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By: Aditi Mishra, Annie Chin,Ashley Chang, Mayant Lan, Shirley Liu
History                                                       FEB - Coinstar becomes             Launched video game      ...
Business Model: Direct-to-Consumer  • Instant gratification: widespread locations in grocery    stores, drugstores, restau...
Redbox Consumer Segmentation                                                                 Demographics                 ...
Industry Trends                                             Economic: Threat                Demographics - Psychographics ...
Target Market for Industry and Brand                                                                 Geographics          ...
Industry Key Statistics                        DVD, Game, and Video Rental IndustryCompanies that rent: prerecorded physic...
Redbox Statistics                                               In Disc Rental Market, Redbox           Redbox’s Relative ...
Major Players: Identify and Profile          Current Competition in DVD Rental                      New Competition in Mov...
Strategic Groups and Mobility Barrier Movies and:TV shows, orDocumentarie                                                 ...
Competitive Set                                    Netflix                             Hulu Plus               Amazon Prim...
Potential Brand     Differences                                   Brand Assessment                              Consumer W...
Sources of Brand Equity              Brand Awareness                                                Brand AssociationsCust...
Brand Perception vs Marketing Expenses                   YouGov: Buzz Score                                          Marke...
Next Steps                    Geographical                     Expansion                                      Format      ...
• Overview• Consumer Market• Competitive Landscape• Brand Assessment
•   http://www.redbox.com/release_20110811•   http://www.prnewswire.com/news-releases/verizon-and-coinstars-redbox-form-jo...
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Redbox presentation final project 1

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A brand audit on Redbox pre-online streaming entertainment.

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Redbox presentation final project 1

  1. 1. By: Aditi Mishra, Annie Chin,Ashley Chang, Mayant Lan, Shirley Liu
  2. 2. History FEB - Coinstar becomes Launched video game Coinstar invests in sole owner of Redbox; rentals nationwide Redbox, making it a separate ~19,000+ locations ~29,000 locations company 2005 2009 2011 2002 2006 2010First Redbox created SEPT - Online reservation system SEPT - 1 billion rentals in McDonalds launched at www.redbox.com reached ~1,900+ locationsRelevant Alliances Media Distribution In Store/Kiosks Partnerships Online Streaming Growth Objectives Maintain current relationships with customers and partners Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  3. 3. Business Model: Direct-to-Consumer • Instant gratification: widespread locations in grocery stores, drugstores, restaurants, convenience stores, and popular landmarks. • Online rental reservation: using the same interface of its kiosks, users can search for the nearest Redbox location and availability of titles at that particular kiosk (made possible by real-time inventory updates), and reserve the movie for later pick-up. • 3rd party website promoters: share promotional codes that give users free rentalsOverview Consumer Market Competitive Landscape Brand Assessment Appendix
  4. 4. Redbox Consumer Segmentation Demographics DemographicsTarget Market for Disk Rental Industry Expanded Age: Young Adults, 18-24 and 25-34 Age: Older, 35-44 Education Level: College Students, Graduates Family Size: 63% have at least one child, 51% Income: Middle Class, $50-100k have a household of at least four people Generation: Y Income: Low-Middle Class, $30-60k Family-Oriented Renters City or Suburbs: City City or Suburbs: Suburbs Casual Renters Psychographics/Attitudinal Psychographics/Attitudinal Motivations/Aspirations: a sense of Motivations/Aspirations: a comfortable accomplishment, social recognition, excitement life, family security Cares About: social involvement, trying new Cares About: financial security, safety, social things, being efficient, progress etiquette, time, familiarity, trust Lifestyle: early adapter, tech savvy, multi- Lifestyle: slightly conservative, old- tasker, liberal, adventurous, in fashioned, traditional Attitudes: open, confident, willing to explore control, independent Attitudes: practical, strict, patient innovate technology/new media, hopeful Product Usage Product Usage User Status: light user User Status: regular user Rental Frequency: low-medium, occasional Rental Frequency: medium Product Benefits: cheap, numerous Product Benefits: cheap, convenience locations, no commitment (quick/easy) How is it Used?: social gatherings, dates, leisure How is it Used?: family & quality time, leisure Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  5. 