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Netflix Vs. Redbox Essay

964 words - 4 pages

Netflix vs. Redbox Assignment

1. Netflix: The target segment of Netflix is frequent users. Netflix offers customers an ever-expanding collection of TV and movie titles. The pricing range of the subscriptions varies depending on the type of plan. All plans will allow customers receive a certain amount of DVDs every month. So it is suitable to the frequent users, who may watch the movies regularly every month. They do not need to pay the money, which is related to the number of movie they borrow. And they are given the capability of renting as many movies as they can in a month for a fixed subscription fee. It may reduce their cost. In additional, for frequent users, they may frequently ...view middle of the document...

Paying monthly subscription is a good way to save money, if people want to watch many movies every month. And there is also no late fee, which may alienate its customers. Finally, Netflix has the biggest movie selection. As all of the movie will be selected online. Netflix can rent as many movies as possible without worrying about the reservation cost of movies.

Redbox advantage: First of all, Redbox kiosks provide competitive convenience in some areas against the Netflix online service. As the kiosks can be found everywhere is suitable for some people who just want to kill their time. For example, the customers can rent a DVD on the way to the airport, watch it on the plane and return it after landing. Secondly, for those who do not watch the movie frequently, renting from Redbox can save them a lot of money. It is cheaper to pay the fee separately if they just need a small amount of movie. Lastly, Redbox now has always launched its online movie streaming, called Redbox Instant. Compared with Netflix, Redbox Instant has lower price.

3. In reference to Netflix and Redbox, target market determines the pricing strategy. In other words, Netflix and Redbox set their price based on the target market. Both of the companies are using the Market-oriented pricing strategy. For Netflix, it still offered the original single DVD rental plan when it was founded. However, after Netflix has targeted its own customers, it began to us monthly subscription to replace the traditional plan. Netflix realized that the people who watch movies regularly may prefer spending less even though they had to pay monthly. And Netflix launched the pricing strategy and succeeded. For Redbox, as its primary target market is the people who watch movie causally or prefer traditional rental plan, the company...

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