Redbox Marketing Plan

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Redbox – Marketing Plan U.S.A
Redbox – Marketing Plan U.S.A

1 Contents
1 Contents1
2 Executive Summary3
3 Introduction3
4 Problem Statement4
5 External Analysis4
5.1 Marketing Segmentation4
5.1.1 Geographic Segmentation4
5.1.2 Demographic Segmentation4
5.1.3 Pshychographic Segmentation4
5.2 DESTEP analysis5
5.2.1 Demography5
5.2.2 Geographic5
5.2.3 Economy5
5.2.4 Political5
5.2.5 Social6
5.2.6 Technological6
5.3 Competitors Analysis6
6 Internal Analysis7
6.1 Current Target Market7
6.2 Current Positioning7
6.3 Competitive Advantage8
6.4 Current Marketing Mix8
7 Strengths, Weaknesses, Opportunities and Threat Analysis9
7.1 Strengths9
7.2 Weaknesses9
7.3 Opportunities10
7.4 Threats10
7.5 Confrontation Matrix11
8 Market targeting, positioning11
9 Strategy12
9.1 Positioning12
9.2 Product Strategy12
9.3 Pricing Strategy12
9.4 Marketing Communications Strategy13
9.5 Distribution strategy13
10 Action Plans13
11 Objectives15
11.1 Short-term goals15
11.2 Long-term goals:16
12 Issues16
13 Marketing Mix (future oriented)16
14 Controls17
15 Recommendations to the decision maker18
16 Bibliography19
17 Appendices20
17.1 Problems20
17.2 Peer Evaluation20

2 Executive Summary

Redbox is facing two main issues, one being the online business. Redbox is preparing to launch an online video streaming service within 5 months on the market and will try to get a significant market share in the long run. The other issue is problem with major film studios, but Redbox is going to make a new agreement with them, which is a financial issue and means that costs will increase. Redbos will also enlarge their video games and Blu-Ray portfolio and in addition the functionality of the vending machine is going to be improved. There are going to be as many as four slots per vending machine for rentals and returns. Furthermore, Redbox is going to expand in terms of numbers of kiosks and also will make a distribution agreement with Starbucks, which will increase the number of locations to more than 40,000. With this and the expansion into the online video business Redbox aims to raise its market share to 30% within two years.

3 Introduction

Redbox is an American company that rents out DVD’s through vending machines for $1 per night and owns about 24,000 kiosks, which are located in fast food restaurants, grocery stores, and convenience stores throughout the US, as of September 2010. Founded in 2002 by McDonalds Ventures, a subsidiary of McDonald’s Corp, Redbox initially sold fast food products to consumers. The company started its DVD rental business in the Washington area in 2004 with 12 kiosks and in 2005 it sold 47% of its shares to Coinstar and later in 2009 Coinster acquired the rest of the company making Redbox a subsidiary of Coinstar respectively. In November 2009 Redbox launched official iPhone app and reached one million downloads in February 2010. It has surpassed Blockbaster in number of locations and in April 2007 the company was ranked the fifth largest in the DVD rental business by revenue in the US and the largest DVD rental service via vending machines in the US as of 2010.

4 Problem Statement

The biggest problem faced by Redbox is the fact that they are not yet in the online video business, which is permanently getting a higher market share. If Redbox is not expanding into the online business soon, others will eventually and then it will be too late for Redbox to establish them. Another major problem for Redbox is its suppliers and retailers. Since 2009, 20th Century Fox, Warner Brothers and Universal refuse to sell DVD’s to Redbox until not less than 28 days after they are for sale in stores and Wal-Mart and Target have limited purchases per buyer to five DVD’s.

5 External Analysis
5.1 Marketing Segmentation
5.1.1 Geographic Segmentation 

Redbox has segmented its market...
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