Netflix Marketing Strategy

Netflix was created as a provider of service that is focusing on keeping the rented DVD not paying a return fee. The company started its operation with sending DVD with a high speed anywhere in the US at a low price. It did not require an additional payment for a longer storage of the product. However, in case the company could propose only this service, it would not continue to prosper on the market. Today, the biggest part of its revenues comprises the unique video streaming. Netflix was the first organization that proposed this service and attracted million of customers that used it daily. However, the company should be attentive because a range of competitors can propose the clients more effective services using innovative technologies. Thus, the firm should continuously improve its service and emphasize more on the vertical integration producing new TV shows that currently bring great profits.

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Segmentation Approach

One of the outstanding goals of Netflix is to extend its operation in all places where the Internet connection is present. It has more than 84 million clients in 190 nations getting the charge out of more than 125 million hours of motion pictures and TV shows. All members can watch the chosen video as long as they want and at any time (“Here’s What Netflix Needs to Succeed in International Markets,” 2016). They also do not depend on the commercials and commitments to play, pause, and resume watching. Such aspects comprise the firm ground that helps to increase the number of customers of different age. There are various methods for segmenting the market in a video streaming business. Thus, creating the product the company regards such aspects as income, age, geographic region, and watching preferences that fluctuate with time. The crucial attribute is that the age of consumers varies between 18 – 60 years that demands the identification of the specific approach to every category of people (“Here’s What Netflix Needs,” 2016). However, young adults of 18 – 25 years belong to the biggest part of clients that consume 3,7 hours of the video content per week (“Here’s What Netflix Needs,” 2016).  Hannah reported that only in Australians 2,7 million people used Netflix to watch TV series and films.

The crucial desire of consumers is to receive the qualitative and economy convenient product with a high speed simultaneously gaining a range of additional benefits. It tries to fulfill all desires of clients. The majority of them are living in the urban areas with the good connection. Nevertheless, the company noticed that the countryside habitants also widely used service. The reason is that, for them, it was more convenient to apply streaming than ride several kilometers to find a cinema or a DVD rental store (“Here’s What Netflix Needs,” 2016). Consequently, regarding the part of segmentation it would be appropriately to notice that the geographic aspect is comprised in Netflix’s operation, mostly in the urban areas supporting a high speed of Internet. The demographic segment includes customers, whose age is between 18 – 60 years old (“Here’s What Netflix Needs,” 2016). The behavioral segmentation shows that the clients want to pay low costs for the service but simultaneously enjoy directly from the content they want to watch. A psychographic aspect is based on the fact that the customers of Netflix are mostly the people that have time to watch television (“Here’s What Netflix Needs,” 2016).



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Target Market Description

Netflix’s target mass marketing includes clients, who pay for streaming subscriptions of movies and TV shows. However, the significant work is also focusing on the individual needs of these customers, their age, convictions, and inclination. The only limitation is a need of good Internet connection and bound with the technology that is an extra reason why the company collaborates with the ISP in order to optimize and improve bandwidth in some regions. The target market comprises a range of foreign countries to increase the international markets. The company invites the members to participate in forums, reviews, and blogs. The tell-a-friend option creates a vital element that is useful in the world-of-mouse marketing. Studying the needs of customers the company determines the new prospects, which help to implement innovative technologies that consequently widen the target market. One of the significant aspects is an ability of every member to manage their own queue. The queue is used to control the order and titles of movies that should be delivered to the client (“Here’s What Netflix Needs,” 2016). The site uses this customization element to provide the member-specific experience to a user. The other feature of customization consists of the movie suggestion section. Every client receives an interactive list of films that can be added to their playlist. The company performs an analysis of the previously watched movies by customers and creates the suggested playlist to induce them to apply the service more often that helps to extend the target market.

Positioning Statement

The positioning statement is the providence of a great choice of content and affordance for the people that are interested in movies and various TV shows. The priority of clients is affordability, convenience, personalization of video streaming, and speed that efficiently supports the company (“Here’s What Netflix Needs,” 2016). Netflix focuses on the individual serving of every customer applying the sophistical analysis of great scope of data and accurate recommendation algorithm. The crucial role plays a vertical integration that significantly supports an effective operation of the organization. For example, the creation of personal TV shows allows entering the television production market in addition to the taken place in the distribution market (“Here’s What Netflix Needs,” 2016).

