FORTUNE 500 COMPANY FROM THE SERVICE INDUSTRY 1

NETFLIX: GLOBAL MARKETING STRATEGY ANALYSIS

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Abstract

Netflix is a renowned subscription-based streaming service provider, operating in 190 companies

(including United States, United Kingdom, Canada, Greece, India, Australia, and Ireland), and

having over 8,600 employees, Netflix now is a Fortune 500 company which moved up 310 ranks

since 2015 to 164 in 2020. This report focuses on the marketing strategy of Netflix and how it

expanded globally effectively. The 4Ps of marketing will be covered in this report, which would

fully incorporate Netflix's Strategy.

Keywords: Netflix, Marketing Mix, Marketing Strategy, Fortune 500

NETFLIX: GLOBAL MARKETING STRATEGY ANALYSIS

Netflix was founded in Scotts Valley, California, in 1997 by Marc Randolph and Reed

Hastings. Being started as a disc rental company, Netflix now is an eminent name in every

household. It is a lead streaming service providing company operating in over 1901 companies

and having more than 183 paid users worldwide[ CITATION Ele191 \l 2057 ]. Netflix is widely

known for its personalized modern marketing strategy that led to an increase in its reach.

At the start of the 1990s, Netflix saw an opportunity and immediately tapped into that

market. This time, the store-based DVD rental business named 'BlockBuster' Netflix realized that

people no longer wish to go to the store to rent their DVDs or purchase them in person;

sometimes, the stores did not have those movies. It knew that people would rather stay at home

and get their films at home in comfort. Their competitor Block Buster felt differently and

believed that no matter what, people would instead go to a store since they had been flourishing

for the past years. Their marketing analysis was wrong, leading to their decline and eventual

bankruptcy [CITATION Gra14 \l 2057 ].

Netflix gained control of the market and started the now widely known trend of streaming

service, which is now used by many other companies as well such as Disney, Hulu, Amazon, etc.

[ CITATION The18 \l 2057 ]

Amongst the 190 countries Netflix operates in, United States, United Kingdom, Canada,

and Greece are its top users (see Figure 1).

Marketing Mix

The marketing mix is a part of any business's marketing analysis; this comprehensive set

of 'Ps' contain Product, Price, Promotion, and Place. The most famous definition is by Phillip
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Kotler. He stated that the marketing mix is a "set of marketing tools that the firm uses to pursue

its marketing objectives in the target market" (p. 9) [ CITATION Phi00 \l 1033 ].

Product

Netflix is one of the major players in the streaming industry; it started as a DVD rental

business but is now a market leader. Users can subscribe to its services, helping them watch

movies, anime, series, and even documentaries. One of the critical factors that distinguish Netflix

from other streaming services is the lack of ads, buffering, and the increased variety of content to

watch alongside subtitles in the custom language. The user can subscribe to its services and have

the first month for free, charges will have to be paid from the next month, and there are no

cancellation fees. There are three types of Netflix membership plans that are available to every

audience

1. basic plan

2. standard plan

3. premium plan

It provides its streaming services instantaneously and can be viewed on any gadget

anywhere by anyone. More than one person can use one account. Netflix uses an algorithm that

helps decide what the user would want to watch next.

Netflix still provides DVD rental services that it used to in the 1900s.

Price

Netflix provides pocket-friendly pricing to its customers. The first month is free, which

helps convert its customers into permanent ones. The pricing is different according to its plan;

the basic plan costs $8.99, the standard plan costs $13.99, and finally, the premium plan costs

$17.99 per month. These plans then have their specific benefits that the user can enjoy. This cost
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can also be divided between the number of users. Apart from this plan, the rental service costs

$7.99 for the basic plan and $12.99 for the premier plan2.

Promotion

Netflix uses almost every medium to promote itself, from Instagram to YouTube to

Facebook; no stones are left unturned to ensure that their audience is always kept engaged. They

use humor to attract their customers. "First month free" is also a way to promote the business,

which helps turn their customers into permanent ones.

Place

Netflix is an online streaming service that can be viewed anywhere and on any medium.

Customer support is done through online means, which helps Netflix reduce location costs such

as rent. For their DVD rental services, they use strategic distribution services to provide the

DVDs on time.

Global Marketing Strategy

Market Penetration Strategy

Netflix did not expand globally instantly. Instead, it took its time to make sure that it did

a thorough analysis of the host country and developed it. The expansion was done in three

phases. The first phases started when it expanded into the Canadian market in 2010, which was

like the US market, but it helped Netflix get familiarized with the international movement.

Hence, the first phase was like any other traditional global strategy. The second phase was more

rapid, which involved internationalization, partnering with local stakeholders, and expanding

into 50 countries. The last step was more rapid as Netflix now had information on globalization

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and knew how to keep itself local globally, which led to Netflix being expanded into 190

countries.

Country Based Marketing

While expanding, Netflix made sure that it kept an impact in the local market; it did that

by partnering up with different stakeholders. It joined with cable operators, cell phone

companies, etc., which aided in their marketing. For example, it partnered up with Vodaphone in

Ireland, which had a dedicated Netflix button on its remote. The same is the case with Samsung

TVs in Pakistan, Telefonica in Spain 3 , and KDDI in Japan4.

According to an interview with Netflix's chief content creator, Netflix believes that "great

storytelling transcends borders." It aims to create content that is not just "local-for-local" rather

than "local-for-global" [ CITATION Lou18 \l 1033 ]. Netflix invested locally to produce local

content, which is also viewable globally. It uses its customer's insights to make sure that it

appeals to a wide range of customers. Its usage of a customer-centric communication model

helped it gain roots in the local market and eventually enhance its credibility.

Global Twist

It may not be wrong to call Netflix a Globally Local company, which tries to incorporate

each country's local strategies and customs in their marketing strategies and personalize the

content accordingly. One of the prominent examples of this strategy is their "One Story Away"

strategy, where they provided personalized and custom content to appeal to the customers in each

country.

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 The Netflix ad voiceover is customized country wise to ensure that customers feel in

touch with what is being said. It is DuVernay for the United States and some other

countries; Hannah Gadsby for the Australian audience, moreover, Jasmine Jobson in

the UK version.

 While the US-based shows are also global, shows such as Elite are only referred

toward the Spanish audience, and Bojack Horseman and Kingdom are for the Asia

Pacific countries. Host country local marketing executives choose the content they

want to show and the narrators according to the local country's needs.

 Apart from country-specific marketing, social media campaigns are also country-

specific. For example, there are different video interviewswith the creators in India to

ask about their inspiration. For Brazil and the UK, social media is more infographic

and meme-based5.

References

Brennan, L. (2018). How Netflix Expanded to 190 Countries in 7 Years. Global Strategy.

Elena. (2019). From Netflix Streaming to Netflix and Chill: The (Dis)Connected Body of Serial

Binge-Viewer.

Grace, Darothee, & Holly. (2014). THE RISE AND FALL OF NETFLIX: WHAT HAPPENED

AND WHERE WILL IT GO FROM HERE?

Kotler, P. (2000). Marketing Management, Millenium Edition. New Jersey: Pearson Custom

Publishing.
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The Netflix effect. (2018).

Figures

6000

5800
Number of movies and tv shows combined

5600

5400

5932
5200
5702 5692 5640
5522
5000
5329
5246
5129 5123 5070
4800

4600
United United Canada Greece India Australia Ireland Pakistan Nepal Malta
States Kingdom

Country Name

Figure 1. Top 10 countries with the most content available on Netflix 2020

Source: https://www.statista.com/statistics/1013571/netflix-library-size-worldwide/