5. Industry Trends Economic: Threat Demographics - Psychographics Recession makes rentals more Target Market for Disk Rental Industry attractive but loweringIndustry & Competitive Environment unemployment reduces leisure time 18 - 24 25 - 34 Age 35 - 44 45 - 54 Political/Legal: Threat 55 - 64 65+ It is now legal to download Most attractive to families and young adults and stream movies Older age groups least willing to switch to online streaming technology Sociocultural: Threat Growing trend to online media Viewing Behavior consumption PPV or On-Demand 55+ TV Programming 35 - 54 Technology: Threat DVDs or Blu-ray 18 - 34 Shift from physical media DVR All to online streaming 0 50 100 People with increased leisure time availability Global: Slight Threat are more likely to rent movies International barriers but growing Most attractive to owners of multiple consoles low-cost domestic entrants Dominant in middle to high income households Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  6. 6. Target Market for Industry and Brand Geographics DemographicsTarget Market for Disk Rental Industry Expanded Popular in Southwest, West, & Great Lakes Households Target Market for Redbox College Consumer Wants and Needs No Kids 12% Education 37% 51% Has Kids Most Important When Choosing Rental Outlet 43% Distance 14% 1% Ethnicity 44% Price Caucasian Selection 4% Afr. Am. No College Membership Asian Return Policy College Late Fees Hispanic Graduate School Technology 74% Other Hours of Operation 8% Time Income Level 16% Top wants are distance, price, & selection 2% Age 7% Most preferred service is subscription-based 15% Under 18 14% 26% 18-24 Target Market for Competitors 25-34 29% 51% Netflix: high-involvement consumers and 27% 35-44 web-savvy consumers 45-54 $0-50k $50-100k Blockbusters: a range, low to high 11% 55-64 $100-150k $150k+ involvement subscription based consumers 23% 65+ Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  7. 7. Industry Key Statistics DVD, Game, and Video Rental IndustryCompanies that rent: prerecorded physical media like discs that contain movies or video games; includes subscription for mail-distributed and in-store media rentals Projected (‘11- Industry Health & (‘06-’11) Annual Attractiveness Decline ’16) Annual growth -9.8% growth -13% Industry Statistics Cost-Leadership Industry Customer’s willingness to buy Customer Value Price of Industry Trends product/service Company Value Trend toward online-streaming (Profit) Trend away from Blu-Ray Cost of product/service Trend to video game rentalsOverview Consumer Market Competitive Landscape Brand Assessment Appendix
  8. 8. Redbox Statistics In Disc Rental Market, Redbox Redbox’s Relative But this Market dominates. Market share’s increasing Strength and will last for only while other competitors’ shares Competitive Position another 5 years decreasing Redbox Revenue Disc Rental Market Share Redbox and Competitors’ 40.00%$400.00 $363.90$350.00$300.00 30.00%$250.00 $271.90$200.00 20.00%$150.00$100.00 $50.00 10.00% Q2 10 $- Q 2 10 Quarter 2 11 0.00% Q2 11 Online/By National All other Redbox Redbox Revenue in $MM Mail B&M B&M Rental Renal (includes Provider Chains local) (includes .com) Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  9. 9. Major Players: Identify and Profile Current Competition in DVD Rental New Competition in Movie Rental (physical Media) (Online Media) DISH Network Corp, Inc: Coinstar Inc: Netflix Blockbuster Redbox• 13.9% Market Share • 24.2% Market share • 4.9% Market Share• 2nd largest satellite TV company • Kiosks DVD and Blu-Rays disc • Pioneered mail-order rentals• April 2011 auction Blockbuster renting ‘90s $220 Million • Redbox is 80.7% of Coinstar’s • Taken initiative in extensive• Close > 1,000 stores revenues streaming library (90k DVD• 5.1% revenue from physical • Redbox in more than 26,000 titles) media rentals locations in U.S. • 14.8% revenues from physical• Will open more DVD rental kiosks • Revenue boost +259.8% through disc rentals (cheaper to operate) ’11 • Revenue declined as company’s• Open online streaming, still do • Convenience of location and low- subscribers switched from mail mail order price point is key to competing with to streaming• Revenues -21.7% annually online movies • 95% mail ordered 2009, now through 2011 • Kiosks offer 1-day movie Rentals 35% mail order• Reduced operating expenses • Low price possible with kiosk low • Adverting efforts curb• Poor DVD title releases worsened maintenance cost bankruptcy Blockbuster’s performance • Growth will be slower because market saturated Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  10. 10. Strategic Groups and Mobility Barrier Movies and:TV shows, orDocumentarie Netflix s, or Video Redbox Hulu Amazon Games Plus Plus Product Line Breadth (Selection) Movies/shows only Mail Distribution Technological Approach Online Streaming Or Kiosk only Mobility Barrier: Proper licensing to download movies for distribution. Gives movies studios strong supplier power. But partnership with Verizon removes barrier . Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  11. 