Regarding the positioning statement, it would be appropriately to notice that the company tries to provide the benefits to all parts of collaboration (Kerns, 2016). For customers, Netflix provides the stellar service, for investors – the prospects of the sustained profitable growth, for suppliers -valuable partnership, and for  employees – the allure of huge impact. The company supports its positioning statement by publishing its values that further clarify the core of principles, which guide employees in their daily decision and activities (Kerns, 2016). The organization’s management team is sure that the effective work of employees forms a firm ground for the development of business and significantly supports the satisfaction of clients.

Marketing Mix Details


Product is the first P among the other Ps in marketing. The individual has to identify the necessary product before to do the next step (Kerns, 2016). The product is important in every business because it is a significant aspect that should attract clients and bring profits (Kerns, 2016). The company is focusing on the development of such products as DVD rental, streaming, and TV shows. Clients, who use DVD rental in the US for the monthly fee, can rent as many DVDs as the customer wants and save it during the necessary period (Kerns, 2016). The only problematic point is that the clients can possess a limited amount of DVDs that strongly depends on the subscriptions.

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The other product is streaming. The use of streaming provides an opportunity to access the Netflix catalogue. Consequently, every person can watch the video on any device and at any time using various articles of catalogue. The other beneficial aspect is Netflix TV shows. The company knows very well its clients because of the constant analysis of their needs (Kerns, 2016). Netflix keeps the efficient strategy through the composing of most seasons by 24 episodes. Such approach allows to attract various stars like Kevin Spacy and Halle Berry (Kerns, 2016).


In the beginning of the product development, the clients could receive a range of DVDs by mail with the aim to gain the cheaper monthly price. The customers could watch as many movies as they want one at some time. The price was less than two movies tented one time for only 24 hours at Blockbuster (Kerns, 2016). In several years, Blockbuster failed to change, became not rentable, and consequently was moved on. Blockbuster went bankrupt in 2010. Therefore, Netflix became $28 billion dollar company, being ten times more worthy than Blockbuster (Kerns, 2016). Forming its price it thoroughly studied the flaws done previously to eliminate the possibility of the similar fail. The crucial lesson that was gained from the not successful operation of the predecessor is not to be greedy. Besides, Netflix got the developed product; and the company only needed to become a distributor. The current goal of  the organization is not to benefit from the expensive service but to attract more clients through studying their needs and interests. Thus, the main profits should come from the economy on the scales. The company is sure that $7, 99 is a target price that should not be changed (Kerns, 2016). In Belgium, the price comprises EUR 7, 99 for the basic subscriptions and EUR 11, 99 for the full functionalities (Kerns, 2016).


The product’s success is determined by the bunch of aspects. However, the most crucial one is whether an individual has a good enough product at the definite point and in the definite time. Thus, the critical issue is to estimate various locations and clients to increase the scopes of business (Kerns, 2016). The place is a location where the product can be purchased. It can include any physical or virtual store like Internet. It also closely refers to the distribution channels. The company is paying great attention to form the efficient distribution channels. For example, the company uses the US posts for the DVD rentals (Kerns, 2016). In the areas where the DVD rental service is not available, the company uses ISP for streaming.


The promotion strategy is focusing on four categories of communication that comprise mass marketing, personalized, general, and direct approaches. Netflix relies on a general approach of the banner ads, viral marketing, and email (McAlone, 2016). The clients even should not purchase or download the service because it comes as pre built in so many products. For example, Itunes have the app free of charge. The only thing the individual should do is to authorize it and less that in 10 seconds the customer will enjoy the product (McAlone, 2016). In the age of emerging technologies and instant gratification, the organization stays an ultimate marketing giant. Netflix applies one of the oldest methodologies to attract new subscribers and form loyalty through the proposing of first free months.

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The objectives of Netflix’s promotion is to increase the range of subscribers from 40 till 70 million, raise of the brand awareness, highlighting the competitive price of content and social media integration, and increase of the frequency rate (McAlone, 2016). Additionally, the company applies Internet adverts and various event sponsorships. The significant line of promotion is the providence of a consistent message proposing to watch what customers want at the affordable price.

