M630 - New Service Design Project BLOCKBUSTER VIDEOS CLASSIC FILMS, ETC. |
22 June 1999 Copyright
by Gordon Skaljak |
CONTENTS:
1. - Introduction The company chosen to form a basis of comparison for this New Service Design Project is Blockbuster Videos. The objective of this project is to create a new service, combining video rentals with other supplementary service, providing more and better choice for "mature" and more demanding audiences and more specific needs. Although modelled initially on the existing Blockbuster Videos, this service would be modified and improved in its new form, not only by introducing changes to the existing formula but also by designing and introducing many new additions to it. The new service should be launched under a new brand name -"Classic Films, etc.". Ideally the new service should be formed to become a "specialised" arm of the Blockbuster Videos, part of the existing operation, providing service to the more mature and demanding audience. 2. - Market segments to be targeted are more mature (age 30+) audience from professional and managerial backgrounds, mainly AB socio-economic groupings and a growing market of age 60+ category. Also mothers with small children. 3. - Main benefits relevant to the above audiences that should be brought by the new modified service would include:
4. - Positioning: The new service would be based on a more "mature and stylish" outlook, hence to be named - "Classic Films, etc.". The service should be associated with classic films, best films of all times, wider variety of documentaries and educational videos, better more convenient and pleasant, versatile and fun service experience. The appropriate "friendly, mature and stylish" design of the outlets and promotional literature, staff selection and training, and the appropriate selection of videos and other supplementary services should support this image. This new service should appear different from the overall majority of competitors' video outlets that are targeting wider audiences, younger audiences following "blockbuster" popular type, various ethnic niches, etc. The existing outlets are normally providing merely the most popular and narrow selection of films and supportive services are also revolving around the same simple type (i.e. fast snacks, popcorn, candy and chocolate). The staff is normally very young, seemingly not motivated or interested in their job. The outlets available are often small and clattered and not providing pleasant service experience. 5. - Reasons behind the new service design proposal: The existing Blockbuster Videos outlets cover almost every major location and many towns in the UK. The operation is part of a much bigger international group with presence in many countries all over the world. The service in the UK covers the needs of the young especially teenage audience but leaves much to be desired for other types of consumer: especially more demanding and mature audience such as the target groups described earlier. Most of the shops do not cater for their needs and the same seems to be with major competitors, all seem to be majoring on the same target audiences. These types of customers would probably share the opinion that browsing in the existing video-shops clattered with poor choice of hyper-action films is not a very satisfying experience. The service encounters within the outlets could normally be described as "nothing special" at best of times. Flexibility of pre-ordering, supplementary services, other products, borrowing between the shops' branches are virtually non-existent. 6. - Assumptions: The three market segments described as target audiences for the new service design project could be considered as neglected or let down by the existing Blockbuster Video service, yet they are growing in numbers, purchasing power and importance in the market place. Their needs are more demanding but have been ignored as "non-main stream". The fact that the "new media" element which forms the part of the physical evidence of this service (i.e. interaction with customers via the Internet ) is largely accepted by one of the above mentioned target groups, but might not be equally accepted by the other (age 60+) customer group, can be successfully overcome by interaction via telephone and catalogues. It is
important that any marketing research to support the
above assumptions should be adequate, sufficient, focused
on customer needs relevant to this market segment, and
the results should be interpreted properly and used to
arrive to the following conclusions:
7. - The New Service - Description Core services To be based on the research to confirm the needs of this market niche. Videos available would cover the following categories: classic films, documentaries, off-beat cinema, foreign films, videos about art, drama, music (jazz and classical), educational and self-tutorial videos on various subjects (ranging from DIY and travel to foreign languages and cooking, etc.), childrens videos (for young parents' needs). For example, the travel related programmes videos could be linked to an extensive library of these programmes, which should also be available in a shorter format via the CD-ROM or website previews where the customers could book a holiday after having enough information to make a choice. Same could apply to other purchases, reservations or bookings. The information to help selection of videos should be extensive and easy to search/find via the catalogues, CD-ROMs (free of charge), on screen (if in shop), or via the Internet (own website). The website should include interesting film editorials but also self-editorials (in form of bulletin boards) with contributions from the members of this service. The reviews and comments about any of the films and other services available would not only be prepared by the editors and film critics but more importantly from the customers (members) who should be able to place their observations and recommendations directly via the website. Based on the above mentioned observations and recommendations an additional benefit to customers can be created by introducing "satisfaction guarantees" attributed to highly recommended videos. For example, if the customer returns the video which was recommended with "4 stars" rating and is not satisfied or feels disappointed, a special voucher with 50% discount should be given to be used with the next purchase. Similarly, if any of the videos or other products are defective or not of a good quality a 100% refund should be given. Supplementary services also available would include: 1. Pre-ordering and home deliveries with optional snacks, pizzas and/or light hot meals and drinks; - these should be available for ordering either via the Internet or telephone. The selection should be easy and either from the catalogues, CD-ROMs or website and it should include a variety of food and drinks that can be delivered if pre-ordered. The customer could pre-order a video, then combine own choice of pizza toppings and specify the delivery day/time. 2. CD-ROMs with either self-tutorial or informative packages or with catalogues for shopping (ordering again via the Internet or telephone); 3. Workshops organised either via the website or periodically at the appropriate venues for members interested to learn more about cinema, art, music or other themes and packages available via "Classic Films, etc." 8. - Place (Distribution) Distribution will be available either via the