I.

EXECUTIVE SUMMARY

The 2018 DECA Clark Creative Marketing Project was based on the nationally known
company, Redbox, which allows users to rent DVDs, Blu-rays, and games. The company beat
BlockBuster and rose to become the leader of movie-rental services. However, as people started
wanting more videos on demand, Redbox was not able to keep up with the times. With
competitors like Netflix, Hulu, and others, Redbox has steadily declined in the number of total
rentals, rental kiosks, and the amount of revenue. The primary objective of the project was to
change the marketing platform so as to revive the customer base and to increase sales. The
methods that will be used to achieve these results were researched extensively through a primary
and secondary assessment of Redbox’s consumer perception of the product, current financial
situation, and the advantages it has over its competitors. The research focused on three main
questions:

1. What can Redbox do to gain a competitive edge over its rivals?

2. How can Redbox properly utilize social media to recapture the interests of Generation Y,
and spark the interests of the Baby Boomers?
3. What can Redbox do to maximize its advertisements and special deals?

In order to answer these questions, the Chapter Representatives took the initiative to
obtain their own primary source by conducting multiple surveys, both online and in person. This
amounted to a total of 160 respondents of varying demographics. The surveys revealed the
average consumer’s perception of Redbox, Netflix, and other video services. Additionally, target
market focus groups and interviews were conducted amongst community members and students.
These focus groups and interviews allowed for a more in-depth approach than the surveys and
gave reasons for why consumers preferred certain services over others.
For secondary research, statistics and trends showed Redbox’s financial status and how it
compared to other services. The history of Redbox’s popularity and past performance as well as
the history of beaten competitors, like Blockbuster, were also extensively researched. Lastly,
Redbox’s consumer perception and market share/growth in the video streaming/renting industry
was analyzed. From the primary and secondary research, a conclusion came together.
The chapter representatives created the concept “RED”, which involves Rethinking the
marketing, Enhancing the product, and Deepening the differences. These three ideas made up the
strategies to help Redbox bounce back and become better. They include advertising through
social media, putting out more locations, and advertising that Redbox is different from its
competitors. If this were to all be implemented, it would likely see Redbox’s revival. The
Chapter Representatives greatly enjoyed helping the company and encourage them to keep
Thinking Outside of the (Red)box.
 II. INTRODUCTION

A. Statement of Problem

The main problem that will be analyzed in this report is the fact that Redbox fails in keeping up

with current trends as well as fails to innovate their marketing techniques. As an effect, Redbox

is in the declining stage of the product life cycle and is predicted, like Blockbuster and many

others, to follow the steps of the dodo bird into extinction.

The Competitive Market

In the 1980s, Blockbuster was everyone’s favorite video rental store. They had a huge

selection of over 6,500 VHS tapes, were open longer than most stores, and displayed all titles on

shelves instead of behind counters. The company had some problems because of their

background and received a lot of criticism, but they managed to stay afloat until about 2004,

when Redbox first started gaining popularity. Redbox was cheaper, carried more options, and

was just more convenient for the average American. Then, with the rise of newer technology and

faster internet, Redbox started fading into obscurity as companies like Netflix and Hulu offered

even better services. These companies offered streaming anytime, anywhere, and offered a much

wider selection. As technology changes, the old way of doing things falls out of favor, and

Redbox started to fall out with it. However, because the company realized this, they have started

an “On Demand” service which is now in public beta. But if Redbox wants to survive for any

longer, they will need to beat their rivals, not just meet them.

Marketing Problems and Dissociation With Current Trends

Redbox’s problem carries beyond the fault of their competitors. The ineffective

marketing campaign carried out by the company contributes towards their downfall. For
example, social media is now one of the most used forms of advertisement today. Yet, Redbox’s

Facebook and Twitter pages are dry and have little to no interactions with consumers. Compare

this to Netflix, who regularly shares jokes with fans and provides updates on their shows. A good

majority of social networking sites are used by Generation Y, who was once the main consumer

of Redbox. However, as stated above, with better and easier technology, Redbox has lost the

interest of that market group. One can clearly see a correlation between losing Generation Y’s

interests and not maximizing the usage of social media. In addition, Redbox does not utilize their

text club well enough. While the program is simple and has fairly good deals, not enough people

know about the text club. This means that though they have good marketing skills, their

advertisements are not getting out to as many people as possible. In a similar way, Redbox Play

Pass, which was a point system where every 100 points earned the consumer a free movie, was

unknown to the public. These points prove that even when deals are good, if they are not

marketed towards the right group of people, or not marketed well enough at all, they are useless.

