BUS330 Principles Of Marketing

NETFLIX 1

Bus 330

Malinda Buckner

(Principles of Marketing- Ashford University)

Week 2 Assignment

Instructor: Daniel Brogan

Netflix

October 10, 2018

NETFLIX 2

Netflix is an on-line streaming service that provides its customers access to one of the

largest on-line video libraries in the world. Netflix charges users a monthly subscription fee to

provide their service. As of today there are more than 90 million subscribers worldwide that are

paid customers.

The core product of Netflix is the online video library. But some of the best selling

features for Netflix is the ability to offer all subscribers access to their original content of tv

shows. These shows are exclusive to Netflix and made only available to their month service

subscribers.

Netflix was started in 1997 by Reed Hasting as a by mail DVD service. This was where

you picked out the movie you wanted, and it was sent to you via mail as a rental. Eventually

they changed their format to a flat fee rent and view as many movie per month as you wanted.

They then went to an online format where you pay every month, but you can watch as much cont

as you like.

There always has been a market for renting videos. Netflix has seen its share of

competitors come and go. From the beginning when Netflix was strictly renting out DVD’s,

there main competitors were any mom and pop video rental store, all the way up to the national

providers like Blockbuster video. They still have current competition in the on-line streaming

industry like Hulu, and Amazon Prime being the main competitors.

NETFLIX 3

SWOT ANALYSIS

Strengths

● Brand- Netflix is best known for its slogan “Netflix and chill” making the brand a current pop

culture icon

● Platform- Netflix provides the best delivery system of all the other streaming services

● Content- Netflix provides original program content that’s only available via membership

● Price- $9.99 for unlimited access to all content is unbelievable

● Forward thinking management- The future is now with Netflix. The founding members had a

dream and it’s now a reality

Weaknesses

● Valuation- Netflix stock usually fluctuates

● Show ownership- Netflix owns exclusive shows and movies

Opportunities

● International expansion. Beginning solely in the US, Netflix is currently available in several

countries outside of the US like, Canada, England, Netherlands, Scandinavian, and Latin

America.

● Advertising- The best advertising is word of mouth from a happy customer.

NETFLIX 4

Threats

● Google- Google already owns YouTube, which it has successfully monetized and Google has put

the industry on notice that it plans to have forged deals ranging from the Hollywood elite to the

Wall Street Journal.

● Amazon - is buying up everything these days from grocery chains to brick and mortar retailers.

Netflix could eventually become a victim.

● Monthly subscription – Right now it hard to beat $9.99 for unlimited access to the Netflix

library, but eventually competitors like Amazon Prime could undercut Netflix by slashing their

prices on subscription service to attract new customers.

Netflix does offer free 3 day trail runs only for new customers to try out their service and

to decide if they would like to purchase a subscription. The new product I would like to

introduce is 3 month free service from Netflix for new potential subscribers. This way they can

make an informed decision on whether or not they would like to keep the Netflix service. The 3

day trial period does not offer a potential customer enough time to thoroughly evaluate all the

available content of Netflix. With a 3 month trial period, they can view a lot of the content, get

hooked on the amazing service and hopefully decide to commit to the service after they’ve made

an informative decision based on the content they’ve viewed and the service that they have

received.

NETFLIX 5

I would also like to look into a commercial free subscription for paid monthly customers

and subscribers. A lot of revenue is generated via commercials but the average consumer hates

sitting thru commercials. This is especially true if it’s an advertisement for a product that the

customer would likely never purchase. I would introduce a commercial free subscription option

for $14.99 a month where there are no advertisements or ads for the customer while they are

watching .

References

Bauman, L., Deal, N., Ishak, P., & Johnson, S. (2013). Netflix Environmental Scan/SWOT

Analysis. ​Retrieved October 10, 2018​.

Goldfayn, A. L. (2012). ​Evangelist Marketing: What Apple, Amazon, and Netflix Understand

about Their Customers (that Your Company Probably Doesn't)​. BenBella Books.