NETFLIXMackenzie McGilvrey

Reese Miller

Matt McKay

Kameron Wiles

Kory Wood

Executive Summary

• Netflix is the world's leading Internet television network with over 50 million members in more than 40 countries enjoying more than one billion hours of TV shows and movies per month, including original series.

• Philosophy: For a low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen.

• Mission Statement: “Our core strategy is to grow our streaming subscription business domestically and globally.”

• Overall Orientation: Members can play, pause and resume watching, all without commercials or commitments.

• Position of the Product: This is Netflix’s only service

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Positioning Statement

• “For individuals and families with bank account access, capable and disposable income, technology, and internet, Netflix, of all streaming TV/Internet companies, delivers as many television shows, movies, and original series as they want, because Netflix is more convenient and beneficial than other streaming television companies.”

Situational Analysis

• Netflix is a continuously growing company that was first started in 1977 by the CEO and founder Reed Hastings.• Hasting graduated from Bowdoin College and received his

MSCS in Artificial Intelligence from Stanford University.

• The Chief Marketing Officer (CMO): Kelly Bennett• Netflix is the leader in the internet television industry

with over 50 million customers in 40 different countries.• Netflix can be found under the label NFLX in the stock

market and is a part of NASDAQ.

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Customer Analysis

• Netflix provides service to a very diverse group of individuals from teenagers to adults.

• A huge part of Netflix’s demographic are people with busy schedules. These people don’t have time in their schedules to watch their home cable, so they watch Netflix on the go.

• People buy Netflix for the convenience. The psychological aspect of being able to watch what you want, when you want.

• With its low price, it is affordable to almost everyone with internet, bank account access, and disposable income.

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COMPETITOR ANALYSIS

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  Netflix Hulu PlusAmazon Prime Instant

VideoComcast Cable TV

Target Market

For individuals and families with bank account access, capable and disposable income, technology, and internet.

Same market as Netflix Same market as Netflix

Broad Market, contains any user with some disposable income, owns a TV, and has cable in their residence

Product

Internet TV network offering movies and TV shows commercial-free, with unlimited viewing on any Internet-connected screen.

Over-the-top subscription service offering ad-supported on-demand streaming video of TV shows, movies, episodes and other new media

Internet video on demand service by Amazon

Traditional TV with on Demand functionality as well as DVR capabilities

PlaceAny place you obtain an internet connection

Same as Netflix Same as NetflixAny place covered by Comcast's cable network

PromotionOffers more shows to stream than any of its competitors

Offers the newest content for all major shows

Comes free with any Amazon Prime membership, Free shipping on millions of items through Amazon

Offers the most onDemand content, reliable service, most HD sports and channels

Price $8.99/month $7.99/month $79/year$29.99/month for 12 months

Competitive Barriers

Getting rid of DVD rental portion of business (made up 90% of profits for company)

Considerably less choices of TV shows to choose from compared to Netflix

Considerably less choices of TV shows to choose from compared to Netflix

High price and notorious for long commitment price increases

Likely ResponsesContinue to improve streaming portion of business to maintain customers

Plans to triple spending on content marketing for original series

Just signed a deal with HBO to stream all of their hit shows

Focus on offering the most flexibility, adding internet TV and anytime on demand to any device

Economic Environment

• Netflix has seen sales go up even in the recent recession. • It has been “recession proof” due to the fact that people

see it as a cheaper form of entertainment. • Families are choosing a night at home with Netflix over

going out to the movies. • A downfall to the company is that we have to eradicate

some hit shows to keep prices down due to licensing agreements.

Technological Environment

• Netflix is able to reach many new consumers because of technological advances in cell phones, tablets, video game consoles, and TV’s.

• Internet is now able to stream through all of these devices thus creating a much larger consumer base for Netflix.

• With this many options and screens to watch, people will be more likely to sign up for Netflix.

Cultural Environment

• The cultural and social environment of our company is positively affected by the satisfaction of our customers.

• Externally, Netflix customers discuss the possible new additions. • Including new movies or TV shows• Based on your previous screenings, Netflix will provide you

with other television show options that are similar to your previous viewing history

• In a sense, Netflix brings together its customers that form a cultural group based on video and media streaming interests.

Legal

• Netflix has to abide by certain laws regarding each individual countries internet usage laws. The idea of net neutrality can be an issue for international users causing the inability to access Netflix. As far as legal environment, all of Netflix programing has to be licensed which limits them in their selection. If Netflix can’t acquire licenses for popular movies and shows, they may lose customers to other services that have those licenses, or even the illegal streaming services found on the web.

SWOT Analysis

• Strengths: Netflix offers the most movies and TV shows compared to its competitors.

• Emmy award winning original series.• DVD mailing plans• Advertisement free shows• Weaknesses: Netflix is having trouble getting new hit

movies.• Losing customers because we are not paying to keep

certain hit shows.• More shows equals higher prices

SWOT CONT.

• Opportunities: Netflix can expand its market overseas. • We have already entered six countries in Europe, but

there are many more.• Adding Italy and Spain brings 26 million more possible

customers

• Threats: The biggest threat to Netflix is the competing streaming services:• Amazon Prime, Hulu plus, Redbox and local cable

providers.

Marketing Objectives

• Product/Service• Increase production of original series by 30%• Release current television shows’ seasons 1 month after the

entire season has been aired.• Update and add movies to the online movie selection every

month

Objectives

• Place• By 2015 Netflix should increase their international

subscribers

• Price• Keep the current price $8.99 per month

Objectives

• Promotion• Introduce 20% off student discounts in 2015• Next quarter, new members will receive a 40 day free trial• Increase monthly email reminders by 40% and create

weekly newsletters

Marketing Strategy

• Product/Service:• Hiring internal translator to create subtitles giving bi-lingual

consumers a new incentive to sign up with us.• Develop partnerships with movie/television licensers to

increase the release rate of newest shows and movies to give customers best selection.

Market Strategy

• Place/Price:• We are going to put more foreign films and documentaries

in our library selection to increase motivation of international consumers.

• Develop marketing strategy that will reach out to our current market and international market with one internal program.

Market Strategy

• Promotion:• We will advertise student discounts on social media sites to

reach out to student users.• New non student members will receive a 40 day free trial to

compensate for the $8.99 price instead of $7.99 if they sign up now.

• Find out who has discontinued their account every 3 months and increase email reminders on new movies, shows and services available.

Implementation

• Spend smarter to get newer titles that will gain and retain subscribers in the U.S.

• Work with movie/TV licensers to help establish a good relationship for both sides.

• Spend over 3 billion dollars again this year on content that creates customer satisfaction

Implementation

• Continue creating original content for viewers that keep them on Netflix. (House of Cards, Orange is the New Black)

• Put more investment into this area to make Netflix unique and exclusive from other video streaming competitors

• Hire more writers and producers for this purpose

Implementation

• Promote and advertise Netflix in new international markets of Germany, France, and Australia.

• Increase selection of foreign made films and TV shows

• Increase number of languages we offer for movies and subtitles.

• Increase our international subscribers by 1.5 million in the next quarter.

Evaluation and Control

• Consult in-house data monthly, to show what current titles and content are being viewed the most

• Keep tracking record of number of new international subscribers quarterly

• Constant feedback at the end of every financial period to make sure we are generating revenue to cover these new costs and making a profit

Evaluation and Control

• Use sales software to show if new student discount is helping increase student subscribers

• Conduct surveys to see how many new subscribers joined for the longer free trial, and to check satisfaction rate of new content

• Keep on-going e-mail list of discontinued subscribers to remind them of Netflix’s new promotions and content