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Netflix: Marketing Plan

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Netflix Netflix

on 15 June 2015

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Transcript of Netflix: Marketing Plan

Netflix has concentrated in these geographical locations that has the most widespread availability to access and use of streaming. Netflix depends on this segment to maintain its continued success in online streaming.
Netflix: Marketing Plan
Step 1: Business Mission / Objectives
Step 5: Evaluate Performance Using Marketing Metrics
Boston Consulting Group Metric:

Mission Statement
Step 2: Situation Analysis / SWOT
Step 4: Implement Marketing Mix
Planning Phase
Step 3: Identify Opportunities
Implementation Phase
Control Phase
Step 1: Establish Overall Strategy or Objectives
Step 2: Segmentation Methods
Step 3: Evaluate Segment Attractiveness
Step 4: Select Target Market
Step 5: Develop Positioning Strategy
Environment Analysis

Immediate Environment
Macroenvironmental Factors
Brian LeBlanc, Micaela Murphy, Stephanie Kaiser, Cuiwei Rao, Parker Spelling

Marketing Strategy
-Appeals to people ages 5-59
-Buying power = Sufficient profits
-Easily accessed
-Positive Reactions
-Loyal Customers
"world’s leading internet television network..."
: Two services (service lines)—> streaming service (completely intangible) and DVD rentals (a little more tangible)
: Categorizing the depth for netflix service lines is difficult

-Currently 9,796 titles available
-$7.99 a month for unlimited streaming.
-Targets the mass market.
-Does not practice price differentiation

Becoming the best global entertainment distribution service
licensing entertainment content around the world
Creating markets that are accessible to firm makers
Helping content creators around the world to find global audience
"Our core strategy is to grow our streaming subscription business domestically and globally. We are continuously improving the customer experience, with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more Internet-connected devices, while staying within the parameters of our consolidated net income and operating segment contribution profit targets."
roduct — Value Creation

rice — Value Capture

lace — Value Delivery

romotion — Value Communication
Core Objectives:
57% of video-streaming market
Grow domestically and globally
Grow and continuously improve customer service
Enhance interface and expand streaming service to more Internet-connected devices
Staying within the parameters of the consolidated net income
Operating segment contribution profit targets
Focus on strengths
Improve on weaknesses
Stay away from threats
Take advantage of opportunities
Company capabilities:
Brick and mortar rental and sales
DVD vending kiosks
Online rentals and sales
Mail-delivery services
Video-on-demand services accessible through the television

Blockbuster, Time Warner, Comcast, DirecTV, Best Buy, Wal-Mart, Amazon, Apple, Echostar, AT&T and RedBox

Corporate partners:
Buena Vista, Warner Bros., Sony Pictures, 20th Century Fox, Paramount Pictures and Universal
SWOT Analysis



-Customer Loyalty

-Declining DVD Subscribers

-Damaged Reputation

-Slow to get recent content

-International Expansion


-Original Content

- Increase in licensing Costs

Legal Factors

mass-market of consumers
Brand Name / Logo
Apply the 4 P's to Service
Demographic & Benefits
Needy customer & Convenience customer
Needy customer:typically older, used to traditional channels, low propensity to substitute,higher propensity to purchase video
Convenience customer:typically younger, want to watch anytime in their computers, high propensity to substitute
Essentially a Distributor
What makes Netflix's mix so successful?
Introductory price promotion: free one-month trial

Began with extensive advertising campaign:
TV commercial
Online advertising
Prominet form:web banners, ads on various websites,
and “pop-under” ads
Online streaming: growth stage, technological advances
DVD rentals: maturity stage,
TV streaming: decling stage, technological advances
Right now mainly relying on viral marketing--people talk to people
Product Life Cycle:

: Both 18-24 year old males and females reveal the greatest use of online and streaming; approximately 3.7 hours of video content per week. With the new technological culture generation Z and generation Y have become Netflix's target Culture.

