Business to consumer is the transactions managed directly between a firm and consumers who are the purchasers of its brands or services. It involves invoking an emotional response from the buyer, not just on the benefits or value that a product offers. Streaming advanced technologies have helped many companies to have innovations and tactics to increase customers and user experience positively. Netflix accomplished in several areas that assisted in capturing the global market at large. It's not about what a firm sells but how it promotes and sells its brands.
Netflix is one of the business to consumer company. It’s one of the prominent entertainment mass media firms of all time. Netflix started in 1998 by giving customers services through mailing out physical copies of movies, video games shows, and other forms of media. Advanced technologies have led to an improvement in the Netflix company (Mazzolini, 2016). They have changed over time from physical copies to have a software where their customers can view and watch a diversity of documentaries, movies, and TV shows in the comfort of their convenience. It is a subscription model, and it involves its customers paying a recurring flat fee for consistent access to a product or service.
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Netflix has its key activities and products that support its model. These activities are as follows: Netflix complies with the law as per the region or country. Especially for children and minors, it maintains compliance with censorship. Netflix user profiles give freedom to users to personalize their accounts and preferences (Buckle, 2019). This user-profiles permits the admin to restrict, modify, or let certain users. It builds and acquires a partnership with content providers, Movie production houses, and Studios. It advertises through paid channels to promote their new movies or shows. Netflix knows that customers don't like destruction while watching the shows or movies, so they provide an ad-free experience to the users. It also develops its subscription model and pricing strategy to make sure of cost-effective. Netflix expands a roadmap to get into the new market. It continually does algorithms that improve the business, features, and the app. The captured data, such as behavioral, is used for micro-segmentation and future investment decisions into the content. It retains and hires software and technology geeks to be up to date with the streaming technologies.
According to de Villiers et al. (2019), there are four bases for segmenting consumer markets. The psychographic, demographic, geographic, and behavioral segmentation. In psychographic, it involves personality characteristic, and lifestyle. Lifestyle is the way people live and use their money and time. Analysis of lifestyle gives the marketers a broad view of end-users since it segments the markets into categories based on beliefs, opinions, interests, and activities (Lee, 2018). Personality traits are individual character traits, habits, and attitudes. Marketers segment, according to extrovert, ambitious, competitiveness, and introvert. This segment gets used when a product is alike with many competing products, and the end-user needs for the product are unaffected by segmentation irregularities.
The demographic segmentation splits the markets into categories based on variables like family size, education, religion, nationality, gender, income, age, occupation, and race—segmentation on gender bases on cosmetics, magazines, and clothing. Segmentation by the revenue split the market since it affects the consumers' brand purchase. It affects customers buying ability and living style (Buckle, 2019). Income includes automobile, clothing, alcoholic, furniture, housing, luxury goods, and travels. The family cycle makes the product differ according to marital status, the number of people in the household, and the age of children. Stages include home appliances, furniture, automobile, housing, and food. Many firms deal with home furnishing, leisure activities, design brands, clothing, and services for a particular social class.
The geographical segmentation divides the market to varying geological sections like states, cities, neighborhoods, regions, and nations. Geographic variables like terrain, population density, climate, and natural resources also affect consumer product needs. Lastly, the behavioral segmentation splits the purchasers into groups based on their attitude towards, response to, understanding of, and use of a brand (Buckle, 2019). The segmentation is on the essence of user status, usage rate loyalty status, attitude, occasions, and buyer-readiness phase. In the buyer’s readiness stage, the buyer passes six steps when deciding to purchase. The stages include knowledge of what the product does, awareness, preference over competing products, interest in the product, purchase, and conviction of the products satisfactory. For the usage rate, markets get differentiated based on medium, heavy, and light users. Marketers prefer to captivate a heavy user instead of several light users since, even if heavy users are a minor percentage of the market, they call on a significant portion of the entire consumption.
On an occasional basis, buyers get distinguished in terms of when they use a brand, purchase a brand, or develop the urge to utilize a product. It assists the company in amplifying brand usage. Purchasers can be split in terms of their loyalty status as the switchers, split loyal, shifting loyal, and the hardcore loyal (Buckle, 2019). The switchers are purchasers who show no loyalty to any brand, break loyal are the loyal consumers to more than two brands, shifting faithful are buyers who move from one product to some other and the hardcore loyal buy one product all the time. Nevertheless, in user status, the markets are segmented in terms of ex-user, potential, first-time, regular, and the non-user of the brand. Small companies focus on current users, whereas large firms target prospective users.
Demographic and psychographic segmentation is the Netflix base for segmenting the consumer market. In demographic segmentation, the market gets split based on gender, age, and income. Netflix provides a diversity of titles that considers many age groups, from thrillers to children’s programs. The market based on age is boundless; hence aged individuals who have no understanding of the technology prefer old school viewing methods. Male and females account for the most extensive use of online flow (Buckle, 2019). Teenagers and young adults visit online at a rate of 93 percent, making them a primary target consumer. Netflix adds kids' movies and other services according to age. The subscriptions are cost-effective, making anybody afford their subscriptions despite the consumer's income.
The psychographic segment, the market gets split based on the people who are busy and can't get out of their homes to get to movie shops, the consumers who are addicted to movies, and the people who want the maximum value to their money. Netflix provide ultra HD 4K streaming to its clients making their money valuable (Buckle, 2019). It has captured a dominance position in the global world relative to other online streaming websites. Netflix adds recent series, movies, and seasons in its online collection to attract consumers who are willing to watch new videos online and to the comfort of the consumer's convenience. They get new TV shows for the group that is interested in current TV shows.
The consumers who want to stay updated with top new TV shows, series, movies, and others, Netflix is one of the prominent streaming services, striving to compete with better, and other content. Netflix is spending large amounts of money by introducing algorithms for better consumer experience. Its business is currently in the evolving stage, and with the streaming technologies, there be an assumption that there will be surprises in the future.
References
Buckle Harry. (2019). The Relentless Pursuit of the Perfect Customer Experience: A Netflix Story. Business 2 Community. Retrieved from:
https://www.business2community.com/customer-experience/the-relentless-pursuit-of-the-perfect-customer-experience-a-netflix-story-02240302
de Villiers, R., Tipgomut, P., & Franklin, D. (2019). International Market Segmentation across Consumption and Communication Categories: Identity, Demographics, and Consumer Decisions and Online Habits . In Promotion and Marketing Communications . IntechOpen.
Lee Edmund. (2018). Netflix’s Cash-Fueled Road to Streaming Dominance. The New York Times. Retrieved from
https://www.nytimes.com/2018/10/17/business/media/netflix-streaming-competition.html
Mazzolini, P. (2016). Netflix: financial position analysis and evolution in the market for online streaming services.