In terms of trends, Redbox is very far behind current trends. Their new “On Demand” service

might help them for a bit, but Redbox needs to look beyond current trends into rising ones so that

they can stay on top of the video streaming/renting market. There have been many companies

who have gone out of business due to not being able to cope with current trends. These include

Blockbuster, Barnes & Noble, and Borders. If Redbox wants to defeat the product life cycle and

go into product extension instead of just declining over time, they must learn from the mistakes

of those companies.
 B. Significance of Problem Studied

Effects on the Film Industry

While some may accuse Redbox of taking away from the movie industry’s revenue,

Redbox actually does quite the opposite. The company reinvests 50% of its revenues back into

the studios that provide it with new titles and provides new revenue streams to studios. This

benefits the movie industry and its community greatly because it supports them in making new

titles and production. In addition, the company makes media more accessible to those who may

have a TV but who don’t have the newest streaming technology. Redbox increases consumer

interest in film and video games.

C. Background Information

The Business

Redbox was initially founded in 2002 and created for McDonalds. It sold various

products under the name Ticktok Easy Shop but was later closed down. Gregg Kaplan then

decided to use the kiosks to rent DVDs, and after prices of a dollar a day were set, Redbox

soared through its competitors and quickly became very popular. Coinstar then bought a majority

of the company and started placing the rental kiosks into everyday, easily accessible places such

as supermarkets. In 2011, 68% of the American population lived within a five minute drive from

a rental kiosk, and Redbox alone accounted for more than 50% of the total disk rental market. In

2012, Redbox purchased Blockbuster and gained its retailer contracts and DVD inventory. The

number of items rented peaked in 2013 with over 777.27 million rentals that year. However, as

following the product life cycle, Redbox’s profits slowly began to decline as their competitors

outdid the company. Since 2014, Redbox has seen a steady decline in its market share and sales.
The Target Market

Redbox was a perfect product for those on the go; those who didn’t have time to stop at a

store to pick up their DVDs. But as more and more people use technology in their favor, even

Redbox became too inconvenient. The media industry is rising, though, and as seen in the graph

at left, the most profit can be made from

those within the age range of 20-35, or,

Generation Y. Students are always busy

but enjoy taking time to indulge in shows,

movies, and video games, but to recapture

the interests of Generation Y means to

take in the fact that Generation Y uses more advanced, newer technology than any other

generations. Redbox could also aim to spark the

interests of the Baby Boomers, or even the Golden

Generation. People in these age ranges might not

get out of their house much, and so, if using

proper marketing techniques, Redbox could easily

spark their interests and gain another target

market. In the graph at right, one can see that

Baby Boomers and Seniors watch more TV shows

than other age groups. Redbox could easily

capitalize on this by making it more accessible to them.

 III. PROCEDURES AND RESEARCH METHODS USED

A. Secondary Research

The Redbox Social Media Pages (Facebook and Twitter)

With Facebook and

Twitter being one of the most

popular social media sites on the

internet, extensive investigations

on Redbox’s social media

accounts were done to identify

the possible problems of

advertisement. A major issue that was recognised was that tweets were getting around an average

of 15 likes per tweet with a 350,000 follower count, which is shown in the figure above.

Therefore, this shows how Redbox’s Twitter account was simply not being utilized to its

maximum potential.

Also, while looking at their Facebook, one can notice that when an account posts memes

and jokes are to advertise businesses, they were more successful when compared to a simple

announcement. Therefore, after understanding how social media platforms operate, there are

many ways that Redbox can conduct changes to their social media account so that they will be

able to efficiently advertise their products on social media.

The Netflix Social Media Pages (Facebook and Twitter)

In order to understand further on the topic of how social media users “Like” posts on a

social media platform, extensive research on the currently successful companies, ones that fully
utilize social media, was necessary. This is helpful for any unsuccessful business trying to

change their social media. The biggest rival of Redbox that utilized their social media well was

Netflix. With a follower count of more than 4.5 million and likes ranging in the 4 to 5 digits, the

ratio of likes to followers is a lot

better when compared to

Redbox. One reason for this

could have been that Netflix

could connect better to its users

by joking around. Their social

media pages showed that they

had a great understanding of

their target audience and knew

how to reel people in. The

Netflix Twitter account is very relatable to the consumer and it understands their audience,

making Twitter users more inclined to like and retweet it. More likes and retweets garners

Netflix free advertisement so that more people can get information on Netflix once they see a

tweet about Netflix. By examining posts, one could tell that there was a definite problem in the

way that Redbox was using social media as advertising when compared to Netflix, and further

proves how they were not utilizing it to its fullest like other companies.

Additionally, Netflix gets Facebook likes and views in the thousands compared to the

Redbox Facebook, which is unsteady in that it may get over 300 likes on one post, but four likes

on the next. The ratio between likes and views for Redbox’s videos also get 1k views, but less
than ten likes. The major differences between the two Facebook pages was that Netflix uses short

clips to advertise movies and shows while Redbox does not. By understanding how movie/TV

show enthusiasts work, there were many changes that could be made for Redbox to appeal more

to their target demographic.

