Contents

1.1 Introduction........................................................................................................................ 1
1.1 Netflix background...............................................................................................
1
1.3 Netflix Mission.......................................................................................................
2
1.4 Netflix Culture........................................................................................................
2
1.5 Netflix management............................................................................................
2
1.6 Netflix customers.................................................................................................
2
2. Situation Analysis............................................................................................................... 3
2.1 Environmental factors........................................................................................
3
2.1.1 Economic factors..........................................................................................................
3
2.1.2 Social factors..................................................................................................................
3
2.1.3 Technological factors...................................................................................................
3
2.1.4 Political factors..............................................................................................................
4
2.1.5 Legal factors...................................................................................................................
4
2.2 SWOT.........................................................................................................................
4
2.2.1 Strengths.........................................................................................................................
4
2.2.2 Weaknesses....................................................................................................................
4
2.2.3 Opportunities.................................................................................................................
5
2.2.4 Threats..............................................................................................................................
5
2.3 Customer description..........................................................................................
6
2.4 Competition............................................................................................................
7
2.4.1 Comparisons with the 2 closest competitors.....................................................
7

2.5 Segmentation........................................................................................................
9
2.5.1 Why Not?..........................................................................................................................
9
2.6 Targeting................................................................................................................
10
2.7 Positioning.............................................................................................................
10
2.5.4 Research needs...........................................................................................................
12
3. Marketing Planning.......................................................................................................... 13
3.2 Strategic direction, targeting and positioning.........................................
13
3.3 Marketing objectives.........................................................................................
13
3.3.1 Marketing.......................................................................................................................
13
3.3.2 Media...............................................................................................................................
13
3.3.3 Promotion & advertising..........................................................................................
13
3.4 Marketing mix......................................................................................................
14
3.4.1 Product offering strategies......................................................................................
14
3.4.2 Promotion, communication and influence.........................................................
14
3.4.3 Price.................................................................................................................................
18
3.4.4 People.............................................................................................................................
18
3.4.5 Place & Process,..........................................................................................................
18
3.4.6 Distribution...................................................................................................................
18
3.4.7 Physical evidence.......................................................................................................
18

4.

Implementation and
Control.......................................................................
Strategy implementation
details..................................................................................... .
4.2 Time
lines...................................................................................................................
..............
4.3
4.1

1
9
1
9
2
1
2

Evaluation..........................................................................................................
......................
4.3.1 Internet
adverts....................................................................................................
...
4.3.2 Event
sponsorships...........................................................................................
.......
4.3.3 TV
advertisements.......................................................................................
............
4.3.4 QR
codes.......................................................................................................
...........
4.4 Closing
summary............................................................................................................
..........

2
2
2
2
2
2
2
2
2
2
3

References.............................................................................. 2
5.
.................... 4

1.1 Introduction
1.1 Netflix background
Netflix, Inc. is an American provider of on demand Internet streaming media
available to North and South America, the Caribbean, United Kingdom,
Ireland, Sweden, Denmark, Norway, Finland, the Netherlands, etc. and flat
rate DVD-by-mail in the United States, where mailed DVDs are sent via permit
reply mail.
Online streaming service and DVD delivery service are the two main two
main product lines for Netflix. Netflix core product is a service .This
marketing plan will focus on online streaming service.
1.2 Netflix history
Netflix was incorporated in Delaware in August 1997 and started its
subscription-based digital distribution service in 1999. It made its initial
public offering on May 22, 2002 on NASDAQ under the ticker NFLX. Netflix
introduced instant streaming in 2007, by 2009 Netflix was offering a
collection of 100,000 titles on DVD and had 12.3 million subscribers. In
September 2010, they began international operations by offering streaming
service in Canada, and now offers streaming service in Latin America, the
United Kingdom, Ireland, and the Nordic countries of Finland, Denmark,
Sweden, Norway and others. Beginning the fourth quarter of 2011, Netflix
had three operating segments: Domestic streaming, International streaming
and Domestic DVD. The Domestic and International streaming segments
derive revenues from monthly subscription services consisting solely of
streaming content. The Domestic DVD segment derives revenues from
monthly subscription services consisting solely of DVD-by-mail. By end of
2012 the total revenue for Netflix reached at $3.6 billion a 12.6% compared
to 2011 results and it is estimated that Netflix will hit the revenue of $4.4
billion end of 2013. Netflix announced having over 40 million subscribers in
its shareholder letter of October 21, 2013. 31.09 million being domestic
streaming, 9.19 million and 7.15 being international streaming and DVD
delivery subscriptions respectively. Netflix has been growing both financially
and with ever increasing the subscriber base from the start with a brief
stumble in second half of 2011 when it separated the DVD service to
Quickster and increased prices for the subscription by 60% of which it
bounced back and regained its stock value and lost subscriptions.

