Nova Southeastern University
H. Wayne Huizenga School of Business & Entrepreneurship
Assignment for Course: | MKT 5070 | Submitted to: | Professor Herbert V. Brotspies | Submitted by: | Frank Alabau | | Karla Figueroa | | Emma Garcia | | | | |
Date of Submission: August 27, 2012
Title of Assignment: Marketing Plan: Netflix
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.…show more content… As of June 15, 2012 Netflix stock price is trading at $65.79. ("Netflix, Inc. Form 10K," 2012)
2.0 Situation Analysis Netflix has been in the video rental industry since 1997. Beginning with the fourth quarter of 2011, Netflix has three operating segments: Domestic video streaming, International video streaming and Domestic DVD rentals.
2.1 Market Summary As of January, 2012 Netflix has garnered 61% of the video streaming market, Comcast comes in a distant second with 8% of the video streaming market, followed by DirecTV, Time Warner Cable and Apple for third place with 4% of the video streaming market share. Netflix's has 30% of the DVD market share, and its main competition in the DVD rental business consists of Redbox with the lion's share of the market at 37% and Blockbuster Express with less than 16%. Though Netflix has a huge subscriber base its market share could erode if it is unable to effectively compete with its video selection and price. Netflix is continuing to add to its vast video library at the same time keeping its price point low enough to prevent competitors to expand into the video streaming and video rental market. Netflix believes that the DVD rental market will decline and has shifted its core strategy to grow the video streaming business. Netflix’s target market ranges from people aged 17-50 years old that have Internet access, which guarantees a near-future constant market potential of 225 million people in