At the top of the on-demand video services is Netflix, a company that has enjoyed video steaming presence in almost every country of the world. However, the situation is likely to change after Amazon made its intentions clear by launching a major international expansion to rival Netflix’s global supremacy. As of November 2016, Netflix already enjoyed global dominance while Amazon Prime Video was only available in five major countries: U.S, Australia, Germany, Japan, and the UK. Currently, Amazon has expanded to developing countries such as India and is reaping big from its Asian customer base. This paper concisely analyzes basic marketing strategies adopted by Amazon and Netflix in entering and sustaining their presence in the Indian market.
To enter the Indian market, Netflix used a standardization marketing strategy. Standardization is a one-size-fit –all approach, where the organization entering a new international market does not modify the products and services to suit the needs of the local market. Netflix’s standardization strategy came in two ways. First, it paid less attention to personalization. The company did not invest on market research to identify the most-wanted content in the Indian market. Thus, they did negligible modification to their content to give the Indian customers local content. Secondly, Netflix did not consider price moderation. Being the first entrant to the Indian market, their subscription rates were relatively higher at entry, thereby limiting their customer base from expanding exponentially. The little focus on local content and price moderation were the two key areas of Netflix’s standardized entry to the Indian markets.
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On the other hand, Amazon Prime Video adopted adaptation as a strategy to enter the Indian markets. Adaptation essentially entails the modification of products and services to meet the local requirements and customers. It also entails the use of different selling strategies to expose your product to the local market. Cautious of the economic situation in India, Amazon Prime Video modified the prices and entered the markets at relatively cheaper subscription rates compared to Netflix. It also took time to study the local preferences and majored on a lot of local content as compared to Netflix.
Currently, both Netflix and Amazon Video prime have opted for adaptation as a means to expand in the Indian market. Upon realizing that its presence in the Indian market is getting overshadowed by the entry of Amazon, Netflix has opted to cut streaming rates to counter the competition from rivals. Netflix is also opting for mobile-friendly initiatives by reducing data consumption to 100kb on video streams. Further, Netflix is focusing on local content to satisfy the local needs. On the other hand, Amazon is currently advancing to create local partnerships with firms such as Vodafone in order to expand its customer base in India. The Vodafone customers can now access Amazon Prime Video (APV) at promotional rates. Their marketing strategies do not differ significantly because local content and price moderation are Netflix’s and Amazon’s key pillars of expansion in the Indian market. They only differ with regards to local partnerships and the focus on mobile-friendly initiatives. Considering the global hype over Netflix, I think that Netflix is going to compete aggressively against APV to take hold of the Indian market. The mobile-friendly initiative will particularly give Netflix a wider user base.
Globalization and internet technology has made the countries of the world more inter-connected than it was two decades ago. The digital platforms increase the economics of conducting businesses across borders and across cultures. This inter-connectivity directly influences e-commerce, communication, and cultural exchange. The world is more united than ever before.
