Founded by Marc Randolph and Reed Hastings in 1997, Netflix is one of the world’s leading television streaming networks with a subscriber base of over 57.4 million worldwide as a result of over 1,00,000 videos on its network.
Over the years, Netflix has introduced various ways of evolving their marketing mix to boost sales and generate profits, to their success. Its competitors include HBO GO, Vudu, Hotstar, Amazon Prime, Hulu etc. who all have still failed to surpass the success of Netflix.
Also over the years, Netflix profits have skyrocketed as it has established itself as one of the best forms of television streaming.
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The product in the Marketing Mix of Netflix
Since its inception in the year 1999, Netflix has since then established themselves as a successful service provider through their creative selling proposition. Netflix customers have the chance to access thousands of movies and television shows that are daily updated to meet the customers wants.
Additionally Netflix also offers mail-in DVD giving them the huge advantage to competitors especially within the period 1999 to 2007 where they were hugely successful starting off with the creative idea of mailing DVD to the homes of customers.
Available with the option of three different types of subscriptions which are: only online streaming, DVD’s excluding online streaming and the DVD in addition to online streaming which was introduced in 2012.
Each subscription model comes with different features, such as the different HD quality levels, the number of screen one can watch the content on simultaneously.
Netflix can be categorized as both a tangible and intangible product; tangible because of mail-in DVD’s which one can physically touch and see, intangible service as their online streaming cannot be made contact with. This product is accessible on Xbox, PlayStation, and Wii also. Its app is compatible with both Android and Apple IOS thus making it accessible to everyone on a smartphone.
Promotions in the Marketing Mix of Netflix
Promotion being the most important part when it comes to the marketing mix of a brand. As a part of the promotion strategy, Netflix has been constantly promoting and advertising their services in different ways.
Firstly, the prime source of their promotion is through social media websites including YouTubethrough which it attracts teenagers, as well as a range of adults. However, during 2006, while maintaining advertising on media websites, they also switched towards personal marketing videos allowing them to be creative in their promotion for the service.
Since they are already a globally well-known brand, there’s hardly any need of intense advertising, hence they are now sticking to pop-up ads, banners, hoardings and other static ads on websites. Over the past few years, in their marketing videos, to further promote the products they have featured high ranked celebrities to star in the videos to boost sales and profits.
Overall with their online promotion, to attract the customers, they have constantly make reference to their free trial for a month to lure customers and acquaint them by making them trying the service for once on trial basis.
Netflix would over the years have created different advertisements to correspond with different seasons or events which eventually helped them to increase their sales and audience during those most popular times of years. As was the case in the year 2013, Netflix created a winter advertisement for promoting their service and broadcasting how Netflix had a range of genres for family shows for the holidays.
Price in the Marketing Mix of Netflix
Netflix followsValue-based pricing strategy. Value-based pricing is different in a way as it provides three different subscription offers with a different value attached to different prices it is being offered. This subscription-based model gives the brand an edge over competitors who charge per show/movie.
The higher priced subscription is open to more features as compared to the subsequent lower priced, a strategy which helps the brand to earn more profits as it lures the customers to join higher paid subscriptions with various appealing features. “Choose the Plan That’s Right for You” is something which the brand taglines with its pricing options with.
In India, Netflix offers three different plans — Basic plan priced at 500/month, Standard plan atRs 650/per month and lastly Premium plan where a subscriber needs to pay as high as Rs 800/month.
Under the Basic plani.e.Rs 500 plan, the brand offers only one screen — meaning only one person can watch movies or shows at a time, flexibility to watch on any device such as laptop, TV, phone or tablet, and access to all movies or shows.
The Standard or Rs 650 plan Netflix offers the same services as the Rs 500 plan with two additional features — two screens and videos in HD.
The highest priced i.e.Rs 800 Netflix plan comes with four screens, which means four people can simultaneously stream on as many locations. For instance, one of the friends has a Netflix account for Rs 800 he/she can split the amount, which drops the per head cost to Rs 200.
Place Marketing Mix of Netflix
Netflix has both tangible and intangible product offerings. Tangible as in DVD service and intangible as in the subscription-based model. In India, the brand offers the only subscription-based model.
Mail-in DVD service that Netflix has which the DVD is mailed directly to customers home, this is done through a direct distribution channel, thus in this case product goes directly from the producer i.e. Netflix to the customer.
Online streaming service works on multichannel distribution which is when a business has more than two channels to reach out to customers (“Multi-Channel/Hybrid Distribution Systems.”). Multichannel distribution for Netflix as this service became available on multiple platforms like Playstation in 2008, Xbox in 2009, and Nintendo Wii in 2010, in which Netflix distributed by those firms.
As a hybrid channel Netflix which is when the product or service is not directly distributed from. It comes from the production companies, as Netflix gets permission from those companies to use their films, which is then distributed to the consumers (“Distribution Systems: Multi-Channel (Hybrid).
