MARKETING RESEARCH ON

EFFECTS AND SATISFACTION LEVEL OF NETFLIX

Prepared by:- Jay kachhadiya

Nikhil Kapadiya
Priyanka Adhyaru
Radhika Mistry
Course:- MBA (MU) Sem- II
Subject :– Marketing Management

April, 2019
A report submitted to
Marwadi University in Partial Fulfilment of The Requirement For The MBA In Faculty of
Business Management

Marwadi University
Rajkot- Morbi Road, At & Po. Gauridad,
Rajkot-360003, Gujarat, India

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Table of content

Sr.no. Particular Page.no

1. Executive summary 2
2. Introduction 3
4. History 4
5. Company profile 5
6. Products 6
7. Sales & marketing 7
8 Market segmentation & Targeting 11
9 Positioning 12
10 Marketing Mix 13
11 Competitors 14
12 SWOT Analysis 15
13 Data analysis and interpretation 15
14 Conclusion 27
15 Annexure 28

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Executive summary

“The systematic objective and exhaustive research for and study of the facts relevant to any
problem in the field of marketing.” —Richard Cris

Our group have done the project of marketing research of Netflix. With the sample size of 50
and primary source has been used for the project.

The data was collected through questionnaire, this project tells details about Netflix’s company
profile, market segmentation, positioning, competitors SWOT analysis.

This research tells about effects and satisfaction level of Netflix user. Most watched category is
action series and almost the user of Netflix are students.

Details like company’s introduction and products, how it was started and the current status of
Netflix.

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Introduction

Netflix, Inc. is an American media-services provider headquartered in Los Gatos, California, founded
in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. The company's primary
business is its subscription-based streaming OTT service which offers online streaming of a library of
films and television programs, including those produced in-house.] As of January 2019, Netflix had
over 139 million paid subscriptions worldwide, including 58.49 million in the United States, and over
148 million subscriptions total including free trials. It is available almost worldwide except in mainland
China, Syria, North Korea, Iran, and Crimea. The company also has offices in the Netherlands, Brazil,
India, Japan, and South Korea. Netflix is a member of the Motion Picture Association of
America (MPAA).

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History

On October 1, 2008, Netflix announced a partnership with Starz to bring 2,500+ new films and shows
to "Watch Instantly", under Starz Play.

In August 2010, Netflix reached a five-year deal worth nearly $1 billion to stream films
from Paramount, Lionsgate and Metro-Goldwyn-Mayer. The deal increased Netflix's annual spending
fees, adding roughly $200 million per year. It spent $117 million in the first six months of 2010 on
streaming, up from $31 million in 2009.

On July 12, 2011, Netflix announced that it would separate its existing subscription plans into two
separate plans: one covering the streaming and the other DVD rental services. The cost for streaming
would be $7.99 per month, while DVD rental would start at the same price. The announcement led to
panned reception amongst Netflix's Facebook followers, who posted negative comments on its wall.
Twitter comments spiked a negative "Dear Netflix" trend. The company defended its decision during
its initial announcement of the change:

"Given the long life we think DVDs by mail will have, treating DVDs as a $2 add-on to our unlimited
streaming plan neither makes great financial sense nor satisfies people who just want DVDs.
Creating an unlimited-DVDs-by-mail plan (no streaming) at our lowest price ever, $7.99, does make
sense and will ensure a long life for our DVDs-by-mail offering."

In a reversal, Netflix announced in October that its streaming and DVD-rental plans would remain
branded together.

In January 2018, Netflix named Spencer Neumann as the new CFO.

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Company profile

In June 2008, Netflix announced plans to eliminate its online subscriber profile feature. Profiles allow
one subscriber account to contain multiple users (for example, a couple, two roommates, or parent
and child) with separate DVD queues, ratings, recommendations, friend lists, reviews, and intra-site
communications for each. Netflix contended that elimination of profiles would improve the customer
experience.

However, likely as a result of negative reviews and reaction by Netflix users, Netflix reversed its
decision to remove profiles 11 days after the announcement.

In announcing the reinstatement of profiles, Netflix defended its original decision, stating, "Because of
an ongoing desire to make our website easier to use, we believed taking a feature away that is only
used by a very small minority would help us improve the site for everyone," then explained its
reversal: "Listening to our members, we realized that users of this feature often describe it as an
essential part of their Netflix experience. Simplicity is only one virtue and it can certainly be
outweighed by utility."

