The paper "Strategic Marketing Plan for Red Box " is a perfect example of a marketing case study. The current situation industry is exemplified by predominant three market segment. Detailed demographic profile of a generic customer of the Red box is discussed below. While the profile is being made as detailed as possible, it does not claim to be comprehensive and absolutely broad or exhaustive. These target customers segments for Red box are of ages 6-21, 22-35 and 36 plus. The current market situation for Red box has 27.8% of the market share for the entire population while for customers of ages 6-21, have a share of 27.5%.
The segment of ages 22-35 they had a market share of 29.2% while 26.8%. The screenshot below shows the market share of the product Figure 1: Market share among competitors Targeting currently in 6-21 age group only works well in low priced distribution since the group has less income. However most people of overage of 36 have extra disposable income which should be a better target. This mix gives the organization the best returns while generating the maximum amount of value to the customers. Figure 2: Market segment growth On the demographic front, the primary target market for the product has always been an age group of 6 and 21.
During the initial years of launch, these products were marketed only to youngsters but 36+ are taking up entertainment. In the psychographics segment, the product is mainly targeted to people who are younger than 30 years and the ones who have a busy and active lifestyle and to people who are interested in a product that offers them extra entertain to handle the day-to-day stress.
The behavior pattern of the target market of product includes young, thrill-seekers and busy lifestyle, people. The graph below shows the market share of Red box for the three years in 41, 42 and 43. As the market share reduces EBIT is increasing which is as of profitability. Figure 3:share price index This can be explained by shifting from the low price-orientated channels to channels that attracted customers who can pay a high price. Distribution Channel/s Currently, there are three distribution channels low price-orientated, specialized electronic stores and video game specialists.
In year 40 the low price-orientated channels had 64% distribution. In years 41 to 43, Red box distribution channels rates changed from 64% to 62% for specialized electronic stores while for video game specialists increased to 25% and low price-orientated channels was 13%. This reduced the budget deficit was being experienced in year 40. Meanwhile, it is a great advantage for Red box if they would own specialized electronic stores and video game specialists that will allow greater flexibility. In such a decision, Red box could further control the distribution, development, and marketing of their new products. Market Expansion The reasons for the market can be attributed to the diminished profits and the stressful style of consumers which eventually motivates consumers to seek products that offer them some entertainment to get the most out of every day.
In addition, strong marketing, wider supply, and the challenges posed by new brands in the market have resulted in increased consumer acceptance which is again influential to the contribution of higher growth. The current market situation is that they distributed the entire Roundland while they cover 20% of Starland.
This is expanded to 30% in Starland in year 42 and 43. When expanding into Starland, sound marketing is a very necessary component for developing its service in the market as well as successfully selling, nurturing, and growing the Red box. The problem with Red box in its peak of your success is 100% coverage of Poundland. Thus they failed to get the concepts of market reality. Other pertinent issues were the flaws in marketing concepts like distribution margins, sales promotion techniques, and price thresholds.