[Originally posted by Keith Murray on July 30, 2009 on Google's BlogSpot]
An implicit expectation of students of marketing--and, for that matter, most marketing managers--is that good marketing strategy should last a long time. You know, a strategic concept should be robust enough to stand the test of time or, at least, last for more that a few years...why go to all the trouble to develop a plan of action that has a foreseeable demise?
With the pace at which change in the greater environment takes place, say, with respect to technology, the economy, or retail institutions—to name three—sometimes time-limited marketing strategies--better termed market between strategies, or “adaptations”--likely trump the development of a grand marketing plan from now to forever! A firm with such an ingenious road-map from now to the not-too-distant-future is Redbox. In the July/August issue of FAST COMPANY, Farhad Manjoo’s article on “Why Redbox is the biggest movie-rental company you’ve never heard of” is a perfect example of the perfect limited-time marketing strategy.
What accounts for Redbox’s success is really quite simple:The heyday of Blockbuster store-front movie retailing is receding, the future of movie-rental is soon to be [but not quite now] largely digital streaming [say by Amazon, Apple, Netflix, various cable companies]; the Redbox strategy is to be the perfect “in-between” purveyor of getting digital entertainment into the living rooms of people.
Some of the key elements of its winning formula include use of familiar [read: old] technology, i.e., vending machines; low priced service [how do you get cheaper than $1 per nite for a movie?]; convenient locations of distribution [e.g., convenient stores, gas stations, and other high traffic place customers are already going to each day]; and, great movie selections when you make your choice.
Operationally, the strategy is almost fail-safe; it represents the perfect marriage between old technology [vending kiosks] and new technology [internet selections and accounts]. Financially, break-even can’t be very formidable with reported positive cash-flow periods being as little as 120days for new locations! Read more about this in-between-distribution company that won’t last forever, but will be incredibly profitable while opportunity presents itself—it’s a great one-page article for your to check out if you’re inclined.
The Redbox "story" is a great example of excellent marketing strategy--it seems to speak to all the key requirements for business success: customer-centric, financially attractive, technologically-just right for the times. The conception and execution may not get better in terms of company-customer-climate "fit"--even if it doesn't last forever!