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Running Head: MESSAGE ASSIGNMENT

PROW 210

February 18, 2020

Part 1: Negative Message Statement

Introduction

Netflix is a streaming service which allows its consumers (members) to watch a wide

variety of ad-free movies, TV shows, documentaries, and more ("What is Netflix?"). Netflix was

founded in California in August of 1997, the service started as a website-based movie rental

service which allowed people to rent DVDs online ((McFadden, 2019). Since then, Netflix has

expanded to be globally available, and can be streamed on multiple devices and screens through

one account. Netflix has achieved an estimated $15.8B in sales as of May 15, 2019 (Forbes,

2019).

Netflix has 3 main shareholders, being Reed Hastings (CEO and founder), Neil D. Hunt

(CPO), and Ted Sarandos (chief content officer) along with millions of consumers with shares

(Gottschling, 2016), but customers are the most important assets of most companies, so much so

that customer equity has been used as a proxy for shareholder value ((Schulze, Skiera, & Wiesel,

2012). Netflix announced four price increases for its service within the 58 months from April

2014 to January 2019. The most recent being in January of 2019, with a price increase from

$10.99 to $12.99 (Levy, 2019). The company has informed customers through email that it’s

raising prices to “continue investing in great entertainment and improving the overall Netflix

experience.” (Spangler, 2019).

These changes in the pricing of the subscription substantially affect the stakeholders since

there has been a visible decline in subscribers and shares (Owens, 2016). The most important

stakeholder, however, is the consumer/subscriber who will need to be addressed by Netflix in

order to ensure members that they are getting a service worth the price.

Reflective Summary: 3x3 Writing Process

To begin my writing process, I carefully considered who would be most affected by the

price increases and came to the conclusion that my primary audience would be the consumer. I

came to this conclusion after reading tweets in which members stated they would be cancelling

their subscription because of the continuous price increases. I decided the best way to get the

message across would be through an email, since I chose to address the consumer, sending a

mass email seemed to be the most effective and efficient channel. I considered the fact that the

audience most likely has seen or heard of the price increases through social media and assumed

that the response would be most likely negative because of the backlash on social media. For this

reason, I chose to take a direct approach since I wanted to get to the point and confirm that the

prices are indeed increasing. It is difficult to express tone through an email, such as the effects of

channel choice and message structure on the receiver’s perception of bad-news messages which

is why the sentences will be kept short and direct (Braun, 2019). Through this email, however, an

explanation for the pricing change will also be included in order to inform the consumer that

their money will be well spent. Netflix has seen success through the original content which is the

reason for the majority of its growth, its efforts to own rather than license the content they

distribute is what sets Netflix apart from other such services (Wayne, 2020). Consumers will be

informed of this so they can recognize the value of Netflix in comparison to competitors.

I began my research by investigating through social media in order to get an idea of what

people’s general thoughts were, and to see if people were still willing to pay the higher sum or

not. Since I decided to take a direct approach, it seemed the best way to inform was to state that

there will be price increases first and foremost and then go into the explanation. The email will

be kept short, but informative. The goal of this communication is to inform and ensure

consumers that they are getting a service worth their money. My personal goal with this
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Running Head: MESSAGE ASSIGNMENT

communication is to ensure a good relationship with the consumer base and get the message

across as positively as possible.

Rationale: Direct or Indirect?

I chose to take a direct approach for this communication, due to the fact that the news had

already been shared when CNN tweeted that Netflix was quietly raising their prices. Negative

events, circumstances, and conditions are more likely to be picked up by the news, which is

exactly what happened, and Netflix was under fire for it (Jonkman, n.d.). Netflix made an

announcement on October 5, users were informed they would be notified 30 days before the

price change which caused many users to express their opinions through tweets (Friedman,

2017). We saw a lot of backlash towards the price increasing which is why sending an email

which gets to the point and explains the situation was the best approach. It is explained in the

textbook Business Communication: Process & Product that the direct strategy indicates "the bad

news is not damaging, the receiver may overlook the bad news, the organization or receiver

prefers directness" (Guffey, 2019). The consumer will want a direct, casual, straightforward

message since the news is already quite known, and negatively taken.

Negative News Statement

Dear valued member,

We hope you have been enjoying your Netflix membership. We are writing to inform you of an

upcoming change in the pricing. We will be increasing our standard subscription from $10.99 to

$12.99 a month, effective in 30 days on April 21st, 2019. Why? In order to improve Netflix so we

can add more movies and tv shows for you to watch. We will be enhancing some features, which

will make your favourite shows downloadable and you can watch on the go! As these features

are enabled, we hope to meet your expectations and improve your experience with our service.
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Running Head: MESSAGE ASSIGNMENT

Netflix has grown significantly thanks to members like you, from a DVD service to a global

scale streaming service. Netflix has seen success through the original content, which we intend to

keep providing. We hope we will receive the same loyalty and support as we have in the past, as

we continue to grow as a company in order to meet your needs, and provide fresh, updated and

original content.

