Netflix is currently the world`s leading television network. It is accessible to viewers in more than 190 countries and presently, the Company commands a viewership of up to 117 million people (United States Securities and Exchange Commission, 2016). Also, each of the business` shares are estimated to be worth $341.31(Netflix, 2018).
Core Product or Services (25)
Initially, Netflix functioned as a DVD rentals facility, however, later on streaming becoming its chief incentive. Currently the Company offers its viewers an opportunity to stream and watch their favorite shows, and movies at a fee.
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Brief History (50)
Netflix was created in 2007, after the development of an ecosystem for audiences` to watch their favorite movies and shows was established. The domestic services of the Company continually advanced and by 2010, the business had expanded to Canada and later on across the world.
Key Current Competitors (50)
Some of Netflix` major competitors are Amazon Prime, Hulu and HBO. Netflix, however, commands the greatest part of video streaming. Also, Amazon poses the greatest competition to Netflix compared to other service providers. This year, Netflix announced that it had over 110 million subscribers across the world with a with a market cap exceeding $100 billion; which further establishes the business` dominance ( Cárdenas & Banos, 2015 ).
SWOT Analysis (500)
Strengths
One of the most significant strengths of Netflix is the customized genre preferences for its movies. There is a wish list for all its customers which allows them to select their desired shows. Also, overhead costs spent on the Company`s employees is substantially low since most of the business` operations are online ( Hallinan & Striphas, 2016 ). In addition to this, Netflix has the largest collection of videos which makes it desirable to its large network of clients who get to select from a wide variety of films and shows. Besides, this entity has over 30 centers of distribution within the United States alone making it easy for the clients who opt for online services to access the content provided.
Weaknesses
For the Company to be in a position to gain access to some of the big movies in production, a large amount of capital reserve is required in to keep all operations in tandem. Besides, the manufacturing fee, licenses and other costs pose part of the greatest costs incurred by this entity. Further still, there is additional licensing required by Netflix for the business to be in a position to stream online ( Cárdenas & Banos, 2015 ). Only 10% is accessible to a day comprising of up to 15000 titles ( Cárdenas & Banos, 2015 ). Another weakness lies on the Company`s inability to convert some of the DVDs into HD content for greater viewership, in an effort to meet the great demand from clients.
Opportunities
Currently, there is a great demand for videos, most of which are demands for online content owing to the great advancement in technology across the world. Such incentives constantly in competition with Comcast or alternative Satellite entertainment services providers. Besides, the increase in the number of contracts with movie distributors offers an even greater opportunity for the business. Also, this idea has led to an even better opportunity for Netflix to expand their licensing of their content. The idea of emergent needs and increasing demand for video games in the market present a potent opportunity for the business to venture into such inducements.
Threats
The existence of businesses such as Comcast which provide movies based on demand from clients, Hulu and also Amazon present part of the greatest threat for Netflix ( Cárdenas & Banos, 2015 ). Owing to this, it has become increasingly easy for clients to obtain movies and other related content at lower costs. If Netflix fails to consistently upgrade the content of what it produces it is increasingly easy for the business to lose its control of the movie business. Also, retailers such as Wal-Mart are offering competitive prices for DVDs thus leading to a greater challenge for the Netflix ( Cárdenas & Banos, 2015 ). Some clients prefer renting DVDs as opposed to online content, a matter that has led them to associate themselves more with Companies such as Blockbuster. Further competition is being presented by the local stores in most companies whose content is significantly lower than what Netflix is offering its customers. Further still the constant rise in costs pertaining to the fees that Netflix is having to pay on its licenses and other amenities has led to an increase in the cost of services being offered by Netflix.