1.3 Netflix Mission

Netflix mission states our appeal and success are built on providing the
most expansive selection of DVDs; an easy way to choose movies; and
fast, free delivery (Topix.com)
1.4 Netflix Culture
Netflix culture is that of freedom and responsibility as elaborated in CEO
Reed Hastings presentation on Netflix Freedom and Responsibility culture.
They have nine specific values, which includes Judgment, Communication,
Impact, Curiosity, Innovation, Courage, Passion, Honesty, and Selflessness.
Employees help each other to be great.
1.5 Netflix management
Founder and CEO Reed Hastings has created a unique management style
that is most notably similar to that of George Clooneys Danny Ocean role;
that is, a leader who hires the best, and gets out of the way (Wells). Netflix
thus has a laid-back structure that allows employees to make their own
decisions, but greatly encourages that smart decisions are made. Some of
the perks include allowing employees to structure their own compensation
packages, no clothing policies, and having ahypotheticalunlimited
amount of vacation days. Hastings understood that valuable employees are
happy employees. However much of the importance of this style of
management is in its beginning: hiring top-notch colleagues. And finally,
regarding expensing, entertainment, gifts and travel, simply act in Netflixs
best interest
(Siegler). By creating an ideal workspace to provide a highly productive
environment, excellence in work quality is expected, and crucial. In the case
that employees do not live up to this high standard, Netflix provides large
severance packages for quick termination (Kaltschnee, 2007). Some of Netflix
Divisions are content division, streaming and partnership division, product
division, Finance division, Counsel Division, Talent division, marketing and

communication divisions. Names of division heads are in Table 5.

1.6 Netflix customers
Netflix customers are divided into two sections: traditional DVD delivery and
online streaming customers. Traditional consumers are particular and
selective; they have a specific title or genre they are looking for, (often
making up niche market consumers), and they desire a rich viewing
experience, which currently makes them more likely to consume hardcopy
media. They are willing to wait a few days to acquire their title, as long as it
meets their expectations. These also have a low propensity to substitute,
because they are committed to video entertainment, and possibly a higher
propensity to purchase video, more likely to be older, and because they view
and access rentals through more traditional channels, they invest more time
and energy in their choices. These customers opt for Netflix mail-delivery
services as well as more differentiated online subscription plans.
Online streaming consumers are not as selective as their counterparts. They
watch videos when they can. They value easy and immediate access,
portability and transferability of the product, and are more than willing to
watch video on their computers or other devices like I pads, computer tablets
and even smart phones. This consumer has a higher propensity to substitute
than the DVD rental customer. They are also typically younger, and more
Internet-savvy. These customers often opt for affordable monthly online
subscription plans. To access Netflixs services customers incur monetary
costs for rental fees and subscription fees. Apart from the cost that is directly
related to Netflix services, customers have to purchase devices in which they
can use to access Netflix services like computers, television sets, modems
and Internet packages.
2. Situation Analysis
Netflix core products are service for moves online streaming and DVD
rentals. This marketing plan is going to focus on the online streaming
product line.
2.1 Environmental factors
Netflix has environmental factors affecting it like economic, social cultural,
technological, political and legal factors. All these factors and many more
either positively or adversely affect Netflix but the major five factors
explained below have the greatest impact.
2.1.1 Economic factors
This industry is affected by changes in consumer spending, which can be
influenced by changes in the rate of employment growth, interest rates
and tax rates. When spending rises, consumers will be more likely to buy
subscriptions. Consumer spending is expected to increase slowly during
2013 and presents a potential opportunity for the industry.
2.1.2 Social factors

