A Case Study on Netflix's Marketing Strategies & Tactics - Desklib

Its an report of 2000 words in different company marketing strategies has to be compared. I attached an assessment file you will get information from it

Running Head: MARKETING ANALYSIS OF NETFLIX
MARKETING ANALYSIS OF NETFLIX
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Abstract
The paper deals with the marketing analysis of Netflix. It includes the organization’s marketing
environment and its responses towards the environment. An organization’s marketing
environment is the study of its business plan, which includes the macro and microenvironment in
which it operates. The analysis studies the dynamism of the market of the organization. It is an
American media services provider company. It has headquartered in Los Gatos, California. Reed
Hastings and Marc Randolph founded Netflix in 1997. It has over 148 million subscribers
worldwide (Lobato, R., 2019). The services provided by Netflix are subscription-based, which
provides online streaming of films and television programs. Its services include film production,
distribution, and television production. The report also gives details analysis of the target
customers, products, price, growth strategies and the buying behaviour of the customers towards
the company. However, the company is doing well in expanding its services online worldwide.
Nevertheless, some recommendations would help the company flourish more in its e-commerce
business. For example, the company should use a marketing action plan, which can be designed
to send an e-mail that offers highest subscription service at a discounted price. The biggest issue
about the company is that, it does not provide an e-mail address or any other address through
which the customers can write to the company. The report presents detailed analysis of the
above-mentioned issues of the company.

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Task one: Macro environment.....................................................................................................2
Political factors........................................................................................................................2
Economic factors.....................................................................................................................3
Social factors...............................................................................................................................3
Technological factors...............................................................................................................3
Environmental factors..............................................................................................................4
Legal factors............................................................................................................................4
The three factors that help or hinders the growth of the company..........................................4
Task two: Target customers.........................................................................................................4
Task three: Product and price( perceptual maps)........................................................................5
Task four: growth strategies........................................................................................................7
Product.....................................................................................................................................8
Price.........................................................................................................................................8
Place.........................................................................................................................................8
Promotion................................................................................................................................9

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Task five: Buyer behaviour.........................................................................................................9
Conclusion and recommendations.................................................................................................10
References......................................................................................................................................11

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Introduction
An organization’s marketing environment is the study of its business plan, which
includes the macro and microenvironment in which it operates. The analysis studies the
dynamism of the market of the organization. The analysis is to formulate the strategy to run a
business or to find out those factors, which hinders its growth. The paper deals with the
marketing analysis of Netflix. It is an American media services provider company. It is
headquartered is in Los Gatos, California. Reed Hastings and Marc Randolph founded Netflix in
1997. It has over 148 million subscribers worldwide (Lobato, R., 2019). The services provided
by the Netflix are subscription-based which provides online streaming of films and television
programs. Its services include film production, distribution, and television production. The report
explains the macro and microenvironment analysis of Netflix. The report also gives details
analysis of the target customers, products, price, growth strategies and the buying behaviour of
the customers towards the company.
Discussion
Task one: Macro environment
The macro environment of any organization are the external factors that cannot be
controlled by the company but influence the decisions, performance and strategies of the
organization (Frue, 2020). Netflix has many factors that help the company as well as hinders its
growth.
Political factors
 Netflix contents are restricted due to limit expansions.

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 There is availability limits in many countries and cannot provide content to all the
countries. Crimea, Syria and North Korea are places that are more affected.
 Due to censorship and legal permissions, many countries like China has put
restrictions on Netflix. More than one hundred thirty countries have put
restrictions on the company.
Economic factors
 The monthly subscriptions of services of Netflix have increased over the years.
This is the positive point for the company to earn revenue.
 The Netflix is in operation in around more than hundred countries globally, so due
to the difference in exchange rates of the currency has influenced Netflix’s bottom
line.
 The company is facing threat due to its competitors like Disney whose services
are popping up in the market. There is always one question that arises, will the
monthly cost of Netflix increase again?
 Netflix’s services are affected badly due to illegal torrenting (Frue, 2020).
Social factors
 The company provides a good working climate for its employees, which makes it
a better place to work.
 The CSR activities of Netflix, like providing financial aid to low-income students,
has helped in brand building in the market.
Technological factors
 Netflix offers superior videos and content to its users.