Marketing Plan (100)
Originally, Netflix`s plan involved increasing sales and brand awareness. The Company has, however, managed to achieve this through consistent enhancement in the services it offers to its customers. Currently, Netflix is targeting a larger market of subscribers by seeking to move into foreign domiciles where individuals have just recently become accustomed to online streaming services ( Hallinan & Striphas, 2016 ). Its plan also involves consistently providing viewership of its content without disruptions which are constantly observed on Hulu and other competitors. The business also plans to highlight competitive pricing of its services to customers so that it can eliminate the risk of losing its share within the market. In addition to this, Netflix is focused on increasing the frequency of adverts so that they can manage to reach a larger number of individuals. Another significant plan is based on reaching 95% of its target audience more than 2 times with the message of enhancing the online streaming experience for them ( Hallinan & Striphas, 2016 ). Besides, mobile adverts have become part of the Company`s marketing strategies. For
Netflix` STP
Segmentation Approach (75)
The Company`s business segment is robust with constant changes occurring concurrently through innovation. A lot of methods for segmenting the market are currently available, however, owing to the different clients the Company has, their preferences and tastes require that changes are made over time in a bid to command a greater following within the market. Besides, other factors such as differentiation of products are taken into consideration so as to ensure that Netflix offers unique services which are distinguishable from those of other service providers within the market.
Target definition (25)
Unlike other businesses, Netflix focuses on a greater business segment by purchasing greater Television content so that it can have the greatest piece of the pie. The Company pays little attention to specifics such as age, convictions, and inclinations. Instead, the main aim of this business is to reach out to customers of all means by offering great content at affordable prices which vary depending on the ability of individuals.
Positioning Statement (25)
“ Situating the Customer`s top need is comfort, reasonableness, speed, personalization of the video spilling and high choice of titles ( Hallinan & Striphas, 2016 ).” The business offers quick, helpful, high determination for a greater majority of its contenders.
Marketing Mix discussion (800)
Marketing Mix: Product
Netflix plans to add to the collection of movies at the disposal of its clients. This plan is aimed at attracting clients seeking to watch more online content being provided by the Company. In addition to this, Netflix is seeking to gain access to more recent Television shows for clients who are in search for the most recent programs. Besides, the increase of online video games is part of what this business is planning to use to reach out to an even greater network of clients ( Keating, 2013 ). Recently, there is an increased number of individuals seeking to gain access to sporting activities and events and Netflix is planning to capitalize on this to attract such individuals. It is also apparent that the Company is currently in talks with many producers with an aim of reaching an agreement which will see the business gain access to more content which will in turn allow Netflix to become the most highly reputed brand within the market. The enterprise can for instance, capitalize on North America Sports League where up to 22. 4% of fans spend at least 4 hours every week as they search for sports related content online ( Hallinan & Striphas, 2016 ). Additionally, the business can also seek to accommodate more advanced internet speeds for their clients so as to enable them access more content at a faster rate. Further still, the business should make it possible to increase the medium of payments for their clients.
Marketing Mix: Price
The most significant pricing objective for Netflix is to get the largest share in the market by superseding all its competitors. For instance, by charging $7.50 for unlimited content available to viewers, Netflix is able to get more customers compared to Companies like Hulu which offer the same for $6.50, however, customers are forced to pay extra costs for specific titles ( Keating, 2013 ). Netflix is keen on maintaining a fair pricing incentive for all its clients. The business is always ready to react in case any of its competitors offers a more attractive offer to clients based on pricing. It is also the price setter within the industry based on its undisputable reputation within the industry.
Marketing Mix: Promotion
Netflix has worked towards ensuring that their products become available to more users everywhere across the world. For instance, the business is offering free monthly trials to new users so that they can get a feel of what to expect once they become constant users of the Company`s products and services. Also, this helps in building trust and creating confidence in the amenities being offered by the enterprise ( Keating, 2013 ). Besides, it also makes it known that the Company is confident of the services it is offering to clients and that it is also certain of the kind of business incentives it is working on. Potential customers can thus be in a position to experience what Netflix has to offer prior to initiating subscriptions.
Also, the internet, billboards and commercials are part of the product promotion incentives which Netflix is keen on exploiting ( Keating, 2013 ). Further still, the idea that mobile devices are accessible to more individuals across the globe presents an even better chance for the business to advance to greater levels. It is now possible for Netflix to advertise their content on mobile gadgets and reach out to more people globally. In addition to this, an additional product promotion incentive occurs where the company uses other platforms such as online games to promote its products. Social media is also very important to Netflix since most of its services are accessible online. The close proximity between the business and social media makes it easier for Netflix to promote its agenda. Additionally, more than 90% of American citizens use social media. It would, therefore, be easier for them to view such adverts ( Hallinan & Striphas, 2016 ).