People with increased leisure time availability are more likely to watch
movies and TV shows and video games from companies in this industry. As
unemployment gradually falls during the next five years, people will be
more likely to opt for less time-consuming rental options like streaming.
Time spent on leisure and sports is expected to decrease slowly during
2013.

leisure and sports

Figure 2 Consumer spending and time spent on

2.1.3 Technological factors

As the internet served more functions and became more popular, video
streaming services, such as Netflix, rose in popularity. Consumers will
continue to look to the internet for services previously conducted with
physical media. Therefore, the increased adoption of the internet will be an
opportunity to the industry. The percentage of services online is expected to
increase in 2013. Increased use of smartphones, tablets and computers has
also worked in favor of this online video streaming industry.
2.1.4 Political factors
Network neutrality is the principle that Internet service providers and
governments should treat all data on the Internet equally, not discriminating
or charging differentially by user, content, site, platform, application, type of
attached equipment, and modes of communication. The possibility of
regulations designed to mandate the neutrality of the Internet has been
subject to fierce debate, especially in the United States. If the network
neutrality bill will be rejected then Netflix and the like companies will face a
major threat because their existence depends on the internet and if the cost
of using Netflix will become too high as a result of lack of network neutrality
then Netflix will be adversely affected. Apart from network neutrality there
many other laws which are not in favor of the industry like the Video Privacy
Protection Act (VPPA) which Netflix had to actively lobby for its amendment to

allow them have the social media sharing features. Other political factors
include FCC restrictions on vertical integration and content monopolies,
funding problems for US postal service, increased state taxation for online
businesses and congresss historical receptiveness for Hollywood lobbying.
Netflix has its political action committee.
2.1.5 Legal factors
Due to extensive use of licenses for contents and contracts with content
providers also customer privacy issues there is a potential for a lot of legal
actions against companies in this industry.
2.2 SWOT
2.2.1 Strengths
Netflix has the First Mover Advantage into the movies and TV shows
instant streaming which gives its brand higher recognition compare to
other competitors.
Netflix brand has Strong Brand Recognition and winning Emmy
awards with its House of cards show, Emmys best the Personalized
Recommendation Engines for Video Discovery award and many
others making it the strongest brand in the industry.
With the personalized recommendation system and a large
selection of content Netflix has managed to get high Customer
Satisfaction
Netflix has the largest Streaming library compare to other competitors
like amazon and Hulu.
Netflix has the ability to adopt to various platforms like TVs, game
consoles, smart phones, tables and computers as well as flexibility
to different internet speeds which other competitors like Amazon
do not have
Production of original content has increased Netflix brand equity,
customer loyalty and revenues for example House of cards and orange
is the new black.
A huge database of customer data and a good system for analyzing
the data enabling them to have more accurate predictions and
recommender systems.
2.2.2 Weaknesses
Netflix has a big window of time from when the movie is launched to
when it is adopted by Netflix library. Customers have to wait for 28
days to have access of new content releases
unlike Hulu who can provide them earlier
Contractual restrictions on streaming content. Netflix is bound by the
contracts with the content providers restricting its flexibility on
expansion of the market and the content.
Expired contracts with Sony & Stars, resulting in lost videos about 1800
titles setting back the efforts to expand the video library. Also losing a
video provider EPIX to Amazon who is a competitor was a setback for
Netflix.

Damaged reputation after attempting to increase fees and separate

DVD & streaming video

Financing large aggressive international expansion may affect its

liquidity (Reed Hastings in Q3 interview with BTIG and JP Morgan)

2.2.3 Opportunities
Product Line Expansion of original shows may have a favorable
effect to Netflix subscriber base, profits and brand equity
More expansion in International market. According to table below
there is a rapid growth of the number of broadband subscription
every year and this is a tremendous opportunity for Netflix to
introduce video streaming in those markets.

Other potential areas in Internet streaming services where Netflix has

opportunity for growth are the live sports, and online games that Netflix
do not currently provide.