Articles

In order to understand how the usage of Redbox was declining, even more secondary

research had to be done about the state and demographics of Redbox’s business as a whole.

Through research, multiple problems could be identified that correlated to Redbox with their

income and multiple reasons in which their businesses have been struggling. Through articles

about Redbox, the problems that Redbox was running into could be understood at its roots,

therefore being able to propose an effective method to fix the struggles.

Redbox’s revenue had dropped 17% to $407 million in

2015, while movie rentals fell 24% year over year. In a matter of

another year they lost 1 out of 4 customers according to

Variety.com. Also, as shown in the figure to the left, 2013 was

the year that they peaked with the most amount of rentals.

However, since 2014 there has been a steady decline. This was

also the year that the price of renting a DVD increased from

$1.20 to $1.50. This shows how there was a correlation with

these two events. However, this wasn’t the main reason why Redbox was failing.

With more investigation on the subject on why the company has been on a decline,

research showed that it was due to the fact that there has been lots of reports of “weak content”.
This is described as movies that aren’t very appealing and movies that people don’t like to

watch. This problem of weak content is something that must be fixed in order for Redbox to

succeed.

However, one thing almost every source about the main reason for decline was the ever

changing adaptations of technology along with major competitors like Netflix and Hulu. These

companies have been successfully keeping up with the times and have changed their platform to

video streaming services. In contrast, Redbox has not officially changed or added a video

streaming service, although there is one in beta out to the public, because Redbox has most likely

realized by now that they must do something to become current again. As other companies

became more and more of a threat to Redbox, something had to be done to make Redbox more

unique and adapt with others. This didn’t necessarily mean to follow the bandwagon and make

themselves a video streaming service, but to make them more convenient and make themselves

able to stand out from the other companies.

In conclusion, the secondary research that was conducted was used to understand the

services Redbox provided and how their company compares with other companies through social

media, which is an important platform for the marketing campaign. Also, being able to

understand the issues Redbox had was crucial when coming up with possible solutions or

alternatives to revive the declining company.

B. Primary Research

The Redbox Official Website

When examining the core of the problem of why Redbox is declining and being overrun

by companies such as Netflix, one needs to understand what type of services they are providing.
On the Redbox official website, it is shown that they have movie rentals, game rentals, and a beta

version of a streaming service along with a live chatting service for any questions. They are also

trying to implement a new rewards program. Their website is easy to navigate and provided basic

information.

Purpose of Survey

The chapter representatives took the initiative to obtain their own primary source by

conducting multiple surveys, both online and in person. This amounted to a total of 160

respondents of varying demographics, including a number of DECA Clark members who were

willing to offer their input. The surveys revealed the average consumer’s perception of Redbox,

Netflix, and other video services.The purpose of the survey was crucial to investigate people’s

thoughts towards how the general population thought and used Redbox. Google Forms provided

the platform in which the survey was hosted. There were 90 responses for the online survey that

were used to identify the usage of Redbox and competitors as well as problems that they have

encountered. This helps understand fully on how the people want their services to be so that they

will be more inclined to use them.

Survey

The survey was created using Google Forms. This survey included 11 questions that were

either multiple choice, select all, or fill in the blank. The survey had 90 responses.

The survey questions go as follows:

Video Streaming Services Survey

Have you used Netflix (video-streaming service) in the last month?

a. Yes
b. no

Have you used Redbox (dvd renting service) in the last month?
a. Yes
 b. no

Which video services do you use?(choose all that you use)

a. Netflix
b. Redbox
c. Hulu
d. Amazon
e. HBO
f. Other_______________

What are some problems you have encountered when using video-streaming services?
_______________________________

Do you think video-streaming services should have reduced prices?

a. Yes
b. No
c. I don’t know the prices

Redbox lets you rent PS3, PS4, Wii, Xbox, and Nintendo Switch games. Do you think Netflix should have game
streaming services?
a. Yes
b. No
c. Other______________

What video-streaming service do you think is the most popular among your peers?(choose all that you use)
a. Netflix
b. Redbox
c. Hulu
d. Amazon
e. HBO
f. Other______________

Have you ever used BlockBuster?

a. Yes
b. No, but I at least know what it is
c. No, what is blockbuster

If you had used BlockBuster, why do you think they went out of business?(choose all that you use)
a. I never used blockbuster
b. Competitors were better
c. Inconvenient
d. Not enough options
e. other__________

If you have used Redbox before, what do you think they can improve on?(choose all that you use)
a. I never used Redbox
b. Cheaper prices
c. More options
d. Available in more places
e. Other_______________

If there were a Redbox Kiosk (machine where you can rent movies/games) next to the vending machines at your
school, do you think you would use Redbox more?
 a. Yes
b. No
Target Market Focus Group

The survey gave results mostly from Generation Y and Z. However, because this project

looked into Redbox additionally focusing on the Baby Boomer generation, a focus group was

formed to get their opinions and input. Six members between the ages of fifty-one and sixty-nine

were interviewed which gave deeper feedback regarding the older generation’s thoughts. Even

though the participants all came from different backgrounds, their answers were very similar.

