Netflix: Analytical Discussion on Price in Marketing (2021)

This essay provides an analytical discussion on the pricing strategies employed by Netflix, a leading over-the-top content platform. It delves into how Netflix positions its pricing in an oligopolistic market, considering the impact of tiered subscription plans, price elasticity, and competitive pressures from rivals like Hulu. The essay examines Netflix's historical pricing adjustments, including the introduction of different subscription tiers and the implications of these changes on consumer behavior and the company's revenue. The analysis also explores the challenges Netflix faces, such as content owner demands and the shift from DVD rentals to streaming, and how these factors influence pricing decisions. Furthermore, the essay considers the role of consumer perception, value for money, and the impact of pricing strategies on profitability. The conclusion summarizes the key findings and emphasizes the importance of price optimization strategies, such as conjoint analysis and regression analysis, to drive profitability and maintain a competitive edge in the streaming market.

An analytical discussion on
Price for the brand Netflix

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Price on the brand Netflix............................................................................................................1
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Price is considered as the amount a firm charge their consumers for their goods or service.
Moreover, it is set based upon how many a consumers is interested as well as capable to pay.
Pricing is also undertaken as the essential aspects for brand or organisation as this describes the
value which their products are worth for them to make as well as for their consumers for usages.
In addition to this, it is the tangible point of price to let consumers for understanding this is
valuable for their investment as well as time. For this report, the undertaken brand is Netflix,
which is an American over top content platform as well as production entity. Its headquarters is
in Los Gatos, California. The aim of this report is to write an essay on topic Price on the brand
Netflix.
MAIN BODY
Price on the brand Netflix
Netflix, which is an American over top content platform as well as production entity. Its
headquarters is in Los Gatos, California. n an oligopolistic marketplace the groups have a shared
manipulate inside the rate of the product/carrier they offer. the largest company inside the
enterprise has the power to set the pricing fashionable throughout the marketplace. All other
corporations within the marketplace will go with this preferred e.g. whilst Netflix accelerated
their prices by $1 final October, Hulu observed healthy by introducing a greater highly-priced
‘ad-unfastened’ subscription package deal which changed into extra much like Netflix’s services.
They did but decrease their preferred bundle price (with advertisements) in an try to come to be a
stronger competitor inside the market. due to the oligopolistic nature of Netflix Inc.’s, their rate
elasticity can be stated to be enormously inelastic. This has been proven over the years from
incremental rate will increase and the advent of tiered pricing for extra functions. It also allows
users to feature concurrent streaming on a couple of gadgets.
Netflix Inc.’s current pricing approach become first implemented in 2011 when they
brought a standalone streaming subscription (No physical DVDs blanketed). they have three tiers
of fees. It starts with their €7.ninety nine/month basic Plan which permits you movement
television shows and movies on one device at a time in widespread definition. It also allows you
down load titles to cell devices. the following step up is the €10.99 standard plan, allowing
concurrent streaming on gadgets in HD (additionally consists of choice to down load). Finally
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the €13.ninety nine premium plan lets you stream on 4 gadgets on the equal time in HD and
UltaHD protected in the download alternative. As you could see, each tier offers greater
capabilities which give the influence of value for money. on the primary Plan you’re paying
almost €8 for most effective 1 screen while you're offered extremely HD and 3 extra monitors
for an additional €6 per month, this leads the purchaser to pick out the higher priced package as
it is better price.
Netflix has been getting a ton of consideration of late for its new estimating procedure. On
the off chance that you have watched out for the issue you will have seen that there is an
intriguing conundrum:
Customers disdain it yet investigators love it. They may lose the same number of as 2.5
million clients yet productivity should go up. The new valuing plan builds the cost from a $9.99
month to month plan, permitting endorsers of transfer recordings and lease each DVD in turn, to
$15.98. Your other decision will be to pay $7.99 every month for the each DVD in turn plan (in
addition to an extra $2 per month for Blu-beam rentals) or $7.99 per month for the limitless
streaming arrangement. It appears to be that the emphasis is on attempting to diminish the
utilization of DVDs and increment the utilization of video web based. The explanation is basic; it
costs around .75 pennies in postage to send a DVD though it just expenses around .25 to stream.
At first Netflix guage that $9.99 a month would drive the majority of the business to streaming