2.2.4 Threats
Exclusivity agreements with content providers may effect availability of
movies for streaming
More competition from big name companies (Apple, Microsoft, Amazon)
and global competition from companies operating locally overseas. The
Competitors offering streaming video are also bidding for exclusive
rights to content example: Amazon, HBO, TV networks which makes
gives the content providers higher negotiation power which results to
Higher licensing costs. The former Netflix content provider, EPIX
currently provides Disney videos to Amazon; Disney recently acquired
Lucas film & entire Star Wars franchise that makes Amazon a stronger
competitor than before.
Limits on Bandwidth usage from internet providers if the Congress
will not pass regulations to honor network neutrality. This will make
Netflix services more expensive that the customers are willing to pay
and therefore affect Netflix business.
Price adjustments to cover new expenses can result to consumer
outrage like it happened in 2011
Competitor partnerships. There is a threat of Netflix competitors
forming partnerships which will make competition more hard to overcome
for example (ex: Amazon & Epix)

Movie & TV industry less willing to make exclusive deals with online
video services.
Netflix receive web services from Amazon who is also a
competitor which draws attention to conflicts of interest issues
and Netflix faces a risk of Internet disruptions. However Netflix
have developed a software tool called Isthmus, which manages
Elastic Load Balancing services to curb Amazon services outages
early this year.
Motion Pictures Association of America (Industry
regulator) poses a risk if changes will be made affecting
Netflix adversely.
Increasing in cost for content licenses and increase in
cyber-crimes are some of the other stumbling blocks for
Netflix

2.3 Customer description

Netflix serve a business to customer market. The potential market includes
people of ages from 5 (kids), 18 to approximately 59 years and beyond and
they are located in the US and other 41 countries where Netflix currently
operates. They have two major product categories which are DVD by mail
subscription and online streaming subscriptions. The focus is online
streaming.

Netflix customers are highly diverse in their watching preferences, ages,

income, technological advancement and in many other aspects with the
only common factor uniting them being access to internet and interest in
video content. Most are accustomed to free/ad based content and the
black market. With these options available, prices are driven down as
consumers have high bargaining power
To be able to understand and serve this kind of extremely diverse customer
base Netflix collect and retain the following information about their
subscribers in order to understand individual preferences and be able to
serve every one of their customers individually. The information is collected
from the website by keeping track of subscribers interaction with them; Email
addresses, names, age, credit card information and other basic information,
title selections, reviews, ratings, payment history, correspondence, internet
service providers, Internet protocol addresses, devices and software data
(such as type, configuration and unique identifiers), instant-watching
hours/movies, TV shows and related activities.
They also collect information from other sources; including offline data and
subscribers browsing behavior on other sites and interactions with Netflixs
advertising, movie & TV show ratings, consumption habits, commentary and
reviews.
Subscribers may Choose to connect one or more social networks (such as
Facebook) with them Netflix account. If they do, Netflix will import, use, and
retain information from their social networking account(s) such as names
and profile pictures as well as their e-mail address, list of friends,
subscribers Likes and Interests as well as information they make public on
social networks
From analysis of collected information it is clear that Netflix online streaming
customers primary needs are affordable, convenient, fast and individualized
entertainment. Netflix has kept on delivering and responding to these needs
which results to a rapid growth of its customer subscription base. Figure 3
shows customer subscription trend for 2012&2013

Figure 3Netflix subscriber trend 2012/2013

2.4 Competition
Netflixs two product lines video streaming and the DVD by mail, each face
a different group of competitors. DVD by mail competitors are Blockbuster
and Red-box with market share of 16.9% and 45.5% respectively while
Netflix has 24.3%. Virtual rivals include Amazon, Hulu, Red-box Instant, Xfinity Stream-Pix, I-Tunes, Love-Film, and cable TV companies. According to
NPD Group, in the first quarter of 2013, 67% of U.S. streaming customers
subscribed only to Netflix a significant drop from the 76% posted in the first
quarter of 2012. Hulu Plus scored 10% of total subscribers among those
who used only one service, while Prime made up just 2% of such singlesource users. In the same NPD Group study, 10% of viewers used Netflix
and Prime both for streaming movies and television shows. 8% used Netflix
and Hulu Plus. Other indirect competitors are providers of home
entertainment like cable television, satellite services, other unofficial
websites with movies, you tube etc.
2.4.1 Comparisons with the 2 closest competitors

Price per month

Netflix

Amazon

30 day free trial

membership

30 day trial period

Hulu
1 week trial
membership

$6.67 with two day

$7.99 and there is a

3 types of plans,
unlimited
DVD only $7.99,
unlimited
streaming only $7.99
and
2 DvD at a time
$11.99

Content selection

Most extensive
selection
with thousands of
tittles.
Has licensing deals
with
CBS, ABC, Fox, NBC,
Stars,
BBC, Starts, BBC,
Sony and
DreamWorks
contributing

free
shipping for
purchases

free

made in Amazon

selection and fewer

episodes of shows.