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Products

An Aquos remote control with a Netflix button

In 2007, Netflix recruited one of the early DVR business pioneers Anthony Wood to build a
"Netflix Player" that would allow streaming content to be played directly on a television set rather than
a PC or laptop. While the player was initially developed at Netflix, Reed Hastings eventually shut
down the project to help encourage other hardware manufacturers to include built-in Netflix
support. Wood eventually launched the player as the first device from Roku Inc. which is now
primarily known for its streaming video players, with Netflix serving as a primary investor in the new
company.

In 2011, Netflix introduced a Netflix button for certain remote controls, allowing users to
instantly access Netflix on compatible devices.

Netflix revealed a prototype of the new device called "The Switch" at the 2015 World Maker
Faire New York. "The Switch" allows Netflix users to turn off lights when connected to a smart home
light system. It also connects to users' local networks to enable their servers to order takeout, and
silence one's phone at the press of a button. Though the device hasn't been patented, Netflix
released instructions on their website, on how to build it at home (DIY). The instructions cover both
the electrical structure and the programming processes.

Since 2015, the company received significant technical support from

France's CNRS concerning video compression and formating, through CNRS' Laboratoire des
Sciences du Numérique de Nantes (LS2N). In March 2017 at Barcelona's World Congress for mobile
technologies, the American company presented the French lab's open-source technological creation:

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a compression tool allowing HD+ video quality with a bandwidth need of under 100 kilo octets per
second, 40 times less than that of HD TV needs and compatible with mobile services worldwide.

In May 2016, Netflix created a new tool called FAST to determine how fast one's Internet connection
is

Film and television deals

Netflix currently has exclusive pay TV deals with several studios. The pay TV deals give Netflix
exclusive streaming rights while adhering to the structures of traditional pay TV terms. Netflix's United
States library includes newer releases from Relativity Media and its subsidiary Rogue Pictures,as well
as DreamWorks Animation (until May 2018, when the studio signed a new contract with Hulu), Open
Road Films (though this deal expired in 2017; Showtime has assumed pay television
rights), Universal Animation (for animated films declined by HBO), FilmDistrict, The Weinstein
Company (one of whose founders, Harvey Weinstein, has been accused of sexual harassment as of
2017 (see Harvey Weinstein sexual abuse allegations), causing Netflix to withdraw from hosting
the 75th Golden Globe Awards with TWC, and ending its Golden Globes partnership with the mini-
major film studio), Sony Pictures Animation, and the Walt Disney Studios (until 2019) catalog.

Video games

In June 2018, Netflix announced a partnership with Telltale Games to port its adventure games to the
service in a streaming video format. The games would be adapted to be similar to the existing
interactive narrative stories that Netflix already offers, allowing simple controls through a television
remote. The first such game, Minecraft: Story Mode, was expected to be released later in the year,
and Telltale also received rights to produce a video game adaptation of Stranger Things for
conventional gaming platforms. In September 2018, Telltale underwent a "majority studio closure"
and laid off nearly its entire staff beyond a skeleton crew of 25 employees, citing a loss of funding.
Netflix stated that while the Minecraft: Story Mode port would go on, the company was seeking
alternate options for the Stranger Things project.

Device support
Devices that are compatible with Netflix streaming services include Blu-ray Disc players, tablet
computers, mobile phones, smart TVs, digital media players, and video game

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consoles (including Xbox One, PlayStation 4, Wii U, Xbox 360, and the PlayStation 3). The Wii and
the PlayStation 2 were formerly compatible with Netflix as well.

4K streaming requires a 4K-compatible device and display, both supporting HDCP 2.2. 4K streaming
on personal computers requires hardware and software support of the Microsoft PlayReady 3.0 digital
rights management solution, which requires a compatible CPU, graphics card, and software
environment. Currently, this feature is limited to 7th generation Intel Core or later CPUs, Windows
10, Nvidia Geforce 10 series and AMD Radeon 400 series or later graphics cards, and running
through Microsoft Edge web browser, or the Netflix universal app available on Microsoft Store.

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Sales & Marketing

During Q1 2011, sales and rentals of DVDs and Blu-ray discs plunged about 35%, and the sell-
through of packaged discs fell 19.99% to $2.07 billion, with more money spent on subscription than
in-store rentals. This decrease was attributed to the rising popularity of Netflix and other streaming
services.
In July 2012, Netflix hired Kelly Bennett – former Warner Bros. Vice President of Interactive,
Worldwide Marketing – to become its new Chief Marketing Officer. This also filled a vacancy at Netflix
that had been empty for over six months when their previous CMO Leslie Kilgore left in January 2012.
Netflix's website has 117.6 million subscribers as of 2018, with 8.3 million being added in the fourth
quarter of 2017. As of January 28, 2018, Netflix's website ranked as the 30th most trafficked website
in the world and 9th most trafficked website in the United States.
Netflix has a Twitter feed, used to tweet about the new and upcoming shows that include hashtags to
encourage engagement of their audience to not only watch the show but to contribute to the hashtag
themselves

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Market Segmentation & targeting

Geographic segmentation
 Pan India, primary focus on major metro cities.

