Expert Answer :Product Mix for (Netflix)

  

Solved by verified expert:Discuss your SBU’s product mix. Talk about width and depth and how the company decided to structure the product lines. Include a table that shows the product lines and items.The company that i’m working in Netflix.i want just add for the product Mix it’s a group project, and my part is just the product Mix. if you could use one sourse or two
netflix_marketing_plan.docx

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NETFLIX
Netflix
Marketing Plan Document
Marketing Plan Part 1 (Environment and Strategic Planning)
“Our core strategy is to grow our streaming subscription business domestically and
globally. We are continuously improving the customer experience, with a focus on
expanding our streaming content, enhancing our user interface and extending our
streaming service to even more Internet-connected devices, while staying within the
parameters of our consolidated net income and operating segment contribution profit
targets.” (10-K Item 1)
Nickolas Iaquinta
Ali Alsadiq
Brenden Hynes
Eric Caldwell
MKT 331 04 WI18
Hillary Mellema
Environment and Strategic Planning
Mission Statement
“Our core strategy is to grow our streaming subscription business domestically and
globally. We are continuously improving the customer experience, with a focus on
expanding our streaming content, enhancing our user interface and extending our
streaming service to even more Internet-connected devices, while staying within the
parameters of our consolidated net income and operating segment contribution profit
targets.” (10-K Item 1)
Mission Statement Analysis
Essentially, the mission statement of Netflix is very specific and tailored to it’s primary
streaming service, but also includes some sentiment about the expansion of device
playability options. It also fails to mention any focus on emerging technological changes
that may occur within their life-cycle, for example, their Netflix Originals already go
outside the bounds of their mission statement.
Corporate Level Goals
Our core strategy is to grow our streaming membership business globally within the
parameters of our profit margin targets. We are continuously improving our members’
experience by expanding our streaming content with a focus on a programming mix of
content that delights our members. In addition, we are perpetually enhancing our user
interface and extending our streaming service to more internet-connected screens. Our
members can now download a selection of titles for offline viewing. (10-Q Page 18)
Situation Analysis
Economic: Netflix’s price point is relatively low, but a change in price can cause a large
shift in the demand. Even in the events of economic downturn, entertainment that is
relatively cheap such as Netflix tend to thrive as people still want to be entertained.
Political: The legal/political force that may impact Netflix potentially could be the repeal
of Net Neutrality. While the results of the repeal are unclear, it may serve as threat to
Netflix current service, as internet service providers could potentially charge their
customers an additional premium to watch streaming services such as Netflix (Collins,
2017). Additionally, with the repeal China’s political inclination towards censorship, it
may prove to be problematic for Netflix’s entertainment centric business model to
expanding into Asia (Lashinski, 2017).
Technological: The current technological environment works in Netflix’s favor very
strongly. With the meteoric rise of internet streaming for entertainment, Netflix gained a
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huge advantage by pioneering that form of content, amassing a total of 117.53 million
paid subscribers as of their fourth fiscal quarter in 2017, which is a 353.41% increase
since only 5 years ago (Fiegerman, 2017). The life cycle is still potentially only in its
infancy, as an entertainment hub with a large subscriber base, it has the ability to adapt
to the changes in technology such as porting their application onto new technological
systems.
Internal Environment
○ Figure 1. Engagement vs. Reach for Select OTT Service Providers as
cited in techcrunch.com from OTT intelligence.
Market Share
Financial Situation
○ Netflix is doing very well within its financial situation, as it’s paid subscriber
base rose to 117.53 million this last quarter of 2017. It’s stock price as of
2/6/2018 is 265.50, which is a 87.65% increase from last year (NASDAQ).
Competitive Advantage
○ Netflix has a very strong competitive advantage, as they’ve already proven
the ability to break into emerging markets such as video rental and
streaming services. They’re current capital that they’ve amassed also
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gives them a distinct leg-up in terms of ability to create original content.
(Trefis Team, 2016)
SWOT Analysis