Selection not as big

as
Netflix and shows
movies
released within the
past
year similar to
Netflix.

Speed

Features

Is compatible with
most
devices like PC,x box
360,
PS3, Nintendo, Wii,
smart
TV, Roku, Android,
Blue
ray player, Nook,
tablets
and iOS devices
Netflix is more
adaptive of
the internet speeds
and
can work from slow
internet and also fast
connection as well
Adverts free platform

Own licensing deals

to
provide content from
Fox,
NBC, Disney, MTV
and a
bevy of cable
channels.
Updates library more
frequently than its
competitor
s.
Customers get
latest
episodes faster and its
a
great alternative to
cable.

to the library.

Devices

Version with limited

Not compatible with

gaming devices.

compatibil
Lacks ity
with
Smart TVs and blue
ray
playe
r

Moderately adaptive
of

Moderately adaptive of

the internet speeds

internet speeds

Adverts free watching

Limited commercials
in

experience
Ability to rate movies
and

Plays newer movies

and
shows compare
to
competitor
s

receive personalized
recommendation

Market shares
Strengths

Ability to share with

friends in social
media
Personalized profiles
to
enable parental
controls
for children and the
whole
family can share the
subscription.
Account for 89% of
TV
streams
Largest library
selection,
strong brand, good
and
accurate
recommender
system, biggest
number of
subscribers, original
production of shows,
offers Netflix for kids,
social media
integration

Weaknesses

The selection is not

as
current as Hulu

movi
es

Account for 2% of TV
streams
Have a strong brand
but
associate with its
other
businesses apart
from
streaming , cheapest
for
people who prefer
whole
year commitments,
high
financial capability,
unlike
Netflix video
streaming is
only a small part of
the
business portfolio for
Amazon
Subscriber is forced
to
commit the whole
year.

Some selected tittles

are
paid per stream basis
the

Account for 10% of TV

streams
Lates movi selection,
t
e
A
good substitute for
cable,

Commercials appear
while
subscriber watc
s
h,
the
selection is
unlik
limited
e
Netfli
x,

Netflix has begun investing in original programming, a tactic that stole the
focus from content licensing in the subscription VOD category this year.
Netflix successfully introduced multiple series, including House of Cards
and Orange Is the New Black, while Amazon ordered a string of series in the
comedy and kids genres.
But all that activity has obscured the fact that competition over licensing has
intensified during the same period, as both Amazon and Netflix seem to have
moved away from an earlier emphasis on building the most comprehensive
libraries to focus on snaring exclusive contracts that help them stand out in
the marketplace
2.5 Segmentation
Netflix market is very dynamic and constantly changing in response to
changes in technology and consumer behavior. Netflix had 36.7 million
subscribers as of June 2013 with age range from 18 years of age to 59.
They spend 2bilion hours watching streamed video on hi-speed internet.
There are multiple ways of segmenting the market in the video streaming
industry but due to highly diverse nature of the customers who varies in age,
income, geographic areas, education levels, and watching preferences vary
with time, mood, beliefs, company etc. none of the segmentation will be
totally Homogeneous within, Heterogeneous across, Measurable,
Substantial, Accessible, Differentiable, Actionable and most of all Profitable.
2.5.1 Why Not?
First a person may have extremely different preferences influenced by a
number of reasons like company, mood, time, curiosity, new movies premier,
awards like Emmy awards tends to influence peoples preference at particular
times, what a customer sees as trendy on social media at the same time
these preferences are not pinned to a particular kind of people so it will be

impractical to obtain a homogeneous group within, heterogeneous across or

even measurable.
Second people change these preferences in split of seconds and that will
make it very hard to make the segmentation accessible, differentiable,
actionable and substantial enough to make profits because Netflix depends
on the large number of subscribers to break even, much more to make
profits and focusing on a particular segment will not make this achievable.
2.6 Targeting
Netflix target a mass market of consumer-paid streaming subscription of TV
shows and movies aiming to have the biggest market share with the largest
number of subscribers it can get regardless of age, backgrounds, beliefs,
preferences etc. Although Netflix target to recruit mass market it focuses on
individual subscribers needs in order to retain them for a long time. The
higher the number of paying subscribers the more Netflix can achieve return
on heavy investment in content and technology because only low prices can
be charged due to the nature of the industry and service.