Success Metrics

There is a range of methodologies that can help Netflix to evaluate success of the company. While TV giants rely on the rating with the aim to hawk space to advertise, the organization focuses on subscribers. Thus, the most important economic metrics for Netflix is the identification of the contribution level of movies and TV shows to the retaining of  customers and the increase in the number of signs up (McAlone, 2016). The other successful metric is the identification of valued hours. Such approach helps to determine not only the number of hours spent by a client but also take into the consideration the percentage of someone’s total viewings. For example, in case the individual watches the show for a too long time then the spent hours worth less to the steaming firm (McAlone, 2016). The third way of success metrics is the study of economic efficiency measuring several important items that include the correlation of price-to-earnings; enterprise values to taxes, earnings before interest, depreciation and amortization; correspondence of price to cash flow; and correlation of price to free cash flow (McAlone, 2016). Price-based multiples are oriented on the value from the perspectives of shareholders. The enterprise value based on multiples helps investors to understand the value of Netflix from the point of view of capital sources (McAlone, 2016). Such approach helps the company to evaluate its financial prosper and in case of a need to change the strategic approach.

International Consideration

To translate the marketing plan for using in the foreign market it is important to analyze the cost profits that it can bring. Thus, translating this plan it would be effectively to pay the significant attention to how the fluctuation of the foreign exchange rate could affect the Netflix revenues in the international streaming segment. Besides, the firm is planning to launch a new service in China where video privacy is a problem in the market that also can negatively influence the income level (“Here’s What Netflix Needs,” 2016). Besides, Amazon is planning to enter China that will increase the competition. However, despite the range of obstacles the marketing plan can be successfully translated into the foreign market. The process can be simplified through regarding the range of important business aspects. The crucial attribute is that the English-language primary content has been consumed in numerous foreign countries. Such issue allows the company to step up the scale of distribution of its content globally (“Here’s What Netflix Needs,” 2016). It is important for the organization to increase investing of costs in the spread of content because such countries like Russia can propose numerous subscribers. However, the quantity of people speaking English in this country comprises only 5% (Kerns, 2016). The other significant business aspect is applying the fluctuation of price only in the countries where people have a much lower level of income. The use of such approach will help to reduce the impact of fluctuation, and the company could simultaneously gain a range of new subscribers (“Here’s What Netflix Needs,” 2016). The other crucial business attribute is the development of a payment process and broadband infrastructure. The current logistical part of Netflix system, which the US subscribers take for granted, can cause some problems on the developing markets. Thus, it is important to adapt to the local traditions concerning the payments because customers in many markets do not have the credit cards.


Netflix is a prosperous company, which has a range of beneficial aspects that cannot be proposed by other competitors. The formation of the marketing plan has helped to identify that the firm has been prospering on the market during many years. It constantly searches for the new channels of the service distribution. The crucial aspect is that its goal is not to gain the great income through proposing the high prices but to extend its business and completely satisfy the needs of its clients. The efficiently applied metrics of success are related to constant analyzing the level of customers’ satisfaction with the movies and TV shows and studying the valued hours. The third way of success metrics is the analysis of economic efficiency measuring several important items that include the correlation of price-to-earnings; enterprise values to taxes, earnings before interest, depreciation and amortization; correspondence of price to cash flow; and correlation of price to free cash flow. The company is strongly oriented on the penetration into the foreign markets that could significantly raise its profits and increase the number of subscribers.

Plan Summary

The market plan is divided into several sections, every of which analyzes the operation of the company, its goals, target market, and the number of specific aspects that the organization uses to reach success. Besides, it shows the range of advantages that can propose the firm to clients. The high profitability and great number of subscribers in the US testifies for the constant developments of Netflix and its high productivity that can significantly simplify its penetration into foreign markets. Thus, the efficiency of the marketing plan is comprised in the number of positive aspects that after its implementation could help to reach the best results. However, Netflix should make some improvements concerning the change of its payment price in the foreign countries, broadening the content, and increasing the ways of payment to become a successful competitor.

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