: The qualities demonstrated in this young culture lifestyle includes habits such as, more disposable income, time, technological capabilities and interest. Netflix wants to appeal to this culture specifically by generating a movie selection that is specifically for a younger crowd.
Netflix's Value Proposition: For the streaming consumers they are able to enjoy legal access to an expansive movie database, which is roughly around 20,000 episodes. They also have the personalized service expressed in the personal suggestion of movies for each customer without interruption of advertising. This rating algorithm makes better use of movies available on the website tailored to his or her own tastes. Netflix also creates value by having some of the widest supported device ranges.
Consumer perception
According to a survey conducted by Yougov, Netflix has recently received a significant popularity increase due ot the recent price hike by Amazon Prime one of Netflix's largest competitors. One reason for Netflix's overwhelming success over its other competitors such as Amazon Prime, HBO GO, and Hulu Plus is Netflix's larger inventory, as well as its "critically acclaimed original Programming as well as no commercials."
Market's Ideal Points
and Size
As of right now Netflix's ideal points are right where they want it in terms f product satisfaction. They believe for the cost of their product it is about as efficient as they want it to be. They are well ahead in the streaming market and therefore do not fear their immediate competition. Netflix instead is focusing on improving or promoting their brand awareness and streaming capabilities. They want to increase their market share especially through media presence with the use of promotional tools.
Competitors Position
Although Netflix has held a position as reigning monarch in the online video streaming industry. This is because of its originality, sheer amount of content and ability to meet increased demand. The unlimited access via website log in from cable description has made HBO GO very popular to many already HBO subscribers. Amazon Prime offers free shipping on millions of items and rented books, as well as being an equally strong brand that many people are acquainted with by previous purchasing orders. VUDU, which is Wal-Mart's New Partner has the same brand awareness strength.
Consumer Preferences
A recent study conducted by the CEA or Consumer Electronics Associations, and NATPE the National Association of television Program Executives 51% of the millennial generation prefers Netflix over traditional cable. Over half of the consumers said that they value their Netflix, Inc. subscriptions to be of a higher value. a major reason for this is the jump from watching television programs on the TV to their PCs or laptops.
Netflix's Position
Netflix operates within the highly competitive media streaming market that has been forecasted to increase tenfold from $1.3 billion in 2007 to $12.5 billion in 2017. Netflix offers physical media rentals, which is slowly being phased out due to lack of demand that has been occurring since 2012 or the introduction of streaming. To stay the leader in this market Netflix positioned them by being the most successful streaming operators in the business. With the incredible advancement in technology this market has the potential to keep increasing. As more markets gain the technology to operate, Netflix has more of an opportunity and larger segments it is able to reach.
Positioning Strategy
To keep current customers from switching services that offer fresh media, Netflix is producing and licensing more content at the same low price point. This positioning strategy is focused on first expanding availability in the United States by increasing the diversity of devices that Netflix media can be utilized on. They also want to move into more international markets as they are gaining the necessary technology. By constantly rechecking their ideal points Netflix was able to shift their goals in providing "the very best new and original content on their already robust platform to an expanding international audience," allowing them to stay at the forefront of their market.
Netflix can be found in all of North America, Australia, New Zealand, South America, New Zealand, South American and Parts of Europe (Denmark, Ireland, The Netherlands, Norway, Sweden, Finland, France, Switzerland,Austria Belgium Luxembourg, United Kingdom, and Germany.
-Instantly Recognizable Logo

-Relies solely on austerer logo and netflix.com

-Invokes classic cinema imagery

Strong Brand Awareness
-Multitude of compatible devices
-creates ecosystem for use on various internet connected devices
-TV, Computers, Tablets, Smart Phones...

*All one needs is a compatible device and internet connectivity.

-Netflix: currently 9,796 titles available

-Largest library available for streaming

- Constitutes 57% of video streaming market

-Create loyalty through product excellence
-streaming without commercials
-fast streaming
-quality and quantity of content

December 2011, 11 million subscribers

September 2014, 5.9 million subscribers
-significant drop off

DVDs in the decline phase of the product lifecycle.

-Tremendous Backlash from Netlix's separation into two separate subsiding services (Netflix and Qwikster)

-Qwikster was eventually dissolved, leading to the creating of a sub-website, https://dvd.netflix.com/
-Due to changes in European Laws, Netflix will have to pay higher value added tax in most of Europe
By prioritizing long term performance over short run profits, they are looking to expand internationally,
because these markets are relatively untapped.
-Netflix currently lacks strong diversification, as its entire service falls under the film and television industry

-Netflix could diversify its portfolio by branching out into different markets like
video games, puzzles, interactive media, live video (news, sporting events, etc.)
-With success from original shows like House of Cards, Orange is the New Black, and the continuation of previously canceled TV shows like Arrested Development, Netflix has shown that pursuing its own original content is highly marketable.
-Increased competition is company's largest threat

-Competitors seeking to penetrate Netflix's dominant market share

-Hulu Plus, Amazon Prime and HBO Go represent three major competitors
-Netflix is dependent on the material it has licensed from media providers

-An increase in licensing costs would present a much greater expense, and could reduce the speed at which Netflix expands its library.
Responding to the Environment
Social Trends
Technological Advances
Increased leisure time = More likely to watch television
-Deals with new technology for advancement.
-Raises the bar for competitors.
Generational Cohorts
Gen Z
Gen X
Baby Boomers
-Ages 0-13—> Children's and family programing
-Largest group of Netflix viewers
-Watch on the go (mobile heavy)
-Top Genre = Comedy (74%)
-Most likely to watch movies (76%)
-especially Dramas
-Word of mouth important in viewing decisions
-Preference —> live programming (77%) like local news.
Cheap, high quality service...circumvents income disparity and class
Streaming Media
Tech Improvements:
-greater network bandwidth
-increased access to networks/Internet
-Use of standard protocols and formats like TCP/IP, HTTP, HTML
-January 16, 2007- Netflix introduces streaming
-2014 - Netflix begins streaming some content in 4K resolution

Time poor society results in binge watching
45% Female, 45% Male users Q1 2015

Doesn't market to specific genders
-carries titles that may appeal to/be about certain genders
-Not ethnic specific, but library covers a wide range of ethnic groups, languages.
-Some of the most critically reviewed film on Netflix are foreign.
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