2.7 Positioning
Customers top priority is convenience, affordability, speed,
personalization of the video streaming and high selection of titles. Netflix
aim at being the top and only choice for its customers by providing a
more personalized, fast, convenient, high selection and yet affordable
online streaming service than all of the competitors.

Figure 4 Perceptual Map (selection/personalization)

Figure 5 Perceptual map (convenience/economy)

Perceptual Maps key
N=Netflix, H= Hulu, R=Red-box Instant, A=Amazon, C=Comcast
(Xfinity Streampix)

Values used to construct the perceptual maps

2.5.4 Research needs

Additional research results needed to fully characterize the market will
be the supplier information because there are many Netflix content
suppliers and the information Netflix content license purchases.

3. Marketing Planning

3.1 Market size and growth potential

Netflix market has had a consistent growth trend over the years. It started
operations in 1999 with 101000 subscribers to more than 40.28 million
streaming subscribers ending Q3 this year and 7.51 million physical DVD
mail subscribers as of June 2013 (Yahoo: By numbers: Netflix subscribers)
According to US census bureau as of June 30 2012 North America had a
total of 273million people with internet access who can be Netflixs
potential subscribers. Netflix target the mass market both in United States
and internationally and there is a promising future for growth for Netflix.
3.2 Strategic direction, targeting and positioning
Netflix streaming service is positioned as the personalized low price
instant movies and TV shows entertainment with the biggest collection
targeting the mass market. Comparing to other competitors Netflix offers
the watching experience without disruptions from other adverts compare
to Hulu, It has the largest selection compare to all close competitors and
customers can watch from a bigger variety of devices and internet
connection speeds which puts it on top list when it comes to convenience.
Every customer is served individually using a sophisticated analysis of
big data and accurate recommender systems so that the service can be
as personalized as possible while aiming at attracting as many
subscribers as possible from all walks of life.
3.3 Marketing objectives
3.3.1 Marketing
1. Increase the brand awareness
international markets.

and

goodwill

especially

in

new

2. Highlight the competitive price and variety of content and the

social media integration that Netflix offers compared to their
competition by including these details in every message.
3. Increase number of subscription from 40 million people to 70 million
4. Improving the Instant streaming service in various aspects (discussed
under product offering)
3.3.2 Media
5. Increase our share of voice by 40 percent by the end of the campaigns
first year.
6. Increase the frequency rate of all current advertising messages by 50
percent and extend our reach by 10 percent.
3.3.3 Promotion & advertising
7. Reach 95 percent of the target audience at least twice with
messages detailing Netflixs instant streaming.
8. Use mobile ads to increase awareness of Netflixs instant

streaming service on particular mobile devices.

Communication
The main vehicles that will be used are the internet, Television
commercials and Billboards.
a. Advertising through mobile phones & tablets messages
As of May 2013, 91% of American adults had a cell phone, 56% a smartphone, and
34% had a tablet computer. As of January 2013, 26% of American adults owned an
e-book reader. The figure below shows gadget ownerships in United States.
Ads will include notifications that the current free trial offer will run
through the campaigns first year and all other Netflix new features.

b. Social media and internet advertising

Social media is extremely important for Netflix because the service is
located on the internet the same place where the social media is. Netflix

provides opportunities for its customers to share and interact with their
friends in various social media while they are on Netflix account. Netflix
also collect the social media information to better serve the customers
and know how the customers perceive them.
90.1 percent of the U.S. actively use the internet. That is a huge
coverage rate. The biggest advantage to internet advertising for Netflix
is one click on an ad and the potential consumer is taken right to the
product. Internet users have come to accept and even expect banner
ads. The figure below shows forecasts and estimated of sales as
outcomes of banner and search Ads in US.

