INDIVIDUAL REPORT

Name: Medabauen Tala Lesly Danielle

Registration Number: 220053802
Your Programme of Study: Integrated Marketing Practice
Module Code and Title: MGT203
Module Tutor’s Name: Kriss Wood
Date: 15-01-2024

Word: (3000) over by 118

1
 TABLE OF CONTENT

1 Introduction

Executive
Summary.......................................................................................................
3

Background...................................................................................................
...................4

2 Netflix brand operation

Porter 5
Forces...........................................................................................................
.....5

Pestle
Analysis.........................................................................................................
........6

Swot
Analysis ........................................................................................................
.........8

3 Key Customer Consideration

5WH..............................................................................................................
.....................9

4 Netflix brand value

creation............................................................................10

Three-Level Pricing Structures

campaigns in major markets that emphasise brand building.

Investing on Internet going Global

Netflix evaluation strategy

2
Marketing
Mix................................................................................................................
...12

Market
penetration...................................................................................................
........13

Segmentation................................................................................................
.....................

Targeting.......................................................................................................
.....................14

Positioning.....................................................................................................
.....................15

Recommendation.........................................................................
........................16

Conclusion ..................................................................................................
......................17

Appendix.....................................................................................
...........................18

Executive Summary

Netflix founder Reed Hastings and Marc Randolph and has 125 million users.
Netflix a streaming platform that has many competitors and made a
difference between them and their competitors. The research is about the
strength, weaknesses, and recommendations that Netflix has. Firstly, the
research is about Netflix brand and marketing operation (Porter 5 forces),
PESTLE analysis, SWOT analysis. Also, key customers consideration 5WH
and how identify their brand to their segment like Three-Level Pricing
Structures, campaigns in major markets that emphasise brand building

3
and others which can be seen below. Furthermore, Netflix evaluation of
marketing Strategies, tools and techniques like Marketing Mix. Moreover,
Netflix segmentation, Target, Positioning, Penetration in the market.
Lastly, the recommendation that can be given to Netflix.

INTRODUCTION

2.1 Background

Netflix, launched in 1997, Netflix was implemented by Reed Hastings and

Marc Randolph as a U.S.-based postal mail-order DVD rental service with
the request made through their website. Netflix introduced and continues
to implement monthly subscription in 1999, allowing subscribers to enjoy
infinite rentals for monthly fee. Netflix is a global video-streaming service
with over 125 million users in over 190 countries that can potentially
viewed via computers, cell phones, tablets, and televisions. While Netflix

4
originated as a US-based service, it quickly expanded overseas, beginning
in 2010 with Canada. While the United States is Netflix's largest market, it
also has large user populations in Canada, Europe, and Australia. Netflix's
streaming video service contains over 1,500 television episodes and 4,000
films from a variety of genres for example movies like Strangers Things,
Squid game and others. Netflix is extremely popular over the world. The
United States has the highest percentage of user penetration (64.5%),
although Sweden, Denmark, Canada, and Norway also have rates above
50%. Netflix lags competitors in India and has experienced poor growth in
China. Subscribers can view as many programmes as they want and have
full access to the catalogue of content that Netflix has licenced in their
nation. The aim of this report is to investigate on Netflix brand operation,
value creation to Netflix segment and evaluation of Netflix marketing
strategies and their appropriate tools and techniques.

NETFLIX BRAND OPERATION AND MARKETING STRATEGY

(External factors)

3.1 PORTER 5 FORCES

 Internal Rivalry

There is an intense rivalry and competition among the streaming industry,

such as Redbox, Amazon, and Blockbuster. The amounts that each
company spends on advertising and marketing serve as a visual cue for
this competition. With over $200 million in advertising expenditures in
2008, Netflix mostly used online and affiliate marketing campaigns for a

5
good strategy. Netflix's advertising revenue accounted for 14% of total
revenue (Netflix, 2010).

 Substitute product and services

Cable television companies' "On Demand" services could potentially

replace Netflix because Digital cable is taking over homes, so many
subscribers will have a library of films from their cable Networks like EE,
Sky, Talk-Talk. Due to this, Netflix must expand their movie library to
include a comparable selection of titles so If Netflix wants to continue
being ahead of the need to constantly evolve technology landscape.
Another Threat is that people tend to watch movies illegally due to vast
internet.

 Entry of new competitors

Netflix needs to continue sustaining the growth of e-commerce trend by

adding more HD streaming content and improving their movie streaming
selection. If this endeavour is postponed, more lucrative movie rental
businesses like "On Demand" will take over. This is likely due to the
inexpensive entry barriers in the streaming content industry associated
with the vast quantity of streaming content that may become available to
potential distributors.

