Redbox Marketing Within the Box free essay sample

Americans are an elite class of consumers. As consumers, Americans are very comfortable in knowing when a product will be needed or wanted, where to find that particular product, and how much they are willing to pay for a particular product. Consumerism has become a second nature that we seldom give much thought to the process. This desire for products can be attributed to the work put in to marketing and promoting such items. Marketing strategies put in an overwhelming amount of effort to grab the consumer’s attention, create a need or desire and develop brand loyalty. The first REDBOX kiosk was launched in 2002, inside a McDonald’s restaurant. Since then REDBOX has expanded to over 27,000 locations. Solely in part to the way the REDBOX has marketed itself, targeted current and potential customers, and created brand loyalty. This paper will discuss how REDBOX uses its product, placement, price and promotion as a part of the marketing strategy to generate millions of dollars in annual revenue. REDBOX is a â€Å"Coinstar Company that rents DVDs for a dollar a day through vending machines in more than 25,000 convenience store, supermarkets, and fast-food restaurants† (Kolter and Armstrong, 2012, p. 70). REDBOX was the first of its kind to offer affordable daily DVD rentals from a kiosk. REDBOX is still in competition with Blockbuster and Netflix in the DVD rental market. However, REDBOX is a step ahead. They realize the high cost of rental and membership fees consumers can endure, so they offer a unique distinguishing marketing tool, $1 a day rentals. Imperative to their success, REDBOX uses a sophisticated software system designed to skillfully deliver DVDs to consumers instantly at the touch of a button. REDBOX does not anticipate cutting back on its products or kiosks; instead they are diligently trying to fulfill higher demands from consumers by using the future of technology. â€Å"REDBOX operates more than 24,000 DVD rental kiosks in McDonald’s, Walmart, Walgreens, and other retail outlets. Customers make their selections on a touch screen, then swipe a credit or debit card to rent DVDs at $1 a day. Customers can even prereserve DVDs online to ensure that their trip to the kiosk will not be a wasted one† (Kolter and Armstrong, 2012, p. 504-505). Businesses are faced with a multitude of challenges, especially in the beginning development and establishment phases. The first challenge for an organization is to identify the type of consumers that will be purchasing the product and to identify their specific needs. REDBOX implemented â€Å"Free Movie Monday’s† in which a monthly code is distributed the first Monday of every month. â€Å"’Our free rental code promotions are a great tool to raise awareness and trial of REDBOX and to encourage consumers to experience the convenience of our DVD rental kiosk,’ said Mitch Lowe, president, REDBOX† (Michael, 2009). With such promotions, marketing representatives are given the chance to identify and analyze their audience. Once a target audience is identified, marketing strategies can be targeted and categorized. Once a company starts to grow, the clientele becomes larger and broader; as such, the marketing aspects change. REDBOX is unique in the sense that they target the entire DVD rental market. There is no specific demographic that the REDBOX marketing strategy caters to. With the debut of its â€Å"’Location Finder’ text service is designed to make renting and returning DVD and Blu-ray Discs easier for consumers nationwide† (Anonymous, 2010). The first element of focus for a marketer is the product as a whole. This includes developing appropriate pricing for the product or service, distribution and promotion. All three components are vital in order to keep the consumer interested. REDBOX offers easy-to-use, hassle free and affordable DVD rentals. This unobtrusive, budget-friendly method of watching blockbuster movies is almost a guarantee that any demographic, can and will at least try it. Businesses offer incentives to consumers such as, free trials and discounted coupons to grab a potential customer’s attention. Once consumers test the service and are satisfied they are likely to become loyal customers. However, if there was no â€Å"try before you buy period† an alarmingly large number of potential customers would not take the risk. In order for promotions such as these to be successful, business have to appeal and cater to consumers to achieve brand loyalty. They do this by offering loyalty discounts, above and beyond customer service. REDBOX does this with their â€Å"Free Movie Monday’s† promotion and â€Å"return anytime, anywhere† policy. The most remarkable characteristic of the marketing strategy of REDBOX is how minimal their marketing efforts have been, yet they’ve risen to a leader in the DVD rental industry. â€Å"Redbox combines the easy and usability of Netflix with the â€Å"watch it tonight† concept of Blockbuster† (Boris, 2010). However, with competition there will always