Some questions asked were, “Why do you use Redbox when there are many other options?”

Many of them said because they didn’t want to be committed to a certain service, because they

may not get the time to watch every month yet they would still have to pay. The facilitator also

asked them if Redbox should consider changing their price for a one night rental back to $1.20.

One of the participants stated that, at one point, “Those DVDs used to cost but $1.” He told the

chapter representatives that they should offer a 3-6 month publicized trial of $1 DVDs, and see if

it increases their revenue. Although this focus group was very informal, the focus group

moderator was able to obtain a lot of valuable information.

C. Involvement of Chapter Members and Businesspeople

Involvement of Chapter Members

The main method in which fellow chapter members were involved was through a

one-on-one interview. During the interview, three questions that required in-depth thinking were

asked. The interview, unlike the primary and secondary research, gave more insight on and

provided honest opinions that were not able to obtain through a simple internet search. Below are
some excerpts from the interview where bolded text is the interviewer and italicized text is the

interviewee:

Q: Netflix currently dominates the streaming market, making between $10-22 million a

month. What do you think helped make them so popular even though they started out as a

small business that mailed DVDs to people?

A: It was able to adapt and become more convenient.

A: It is convenient, always current, and just awesome.

Q: In your own opinion, what do you predict will be the next biggest trends in terms of

video streaming? For example, do you think the mass population will start using virtual

reality to watch media?

A: Virtual reality is pretty popular right now, so maybe that.

A: I don’t know, maybe people will start getting access to movies earlier.

Q: If you could talk to the CEO of Redbox, Galen Smith, what advice would you want to

give him concerning the future of his company?

A: He needs to be more up with the times. Maybe he should hire younger staff members who can

give him insight, since it’s mostly young people who watch and would rent movies.

A: Adapt or be prepared to go out of business.

Relevance of the Interviews:​ The interviews with two different DECA chapter members

provided insight on the average consumer’s point of view of Redbox, its competitors, and how

Redbox can change. Because Redbox’s main target audience includes students, DECA chapter

members were important to ask. Their opinions were unbiased which is beneficial because many
secondary sources are biased towards one side. The opinions are also creative and therefore can

be implemented in recommendations that Redbox can apply.

Business people

In order to understand the way a business can be fixed and maximize its profits, a

businessperson was contacted. After consulting with the businessperson, information about the

market economy was received and greatly aided the project. The business person that was

involved in the project, Young Yi, was a local company owner of the name MJC. He has been in

the business industry for over 10 years. The interview was conducted via phone call. Another

business person, Senior Vice President of the Technology Payments Business Division Guna

Rajendran, was also contacted to get more input on the project. The same questions were used on

both businessmen, and they are as follows:

What does he think about the future of Redbox?

A: Redbox is going to suffer the same fate as Blockbuster because the business model has

become irrelevant. Redbox can survive to some degree because there is a very niche market for

the consumers, so unless they expand their audience... they aren’t going to thrive well in the

industry.

A: Due to the sudden increase of the internet being used to replace many things that required

physical copies such as books and movies, the usage of hard copies undoubtedly will have a

downfall. A good example of this happening are books vs ebooks. However for Redbox, I say that

they are in a similar, but slightly different issue. Because online media streaming service has a

lot of content [that are not popular movies] that is advertised online, there are still many reasons

for people to use hard copies. It comes down to the disinterest of the people that are reducing the
business’s profits. Therefore I would say that the future of Redbox could be revived as long as

they change with the new generation and appeal to the public through advertisement, social

media presence, and other platforms that can reach out to newer generations.

What would he recommend for a dying company?

A: First off, they should acknowledge that they are dying. A lot of companies don’t even want to

acknowledge that. The company has to look at emerging business models and should have the

foresight to grab the opportunity. Taking a risk is key. Being bold, like Amazon or Netflix.

A: For a dying company, it all depends on the type of products that they are trying to get across

to the consumers. The main reason for a dying company is the fall of the old generation. They

need to know their audience like the back of their hands.

Will there ever be new technology that beats out Netflix and everything else?

