Redbox: Marketing Within the Box

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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 “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. 370). 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. “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 “Free Movie Monday’s” in which a monthly code is distributed the first Monday of every month. “’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 “’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....
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