Thank you for being a loyal member as we work to enhance the Netflix experience for everyone,

everywhere.

- The Netflix Team

References

What is Netflix? (n.d.). Retrieved from https://help.netflix.com/en/node/412

McFadden, C. (2019, October 14). The Fascinating History of Netflix. Retrieved from

https://interestingengineering.com/the-fascinating-history-of-netflix

Forbes (2019). Retrieved from https://www.forbes.com/companies/netflix/#306b35a58541

Figure 2f from: Irimia R, Gottschling M (2016) Taxonomic revision of Rochefortia Sw.

(Ehretiaceae, Boraginales). Biodiversity Data Journal 4: e7720.

https://doi.org/10.3897/BDJ.4.e7720. (n.d.). doi: 10.3897/bdj.4.e7720.figure2f

Schulze, C., Skiera, B., & Wiesel, T. (2012). Linking Customer and Financial Metrics to

Shareholder Value: The Leverage Effect in Customer-Based Valuation. Journal of

Marketing, 76(2), 17–32. https://doi.org/10.1509/jm.10.0280

Levy, A. (2019, October 24). Analysis: Here's why Netflix won't raise prices again in 2020.

Retrieved from https://www.usatoday.com/story/money/2019/10/24/netflix-price-raise-

for-subscribers/40350651/

Owens, J. C. (2016, July 19). Netflix price increase does damage, but media and subscribers

blamed. Retrieved from https://www.marketwatch.com/story/netflix-price-increases-

causing-subscribers-to-sign-off-2016-07-18

Spangler, T. (2019, April 3). Netflix Prices for Many U.S. Customers Will Increase in May 2019.

Retrieved from https://variety.com/2019/digital/news/netflix-prices-hikes-us-may-2019-

1203179495/

Friedman, M. (2017, November 15). People Are Freaking Out Over Netflix's Higher Prices.

Retrieved from https://www.cosmopolitan.com/entertainment/tv/a13607214/netflix-

raising-prices-social-media-reactions/

Guffey, M. E., Loewy, D., & Griffin, E. (2019). Business communication: process & product (6

Brief). Toronto, Ontario: Nelson.

Wayne, M. L. (2020). Global streaming platforms and national pay-television markets: a case

study of Netflix and multi-channel providers in Israel. Communication Review, 23(1),

29–45. https://doi.org/10.1080/10714421.2019.1696615

Braun, S., Hernandez Bark, A., Kirchner, A., Stegmann, S., & van Dick, R. (2019). Emails From

the Boss—Curse or Blessing? Relations Between Communication Channels, Leader

Evaluation, and Employees’ Attitudes. International Journal of Business Communication,

56(1), 50–81. https://doi.org/10.1177/2329488415597516

Jonkman, J., Boukes, M., & Vliegenthart, R. (n.d.). When Do Media Matter Most? A Study on

the Relationship between Negative Economic News and Consumer Confidence across the
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Running Head: MESSAGE ASSIGNMENT

Twenty-Eight EU States. INTERNATIONAL JOURNAL OF PRESS-POLITICS, 25(1),

76–95. https://doi.org/10.1177/1940161219858704

Part 2: Positive Message Letter

Introduction

This positive message in the form of a letter will be written to inform current customers

of Hair Needs Inc. that I, the founder and CEO of the company will be opening a nail salon

under the same corporation as a DBA next month. After many consumers suggested we expand

our services, we decided to comply and give our client base what they want. As Warren

recognized “the company that listens to and acts on this kind of customer feedback – or better

yet, anticipated it – is the company that will position itself to ride the swelling wave of consumer

demand for convenience … and establish a powerful marketplace advantage” (Hyken, 2018).

The behavior and the intention of the people and average consumer depend on the action of the

organizations, which is why taking consumer feedback into account is so important (Manimalar,

2016). Both businesses will be run under the same limited liability corporation (LLP) and current

customers at Hair Needs Inc. will receive a coupon for their first service at Nail Needs Inc. free if

they bring a friend as a loyalty reward. The objective of loyalty programs and rewards is to retain

valued customers with a firm. Loyalty programs are effective in making customers feel special,

important, and appreciated by rewarding them with preferential incentives (Lee, 2015) Needs

Inc. provides services for all hair needs from styling to cut and colour, and we will now be

branching out to also provide nail services such as acrylic, shellac, and spa pedicures. Although

the letter will be going out to existing customers, it will tend to new customers as a secondary

audience.
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Running Head: MESSAGE ASSIGNMENT

Reflective Summary: 3x3 Writing Process

I began my writing process by identifying the primary and secondary audience since the

purpose of the letter is to form a clientele and welcome current customers of Hair Needs Inc. and

new customers to Nail Needs Inc. The channel chosen to get this message out is a letter, because

it is a welcoming statement for a completely new service and because Nail Needs Inc. is opening

in a month’s time, so an immediate response is not needed (Guffey, 2019). I decided to use a

direct approach since it is a positive message and the response will be positive as well. The tone

will be kept casual, since the letter is going out to customers with existing relations but not too

casual since there is a secondary audience who’s very first communication with the company

will be the letter.