A: There will always be newer technology. Netflix has already formed competition like Hulu and

Amazon. Hulu has already formed a way to stream live TV channels and that has started to

attract viewers so other companies will have to find new ways to attract consumers. There’s a

quote that states, “Anything that can be invented has been invented.” I feel that that’s untrue

because if so, we would have still been living in darkness with candles, but now we have

electricity and wifi. There is a lot that we can do. ​Moore's Law, framed by Intel co-founder

Gordon Moore, continues to have a significant impact on the electronics sector as the

fundamental [principle] that guides the course of modern computing and the semiconductor

industry. He noticed that the number of transistors per square inch on integrated circuits had

doubled every year since their invention. Technology just keeps getting better and better.
A: Of course, just like Redbox beat out Blockbuster, Netflix is currently beating Redbox, and

someday something will beat Netflix. However, not all hope is lost. Everyone loved the digital

camera when it came out because it was super convenient, but trends are always reused and now

I see many people carrying around polaroid cameras. A revival of Redbox could happen just like

that, as long as they play their cards right.

IV. FINDINGS AND CONCLUSIONS

A. Presentation of Data

After thoroughly researching statistics about Redbox, Netflix, and other streaming

services, the chapter members decided to survey people so as to further expand the array of

primary sources. People were surveyed individually for about two weeks and 70 results were

received in person. The demographic for the survey was students from the ages of 12-18 because

the survey took place at Ed. W Clark High School. The survey was then uploaded online for

people to take which provided a more varied demographic of 90 respondents. In total, the

surveys amounted to 160 respondents. The surveys provided accurate data which led to making

the recommendations.

Question 1: Have you used Netflix (video-streaming service) in the last month?

1) Results: Of the 160 people

surveyed, 122 (76.3%) had used Netflix at

least once in the last month. 38 (23.8%)

hadn’t used Netflix in the last month.

2) Significance: The importance of

these results are that they clearly show that

 Netflix is used often, and therefore popular. It helps validate that Netflix is greatly used

in the movie/streaming field. From these results one can conclude that Netflix is Redbox’s

current greatest competitor.

Question 2: Have you used Redbox (DVD renting service) in the last month?

1) Results: 14.4% (23) of the people surveyed

have used Redbox in the last month. The

majority, 85.6% (123 people) have not

used Redbox in the past month.

2) Significance: Some of the respondents

didn’t even know what Redbox was. This

clearly displays the problem as the users of Redbox are declining in numbers.

Question 3: Which video services do you use?

1) Results: The largest option

selected was the first option of Netflix,

with about 56.2% of those surveyed

selecting it, although respondents were

able to choose more than one option.

This question had many different

options, but Netflix is clearly towering over the others. Redbox was only the fourth most

selected option with 9.4% participants choosing it. Amazon had 13.5% of the votes and

Hulu received 10.6% of the votes earning second and third place, respectively.
 2) Significance: This shows that Netflix is a huge rival as well as other companies like Hulu

and Amazon. Netflix overpowers the other video streaming services so it is Redbox’s

main competition, but Redbox should still keep Hulu and Amazon in mind. All of those

companies have so much in common, so it is important that Redbox distinguishes itself.

Question 4: Do you think video-streaming services should have reduced prices?

1) Results: 13.8% (22) of the participants

didn’t know the prices for the video

services they owned. 31.9% (51) of the

subjects didn’t want to reduce the prices,

because they were fine with it as it was.

The other 54.4% said that the prices should be reduced.

2) Significance: The majority of the people said that the price of their streaming services

was too high. Some of them valued the cost that it would take to produce and make what

they watch and took that into consideration. This shows that money plays a huge role in

consumerism of video-streaming services, and that Redbox could consider lowering its

prices as a start to success.

Question 5: Redbox lets you rent PS3, PS4, Wii, Xbox, and Nintendo Switch games. Do you

think Netflix should have game streaming services?

1) Results: Most of the individual's

would have liked for Netflix to take on the

world of gaming, with 52.5% (84). This

isn’t a major difference compared to the

 ones who didn’t want this, with a 39.4% (63). The other 7.9% didn’t really care, and

weren’t immersed in gaming unlike the other teens.

2) There was conversation about this between the partakers, and a lot of them didn’t think

that it would be possible. A comment section was added to the online survey, in which

people also brought the idea up that it would be difficult for Netflix to develop this

concept. This greatly helps Redbox because as the question says, Redbox provides video

games already, whereas none of the other streaming services do. This gives an edge to

Redbox in the gaming area and is something that makes them stand out.

Question 6: What video-streaming service do you think is the most popular among your

peers?

1) Results: The majority answered

Netflix, with a percentage of

55% (88). The second most

selection option was Hulu with

6.3%(10), and then Amazon and

HBO tied with 2.5 % (4). Out of all of the people surveyed, not one choose Redbox as the

most popular, and it therefore does not even show up on the graph.

