SUMMER 2012
Nova Southeastern University
H. Wayne Huizenga School of Business & Entrepreneurship
Assignment for Course: | MKT 5070 | Submitted to: | Professor Herbert V. Brotspies | Submitted by: | Frank Alabau | | Karla Figueroa | | Emma Garcia | | | | |
Date of Submission: August 27, 2012
Title of Assignment: Marketing Plan: Netflix
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
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As of June 15, 2012 Netflix stock price is trading at $65.79. ("Netflix, Inc. Form 10K," 2012)
2.0 Situation Analysis Netflix has been in the video rental industry since 1997. Beginning with the fourth quarter of 2011, Netflix has three operating segments: Domestic video streaming, International video streaming and Domestic DVD rentals.
2.1 Market Summary As of January, 2012 Netflix has garnered 61% of the video streaming market, Comcast comes in a distant second with 8% of the video streaming market, followed by DirecTV, Time Warner Cable and Apple for third place with 4% of the video streaming market share. Netflix's has 30% of the DVD market share, and its main competition in the DVD rental business consists of Redbox with the lion's share of the market at 37% and Blockbuster Express with less than 16%. Though Netflix has a huge subscriber base its market share could erode if it is unable to effectively compete with its video selection and price. Netflix is continuing to add to its vast video library at the same time keeping its price point low enough to prevent competitors to expand into the video streaming and video rental market. Netflix believes that the DVD rental market will decline and has shifted its core strategy to grow the video streaming business. Netflix’s target market ranges from people aged 17-50 years old that have Internet access, which guarantees a near-future constant market potential of 225 million people in
Netflix is in a fairly favorable position on the strategic group map. Where Added value is measured in terms of instant movies and recommendations, and market coverage is measured in number of stores, vending machines, and online presence.
Netflix was founded in 1997 with the intent to revolutionize the way in which consumers watch movies and television shows. Their accomplishments both in innovation and in customer base for their service indicate that the firm has been, and continues to be, successful in doing so. Currently, the
Netflix, an internet television network that is revolutionizing the way we watch TV series and movies without having to leave the comfort of our couch has over 50 million subscribers in more than 40 countries.
It appears that Netflix has control over the vast majority of the movie rental business. Consumers are renting less than they used to and the convenience that Netflix incorporates into its service, such as online streaming and mail orders eliminates other competitors from considering entering the movie rental business.
Reed Hastings and Marc Randolph co-founded Netflix in Los Gatos, California in 1997. Between 1998-2000, Netflix launched its online rentals, sales, subscription service, and a system of recommendations that can predict a consumer’s choice (Netflix). In May 2002, Netflix announced its first public offering led by Merrill Lynch. They offered over 5 million shares of common stock for $15 per share.
For netflix's business portfolio they outline that their main area of focus are online DVD rentals via online streaming (Netflix ,2010). It is clear from this that netflix have outlined that they aim to provide a service that they hope many people across a broad market will be able to use. With this in mind they would be able to generate a large revenue. Netflix is operated on the basis that you pay a monthly subscription and in
The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in
Netflix is on demand DVD rental as well as internet streaming provider working in different countries such as United Kingdom, USA, Latin America, and Ireland. Some of the corporate objectives of the company are as follows:
Netflix previously had a plan in which it included both online streaming, as well as unlimited DVDs by mail, 4 out at a time, for $9.99 a month (Gregory, 2011). However, in July of 2011, CEO, Reed Hastings, announced that they were going to separate the online and DVDs plan and charge
Netflix, the online subscription-based DVD rental service aimed to better satisfy customer in a way competitors didn’t, customized and personalized service with unlimited monthly rentals from a great variety of film offerings. Now they want to leverage their strengths to enter into the Video on Demand market
Netflix Inc. is in the entertainment market, which is a part of a larger video, film
Netflix, founded in 1997 by Reed Hastings, has achieved its goal of becoming the largest online movie rental service in the world. By the end of 2007, Netflix recorded revenues of $1.2 billion. With a library of 100,000 movie titles and a subscriber base of over
Netflix exhibits dominant economic characteristics in the online movie rental business. They enjoy strong market size and growth rate when compared to rivalry competition. The number of rivalries are increasing, and the market remains dominated by only a few sizeable rivalries like Blockbuster Video, Wal-Mart, Walt Disney Movies and Movielink’s Downloadable Movies. Netflix is determined to offer new and innovative technology to sustain their competitive advantage.
Netflix was founded by Reed Hastings and Marc Randolph in 1997 and was originally based out of Scotts Valley California. The business model that they were working towards was to create a company that would offer online movie rental service made available by streaming media as well as DVD’s that could be ordered online and delivered to the customers’ homes. (Wheelen, Case 12). Netflix had a strategic plan to undercut the competition in an effort to stress the market and force weaker competition out of the field. This was a very successful plan and over a period of years it was able to force the closings of most of its competing market to include the mega giant Blockbuster video. Using a business
Because users of the above websites and social media outlets overlap heavily with Netflix’s target demographic, the coverage of their selected audience will be stronger than most other forms of communication (and e-mails and letters to their