The reason that consumers began renting from Redbox is quite simple. Redbox found a way to make renting movies and video games easy and convenient for the customer. They began by teaming up with CoinStar in 2005 and placed their Kiosk machines in similar locations, such as grocery stores, drug stores and other high traffic areas (Heffes,2011). These were the most frequent places that consumers accessed. By the end of 2009, there were more than 19,000 Redbox locations in (Heffes,2011).
Over the years Redbox has had many ups and downs. Most of them were due to the company's competitors. When they first started the company they were making companies like Blockbuster fade out. Redbox was much easier and cheaper to rent than a Blockbuster video.
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These other companies have a wider variety of movies that Redbox, making them more favorable by the consumer. Additionally, a plus for Redbox is that these other companies require cellular data or internet service to make them accessible, while Redbox does not.
In a growing economy, in order to keep up with competitors, Redbox will have to maintain low prices on all of their movies and games. Them doing this will make the other competitors second best, because of the convenience of Redbox locations and easy access.You are able to return Redbox movies at any Redbox location. If you are not able to find a movie you want at one Redbox location and if a certain location you are able to go to Redbox.com and reserve it at any other location. I believe that Redbox consumers will be using this kiosk for many more years as long as they are kept in high traffic
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The main factor in my decision is that even with a slight increase, the company will still have the lowest prices on DVD rentals. Redbox is leery of the price increase because it has seen some of its competitors fail after doing so. I would also propose that instead of jumping from $1 to $2, that they should only go up to $1.50. Gradually increasing the price would not be such a big change to most consumers.We are all aware that consumers do not like change and lower prices appeal more to the consumer(Ferrell, Hirt &