2) Significance: This shows that Netflix is rated very highly in terms of familiarity. Redbox

isn’t out there doing advertisements and deals as often as Netflix does which is why it got

zero votes. There are many ways to increase popularity such as social media, billboards,

advertisements, and much more. Some people who haven’t heard of Redbox might

actually like if they knew what it was about.

Question 7: Have you ever used BlockBuster?

1) Results: 58.6% have used

Blockbuster in their lifetime.

About a third (33.3%) of the

participants have never used it,

and the other 8% haven’t heard

of BlockBuster. The majority of those surveyed have heard of it.

2) Significance: Most people have used BlockBuster, which is good because that means that

they are familiar with renting services. After BlockBuster went out of business, Redbox

became the top DVD renting company. This is another factor that makes Redbox unique

compared to other similar companies.

Question 8: If you had used BlockBuster, why do you think they went out of business?

Results: 31.5% thought that the competitors

of Blockbuster made them go out of business.

28.1% of the votes went to the fact the it was

inconvenient, and not easily accessible.

18.7% have never used it. 12.8% didn’t think

that there were enough options.

Significance: The main reasons for the

extinction of Blockbuster were competitors and inconvenience. Knowing why BlockBuster went

out of business helps Redbox know what to do. While they can’t change their competitors, they

can always adapt to become more convenient.

Question 9: If you have used Redbox before, what do you think they can improve on?

Results: The most chosen options was

more variety of movies/games (31.2%).

After that, people wanted Redbox to be

available in more locations (26.5%).

Third third most selected options was

to reduce the prices (18.5%). 14.8%

have never used Redbox, and 6.3%

would like longer periods of rent.

Significance: The two major problems of Redbox currently are the lack of options, and

availability of the locations of kiosks. Also, the fact that 14.8% have never used Redbox is a

problem because they haven’t even been exposed to what Redbox is and maybe if the have, they

would use it more.

Question 10: If there were a Redbox Kiosk (machine where you can rent movies/games)

next to the vending machines at your school, do you think you would use Redbox more?

Results: 77 individuals said no and 83 said yes.

Significance: Most of the people at the school would use

the Redbox more if there was one located here, so that

idea would be successful and sales would increase.

Question 11: ​What are some problems you have

encountered when using video-streaming services?

Results: This question was asked near the end of the survey. Most of the participants said that

the wifi, buffer, and lagging of the video was the problem. The second biggest problem was the

advertisements. The third largest problems were about the cost and lack of options.

Significance: Wifi problems can arise when using Netflix, Amazon, or Hulu, but not when using

Redbox. This displays another key benefit of Redbox over the other services.

B. Presentation of Conclusions and Rationale

The best way to summarize this research is to go back to the research questions

mentioned in the Executive Summary (ES). The first ES question talks about what Redbox could

do to gain a competitive edge over its rivals. From the research conducted, the chapter members

found that, to gain the competitive edge, Redbox should consider adding more movie selections,

have more locations, decrease their prices, and promote their company better. In the second

question of the survey, results about the popularity of Redbox was found to be low. For survey

question six, no one choose Redbox as the most popular video streaming services. Some of the

participants haven’t heard of the term Redbox, which exhibits that Redbox isn’t calling enough

attention to its brand. The ninth survey question talked asked what Redbox should do to improve

in the business, and the majority answered to add more options and be available in more

locations. This carries over the next question which talks about the idea of having a Redbox

kiosk at school. Likewise, most people said that they would use it more, and that sales would go

up. In question four, most of the individuals would like the prices of their services to be cheaper.

In 2012 the price for a DVD from Redbox was $1.20, but then in 2015 the price rose to $1.50.

There are many ways to reduce the prices such as offering discounts and coupon codes on

products . One tactic would be to make them seem exclusive, as if the customers who are getting
them are part of an elite few. By offering a few dollars off of the regular price, customers will

stay loyal to Redbox for years to come.

The next question off of the Executive Summary talked about how Redbox could appeal

more to their target audience, Generation Y. The question also wondered how to spark the

interests of another possible audience, the Baby Boomers. This was a possible audience because,

unlike with younger generations, the Baby Boomers spend more time online and at home than

compared to other age groups. This meant that they might be interested in Redbox’s services

more than those who spent more time outside. Analyzation of the survey results drew the

conclusions that Generation Y and Z, the two main age groups that took the survey, liked Netflix

the most because of its easy access, so Redbox could consider becoming more convenient.

Finally, the last ES question asks what Redbox can do to maximize its advertisements

and special deals. There are many ways to reduce the prices such as offering discounts and

coupon codes on products, and reducing prices can garner a lot of attention. One tactic would be

to make consumers feel special, as if the customers who are getting deals are part of an elite few.