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 The new rating system will be helpful in personalization and made Netflix more
relevant to the users (Raymond, 2017).
Environmental factors
 The new initiative of reducing carbon footprints with the use of wind power for
cloud storage is beneficial for the environment.
Legal factors
 It has to fight battles against copyrights infringements.
 The company is suffering huge losses due to video piracy.
The three factors that help or hinders the growth of the company
1. Due to large subscriptions, it has the opportunity to generate revenues. The
company also has vast potential of earning income from advertisements.
2. The fluctuating exchange rate makes the company too much dependent on
international business for its revenue.
3. The price rise of the subscriptions could lead to losing the customers base. The
customers will make a switch to the competitors.
Task two: Target customers
The target market or the target customers of Netflix include both the males and females
of age 17 to 60 with an income level of around $30000 and above. It has around 150 million
subscribers around the world. Because of psychographic segmentation-, Netflix targets three
basic groups of customers: customers who go out very less often to watch movies, people who
are regular rental and are addicted to movies and even the customers who are willing to get the
most valuable services for their money. Netflix has a website that is highly identifiable due to its

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bulge red color, but some of the navigation round the website is complex. To build brand image
and identity and gain potential customers, the company has changed its strategy from simple
advertising and prospecting to affiliate programs for making a significant presence over the
internet. Due to its online customer services and getting the grievances of the customers solved at
a faster pace has attracted more customers. It increases the customer relationship management of
the company. Netflix is performing well in comparison to its customers. It has successfully
engaged its customers over social networking sites like Facebook and Twitter by providing
follower response on many updates. Since, it has a large audience on both the sites, so, its update
is reachable to a large audience.
Task three: Product and price (perceptual maps)
Perceptual mapping is the diagrammatic way of presenting the perceptions of the
customers.
Figure: Perceptual Map of Netflix Showing Its Competitors
Source: (Venkatesan and Shively, 2017)

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Netflix is at the top of the perpetual map because of its high-quality content provided to
the users. Its huge customer base and subscriptions worldwide has made it reach the top position.
The reason behind this is that the customers want advantage, affordability, speed, reliability and
personalization of the video streaming services. Netflix has succeeded in providing top quality
services to its customers.
Figure: Perceptual Map Showing the Convenience and Affordability of Services
Source: (Venkatesan and Shively, 2017)
N for Netflix
H for Hulu
A for Amazon
R for Red box instant
C for Comcast
Netflix provides high convenient services to the customers as compared to its
competitors. The services are easily available at affordable prices. The strategy made the
company gained more subscribers, which helped the company gain competitive advantage.

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Task four: growth strategies
Figure: Ansoff matrix
Source: (Gurcaylilar-Yenidogan and Aksoy, 2018)
According to the Ansoff matrix, market penetration is the main growth strategy of
Netflix. It should try to expand its market in the existing place because it has already gained a
strong customer base. This growth strategy includes selling more streaming services through
online medium and in the same market place that the company already has. The objective of this
growth strategy is to grow revenues and market shares of the company, but this is dependent on
the generic plan of Netflix of maintaining competitive advantage to retain and gain more number
of potential customers in the existing market (Lobato, 2019). The companies’ intensive growth
strategy should include aggressive marketing technique for the expansion of multinational
operations. The companies’ online business framework includes strategic management, which is
to support the information technologies for the efficient functioning and global expansion of the
business. To support the market penetration of the company, the operation management should
implement strategic implications to ensure the strengthening of the business model of Netflix.

