ICF will be focusing on two distinct groups that utilize movie rental stores. These groups can be differentiated by age, a younger group and and older group. Although both of the groups enjoy non-commercial releases, they have different tastes in movies which are not being addressed by the current offerings of the "corporate" movie stores.
ICF's customers can be divided into two general groups that are differentiated by age, over 30 and under 30.
ICF is focusing on these two groups because they are underserved in Eugene. Currently, there are two large corporate rental chains, Hollywood Video and Blockbuster that hold the majority of the market. In order for them to be successful, they must concentrate on the middle of the market, the mean. This allows them to use economies of scale to drive down the costs of operating a movie rental business. While this works for the general population, it does not address the fringes at all. ICF is addressing the fringe movie rental market.
Please note that while the term fringe market sounds almost derogatory or abnormal, in Eugene it really is not. The alternative market in Eugene is thriving, particularly relative to most other cities. Eugene, demographically, is also a much higher educated population than most cities. Alternative movies generally appeal to a more educated crowd. The masses can have their commercialized movies, they generally appreciate movies where they can watch without thinking. This is evidenced by the general popularity of television, mindless entertainment of no real thematic value and little cultural value.
Through targeted advertising, ICF will reach the crowd that appreciates these type of movies and turn then into long term customers. After the advertising brings in customers, new customers will be generated through word of mouth referrals. Our target markets are particularly vocal when it comes to referrals, because they like to spread good news/services around when it occurs because it does not occur that often in today's mainstream society.
ICF is a specialty movie rental store that competes in the broader movie rental business. The industry can be characterized as the "big two," Hollywood Video and Blockbuster. To be sure, there are some independent video rental stores, generally in small neighborhoods and towns, but in general the big gorillas control everything and target the middle, the mainstream.
The movie rental business can be further characterized by selection and rental turnover. If a store offers a good selection and has a large number of rental turnovers, then it is likely going to be successful. This is the gorilla's strategy. They support this strategy even more by selling of some of their rentals as they become less popular to be able to reinvest the money into the newest releases. This last strategy only works with the mainstream market and not ICF's market because the mainstream market is attracted to what is new, the current releases. Once something has been out for a while, interest wanes. With ICF customers, the age of the video is irrelevant, it is the thematic quality, irrespective of popularity and newness that dictates acceptance.
Currently in Eugene there are two different types of competitors:
People make video rental decisions based on a few factors, typically selection and convenience. If they want selection of the latest and most popular movies they go to the gorillas. If they do not rent movies that often and are more interested in convenience then they might visit the local video store.