The research stage of the process entailed of figuring out the extent of knowledge of the

secondary audience. It is important to do so because estimating the audience level can also

enhance information retrieval by increasing the relevance of the message to the audience

(O’Neill, 2008). The primary audience is well acquainted with the services we provide and how

the business functions, but the secondary audience will be foreign to it. Therefore, an explanation

of the types of services we provide and will provide will be necessary to disclose in the letter.

Since a direct approach will be taken, the information will be stated in quick understandable

sentences with the exclusion of extra information which the primary audience will be able to

provide for the new clients such as what the services are (what a cut and color actually entails).

After completing the writing, research, and organization of the letter it is important to

revise and make sure you met your goals of why you wrote the letter. “A consumer draws

conclusion about the personality of the company from the style of the letter” (Kaplan, 1966)

which is why the tone used to address the primary and secondary audience is very important. I
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Running Head: MESSAGE ASSIGNMENT

read over the letter as if I was the one receiving it to make sure it conveys what I want it to, in

the way I want it to.

Application: Block Style Format

Block Style Format is commonly used to convey a positive message in business letters. A

letter is the correct form of communication for this message because mailing letters are seen to

be an effective way to promote services and products (Guffey, 2019). The letter will be

formatted according to block style which means it will be left aligned and the address lines will

be included at the top. There is a discernible salutation, body, and conclusion. In the salutation I

will greet current customers and thank them for being with us followed by an explanation of the

opening of a new business with new services in the body of the letter. I will be making note of

the fact that we listen to their demands, and their opinion matters to us. The goal is to end the

letter in a way that the customer feels appreciated. The overall tone is intended to exemplify

appreciation for the client’s loyalty toward us. The letter will be ending with the incentive of the

coupon, to again, show appreciation. Finishing with a closing salutation, which will be signed off

by me.

Welcoming Letter

February 18, 2020

Valued Customer

6507 89 Ave

Edmonton, Alberta T6H 7F4

Dear Valued Customer,

Subject: New Business Services

Hair Needs Inc. continues to strive thanks to customers like you! Due to the large volume of

requests to expand our services, we have happily obliged. I am pleased to inform you that the

intent of this letter is to introduce Nail Needs Inc. Currently Hair Needs Inc. provides explicitly

hair services such as haircut and color, styling, etc., but now we will be introducing nail care and

design services as a DBA. These services include nail acrylic, shellac, and spa pedicures. Our

first location will be opening next month, and we hope to see you there.

I’d like to take this opportunity to sincerely thank you for being with us and contributing so

greatly to the success of this company. As a token of appreciation, we would like to offer you

your first service free with the use of the coupon attached, if you bring a friend!

Please feel free to contact us at any time with any questions, concerns, or booking details. We

take your feedback seriously.

We thank you for your time and consideration and look forward to hearing from you soon.

Sincerely,

Hair Needs Inc.

CEO, and founder

References

Guffey, M. E., Loewy, D., & Griffin, E. (2019). Business communication: process & product (6

Brief). Toronto, Ontario: Nelson.

Hyken, S. (2018). The Convenience Revolution: How to Deliver a Customer Service Experience

That Disrupts the Competition and Creates Fierce Loyalty: Vol. First edition. Sound

Wisdom.

Kaplan, E. (1966). Writing Effective Letters to Customers. Management Review, 55(7), 42.

Lee, J.-S., Tsang, N., & Pan, S. (2015). Examining the differential effects of social and economic

rewards in a hotel loyalty program. International Journal of Hospitality Management, 49,

17–27. https://doi.org/10.1016/j.ijhm.2015.05.003

MANIMALAR, R., & SUDHA, S. (2016). Consumer Awareness and Feedback Towards

Purchase Intention of Csr Related Products Using Sem. CLEAR International Journal of

Research in Commerce & Management, 7(4), 37–40.

O’Neill, E. T., Connaway, L. S., & Dickey, T. J. (2008). Estimating the audience level for library

resources. Journal of the American Society for Information Science & Technology,

59(13), 2042–2050. https://doi.org/10.1002/asi.20908