Strengths
Established
Convenient Access
Large amount of content
Price Point is relatively low
Original programming
International Availability
International Content
Opportunities
● More original programming
● Greater expansion on existing
franchises
● Greater international expansion
Weaknesses
● Network Contracts
● New Release delay
Threats
● Other streaming services
● Programming costs
Strengths
● Netflix is an established company that provides a large amount of content to
users at a convenient at-home viewing level such as on Smart TV’s and Xbox, as
well as on-the-go on smartphone and tablet access at a relatively low price point
of 7.99 to 13.99 a month (O’Brian, 2017). Additionally to this, it’s accessible
internationally to many countries as well as provides regionally based
programming to those international sections.
Weaknesses
● Within Netflix’s programming, certain shows are only allowed to be on Netflix for
set period of time for a set amount of money, and when that contract runs out,
the show is pulled from Netflix’s service. Netflix also has a weakness in its
inability to get content added to it as soon as it’s released on cable, which
competitors like Hulu have access to much more readily.
Opportunities
● In Netflix’s opportunity lies more original content, as it’s seen success in a lot of
their original shows such as “Orange is the New Black” and “GLOW”, and with
more content such as that produced specifically on their service, you could see a
shift in preference from competitors. Along with this opportunity, you could see
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greater international expansion into markets such as China and other emerging
markets that Netflix is not currently servicing.
Threats
● A large threat for Netflix is other streaming services such as Hulu and Amazon
Video, as people could choose to reduce their content exposure to just one
service a month and cut out Netflix if they see the other is more valuable.
Another threat for Netflix is the cost to produce their programming originally, as
well as the price to obtain the contracts for the shows.
Marketing Objectives
● Based on the current rate of growth that Netflix has been sustaining, a good
marketing objective to reach would be to amass 15 million new paid subscribers
by the end of the next two quarters. Netflix could also thrive among the recent
news of Disney pulling it’s programming (Castillo, 2017)
Porter’s Five Forces
Brand
Subscription Streaming
Video
Hulu
Youtube Red
HBO Go
Amazon Video
Product
Total Budget
Other Video Options
Similarly Priced Options
Redbox
T.V.
Cable
Theaters
DVD’s
Bowling
Put Put
Sports
Concerts
● Rivalry: High and increasing as new competitors have entered the market.
● New Entrants: High, a few new well funded competitors have already entered
the markets and others have announced plans to enter the market, such as
Disney (Castillo, 2017).
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● Substitute: Moderate, substitutes exist but their popularity is generally declining
due to lower levels of convenience.
● Supplier Power: Moderate with exceptions. There is a wealth of content
providers generally limiting power, but content with high demand retains more.
● Buyer Power: Very high. Consumers still retain high levels of influence over the
corporation.
Segmentation
● The industry of streaming entertainment emcompasses a huge amount of
segments within the market as a whole, and it is difficult to pin down what
specifically that Netflix and it’s competitors have a particular strength in.
However, it appears that the strongest segment of Netflix users lies in millennials
aged 18-31, as a report in MoffettNathanson Research (via Exstreamist) reports
that 81% of people in this age demographic at least have access to a Netflix
account (although, this does not confirm that they are paying subscribers)
(Toledo). However, all and the industry is very diverse when it comes to gender,
race, income, etc. For example, most studies of the demographic market of
Netflix appears to have the commonality of men and women sharing the same
percentage of Netflix accessibility regardless of gender (Statista)
● Upper middle class, average household income is $102,000.
(Business2community)
Target Market
● Netflix has expanded its lineup of stand-up comedians by signing contracts with
prominent comedians like Dave Chappelle, Jerry Seinfeld, and Amy Schumer.
● Netflix has entered the realm of original dramas that seem to adapt the HBO or
SHOWTIME network style, even contracting many of the actors from HBO and
SHOWTIME original shows to star in their own episodes or series. Shows like
Stranger Things and The Crown are two extremely successful dramas that also
feature or star many well known actors. Star of SHOWTIME’s Dexter, Michael C
Hall, was given his own episode of The Crown portraying late president John F.
Kennedy.
● Netflix has worked with Marvel to create a whole line of Superhero based TV
shows to build off of the continuum of popular Marvel movies such as Avengers
(which also have segmentations that cut off into more individual franchises such
as Spider-Man, Iron Man, Captain America, Black Panther, etc.)
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● Netflix has tapped into the documentary market, hosting a massive number of
documentaries covering endless topics and issues such as veganism, WWII,
music, agriculture, and so on.
Positioning
● Netflix approaches marketing by making consumers think about specific TV
shows and their streaming service simultaneously, creating an association
between a show and the streaming service. For instance, an advertisement for a
Netflix original series, such as Stranger Things or The Crown, is going to be an
advertisement for Netflix because you must purchase Netflix in order to watch
these very popular and successful shows. Some non-Netflix shows and movies
have also been advertised with Netflix, creating even more association.
Group Feedback

