Redbox in Australia

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Kristy DumlaoJordan NelsonHilary LaBrashJennifer Noinaj

automated dvd rental

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Agenda

1. Project Description2. Cultural Analysis3. Economic Analysis4. Competitive Market Analysis5. Marketing Plan6. Conclusions

DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS

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What is Redbox?• Founded 2003• 17,500+ kiosks in US• US$1+tax/night• 575 million+ rentals• Leading grocery and

convenience stores• 700 DVDs• 200 new release titles• New movies on Tuesday

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS

COMPETITIVEMARKET ANALYSIS

MARKETINGPLAN

CONCLUSIONS


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How to Rent

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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DVD Kiosk Rentals in the US

Coinstar, the owner of RedBox, had “more than doubled its second-quarter revenue from a year earlier after

almost doubling its number of kiosks to almost 18,000 and boosting sales per machine by 33%” (Graser, 2009).

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Facts and Characteristics• Official Language: English• Political Structure: Parliamentary

Democracy, Relatively Stable• Location: Island between Indian and

South Pacific Ocean• Historic conflict between British

colonists and Aboriginals, also between Great Britain and colonists

• Major religions: Catholicism and other denominations of Christianity

• Education: Required through age 15-16, literacy rate of 99%

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Cultural Trends• Australians are increasingly

becoming “time-poor”, they look for more on-the-go options for regular activities, including meals

• Young people are getting married later and live alone longer

• Because of the economic downturn, people are looking for cheaper leisure activities

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Leisure Activities• “Audio-visual” is the fastest growing form of

leisure consumption, with Australians spending more than half their time on this type of leisure activity

• Obesity is a growing problem, but many Australians participate in sports to offset this trend

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Film and DVD Industry

• Large online DVD rental industry, and online rental sales have increased even though traditional retail rental sales have dropped

• Australians tend to prefer US films, but certain Australian films still find large-scale success

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Sales & Players• 2007: AVSDA acquired AU$211.4 million video sales from the

13.2 million copies sold to rental stores• 2007: video rentals generated revenue of AU$522 million • 4th globally in purchasing DVD players• 97% households had at least one with average of 1.7 players

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Get ’em while they’re red hot!• Australian DVD sales and rentals

were AU$1.27 billion from 2007-2008

• Australian DVD rental market brings in about AU$2 billion each year

• Popular titles in the film industry helped increase Australian rental markets from 2% in 2007-2008 to at least 10% in 2008-2009

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


Country Analysis• Population: Over 25

Million– Leveling population

growth– Birth rate slowing

• Population Density– 93% in urban areas– Migration towards

urban areas– Ethnicities

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS

COMPETITIVE MARKET ANALYSIS

MARKETING PLAN

CONCLUSIONS

1995 2000 20070

102030405060708090

10088.42 90.86 93.12

11.58 9.14 6.88

Households in Australia

UrbanRural


Economic Analysis

• GDP: US$1,118,112,100– Growth rate: 1.9%– Expected to slow in future

• Income per capita: US$47,071– Family income: US$53,002

• Distribution of Wealth– 30% making lower than US$20,000/year– 40% between US$20,000 and US$40,000

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETING PLAN

CONCLUSIONS


Resources and Transportation

• Major Resources– Oil– Steel

• Major Modes of Transportation– Cars & air transportation– Similar to the United States– Major ports at Sydney and Melbourne

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETING PLAN

CONCLUSIONS


Communication• Telephone (21

million)• Mail• 90% access to

internet• Increasing usage of

web 2.0 applications

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETING PLAN

CONCLUSIONS


Balance of Payments and Exchange Rate

• Balance of Payments– -US$16,985,000 in 2008 – Trending upwards

• Exchange Rate– .79 against the USD– Trending upwards

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETING PLAN

CONCLUSIONS


Trade Analysis & FDI• Import Taxes

– High taxes among corporations• Other losses of revenue:

– Customs– Licenses– No embargos or quotas

• Tariffs change with quantity and item– Must apply for information

• Foreign investment in growing Industries– Housing, Transportation, Leisure and Alcohol– Redbox in Leisure industry

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETING PLAN

CONCLUSIONS


Labor Force and Inflation

• Size:– 10,770,200 (Euromonitor) – Growing Demand– Unemployment Lowering– Under 5% in 2008

• Inflation– Under 3% for past 5 years

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETING PLAN

CONCLUSIONS


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redbox in a nutbox

Relative Advantage• Internet accessCompatibility• Lifestyle & access to DVD players• Utilizes credit or debit card transactions• Leisure sectorComplexity• Credit or debit card transactions• Screen instructions & email address• CaseTrialability• Time & priceObservability• Word of mouth• Foot traffic and utility of retail and grocery stores

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Who’s the competition?