By offering a few cents off of the regular price for short periods of time, customers could stay

loyal to Redbox for years to come. Distributing press releases is also a great way to keep people

of this industry apprised of important updates from Redbox. Press releases can be created to

announce new releases, ideas, changes in the company’s structure, and more. It may take time to

build up the right press contacts to gain the announcements real exposure, but one just has to

persevere and keep trying. Making controversial statements also catches people’s eye. Creating

controversy is one way to get this brand to race out in front of the masses and garner some

serious consumer attention.

 V. RECOMMENDATIONS

A. Recommendations Resulting From the Study

In summary of the primary and secondary research conducted, Redbox has been steadily

declining in the past few years. Respect for the brand has also dramatically decreased. Redbox

cannot afford to keep up their company in this way, thus there must be some recommendations

so that the company can increase their fortune and extend the product life cycle. The key

recommendations for Redbox are to improve its product, marketing, and to make itself stand out

from its rivals. These three things make up the concept “RED”:

Rethinking the Marketing

Redbox has implemented its mobile “Text Club” for about four years now. Although the

concept is great, not many people know about it. In fact, the chapter representatives asked eight

different people from different demographics and all eight of them had no idea of what the

program was, nor had they heard of it. The text club offers numerous deals and programs that

would make the consumer keep using Redbox. The text club would be much more beneficial to

the company if more people knew about it and used it. In addition, Generation Y is one of the

main target groups for Redbox.

This generation uses the most internet out of any other groups, and are also the main

consumers of internet media. Because of this, Redbox could take advantage of the fact that many

millenials use programs like YouTube, Facebook, Instagram, and other social media and then

send out ads. Lastly, Redbox’s rewards program should be better advertised and this can be done

through newspaper, magazine, or social media and the internet. Because social media

advertisement is crucial to the success of companies. As stated by a local businessman, we need

to appeal to consumers through advertisement, social media presence, and other platforms that

can reach out to newer generations. We can do this by working off of what brings success to

Redbox when they post online advertisement content.

Facebook: When the Redbox Facebook account posted a

controversial post that was funny and threw fun at their competitors,

lots of people liked the content, as seen in the screenshot to the

right. These types of posts got the most attention from the social

media community. However, throwing fun at their competitors does

not fully help advertise the products that they are advertising. By

looking at how Netflix manages their account, it is obvious that

their likes and share to follow ratio is better than Redbox’s ratio. The differences between Netflix

and Redbox is that Netflix uses entertaining clips to advertise their products. Therefore Redbox

is recommended to add more slightly controversial content as well as transitioning their picture

advertisements into short video clips to advertise their products.

Twitter: Redbox’s Twitter has been on a massive decline. They average 10-15 likes per

post even though the account has 350,000 followers. This means that people are receiving the

tweets that they send out, but people simply have no interest in the type of tweets that they are

posting. With 350,000 followers, the account has a lot of potential for advertisement. Through

the investigation of Netflix’s Twitter account, they made a lot of memes that pertained to the

movie/TV show that they were advertising. The way social media works is that if someone finds

something funny or relatable, they will be more inclined to retweet/like the post. If Redbox
makes relatable posts that are hilarious, as well as advertising products like Netflix, their ratio of

retweets and likes/followers will dramatically increase, expanding their audience.

Enhancing the Product

One of the main reasons that Redbox was failing is that they were not up with the current

trends. After some secondary research, it was found that monthly subscription boxes have

become very popular among Generation Y and X. Unlike mailing select DVDs to homes

whenever a consumer orders it (this is how it was at the beginning, and not very popular),

subscription boxes come once a month. The consumer would only need to pay for the

subscription boxes once, because it would cover a whole year, or, twelve different boxes. Each

box could have a theme. For example, in the month of October, Redbox might want to send out

horror themed movies. Additionally, the subscription box could come with movie snacks such as

chocolate and popcorn. In addition to the monthly subscription boxes, Redbox could also start

renting out 3D DVD movies and 4K Ultra HD Blu-Ray disks. Many Americans own 3D TV

players, and 16% of all American households have a 4K TV player. In fact, this number is

expected to grow because because 4K TVs have become very popular. The last thing that

Redbox might want to change about their product is add it to more locations. In America, the

company could add kiosks in high schools. According to the survey administered by the chapter

representatives, 51.7% of the respondents would consider using Redbox if there were a kiosk

near vending machines in their school cafeteria. In addition to schools, Redbox could consider

international locations in places such as South America and the United Kingdom, as these are

places with high percentages of Netflix users. One last recommendation for Redbox could be to

lower its prices. There was a correlation between increasing prices and decreasing sales. Redbox
wouldn’t have to keep its prices permanently low, it would just have to create a well-advertised

project so that people know about it. Then, consumers would try Redbox out, even if the prices

go back to the original after three to six months. This method allows Redbox to try something

new, but if it fails they can always bounce back again.

