl Newsps 0 Internet 2520 Outdoor 3489.2 Direct Mail 0 Other 1027.5 Over the 50% of the budget is spent on magazines. This is happening because magazines are expensive medium compared with Internet and radio. Network radio comes second followed by outdoor, Internet, and other (spot radio). Radio is not expensive, but a lot of spots were purchased year-round, so it consists of almost onefourth of the budget. Internet is inexpensive too. Thus, it has small percentage of the whole budget. Outdoor is used only for four months, and that is the reason it does not cost much.
Scheduling/Timing Objective & Strategies Magazines Netwk Radio Netwk TV Direct Mail Internet Spot TV Outdoor Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec This is a pulsing pattern schedule. Magazine, radio and Internet go year-round while outdoor is used only for four months (November-January). Movies and video games are year-round entertainment, so it is reasonable to have advertising year-round. The sales are expected to increase during winter, especially holiday seasons, because people are likely to stay home and seek something they can enjoy at home for entertainment. And movies and video games are good choices. Thus, November through February were set as intensive months. In addition to the outdoor advertisement, there will be extra spots added to radio and magazine during these months to increase reach and frequency. III. Media Analysis & Recommendations Analysis of Media Vehicles It is important to choose media vehicles that are popular among our target audience. We need to choose vehicles considering their lifestyles and tastes. Recommendations Facebook.com This is one of the most popular social networking sites among young people. People socialize virtually on this website, so the information about entertainment is appropriate to be put. If the advertising includes share this info with friends and lets the audience to send a link to their friends, Blockbuster s message will reach so many people through facebook. According to MRI+, this is a great vehicle for our campaign (Index 154). Newsweek Young business persons would read Newsweek. Our target audience is young adults with college or higher education, so those people are likely to read business magazines. MRI+ shows a high index number for Newsweek (Index 122). A radio station that plays sound tracks of movies Those who like watching movies are Blockbuster s primary customers. They may like listening to movie songs as well. Listeners of the station are likely to be movie fans. IV. Evaluation Plan Consumer awareness of the brand, especially the online Total Access program and brand loyalty would increase by about 3% in 12 months. Brand loyalty should have increased moderately in the same period of time.
References Blockbuster: http://www.blockbuster.com/ Netflix: http://www.netflix.com/ Movies On Demand: http://www.movies-on-demand.tv/ Wal-mart: http://www.walmart.com/ MRI+. (2007). Blockbuster Video Store In last 30 days Rented. Mediamark Research, Inc., New York, N.Y. MRI+. (2007). Blockbuster.com in last 30 days Rented. Mediamark Research, Inc., New York, N.Y. Sissors, Jack. Advertising Media Planning. New York, N.Y.: Mcgraw-Hill, 2002.