be issues brought on by consumer dissatisfaction and REDBOX is no exception. â€Å"REDBOX is losing some business as renters use kiosks to get new releases and go to Netflix for older, harder-to-find titles† (White, 2010). Recently, â€Å"REDBOX ended legal battles this year with three studios, News Corp. s Fox, General Electric Co. ’s NBC Universal and Time Warner Inc. ’s Warner Bros. , over access to DVDs. The studios agreed to sell discs to Redbox for rental after the movies had been in stores for 28 days. Walt Disney Co. , Viacom Inc. ’s Paramount Pictures, Sony Pictures Entertainment a nd Lions Gate Entertainment Corp. let Redbox offer DVDs when they become available for sale in stores† (White, 2010). Such litigation can often times become a problem for businesses as they are scrutinized by the public for not being capable of fulfilling consumer needs and potentially losing current and future customers. On the other hand, to some industry observers, the settlement looked more like a strategic win on REDBOX’s part. Finding a target consumer is too strenuous for businesses that offer items that various demographics use. REDBOX has no qualms about advertising to anyone and everyone. â€Å"Testing various approaches has enabled Redbox to leverage Bing as a key marketing channel, said Fenske. â€Å"You have to understand the mindset of Bing customer—it is more shopping and retail focused than Google. Bing has positioned itself as a decision engine. It understands its place is to help you decide. For a retailer like Redbox that means helping shoppers decide what movie to rent and where they can rent it† (Stambor, 2011). REBOX has studied its audience enough to know busy parents are interested in keeping avidly watching DVDs themselves, with children or family; while keeping costs low and without having to deal with a video store. Keeping this tactic in mind the busy parents are able to rent a DVD while grocery shopping or picking up dinner. REDBOX is successfully using a marketing strategy that attracts the busy parent by being readily available and affordable. The value innovation concept provides a relevant support for questioning product/market strategies as well as underlying assumptions. The purpose of a business is to develop and retain a customer base. Differentiation refers to a business’s ability to separate itself and the product from competitors which is instrumental in building and maintaining a competitive advantage. REDBOX is in high competition with Blockbuster and Netflix. Of course, Blockbuster has been around for decades and suffering a decline, and Netflix offers the same hassle-free service but with a wider selection. Netflix is rapidly replacing Blockbuster; it is imperative that REDBOX keep above the competition. REDBOX offers unique and special benefits that no one else can offer the DVD rental customer. Changes in modern day technology have made businesses like REDBOX possible and evermore popular in society. When VHS players became obsolete, it became mandatory to own a DVD player; in order to rent and watch movies in the comfort of one’s home. REDBOX has made it possible, with exasperate box office ticket prices, to be able to enjoy the movies without having to leave the house for a movie night. REDBOX is using advanced technology to their benefit when it comes to marketing aspects and the way the business is conducted, for its consumer’s benefit. REDBOX started out as one kiosk in a McDonald’s restaurant and has developed into a business, which is now has over 27,000 locations and over 1 billion rentals. When a business utilizes advancing technology to their advantage they are opening more doors to provide goods and services to a wider range of consumers. As REDBOX evolves to a market leader and continues to rival against the others; it is important to remember the consumers have the last word. Despite the strong and vigilant efforts of advertising and marketing representatives put into a product or how much research goes into making it appealing to the public, the current and future consumers will be the ones to sink or sail the product ship. Word of mouth, Internet blog, forum discussion, social networking chats or undesirable rate increases have the power to make or break a product in the end. Reference: Anonmyous,. (2010, Sep 28). Redbox Locations Finder Invites Movie Lovers to Text to Find the Nearest Location. PS Newswire. Retrieved Jun 21, 2011, from ProQuest Kolter, P, G. Armstrong. (2012). Principles of Marketing. (Vol. 14, Ed. ). Boston, Pearson Prentice Hall. Michael,. (2009, May. 7 ). Retrieved Jun. 21, 2011, from http://www. insiderredbox. com/redbox-extends-free-movie-monday-promotion/ Stambor, Z.. (2011, Jun. 14 ). Retrieved Jun. 20, 2011, from http://www. internetretailer. com/2011/06/14/irce-2011-report-google-isnt-only- game-town White, M.. (2010, Jul. 19 ). Retrieved Jun. 20, 2011, from http://www. bloomberg. com/news/2010-07-19/redbox-plots-internet-movie-strategy-in-challenge-to-netflix-on-home-turf. html | | | | | | | | | |