Netflix"s Approach to Marketing Essay

To combat the issue of cancellations we recommend that Netflix implement some form of a loyalty program and/or a referral program. If Netflix were to begin to offer deals such as a free month after a customer has subscribed for a year or rebates for customers who use their Netflix account frequently, they would be able to improve brand loyalty and increase the average time of a subscription. Our second recommendation is to implement a referral program. For example, if a subscriber refers three people in a months’ time to Netflix, and those three people begin a subscription, that customer would receive a free month. These programs or another form of them would increase customer loyalty and have a positive effect on the amount of cancellations.

Blockbuster Entertainment, Inc. was once a highly successful and profitable brick and mortar home movie and video game rental store. At its peak in 2004, Blockbuster had up to 60,000 employees and more than 9,000 stores. The idea behind Netflix came from an unsatisfied, embarrassed customer of Blockbuster, Mr. Reed Hastings, now CEO of Netflix, paid a $40 late fee because he returned the movie Apollo 13 six weeks later (Zarafshar, 2013). He began to contemplate ingeniously about a notion to change the movie-leasing pattern into a more pioneering industry. In 1997 Netflix was started as a DVD rental-by-mail business without subscriptions. In 1999, taking a stride additional in the direction of evolving the industry, Hastings began the subscription-based business mode based on renting DVDs by mail with plans reliant on the quantity of titles taken at a time. Netflix put forward 120,000 titles for limitless monthly DVD rental with free shipping no late and per title fees. Since that time Netflix has become one of the most popular subscription services in the world, and is now valued at over $28 billion and steadily increasing. What factors contributed to the success and failure of these two companies?

1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several competitors to enter the market to compete directly,

The year 2011 was considered the “Lost Year” for Netflix as about 1 million of their subscribers dropped their service. Why did this drastic loss of subscribed customers occur and what wrong move did Netflix make to attract such a decrease in subscribers? According to Thompson (2012, p. 127), in June of 2011 Netflix announced a new price plan that caused a 60 percent raise in the the monthly subscription fee for customers who were paying $9.99 per month for access to an unlimited amount of movies and TV shows streamed over the internet and secondly, receiving a limitless number of DVDs every month (by mail one title at a time). Netflix also tried providing its online streaming process through

Strategic planning involves taking information from the environment and deciding upon an organizational mission, and upon objectives, strategies, and a strategic architecture. There are many different ways to go about deciding on your mission. Michael Porter, a researcher from Harvard, had a few ways for developing frameworks for developing an organization’s strategy.

cheaper and more convenient alternatives such as cable/ satellite providers offering recordings via DVR, cell phones, tablets and other electronic devices

First formed in 1991, Netflix has become today’s predominant video rental service. They offer a hybrid service allowing DVD delivery by mail as well as streaming movies and TV shows via their company website or access on 200 other devices. Their unique business process has netted them over 16 million subscribers and revenue around $500 million annually. The reason for their growing success can be attributed to a good business model and just as important, properly implemented systems. An extremely efficient supply chain management system (SCM) and customer relationship management system (CRM) have helped Netflix become the world’s largest video subscription service.

Entering and transforming the video rental industry was a large undertaking for the start-up company. The first marketing objective the company undertook was the process of building a brand. Netflix’s identity was crucial to future growth and success. Without a strong brand, competitors with deep pockets could have easily duplicated the company’s business model. Secondly, leveraging technology was critical to establishing the business and infrastructure growth. The consumer base was the final objective Netflix sought to achieve. Retaining and growing subscribers were fundamental to revenue and marketing goals.

A strategy is a plan that is targeted over the long run. Business level strategies refers to strategic alternatives that an organization chooses from as it conducts business in a particular industry or market (Griffin,2002). A corporate level strategy means that a company manages its operations simultaneously across many industries and markets. Netflix operates across both a business and corporate level strategy. The main areas across which Netflix operate on in their corporate level are business portfolio and partnerships.

The CineMatch software also allows Netflix to maximize their library utilization. Increasing the demand for older or smaller market movies not only assists Netflix in better meeting subscriber demand but also decreases the payout of revenue sharing that often accompanies the most popular new releases. Netflix has revenue sharing contracts with most of the major movie studios. Under the agreements the firm pays a percentage of the subscription fees for a predetermined period of time in exchange for receiving the most popular titles at a considerably discount over the whole sale price (Netflix SEC).

As the world entered into the 21st Century, humanity has witnessed an ecology of innovation that ranges from artificial hearts and livers to iPods to Bluetooth technology to smartphones and many more ("21st Century Inventions That Made an Impact”). Each with its own unique attraction has become a catalyst in nature for how individuals think, act and live. Along with these state of the art developments, Netflix has become the cutting – edge service for internet streaming media. Deemed as “a worthless piece of crap” from Wall Street analysts, Netflix with tremendous leadership gained control of their industry and swiftly transformed the delivery of movie rentals ("How Netflix Beat Blockbuster: An Exemplar of Emerging Technologies”). Faced with impossible odds, we will discover how Netflix was able to survive, conquer and prosper as the emerging technology in their industry.

the need for a retail store in every city. Netflix functions in a virtual environment

Netflix Inc. is in the entertainment market, which is a part of a larger video, film

Netflix is a firm that has become a global leader in the provision of streaming content that includes movies and television series and programming from around the world. Primarily, Netflix has been able to become a global dominant through the adoption of business to business and business to customer models that favor the company’s overall business model. The central argument here is that the B2B and B2C models at Netflix have more in common that there are differences.

Promote the Netflix’s value position with regards (or is it in regards)? to newly acquired content through public relations.