Demographic Segmentation
 Male & female above the age of 16.

Psychographic Segmentation
 Affluent who are seeking quality original global content and ready to pay premium.
 Brand conscious

Target –Differentiated approach

The core segment to target are the ‘affluent’ and ‘aspiring’ set of audience who have:
1. Keen interest in watching the original global content.
2. Wants to be perceived ahead of the league.
3. Can afford to pay for the subscription

Targeting all different segment by placing service on all possible Medias from smartphones to TVs
and set-top box.

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Positioning

Situation customer’s top need is comfort, reasonableness, speed personalization of the video and
high choice of titiles.
Providing more customized, quik, helpful, high quality entertainment.
Binge watching of their favourite programme.

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Marketing mix
Product strategies
1. Add more recent movies
2. Sports instant streaming
3. Expanding the library collection
4. Accommodate different internet speeds
5. More medium for payments

People strategies
1. Increase the customer service team
2. More training for the people
3. Advanced tools and software for customer
service

Process strategies
1. Simple self service
2. Easy to access the site and apps

Physical evidence strategies

1. More features for Netflix website

Place strategies
1. Netflix place is the internet and since they are currently provided these by Amazon more can
be done to establish own facilities.

Promotion strategies
1. Continue the 1 month free and communication it in all advertisements.
2. Mobile texts once every two months.
3. Social media and internet banners Ads TV commercials emphasis on free month trial.
4. QR codes on movie size candy and pop con pack twice a year for 3 months period each.
5. Sponsor film festivals like Sundance, Slam dance etc. and Emmy awards as well

Price strategies
1. $7.99 should not be changed abruptly and proper communication should be done before the
changes.

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Competitors

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SWOT Analysis

strenghts
largest streaming library production of weakness
original content strong Brand does not have latest content
recognition

SWOT Analysis

opportunites
product line expansion of original threats
shows Network Neutrality Principal issue
more expansion in international web services from Amazon (a
market. competitor)
the live sports and online games

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Data analysis and interpretation

There are total 70 respondents for this research.

There are more numbers of Netflix users are male as compared to female.

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It describe that’s the user of Netflix covers the age group between 18 to 24.

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It describes the Netflix user are almost students.

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Netflix user are almost graduates,16.4% are Post graduates and 20.9% under graduates.

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66.2% are using Netflix and non-user are 34.8%.

82.% of Netflix user are using through smart phone, 9.8% through computer.

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85% of Netflix customers using the Netflix for less than 1 year.

63.2% of Netflix customer are visiting the site 1 to 2 times over a 2 week periods.

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45.8% Netflix customer are watching category of action, 22% are watching category of Romance and
15.3% are watching category of comedy.

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50% of Netflix customer are watching the one episodes at a time during one occurrence of use.

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27.1% of Netflix user having strong desire to be watch the next episode of a TV series if the previous
episode ended with a suspense.

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50.8% of Netflix customer feels like level of familiarity with the technology Netflix is does not affect the
Netflix usage.

Price is the most important to Netflix and least important is convenience.

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Competitor of Netflix Company is Amazon Prime.

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Conclusion

Netflix is the perfect example of a company that uses the Internet to reinvest the market.
Netflix came as a disruptive, ahead on its time company. Still many are now trying to implement a
similar business model and to compete against Netflix.
In any case, Netflix will certainly keep its competitive advantage: a true understanding of its
customers’ needs and their behaviors. Those insights are crucial in e-commerce: they are the
basement of any strategy that intends to differentiate the company from the others.
The Internet has allowed many possibilities to businesses, like offering an unlimited choice of
online videos. Still, it has to make the customers’ life easier. Netflix has perfectly understood this
aspect: the Internet and E-commerce businesses are tools that must suit needs and behaviors.
The future of Netflix is not certain. While its product is great, the company has given way to
other companies like Google or Amazon. Netflix is still one step ahead, but they will have to innovate
is they do not want to lose leadership. For example, they could add a social experience to the service
where you would be able to see what friends have watched and recommended.

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Annexure

Questionnaire
https://docs.google.com/forms/d/1rhr00DeGItQFtD1TtuIBjB4ApDIV2CdAUy_XkbvO3MQ/edit#re
sponses

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