shops (outlets) and/or via the home delivery (through pre-ordering via the Internet or telephone). Locations should initially cover only 6-7 towns in the UK and subsequently gradually start branching out into the other major town centres and high streets nation-wide. The shops should be given pleasant, stylish and friendly outlook. The locations should be carefully selected and decisions should be based on the effective and extensive market research. Although the number of physical locations would not be large, the appropriate coverage should be achieved through own couriers for home deliveries or by other couriers/post (not applicable for some supplementary service such as hot meals). This delivery system should be sufficient for all other types of this service applicable to CD-ROMs, videos, shopping etc. Pick up of the videos after the viewing could be also flexible (either by own courier or pre-paid addressed envelopes). Similar to inter-library loans, this should also work with videos. If you cannot find your preferred choice in the nearest local branch and do not like the idea of this being delivered to your door, you should have an option to pre-order it to be available and reserved for you in the nearest Blockbuster Video outlet. The pick-up/delivery and return of any video, no matter how "off-beat", "non-main stream" or rare, should be made available by using the added convenience of already established geographical coverage via large network of the existing Blockbuster Video shops for and behalf of their new sister company, "Classic Films, etc." It would not be necessary to go to the shops to select or order any of the mentioned services: the choice to search, find, pre-view, select and order any of the videos, CD-ROMs, meals or shopping would be available either via the Internet (own website) or telephonically (after viewing the catalogue or CD-ROM). 9. - Pricing Should be consistent with the image of the new service, i.e. "premium service" for "premium price", slightly above the industry average. The membership should be made easy to join although a small annual fee might be acceptable. Videos from "Classic Films, etc." should be priced at 10-15% above the industry average, which should be justified with the fact that this brings a much wider choice and the better service. Home deliveries should be charged at a reasonable price, especially if combined with other purchases (e.g. ordered together with pizza). The option to pick-up the videos for return should also be charged unless combined with a new delivery. If the customer returns the video to the nearest Classic Films, etc. or Blockbuster outlet a special discount voucher should be obtained for the next purchase. The payments should be flexible and this type of customers should be able to choose whether they want to open an account, pay by credit card or direct debit, choose pay-per-view or have a monthly membership fee beneficial for a more frequent user. Important to make pricing strategy more acceptable and attractive are customer loyalty schemes, and they should be made simple, easy to understand, be fun and suppport the image of "good value for money". It is important that the rewards are relevant to this target audience and should be based on 2 criteria: 1. Usage/volume based - the more usage the more reward points to be exchanged for relevant products or services - of special interest to frequent users; and 2. Non usage/volume based - of special interest to occasional user, but relevant to keep this customer interested and reminded of the service. 10. - Promotion All elements of the promotional mix should be consistent, appropriate to the mentioned market segment, and endeavour to contribute to the effective management of customer expectations. The objective would be not only to encourage trial and inform but also to educate customers. Overpromising in advertising, personal selling or in physical evidence cues should be avoided. There must be consistency between communications about the service and the actual delivery. Co-ordinating this successfully would be crucial tool in narrowing the potential "provider gap" and favourably affect the "customer gap" as well, - this being even more important in this service that should be perceived as high in quality. The message, if made realistic, should still be sufficiently attractive to the right audiences. Advertising should be made effective and the message realistic to support the above objectives and it should be used in the channels appropriate to the relevant audiences described earlier. For this purpose, the radio such as "Classic FM" or "Radio 4" should be appropriate as well as the similar "niche" magazines. Sales promotions, as well as publicity and PR should be consistent with the image. People behind the counter in the shops and answering the telephones form the "personal selling" element of the mix and in this case they need to be properly trained to sell-up by using their specialised product/service knowledge relevant to this group of customers. 11. - People As the new service should be perceived as of high quality, the people in the outlets and answering telephones can make this important difference to the intangible part of this service. To address this successfully, special attention should be paid to the human resource policies. There should be an effective recruitment procedure and selection of the right candidates for this customer focused role. The roles must be clearly defined to avoid ambiguity and role conflict. The employees should also be treated as customers. Their satisfaction is one of the key ingredients needed to achieve a high quality service. To achieve this, remuneration packages should be based on customer satisfaction and this can work in practice only if the appropriate evaluation and compensation systems are established. Presence of empowerment at work, better working environment, perceived control and teamwork should support this. 12. - Physical Evidence Tangible communication, such as brochures, advertising, business cards, billing statements, the new website, and the physical environment of the outlets where the service is delivered should be consistent with the overall image of this high quality service and appropriate for the customer segments described in the positioning statement. This again should be supported with good choice of videos, responsive service and excellent quality food delivered. The pricing strategy together with the above mentioned mix of factors should be consistent in order to convey the right "premium" image. All this will be critical for positioning and reinforcing of the image in customers' perception. 13. - Process Comparative to the existing "mainstream" type service of Blockbuster Videos, the new service can be seen as with higher degree of both complexity and divergence. This can be determined by looking at and compering the blueprints of these two services (see exhibits). For example, Blockbuster service is relatively low in complexity (few steps in delivering the service) and low in divergence (standardised every step of the process). Relative to this, the new service has more complexity (more steps in delivering of the service), and with more services, a higher number of variations and as a consequence more divergence (exhibit 2). ________________________________________ © 2001
– Copyright by Gordon Skaljak. All rights reserved. |
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