Implication of Partnership and Brand Extension for Netflix

Marketing and Management 1
Marketing and Management
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Marketing and Management 2
Introduction
Netflix is a global internet forum that provides services for entertaining its subscribers.
The company was established in 1997 by Reed Hastings and Marc Randolph Scotts Valley,
California. Netflix enables its subscribers to watch movies, television live shows, documentaries
and films in different kinds of languages while connected to devises that use internet (Summers
et al.,2016 p.1-12). In the recent past, Netflix made a decision of availing its contents to other
media services. It has partnered with Sirius XM’s to form” Netflix is a joke” comedy station that
will be aired on Sirius XM’s channel 93. The main objective for the partnership was to capture
many audiences for their product since their partner was not their direct competitor in the
industry. This assignment will focus on the implication of the partnership, merits and demerits of
brand extension, the impact of appreciating brand excitement and other brand extensions that
could be done by Netflix Company.
Reaction of the new brand
The idea of forming a partnership with a new brand name will attract new potential
customers for Netflix entertainment services. The customers will be interested in enjoying the
new services after the merge. Original shows and contents from the likes of Adam Sandler,
Trevor Noah among others that will be broadcasted on new studios on a daily basis will make
known celebrities and comedians to have an interest of spending their time at the new studio.
Due to the known contents that will be dealt with by the new brand, it will also attract new
subscribers and this will highly increase net profits that Netflix will earn as a result of
introducing the new brand through partnership terms.
Brand extension
It is a marketing strategy that involves launching of a new product under existing brand
name of a related or unrelated product (Broniarczyk, and Alba, 2014 p. 212-228). For the case of
Netflix, the existing brand name is of the related product nature.
Advantages of brand extension
Benefits the parent brand

Marketing and Management 3
Extension of product brand enhances the image of the parent brand. The strategy can also
revive the parent brand and increase the market size due to the entry of new customers in the
purchasing of new products from the existing brand (Huang et al., 2017, p.59-69).
Cost reduction
The cost incurred by launching brand extension strategy is much lower than the cost
incurred while launching is a new product. This is the result of the already established image of
the existing brand image. For instance, money that will be incurred for services like
advertisements and promotion budget for the new product is foregone.
Building customers trust
If the existing product brand is well known for its quality and its uses are legit then, the
new product will have an added advantage from the good reputation of the parent brand.
Customers for existing brand will have the zeal of trying to use a new product from the brand
that they have known for a longer period of time.
Satisfy consumer variety
Brand extension has the merit of fulfilling the needs of customers who want to change
and use different movies or television shows due to boredom. These customers will be able to
select other television shows of their choice without necessarily having to leave the parent brand.
Disadvantages of brand extension
Damage of existing brand image
All the negative reputations that may be received from the failures of the new product
may tarnish the image of the parent brand. This will result in the reduction of customer which
will eventually reduce the market size thus lowering the sales of Netflix products. Unless good
reputations are maintained, customer will quit using products associated with the parent brand.
Cannibalization
It mainly occurs when markets for existing and original brand are in very close in
location and sale of new product outweigh the sales of the parent brand (Li et al., 2017 p. 1372).