Fan chart forecast of U.S. search and banner ad sales, 2007-17

Figure 7 Sales forecast resulting from

online banner Adverts Source: Mintel/IAB/PwC
c. TV commercials
Based on the Americas commercial broadcast television industrys
(referred to as TVB) media comparisons study 2012, Television reached
more people than the internet (88.3% > 73.1%). However, considering
that the location of the product is on the internet, we want to focus a good
part of the advertising to internet ads as well. Television will have more
money budgeted to it, due to the production costs.

Television

88.3

Internet

73.1

Radio

58.8

Newspaper

36.1

Mobile Phone

27.8

Magazines
Tablet

24.8
11.7

% Reached Yesterday

Persons 18+

Figure 8 Media comparisons study 2012

Source: TVB media comparisons study 2012
Sponsor Movie related events
Some of the major Film related events are Sundance Film festivals in US
which is held in late January every year in different big cities in US.
International Film festivals in Rotterdam Rotterdam Film Festival is one of
the most important film festivals in the world focusing predominantly on
world and international premieres with a large art-house and
experimental focus. Other film festivals are Slamdance, Raindance,
Rendez Vous in France, Gotterburg international for Scandinavia.
Other events that Netflix can sponsor are movies and entertainment
awards like Emmys, BET etc. Netflix will gain more awareness in the
market and get to advertise to the customers who have actual interest
in movies.
Use of Netflix data for Advertising and service improvement
Netflix use subscribers e-mail address to send newsletters, messages
about new Netflix features, Netflix special offers, promotional
announcements, consumer surveys and other correspondence and
marketing concerning their services. The information about online
activity, watching preferences, internet speed and user devices can be
used to determine subscribers general geographic location for the
provision of localized content, enforcing Netflix terms (such as
determining eligibility for free trials, age restrictions), providing
recommendations on movies & TV shows, personalizing services and
marketing to better reflect particular interests, helping Netflix quickly
and efficiently respond to inquiries and requests and otherwise
analyzing, enhancing, administering or promoting service offering.
Netflix also uses the information to provide analysis of their users in the
aggregate or in anonymous form to prospective partners, advertisers
and other third parties. Information from Social Networking sites is used
to better improve the Netflix personalized experience for the
subscribers and their friends if they agree to share such information.
The consistent message Netflix sends with all communication is
watch what you want when you want at affordable price

3.4.3 Price
Netflix pricing objective is gaining the maximum market share for Netflix
which translates to customer attraction and retention. Their pricing is
also set to match the competitors where they charge $7.99/month for
unlimited streaming, the same price as Hulu while Amazon prime
$6.50/month but the customer incurs extra cost for some individual
titles. There have not been a lot of price changes with the online
streaming industry and all the major players keeps the price at the
similar margin which means if any one of the competitors will change the
price Netflix is likely to react if not changing the price will result to lost
subscriptions. Netflix changed its prices and separated the two products
lines of streaming and DVD rental by 60% increase in price for customers
who wanted both services. Netflix has ever since maintained its price at
the industry average. Netflix does not practice price differentiation
because it targets the mass market
3.4.4 People
Netflix should have highly qualified and fast customer service people to
take care of the customers because that is the only point of contact with
the customers. Netflix respond within 5 minutes of a call to all customers
and this could be improved further to 3 minutes.
3.4.5 Place & Process,
Process in which customers go through to subscribe is made simple and
self-service. It takes a few minutes to create the Netflix account and to
start watching instantly and it all reflects the convenience aspect of the
service.
3.4.6 Distribution
Netflix accommodate different internet speeds so that the customers can
watch from anywhere they have an internet connection and in order for
them to do this Netflix is strategically establishing relationships with ISPs
because there is a threat that the government may not honor the
internet neutrality law which will allow ISP to charge customers
differently with different content which will hurt Netflix business.
Netflix can also partner with companies to develop Netflix programs
specific to their platforms that will come pre-installed on all their
devices, further partnership can be done with cable and gaming
companies to develop instant streaming option for video games.
Content providers also should be approached for exclusive rights to
content before the competitors do the same.
3.4.7 Physical evidence
Online movies and TV shows streaming primary physical evidence is the
Netflix website where people log in to watch their movies and Netflix apps
which enable people who use phones to access Netflix get that
experience, the website should be improved constantly and more user

friendly so that subscribers can search for content more easier and
prevent any possible downtime.