Internet advertising is increasingly important since it is possible for click on ads to be used; which in turn lead the potential client to the Company`s website where they can access their desirable content. Further still, the Company could consent to the application of QR codes on their content. For instance, the QR codes can be placed on popcorn packages bought in movie theaters which may later on lead the clients to access the Company`s unique services (Keating, 2013) . Besides, the idea of sponsoring movie related events is bound to make Netflix popular among viewers. Also, providing newsletters and emails on the recent events and products is also likely to be an effective product promotion incentive for the Company.
Marketing Mix: Place
The process that a great majority of Netflix customers encounter through subscription is another yet important feature that the business has a specific interest in. Most clients take only a few minutes to subscribe to the business` services, and over time the Company has been working towards making it increasingly easier for customers to perform operations. Currently, it is also more possible for customers to get access to content at any place within a short duration of time. Netflix is working towards making sure that its services and products are available to its fans in even the most remote parts of the world.
Potential Success Metrics (100)
Many businesses have differing success metrics which they utilize over different periods of time. A majority of them rely heavily on ratings in order for them to attract advertisers. Netflix, on the other hand, is subscriber based and most of its success comes from the excellent quality of services offered to clients. This implies that the chief concern for Netflix is how much a particular television program or show contributes to its network of subscribers in addition to its ability to retain clients ( Hallinan & Striphas, 2016 ). Also, the business utilizes “valued hours” as a mechanism for measuring its success; which is the number of hours spent by a particular person viewing Netflix content.
International Considerations (100)
Netflix is keen to focus on the breadth of local content produced in various foreign countries where it is seeking to expand. Besides, the cost extended to users in varies depending on the level of economy of that nation. Relatively higher prices are presented to subscribers of highly developed nations as opposed to third world countries; all in a bid to improve the business` competitive edge within the market. It has been estimated that by 2020, Netflix will have 75 million international subscribers ( Aaron et al., 2015 ). Also, to attain this, the business will further have to ensure that the content provided is compatible with the internet bandwidth available in some of the foreign nations ( Aaron et al., 2015 ). For example, having Netflix available on mobile phones in Asia is bound to be an expensive affair.
Conclusion (50)
Based on the above analysis, it is evident that Netflix is arguably one of the most revered businesses in the contemporary world. Since its initiation in 2007, the business has managed to grow significantly and currently, there are more than 110 million Netflix subscribers and the number is growing over the years. Much of its success lies on the content provided, quality of service offered, and its product promotion incentives. Also, its online streaming services are currently the most popular across the world. Despite facing fierce competition from Amazon, Hulu and other competitors, Netflix has managed to perform exceedingly well. A lot will, however, have to be done in order to ensure that the business remains relevant for the longest duration possible.
References
United States Securities and Exchange Commission: Netflix Inc. (2016). Retrieved from https://bb.snhu.edu/bbcswebdav/pid-14231418-dt-content-rid-41829286_1/courses/ECO-201-17EW3-MASTER/ECO-201%20Student%20Documents/Netflix%20Annual%20Report%202015%281%29.pdf
Aaron, A., Li, Z., Manohara, M., Lin, J. Y., Wu, E. C. H., & Kuo, C. C. J. (2015, September). Challenges in cloud based ingest and encoding for high quality streaming media. In Image Processing (ICIP), 2015 IEEE International Conference on (pp. 1732-1736). IEEE.
Keating, G. (2013). Netflixed: The epic battle for America's eyeballs . New York: Portfolio/Penguin.
Hallinan, B., & Striphas, T. (2016). Recommended for you: The Netflix Prize and the production of algorithmic culture. New Media & Society , 18 (1), 117-137.
Cárdenas, C., & Banos, J. (2015, August). Network Traffic Analysis and QoE Evaluation for Video Progressive Download Service: Netflix. In Wired/Wireless Internet Communications: 13th International Conference, WWIC 2015, Malaga, Spain, May 25-27, 2015, Revised Selected Papers (Vol. 9071, p. 239). Springer.