however that has not really been the situation. The issue is that the substance of the DVD library
is predominant, and think about what purchasers need; extraordinary substance. That, however
with the new transfer speed cap it takes a ton of the allure from streaming.
The other huge issue that Netflix faces is pressure from the substance proprietors. At the point
when video real time was still new they had the option to make sure about agreements for about
$5-10 million per year. It is assessed that by 2012 the expenses would ascend from $180 million
to $1.98 billion. Studios have begun to give more consideration to streaming and they will search
for occasions to adapt. Sony was as of late briefly eliminated from Netflix because of "agreement
issues" and as these expenses are figured out more could follow.
To fix this issue Netflix has applied a sensational cost increment and is currently confronting the
anger of purchasers rushing to Facebook and other interpersonal organization sources to grumble
about it.
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Allow me to offer several perceptions from my roost as a pricer: Above all else, I am
worried about the incorrect figure of the purchaser relocation from DVD to streaming. Did
Netflix do a legitimate examination to comprehend this movement or did they simply utilize "gut
intuition"? My interpretation of it is that they utilized their own inward most realistic estimation.
Besides, what has driven the $15.98 value point? Was it dependent on anticipated cost
increments and monetary targets or was it driven by esteem? It is difficult to know as a pariah yet
my estimate is that the choices being made are more gut, cost and monetarily determined than
they are science and streamlining driven. On the off chance that that is undoubtedly the situation,
at that point Netflix is previous a colossal occasion to drive productivity. Value advancement
strategies, for example, conjoint investigation, relapse examination and testing could give exact
bits of knowledge into movement designs, value point enhancement and the agitate.
In the event that they were the President of Netflix I would use these value streamlining methods
strictly to guarantee that finding the sweet spot between enhancing my incentive and
productivity. The potential gain is colossal and the drawback of not doing it is significantly
greater.
Apart from this, Half a month back the streaming monster reported impending changes
that will see plan costs increment by $1-2/mo. While a buck or two more may appear to be little,
the continuous increments will hugy affect benefits when spread across Netflix's 193M
worldwide endorsers. A more established, more develop Netflix About year and a half
eliminated from its last cost increment, what may appear to be a standard knock comes at a
crucial time for the organization.
With the world homebound during the 2020 lockdowns, Netflix saw a monstrous flood sought
after, pulling in practically 16m information exchanges in Q1.
Be that as it may, during Q2 (July-September), Netflix oversaw simply 2.2m information
exchanges — over 1,000,000 less than Money Road had anticipated.
Why lift costs now?
As indicated by Diversion Technique Fellow — an unknown media insider with an amazingly
elucidating name — Netflix has arrived at a full grown period of its business, provoking
President Reed Hastings to move the organization's concentration from income to benefit.
For some clients, Netflix has become a more esteemed help during the pandemic.
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In any case, when ordinary occasions return and, you know, we can do things once more, the
stage's estimating lift may see a snapshot of retribution.
CONCLUSION
As per the above report, it has been concluded that price is essential for all firm as this is
helpful to this describes the value which their products are worth for them to make as well as for
their consumers for usages. In addition to this, it is the tangible point of price to let consumers
for understanding this is valuable for their investment as well as time. It is difficult to know as a
pariah yet my estimate is that the choices being made are more gut, cost and monetarily
determined than they are science and streamlining driven. On the off chance that that is
undoubtedly the situation, at that point Netflix is previous a colossal occasion to drive
productivity. Value advancement strategies, for example, conjoint investigation, relapse
examination and testing could give exact bits of knowledge into movement designs, value point
enhancement and the agitate.
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REFERENCES
Books and Journal
Alvarado-Karste, D. and Guzmán, F., 2020. The effect of brand identity-cognitive style fit and
social influence on consumer-based brand equity. Journal of Product & Brand
Management.
Chatterjee, P. and Zhou, B., 2020. Sponsored content advertising in a two-sided
market. Management Science.
Kumar, J., Gupta, A. and Dixit, S., 2020. Netflix: SVoD entertainment of next gen. Emerald
Emerging Markets Case Studies.
Macedo, R., 2020. Netflix or News? An Examination of Young Canadians’ Appetite to Pay for
Online Journalism (Doctoral dissertation, Royal Roads University (Canada)).
Smith, A.N. and Fischer, E., 2020. Pay attention, please! Person brand building in organized
online attention economies. Journal of the Academy of Marketing Science, pp.1-22.
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