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However, market development and product development are secondary intensive growth
strategies for the company to develop and expand. Diversification is rarely applied for the
growth of the company because of the high-risk involvement due to the new market and new
product launch.
The marketing mix for the growth strategy of Netflix can be implemented as follows:-
Product
Netflix can provide free subscriptions on launching a new service to strengthen its
customer’s base. Cancellation of online services anytime may help in the growth by attracting a
large audience. Membership plans to avail Netflix’s services will help in market penetration.
Netflix should experiment with video games to attract several customers in the existing market.
Working as an online distributor will enhance its growth strategies.
Price
By providing free trials to attract customers and later the company, can covert these
prospect into actual customers by offering many plans like basic, standard and premium.
Charging a minimum amount for the subscriptions will help in retaining as well as attracting new
customers.
Place
Since Netflix’s business is internet based services, so it is available everywhere. Online
availability will make the customers avail its services easily.
Promotion
The services of Netflix are online, so the company has the benefit of marketing its
services through all the media channels worldwide.

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Task five: Buyer behavior
Netflix has been offering affordable means of entertainment to its customers by charging
a reasonable fee for the services. Netflix’s prominent services, streaming video, offer the same
affordability of service as its DVD by mail service. The affordable subscription provided by the
company and an unlimited streaming movie for rentals for about $7.99/ month that make the
customers come back to the brand repeatedly (McDonald and Smith-Rowsey, 2016). People who
use this service once or twice a month will find value in the service and will come back again to
avail the benefits. In addition, those customers who used it once will act as word of mouth for the
service.
The instant streaming of high-quality videos and television shows over smartphones
anywhere through Wi-Fi made the customers very impressed with the quality of the videos,
which was available through smartphones and tablets. The strategy of Netflix of appealing the
customers for the convenient, fast and home entertainment has proved successful to gain a strong
base of customers. The streaming services offered by the competitors of Netflix, like Amazon,
Hulu and Red box are competing at a faster rate, but Netflix remains the biggest service provider
among all with a stronger customer base. Netflix has influenced the customers of all the age
groups, which includes adults, teens and even children. The buying behavior of the users towards
Netflix is positive due to its easy payment options that fit with the consumer’s ability to pay for
what they watch.
Conclusion and recommendations
From the above discussion, it concludes that based on Netflix’s website and the
marketing strategies, the company is doing well in expanding its services online worldwide.

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However, some recommendations would help the company flourish more in its e-commerce
business. For example, the company should use a marketing action plan, which can be designed
to send an e-mail that offers highest subscription service at a reduced price. Netflix must permit
the users to sign up the e-mail service without subscribing or becoming a member. The company
should also increase its cross-promotional activities and experiment in gaming consoles to
scream Netflix instantly. Netflix only provides a toll-free number to its users to enquire about the
services. It does not provide any other alternative for customer service. One of the biggest issue
about the company that it does not provide an e-mail address or any other address through which
the customers can write to the company.

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References
Frue, K. (2020). PEST Analysis of Netflix: How Politics and the Economy impact the Media
Provider. [online] PESTLE Analysis. Available at: https://pestleanalysis.com/pest-analysis-of-
netflix/ [Accessed 29 Feb. 2020].
Gurcaylilar-Yenidogan, T. and Aksoy, S., 2018. Applying Ansoff’S Growth Strategy Matrix To
Innovation Classification. International Journal of Innovation Management, 22(04), p.1850039.
Jenner, M., 2018. Netflix and the Re-invention of Television. Springer.
Lobato, R., 2019. Netflix nations: The geography of digital distribution. NYU Press.
McDonald, K. and Smith-Rowsey, D. eds., 2016. The Netflix effect: Technology and
entertainment in the 21st century. Bloomsbury Publishing USA.
Raymond, L., 2017. Netflix Case Study Louisiana State University Shreveport MKT 701 Dr.
James February 5, 2017.
Venkatesan, R. and Shively, D., 2017. Netflix, Inc.: The Customer Strikes Back. Darden
Business Publishing Cases.
Wastling, T., Charnley, F. and Moreno, M., 2018. Design for circular behaviour: considering
users in a circular economy. Sustainability, 10(6), p.1743.

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