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1
Kristy DumlaoJordan NelsonHilary LaBrashJennifer Noinaj
automated dvd rental
2
Agenda
1. Project Description2. Cultural Analysis3. Economic Analysis4. Competitive Market Analysis5. Marketing Plan6. Conclusions
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
3
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
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
4
How to Rent
PROJECT DESCRIPTION
CULTURALANALYSIS
ECONOMICANALYSIS
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
5
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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
8
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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
10
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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
11
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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
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
COMPETITIVE MARKET ANALYSIS
MARKETING PLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETING PLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
Communication• Telephone (21
million)• Mail• 90% access to
internet• Increasing usage of
web 2.0 applications
PROJECT DESCRIPTION
CULTURALANALYSIS
ECONOMIC ANALYSIS
COMPETITIVE MARKET ANALYSIS
MARKETING PLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETING PLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETING PLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETING PLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
20
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
21
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
22
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
COMPETITIVE MARKET 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
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
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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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
25
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
26
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
28
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
29
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING 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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
Easy $2 DVD Rentals. No Late Fees.Rent and Return at many Locations
Many locations near you.
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
32
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
COMPETITIVE MARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
33
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
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
DESCRIPTION CULTURAL ECONOMIC COMPETITIVE MARKETING CONCLUSIONS
34
Recommendations
1. Pricing strategy2. Better movie selection3. Longer rentals4. Strong market5. More locations
PROJECT DESCRIPTION
CULTURALANALYSIS
ECONOMICANALYSIS
COMPETITIVEMARKET ANALYSIS
MARKETINGPLAN
CONCLUSIONS
35
Questions?