Overall group work is going well. We are each finding and adding new sources and
contributing to the document. Our roles are overall the same, in which we have divided
and worked together on specific segments, but no one is really playing editor, sourcer,
etc. specifically. We all work cohesively, and in practice, our abilities all seem to be the
same. There isn’t really one thing that each person specifically does.
Product Mix
Branding
Packaging
Type of Product
Netflix offers streaming and DVD delivery services, one being intangible and the other
being tangible. Netflix is both a convenience and speciality good, being a service that offers a
unique platform for streaming movies and TV shows, cutting out the middle-men such as cable
service or movie theaters, and offering the convenience of in-home theater or the delivery of
movies right to your mailbox. While Netflix is not the only company to offer streaming services, it
is currently the only company to offer both streaming and DVD delivery.
Collins, K. (2017, December 14). Why Net Neutrality Was Repealed and How It Affects You.
Retrieved February 06, 2018, from https://www.nytimes.com/2017/12/14/technology/netneutrality-rules.html
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Lashinski, A. (2017, April 26). Why Netflix’s Move to Enter China Is Both Risky and Relevant.
Retrieved February 06, 2018, from http://fortune.com/2017/04/26/data-sheet-netflix-goes-tochina/
Fiegerman, S. (2017, July 18). Netflix surges on strong subscriber growth. Retrieved February
06, 2018, from http://money.cnn.com/2017/07/17/technology/business/netflixearnings/index.html
O’Brian, S. (2017, October 5). Netflix is raising its prices. Retrieved February 06, 2018, from
http://money.cnn.com/2017/10/05/technology/business/netflix-price-increases/index.html
Castillo, M. (2017, August 09). Disney to end movie deal with Netflix and start its own
streaming services. Retrieved February 06, 2018, from
https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-from-netflix-and-start-its-ownstreaming-services.html
Trefis TeamN. (2018, February 6). Netflix, Inc. Common Stock Real Time Stock Quotes.
Retrieved February 06, 2018, from https://www.nasdaq.com/symbol/nflx/real-time. (2016,
December 26). Original Programming Can Be Netflix’s Key Competitive Edge In 2017.
Retrieved February 06, 2018, from
https://www.forbes.com/forbes/welcome/?toURL=https%3A%2F%2Fwww.forbes.com%2Fsites
%2Fgreatspeculations%2F2016%2F12%2F29%2Fcan-original-programming-be-netflixs-keycompetitive-edge-in2017%2F&refURL=https%3A%2F%2Fwww.google.com%2F&referrer=https%3A%2F%2Fww
w.google.com%2F
https://techcrunch.com/2017/04/10/netflix-reaches-75-of-u-s-streaming-service-viewers-butyoutube-is-catching-up/
NASDAQ (2018, February 6). Netflix, Inc. Common Stock Real Time Stock Quotes. Retrieved
February 06, 2018, from https://www.nasdaq.com/symbol/nflx/real-time
Toledo, R. (2016, March 09). 81% of Those Age 35 and Younger Have a Netflix Subscription.
Retrieved February 13, 2018, from https://exstreamist.com/81-of-those-age-35-and-youngerhave-a-netflix-subscription/
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Statista Staff. (2015, April). U.S. Netflix share of internet user by gender 2015 | Statistic.
Retrieved February 13, 2018, from https://www.statista.com/statistics/421812/netflix-internetuser-gender-usa/
https://www.business2community.com/marketing/look-new-target-audience-netflix-subscribers01813457
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