Redbox Movie DVD sales represent a $16 billion market, and rentals make up another $7.5 billion. Naturally, production studios would prefer consumers purchase DVDs rather than rent them.

Redbox Movie DVD sales represent a $16 billion market, and rentals make up another $7.5 billion. Naturally, production studios would prefer consumers purchase DVDs rather than rent them. Production studios like Twentieth-Century Fox, Warner Bros., and General Electric refused to sell new releases to Redbox, a DVD vending machine company, until almost a month after new releases arrived in stores. Redbox, the ubiquitous DVD rental red kiosks found in and outside of convenience stores, grocery stores, drugstores, fast-food restaurants, and Walmart, is cutting in on production companies' profits. These studios are tangled in lawsuits with Redbox. Sony, Paramount, and Lionsgate, on the other hand, permit distribution through Redbox, and Disney allows third-party distribution to Redbox. With more than 20,000 kiosks now in operation, Redbox ranks fifth in DVD rental revenues, which is impressive considering the rental fee is only $1.00. But Blockbuster is trying to steal vending market share by allowing NCR Corporation, known for ATM machines, to license its name to place Blockbuster Express kiosks in similar types of locations.

• Refer to Redbox. Warner Bros., Blockbuster, Redbox, Walmart, and third-party DVD distributors are part of a:

a. distribution cooperative
b. marketing mix
c. transportation channel
d. marketing channel
e. logistics system

ANSWER: d

• Refer to Redbox. Redbox offers DVDs from several production studios, such as Disney, Sony, and Paramount. Consumers can rent from Redbox instead of obtaining the DVD from the various production studios if they want a children's movie from Disney and an action movie from Paramount. Thus, one kiosk provides for both consumers and the production studios.

a. contact efficiency
b. integration
c. synergy
d. distribution efficiency
e. distribution intensity

ANSWER: a

• Refer to Redbox. Production studios are potentially producing among its existing distributors by allowing Redbox to rent their DVDs for $1.00.

a. vertical conflict
b. cognitive dissonance
c. supply management divergence
d. horizontal conflict
e. disintermediation

ANSWER: d

• Refer to Redbox. Production studios distribute DVDs in grocery stores, drugstores, discount stores, entertainment stores, and vending machines like Redbox. Which level of distribution intensity does this represent?

a. Intensive
b. Extensive
c. Product focused
d. Market focused
e. Exclusive

ANSWER: a

• Refer to Redbox. Video stores that distribute DVDs usually also sell popcorn, candy, soft drinks, and entertainment publications. Basically, they overcome discrepancies of quantity and assortment by combining products into collections or assortment that consumers want available in one place. Which channel function does this describe?

a. Logistical functions
b. Transactional functions
c. Facilitating functions
d. Purchasing functions
e. Secondary functions

ANSWER: a

Learn More :

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