First, if you knew that you had to buy groceries or stop at the corner store for something and you were interested in a movie, chances are good that you would rent one from the box instead of making a second stop. Chances are good that you would settle for what was in the box so that you wouldn’t have to make a second stop! Chances are also good that you would tell the person for whom you were renting the movie that you couldn’t find what they were looking for and this was the best alternative!

Second, there is a tremendous amount of branding in an obnoxious red box. You don’t even need to know the name of the company other than movies get spit out of a big red box at the grocery. This is similar to the branding of the ThinkPad in the late 90s. As the Brand Manager, it was a dream come true. The black box with a red dot, visually, had more brand recognition than any other computer. (Unfortunately, many didn’t know it came from IBM!) However, just like a grocery, you can count on movies to be there when you want them in a place where you would prefer to rent because of convenience. In essence, they are, just like the grocery, a logistics company providing lots of things quickly and conveniently.

Third, the red box fulfills its commitment to its customer. It doesn’t make grandious claims like having the largest selection. It is also very simple to use. What they don’t tell you, however, is the penalty for being late. That $1 movie can turn into $10 rather quickly.

To your point about an exhaustive feature-set, the ThinkPad in the 90′s had more functionality than most do today…still. It had a built-in pbx that permitted me to plug my phone into it, send and receive calls, capture voice-mail directly, all while I was on-line checking my mail. I recently had a Blackberry with this functionality. It’s very cool! How would you communicate this functionality to a public that was just getting into email and who could barely use a word-processing program? Also, during the same time period, I was forced to EOL and tablet PC with more functionality than what we are seeing today because the margins fell below 25%. Sure, it was a niche player at the time, but I lobbied against the EOL knowing that we were way ahead of the curve.

Thanks again Dr Jim.

Kudos.