Deepening the Differences

To succeed in the market, Redbox should not try to be equal to its rivals. Instead, it

should advertise and show off its differences to the world and what makes it unique compared to

others. This will make consumers interested and at least try out Redbox. One thing that is unique

about Redbox is that they offer video games for renting. Currently, ​Redbox rents PS3, PS4, Wii,

Xbox, and Nintendo Switch games. Other streaming services like Hulu and Netflix have not

implemented this, yet 50.6% of the survey respondents said that they wished those streaming

services would allow them to play video games. This shows that if Netflix had video games,

consumers would use them. However, because Redbox already has video games, consumers can

more easily gain access to them. The only problem with this is that Redbox has not capitalized

on this fact, but it can be easily fixed through better advertisement. Another thing that Redbox

has that other companies don’t are new movies. Redbox releases movies fresh from the movie

theaters 28-56 days after the initial releases. Netflix, however, usually does not get new movies

until one to two years after the release because it is cheaper for the company. If more people

knew that Redbox got new movies so fast, more people would use Redbox.

B. Projected Outcomes

If the recommendation plan, RED, is implemented correctly, Redbox would likely see an

increase in profits and consumer usage. Redbox could possibly become a major rival of Netflix,
and, after gaining popularity among American citizens, Redbox could expand its locations

around the world. The company would have an enhanced brand image because both Generation

Y and the Baby Boomers generation would use it more often. Redbox’s social media accounts

would have more of an influence than it currently has especially Facebook and Twitter.

Increasing the like and retweet ratio would garner them more followers, which helps their

company to continuously grow. Redbox would additionally be able to save their company from

going bankrupt because revenue and profit would rise greatly.

C. Plan for Implementation

If Redbox were to go through with plan RED, the plan for implementation is easy. The

best way to do it is make small changes over time. The first thing changed should be the product

itself, as that is what the average consumer notices first. If Redbox were to start a subscription

service, get newer models of disks such as 3D or 4K, or lower the prices with a new program,

they would be able to get more popular even without too much advertisement because the

average consumer is attracted to new changes. RED also talked about adding kiosks in high

school. ​The DVDNow franchise startup cost is around $25,000 for the kiosk and starting

inventory. If our plan works, the school will also be making money, in which they could use to

fund more programs and fix structural problems. Availability of locations is a huge problem that

people mentioned in the surveys. Grocery stores can be convenient, but it's mostly Generation X

who use it, while Redbox’s target audience are Generation Y and Baby Boomers. People also

don’t go grocery shopping every single day. When people go shopping, their main purpose isn’t

to rent DVDs. Putting rental kiosks at schools allows students to see it every single day, and one

of those days they could be craving to watch a certain movie, or just wanting to try the machine
out. Additionally, Redbox could consider international locations because they currently only

have kiosks in the U.S. However, expanding their locations to markets like the U.K., Latin

America, and Canada could have positive impacts because those are locations with the most

number of Netflix users after the U.S. This means that there is a similar audience in those places.

The next step for Redbox would be their marketing campaign, because, as shown with the video

games, even if a product is great, without advertisement, it will fail. Utilizing social media and

the texting program will make their audience wider. However, they can also include “old school”

advertisement methods. ​The average cost to put an advertisement up on a billboard is about

$10,000. Local television stations charge $200-$,1500. Coupons and codes could be potential

way to grab an audience. Redbox already has a rewards program, but that just needs to be more

widely recognized. Even still, social media is the number one marketing platform. It provides

more exposure than a billboard, and allows one to connect with their audience. Wendy’s Twitter

account is a perfect example of effective social media marketing. The social media manager was

very comedic on Twitter, and grabbed a lot of people’s attention. The company’s tweets greatly

helped the company. Social media fads can spread the news of Redbox fast, and expand their

audience. ​The majority of the costs for project RED should be focused towards the marketing

campaign because it is the main thing a consumer interacts with and will help Redbox increase

the likelihood of sales and profit. ​Lastly, w​ith the marketing campaign comes Redbox’s

differences. The way for Redbox to showcase their uniqueness is through those advertisements.

They will be able to show that they offer video games, and fast, new movies. If the plans for

implementation are followed correctly, Redbox should be able to extend their product life cycle

and succeed.
 D. Evidence that the Project has Been Presented

The chapter representatives plan to schedule a time to present the project to the Redbox

Headquarters by video chat in late April. The team will also answer any questions the board may

have and provide them with a copy of the project by email. In addition, the chapter

representatives are planning to talk to the Redbox Headquarters through mail. It was an honor to

have conducted this project on behalf of Redbox as it provided the DECA Clark chapter

representatives with an amazing, irreplaceable learning experience. The team encourages the

company to keep ​Thinking Outside of the (Red)box.

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