Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, September 24, 1994 TAG: 9409270024
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: KNIGHT-RIDDER NEWSPAPERS
DATELINE: LENGTH: Medium
If you rent music videos, you're a potential customer for the company's Blockbuster Music stores. If your little ones have talked you into renting ``Beauty and the Beast'' and ``The Little Mermaid,'' you're a potential customer for Blockbuster's Discovery Zone playrooms. (The Fort Lauderdale, Fla.-based company has outlets of both of those units under construction on Virginia 419 in Roanoke County, across the street from one of its video-rental stores.)
With its computer database, Blockbuster knows what you like. And it has other products and services it wants to sell to you.
Welcome to the brave new world of corporate marketing for mega-companies like Blockbuster, a $2.9 billion entertainment conglomerate with information about 36 million households in its database.
The goal: to turn good customers of one Blockbuster division into good customers of another division.
Under a test now taking place in Richmond, a parent with a history of renting children's videos might get a coupon for a nearby Discovery Zone playroom. Blockbuster owns 50.1 percent of Discovery Zone, a chain of indoor children's playgrounds.
``They're trying to figure out who their customers are and what it takes to gain their loyalty,'' said John Kerr, a Florida State University marketing professor. ``I would expect this of larger corporations who have the financial wherewithal to get this kind of information. I think it's just good business.''
It's based on the notion that traditional mass-marketing - in which companies advertised their products to the public as one large group - has lost its effectiveness in an age when shoppers are more demanding than ever.
With recent advances in computer technology, companies now can keep track of customers' changing preferences down to an unprecedented level of detail.
And now there are ways for companies to communicate with surprisingly small groups of customers once they've been identified through computer analysis.
Companies, for example, can use new media outlets like niche magazines and on-line computer services to pitch products only to men who hunt, drive pickup trucks and own a shotgun and a dog.
Blockbuster's data comes from a computerized tracking system based on laser bar codes attached to its VCR tapes and the shopper's member card.
It means the company can keep track of not only which titles are the most popular but also which are the most popular with certain demographic groups. The company stokes its database with 2 million transactions every day.
It's similar in scope to one of database marketing's legends - data collected by American Express about which kind of members buy what types of products.
In the test in Richmond, Blockbuster is offering customers something new:
A list of 10 movie titles chosen based on the customer's rental history.
Promotional coupons good at other Blockbuster stores. A customer partial to Michael Jackson music videos, for example, might get coupons for the performer's latest CD at a Blockbuster Music store.
Blockbuster, which declined to respond to questions about its Richmond test, has 3,755 video stores in 49 states and 10 countries and 541 music stores in 26 states, Europe and Australia. Blockbuster also owns a part of Spelling Entertainment, a film and television producer, and is working with Sony Music Entertainment and PACE Entertainment Corp. to develop music amphitheaters.
by CNB