11. Competitive Set Netflix Hulu Plus Amazon Prime Plus Redbox • DVD Mail rental OR streaming for • ~$100/year Amazon ~$8/month • 1,000 TV shows for Prime account, you • Pricing option for • No late fee for returns ~$8/month get prepaid shipping What’s offered online streaming • Membership service: choose • Online Streaming free unspecified package, 30-day free trial, can halt • 2500-5000 titles when on vacation similar age as Netflix • Price: charged monthly for whatever package • 1st mover advantage online- streaming • For +$3-$5, can get • Offers rental games • Documentaries, movies, TV shows recent TV (kiosk) • Larger library for selection (than • Bonus TED shows, etc. shows/movies if tied • Offers latest movies • Recent TV shows air fast to TV (via iTunes) (newer than Netflix)PerceivedStrengths Redbox) • on all major tv-connected • Most access to TV shows • Coverage good devices, as well as mobile devices, • User-friendly streamlined • Cheaper option than and PCs navigation Netflix or Hulu Plus • Fast, reliable streaming, • No ads • Simpler use • Growing online selection • Not as good on • User-friendly recommendations • Not available on • Less selection thanWeaknesses • Netflix and needs to Perceived • No games Content not available on mobile • TV content not up till 1 year after all devices • Not user-friendly increase it to achieve air • Short ads interface point of parity • Subscription pricier than • Great on PC (only need • Less video selection alternatives Hulu) but need Hulu plus than Netflix and Hulu for TV and mobile Plus Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  12. 12. Potential Brand Differences Brand Assessment Consumer Wants and Needs Low Energy Cost: Easy toPrice: “you can’t beat $1.20 browse and find right moviefor movie rental” Competitor Strengths Low Time Cost: closeSpeed: Instant Service in location, fast streamingterms of physical rental. Low Monetary Cost: cheapConvenient: You don’t need to watch a moviemembership. Self Service Relevance: having the rightNew Releases: “Hot newReleases” Tablestakes Vulnerabilities movies in stock for them Points of Parity Competitive Brand (Category Benefits Brand Strengths Consumer Needs DifferencesUser Friendly: very easy to Differentiation Title: Netflix has more titleuse service optionsQuality: offers blue-ray discs Membership: Netflix offers membership perksCompatible Devices: samedevices for rental discs Content: Netflix offers more content/information in theirVideo Games/Streaming: libraryMovement towards videogames and streaming Customer Service Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  13. 13. Sources of Brand Equity Brand Awareness Brand AssociationsCustomer Touch points Social Media/Promotions Partnerships Strengths/Uniqueness• 84% Brand Awareness • Facebook: 4,190,980 • Pepsi Cola ViewPoint Reviews:• Points of Purchase: Likes • Orville Redenbachers • cheap (54) Walgreens, Wal- • Twitter: 43,457 Followers • Stouffers • return to any Mart, McDonalds, 7Eleven • Redbox Share Your Love, • Groupon location (54) , Albertson’s, Staterbros • 4250 Entries • Verizon • convenient (51)• 270 Million people walk • 4215 hours spend • many locations (45) past a redbox kiosk every with brand • hot new releases week • Redbox 10 Days of Deals (39)• 68% population lives Campaign • reserve online (36) within 5 minute drive from • a Unique Redbox kiosk Consumer Effort• 28,000 locations nationwideOverview Consumer Market Competitive Landscape Brand Assessment Appendix
  14. 14. Brand Perception vs Marketing Expenses YouGov: Buzz Score Marketing Expenses Netflix Redbox 199 10 Marketing Expenditures (In Millions)Netflix, Redbox, DirecTV and Blockbuster were measured withYouGov BrandIndex’s Buzz score, which asks respondents: "If youveheard anything about the brand in the last two weeks, through Unlike Netflix, Redbox isnt aadvertising, news or word of mouth, was it positive or negative?" big advertiser. Redboxs marketing expenses during theRedboxs Facebook page has nearly 3.6 million "likes" compared first half of this year totaled $10 million compared withwith 1.8 for Netflixs Facebook page, which has attracted more than $199 million at Netflix.81,000 mostly outraged comments about the higher prices. Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  15. 15. Next Steps Geographical Expansion Format change Areas of Exploration New New New consumers consumers Online Streaming TechnologyMarket Format Emerging Targets Kiosk format change Video Game Renters Existing only Existing Online Streaming Renters Existing consumers consumers International Expansion Existing New Products Overview Consumer Market Competitive Landscape Brand Assessment Appendix
  16. 16. • Overview• Consumer Market• Competitive Landscape• Brand Assessment
  17. 17. • http://www.redbox.com/release_20110811• http://www.prnewswire.com/news-releases/verizon-and-coinstars-redbox-form-joint-venture-to- create-new-consumer-choice-for-video-entertainment-138772929.html• http://www.redbox.com/history• http://www.redbox.com/movienight• http://knowledgenetwork.thunderbird.edu/students/2011/12/19/redbox-strategy-in-the-sunset-of- physical-media/• http://business.library.wisc.edu/resources/kavajecz/10_Fall/Coinstar_Report.pdf http://www.quantcast.com/redbox.com• http://clients.ibisworld.com/industryus/default.aspx?indid=1370• http://www.redbox.com/facts• http://www.afterdawn.com/news/article.cfm/2012/02/07/redbox_buys_up_its_biggest_kiosk_com petitor• http://knowledgenetwork.thunderbird.edu/students/2011/12/19/redbox-strategy-in-the-sunset-of- physical-media/• http://www.gadgetreview.com/2012/01/netflix-vs-redbox.html• http://www.quora.com/Hulu-Plus-vs-Amazon-Prime-vs-Netflix-Which-is-best• http://www.ibtimes.com/articles/261456/20111205/amazon-prime-vs-netflix-hulu-plus-best.htm• http://phx.corporate- ir.net/External.File?item=UGFyZW50SUQ9NDM0Nzg3fENoaWxkSUQ9NDU0MTcyfFR5cGU9MQ==&t =1• http://www.viewpoints.com/Redbox-DVD-Rentals-reviews• http://today.yougov.com/news/2011/07/20/sharp-drop-netflix-after-price-changes/

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