Marketing Segmentation for Rental Business

The demand for digital content is driving changes in the rental industry. Technology is shifting from a physical medium to a digital distribution system. This is likely to be beneficial because Netflix is already rooted in the digital streaming industry and would only have to adapt to minor changes in technology.

Blockbuster implemented a new strategy for customers to access their rentals in “five channels of distribution: in-store, by mail, through vending machines and kiosks, online, and at home (direct to the TV)” (DATAMONITOR, 2009). However, this strategy was a reactive approach to the problem produced ten years behind schedule. Wooldridge et al., (2007) stated that Blockbuster should select and adapt their strategy to respond to the fast changing market and maintain a competitive position. This was an obvious failure for Blockbuster. The changes in the market produced a decline in profit at a faster pace than the strategies that Blockbuster implemented to combat these losses.

Kudler plans to expand these areas in the future, providing a multitude of specialized classes to its loyal customers. Offering cooking classes in many areas of the store makes customers more interested in shopping the store and learning new techniques in cooking healthy fares for their families. In addition to offering these classes, the employees are to be cross trained in many areas to provide a pleasant shopping experience for Kulder 's customers. The customers will also be provided with brochures of the dishes they will learn in the store that will provide the recipe and food suggestions that will go with the main dishes taught in the class. This suggestive information has been proven effective in marketing strategies; therefore, Kudler will use this suggestive marketing technique to increase the buying desires of the customers.

Blockbuster used to have so much power in the movie rental industry until Redbox and Netflix have come to the market. One of Porter’s five forces

Blockbuster Entertainment, Inc. was once a highly successful and profitable brick and mortar home movie and video game rental store. At its peak in 2004, Blockbuster had up to 60,000 employees and more than 9,000 stores. The idea behind Netflix came from an unsatisfied, embarrassed customer of Blockbuster, Mr. Reed Hastings, now CEO of Netflix, paid a $40 late fee because he returned the movie Apollo 13 six weeks later (Zarafshar, 2013). He began to contemplate ingeniously about a notion to change the movie-leasing pattern into a more pioneering industry. In 1997 Netflix was started as a DVD rental-by-mail business without subscriptions. In 1999, taking a stride additional in the direction of evolving the industry, Hastings began the subscription-based business mode based on renting DVDs by mail with plans reliant on the quantity of titles taken at a time. Netflix put forward 120,000 titles for limitless monthly DVD rental with free shipping no late and per title fees. Since that time Netflix has become one of the most popular subscription services in the world, and is now valued at over $28 billion and steadily increasing. What factors contributed to the success and failure of these two companies?

1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several competitors to enter the market to compete directly,

Entering and transforming the video rental industry was a large undertaking for the start-up company. The first marketing objective the company undertook was the process of building a brand. Netflix’s identity was crucial to future growth and success. Without a strong brand, competitors with deep pockets could have easily duplicated the company’s business model. Secondly, leveraging technology was critical to establishing the business and infrastructure growth. The consumer base was the final objective Netflix sought to achieve. Retaining and growing subscribers were fundamental to revenue and marketing goals.

Ice-Fili’s marketing approach and product distribution could be seen as weaknesses in the company’s primary activities. In 2001 the firm started its first TV marketing campaign years after competitor’s advertised through the media outlets. To date Ice-Fili is still very inexperienced and far lacking of marketing strategies deployed by Western competitors such as Unilever and Nestle. Not only does Ice-Fili need to market more fiercely against competitors within industry, it must also compete against other consumables such as beverages and snacks. Another weakness is the distribution that is handed over to several distribution companies. There is a much higher chance (twice as likely) to find products of its biggest competitor Nestlé than those of Ice-Fili. Another detriment is how ice cream is viewed socially. Currently ice cream is primarily an impulse purchase. If Ice-Fili can change this outlook, it would result in an enormous

As the world entered into the 21st Century, humanity has witnessed an ecology of innovation that ranges from artificial hearts and livers to iPods to Bluetooth technology to smartphones and many more ("21st Century Inventions That Made an Impact”). Each with its own unique attraction has become a catalyst in nature for how individuals think, act and live. Along with these state of the art developments, Netflix has become the cutting – edge service for internet streaming media. Deemed as “a worthless piece of crap” from Wall Street analysts, Netflix with tremendous leadership gained control of their industry and swiftly transformed the delivery of movie rentals ("How Netflix Beat Blockbuster: An Exemplar of Emerging Technologies”). Faced with impossible odds, we will discover how Netflix was able to survive, conquer and prosper as the emerging technology in their industry.

IKEA is a multinational group of companies that designs and sells ready-to-assemble furniture (such as beds, chairs and desks), appliances, small motor vehicles and home accessories. As of January 2008, it is the world's largest furniture retailer. The company is known for its modern architectural designs for various types of appliances and furniture, and its interior design work is often associated with an eco-friendly simplicity.

One the one hand, the fertility of the industry opened the doors to corporations that sighted substantial growth potential. New entrants with big pockets such as Walmart could pose a certain threat to Netflix, by exploiting a playing card based on cost reduction. On the other hand, barriers to entry became relatively significant as established video rental retailers such as Netflix have the experience and the knowhow to market movies to people. In this industry, firms that do not have a technological advantage can’t compete. The best example is Netflix’s CineMatch program that offered personalized film recommendations based on customer’s rental patterns. This way, Netflix was able to better serve its subscribers. From a cost perspective, the movie rental industry requires high capital expenditures, and the major expenses are highly related to acquisitions of DVD library and investments in technology (exhibit 2 continued). Thus, we may say that entry is difficult in this industry as the competing firms have reputation, experience and recognizable brand names.

Competition in the Movie Rental Industry in 2008: Netflix and Blockbuster Battle for Market Leadership

Netflix‘s business model and strategy compare closely to its key rivals. Although, Netflix won a patent that covered much of its business model and could be used to help stifle competition in the future (Thompson C-33) . Netflix has a team of executives that manage only the on-line DVD rental enterprise. They are well established and use a very sophisticated software program thereby making movie selection easy and fun. In my analysis, Blockbuster has many retail stores to contend with and many other facets of a business enterprise, thereby not having a unique team of individuals solely dedicated to the on-line DVD rental business. Wal-Mart would be Netflix’s greatest fear due to the enormous capital available and expertise that could be employed, yet Wal-Mart continues to lag behind Netflix. Wal-Mart’s online software needs a lot of debugging, whereas Netflix had already spent several years debugging its software (Thompson C-37).

USE was expanded to include field consultants and market managers and today it gives franchisees, store managers and employees a chance to see and taste new products for upcoming seasons that are intended to address the changing preferences of customers. The merchandising plan for seasonal and high-potential new products is also shared. The centerpiece of the USE is the virtual 7-Eleven store, actual size 7-Eleven floor plans are built to show how seasonal products are assimilated into the standard store mix (7-Eleven About Us, 2010). For future reference, this capability should be the tool whereby the adjustments necessary to accommodate a drive thru capability are visualized and ultimately realized.

The hotels that we are writing about are The Ritz Carlton Singapore, the Intercontinental Singapore Hotel and the Marriott Singapore. Our main hotel will be the Ritz Carlton Singapore. We chose the hotels as they pose as prominent hotels in Singapore and they are also known overseas as well. Although they are quite similar, there are also several differences that can be seen as well. They are also very distinct in branding, and value their brands very highly. All three hotels boast amenities and services that will cater to a majority of their customers. As well as an experience that they believe we will value as customers.