• Brick-and-mortar rental stores• Online rental websites• Self-serving rental kiosks• Video on demand service

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS

http://www.oovie.com.au/


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In-Store ProfileNAMES: Blockbuster, Video Ezy, Civic Video and Network VideoLOCATION: all across AustraliaAVAILABILITY: store hoursFEATURES: • Titles, games, Blu-Ray, browsing, movie cover & synopsis• Online reservationsADVERTISEMENTS:• Discount codes & prize packs. • Civic Video: Terrific Tuesday, disc cleaning, AU$1 Tuesdays, 4 Movie

Hires for AU$12, 5 Kid Flicks for AU$5 • Network Video: Cands4Films Festival DEALBREAKERS??: • Average new releases AU $4.60 & older movies AU $1.60• Blockbuster : AU$4.95 -AU$7.95• Video Ezy: AU$6 DVDs and AU$7 Blu-Ray Discs • Civic Video: AU$4.95 for DVD /Blu-Ray Discs• Network Video: varying costs higher than kiosks• Late fee policies

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Online ProfileNAME: QuickflixLOCATION: InternetAVAILABILITY: whenever you’re onlineFEATURES: • Titles, Blu-Ray, online browsing and

request titles • No late fees• Trailers and reviewsADVERTISEMENTS: • Free trial with subscription or rental

vouchers as gifts for family and friendsDEALBREAKERS??: • Wait time for DVDs

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS

Membership Length

Max DVDs per month

Price

1 month (3 DVDs at a time)

10 $26.95

3 Months (3 DVDs at a time)

10 $79.95

6 Months (3 DVDs at a time)

10 $159.95


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Kiosk ProfileNAMES: Oovie and RedRoom DVDLOCATIONS: limited areas of Australia• Oovie in NSW and VIC (~80)• RedRoom in NSW, QLD and VIC (~85 by end of 2009)• supermarkets and shopping mallsAVAILABILITY: 24/7FEATURES: • new releases, games, touch screen, simple DVD case• RedRoom: view pictures, watch trailers, read reviews,

multiple kiosks at one location, manned at peak times but closed otherwise and accessible with membership card

ADVERTISEMENTS: • Discount codes• Oovie: 2 for 1 promo code but expires within two days• Free Oovie Wednesdays• RedRoom: membership cards

DEALBREAKERS??: • RedRoom: AU$2.95 for SIX hours, sooner return, less it

costs• InstantDVD: AU$2.99 per day until 7pm the following

night

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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More on boxing people in!Distribution of Product• Woolworths, Safeway, IGA, BI-LO, Aldi, 7-Eleven and McDonalds. Advertising and Promotion• television commercials and endorsements, outdoor advertisements, radio

excerpts, internet ads, location of machines• DVD kiosks discounts for first-timers and loyal users which can be

distributed through stores where kiosks located

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Red Lights for Redbox in Australia• Brand loyalty (Oovie & RedRoom)• Credit information• Screen Australia• Redbox lawsuits• Piracy issue

– Cost AU$230 million– 47 million pirated DVDs in circulation while 52

million legitimate DVDs sold– 2007: conducted 85 raids

• Internet piracy– Australian Federation Against Copyright Theft

awareness

PROJECT DESCRIPTION

CULTURAL ANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Marketing Considerations• Targeting Objectives

– Young adults ages 18-24– Both genders– In college or starting new career

• Marketing Objectives– 80% awareness of the product with a 75%

experience rate– Gain 60% retention ratio and create a loyal

customer base• Positioning Objectives

– Low pricing strategy: AU$2/night– User-friendly and convenient

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Product Introductions

• Pricing AU$2• 24-hour rental period• Machines accessible 24/7• Read reviews and watch trailers• DVD recommendations

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Market Penetration• 100 machines in Sydney

– 4.4 million people• Supermarkets

– Aldi, Franklins, Ritchies, Supabarn

• Fast food restaurants– Chicken Treat, Donut King,

Eagle Boys, Oporto, Grill’d• Fitness centers

– Fitness First & Goodlife Health Club

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Distribution• iMOZI – Digital media kiosk designs• Distribution Agreements

– Summit Entertainment– Lionsgate– Sony Pictures Home Entertainment

• Motion Picture Distribution Association of Australia

• Australian Visual Software Distributors Association Ltd

• Additional film distributors– Anchor Bay Entertainment, Hopscotch Films,

Hoyts Distribution

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


Marketing Communications• Internet Advertising

– CPM very low– Penetration to 90% of

population– Large usage by target

demographic• Guerilla Advertising

– Receipts– Placement in high traffic

areas• Not using TV or print

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS

Easy $2 DVD Rentals. No Late Fees.Rent and Return at many Locations

Many locations near you.


Advertising

• Small Budget– Operating margin– Similar to the US advertisement

• Analysis of Media Costs– Lower cost for internet– Existing partnerships– Large TV advertising costs– Print advertisement

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Promotions• In-store coupons from stores that have

Redbox machines– Free rental– Reduced rental fee: AU$1

• Discount codes: email list & SMS service– First-time use: One free rental for signup on e-

mail list & on SMS service– Repeat use: One free rental after 15 movies or

suggesting friends/family– Discount for renting numerous DVDs at once: 3

DVDs for AU$5

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMIC ANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Resource Requirements• DVD equipment: 100 machines• Kiosk & maintenance (AU$6

million)– Maintenance includes labor

• DVDs & casing (AU$2 million)• Transportation (AU$2 million)• Marketing costs: advertising &

promotions (AU$1 million)• Break-even: 15 DVDs/day

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS


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Recommendations

1. Pricing strategy2. Better movie selection3. Longer rentals4. Strong market5. More locations

PROJECT DESCRIPTION

CULTURALANALYSIS

ECONOMICANALYSIS


MARKETINGPLAN

CONCLUSIONS

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Questions?

Redbox in Australia

Entertainment & Humor

Transcript of Redbox in Australia