Case study: Blockbuster Marches Ahead?

Background

The article Blockbuster Marches Ahead mainly talks about Blockbuster’s failure in Germany market although Germany possesses the fourth largest video market in the world. With stagnant sales, it withdrew from Germany market only 2 years after entry, and marched toward Japanese market.

Marketing Problems

Blockbuster suffered from several fatal problems in dealing with Germany market. First, it falsely interpreted preliminary research results and targeted young and middle-aged German. However, children were not supposed to enter video stores where pornography was served. Next, the company lacked knowledge concerning consumer behavior. Germans preferred watching movies in theaters to renting videos for home play, liked watching pornography, and hated renting videos in noisy and inconvenient downtown shopping malls. Last but not least, Blockbuster’s brand image was improperly positioned in Germany. Although its family-oriented strategies had been successful in other markets, its unwillingness to orient adults led to a disaster in Germany. In conclusion, the company’s inadequate pre-entry market research and unsuccessful customer orientation resulted in its failure in German market.

Information Blockbuster Needs to Collect

To understand the problems better, Blockbuster need to gather the following information. First, what is the cultural background of German consumers? What is customers’ perception of different video contents. Are they forbidden to watch a certain kind of shows, who are forbidden, and how forcefully are they forbidden?

Second, what is the demographic of German people? The age distribution, gender ratio, social status, education background, religious beliefs and employment condition should all be learned about.

Third, what is the economic condition of the target country? How about Germany’s GDP, export/import, foreign investment, exchange rate, and per capita income?

Fourth, what is the most effective promotional method? What about the ratio of customers exposed to radio, newspaper/magazine, TV and Internet advertising, and their attitude toward public relations campaigns, discounts, coupons, direct selling?

Fifth, what is the best distribution method? Which is the most suitable, direct exporting, licensing, or joint ventures? Are there any other distribution channels?

Sixth, who is the biggest competitor, movie theaters or other video stores? For other stores, what kinds of videos do they serve, where do they locate, how often do customers visit and rent, and what is the monthly/annual revenue?

Last, how about the brand awareness? Is Blockbuster’s brand image and positioning remarkable? How many customers can recall or recognize the brand? Do they have a strong feeling of identification or community with the brand? What customer equity has the brand brought?

Research Methods

To answer these questions, possible research methods are secondary data collection, surveys, focus groups and interviews.

Blockbuster can collect secondary data from internal marketing data, publications, government, and the Internet. The results can provide general information and better guide primary data processes.

Next, doing surveys is a fast and effective way to gather the most information. Based on secondary data, the research team should design questionnaires in consideration of the uniqueness of German customers.

Gathering opinions from focus groups is quite important. The group members should be chosen randomly, and the presence of an experiential coordinator is helpful. Information collected from focus groups is mainly about consumer attitude.

Interviews are also useful. We will pick consumers who have had renting or purchasing experiences with Blockbuster. Interviews help dig into the reasons of particular consumer attitude toward the brand. Observation of facial expression and psychological changes is also useful during interviews.

Comments on this Case

In my opinion, Germany is a promising market for Blockbuster if it repositions the brand out of a consumer-orientation. It should first clearly divide service for adults and children. Then effective marketing campaign lets people know that we are different and we have products healthy for children. Thus it can serve both segments. Moreover, the service should be customer-oriented, providing convenience, benefits, identification and joy. Soon satisfied customers will stop going to theaters and invite more friends to rent Blockbuster videos.

Conclusion

In conclusion, Blockbuster had many blunders in serving Germany consumers. However, through adequate marketing research and appropriate strategy implementation, Blockbuster will see a promising market in Germany.

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