 Bargaining power of consumers

Customers' ability to spend on Netflix will be limited during periods of

slower economic growth when they have less discretionary income.
Customers may spend more money on Netflix during prosperous
economic times. Because they can choose to spend their entertainment
budget on other services or goods, this gives consumers in the film
industry significant negotiating power.

 Bargaining power of Suppliers

Since Netflix have not been producing any of its own content, its business
model was harmed, when it came to contents Netflix depended on
studios. if its suppliers stopped providing content to the streaming service

6
their company would have crumbled. This gave the suppliers tremendous
influence over the terms of the contract when Netflix was negotiating the
purchase of content. (Wharton Knowledge, 2009).

3.2 PESTLE ANALYSIS

POLITICAL FACTOR

Over the past ten years, Netflix has experienced changes in political
considerations. Netflix offers its services in many countries, each with a
distinct political perspective. Every nation has a unique set of laws and
rules that Netflix needs to abide by. Laws and rules are also continuously
transforming. For instance, the European Union's government is debating
new tax legislation for global IT firms that could significantly raise Netflix's
tax obligation in Europe (Amara). If the effects of tax hikes are not
adequately assessed, they may be harmful. Certain instances It might be
preferable for Netflix to withdraw from some regions because of new
legislation and more stringent governmental guidelines.

ECONOMIC FACTOR

Pricing competitively with competitors is crucial to Netflix's ability to

sustain its competitive advantage. Netflix operates in an industry where
its primary revenue source is the discretionary income of its customer
base. Netflix would be the first to suffer from this decline in consumer
purchasing power if economic growth were to be sluggish and
unfavourable. 

SOCIAL FACTOR

Netflix is dependent on their viewers in the target market's segments. The

business could suffer if the average age of the potential customers
continues to decline and filming expenditures among the older
demographic become less popular. ageing and expanding For Netflix to
realise its full potential, it is crucial that it keeps creating content in

7
several languages. Also, it's important for Netflix to offer content
according to age, gender groups.

TECHNOLOGY FACTOR

Netflix's business operations can be significantly impacted by technology,

as its primary business of streaming relies on the internet and IT software
to deliver services to users' homes. Netflix users have the option to
download films for offline viewing, so customers can't rate the films
they've seen, and customise their profile with a choice of stylish avatar.
Moreover, Netflix uses software to suggest films or make
recommendations based on what a user has recently watched. Without
technology, Netflix would not be able to operate.

ENVIRONMENTAL FACTOR

Another significant element that may influence how businesses Netflix

operate is the state of the environment. Dedicated to maintaining a clean
environment, Netflix as an organisation source all its electricity from
renewable energy sources (Netflix, 2015). For efficient delivery, some
technology is provided by "Open Connect," while the majority is run on
renewable energy-powered Amazon Web Services (AWS).

LEGAL FACTOR

Legal considerations vary depending on the business operations' region

and nation. Netflix must follow the laws of the various countries in which it
conducts business. If a customer's email address, password, credit card
information, or phone number is taken from their profile, Netflix may also
face legal action.

3.3 INTERNAL FACTORS

NETFLIX SWOT ANALYSIS

 STRENGTH

Global expansion: In India, Netflix has introduced its most affordable

subscription plan, which costs $3 per month for mobile users. 13 new

8
films and 9 original new series in the works, this 1.3-billion-person has
seen its investment grow at a faster rate than any other market. Such an
investment faces a serious risk because, like their integration in Mexico,
India has poor internet speed and low bandwidth connectivity, which could
lead to fewer subscribers. But internet usage in Mexico has skyrocketed,
and more people are interested in watching Netflix, particularly the
original Mexican series "Club de Cuervo's."

Furthermore, Netflix continued to create high-Caliber content after

launching "House of Cards" in 2011 to increase the value of its
entertainment and draw in more local and foreign subscribers. Netflix
Originals include the following: Dark (Germany), Peaky Blinders (English),
La Casa de Papel (Spain), Elite (Spain), and Stranger Things (USA). Netflix
did, however, also produce a few documentaries, such as "Making a
Murderer," "Our Planet," "Dirty Money," etc. Owning multiple components
of its value chain through vertical integration is an excellent business
model. Also, Netflix has a channel creativity which is their new segment
whereby kid can watch cartoon animation via a kid profile.

 WEAKNESSES

Copyright: Starzl, Paramount, Lionsgate, Disney, and MGM all had an

agreement with Netflix in October 2008. But now that Disney Plus has
launched, the agreement between Disney and Starzl. for instance, Disney
Plus now owns the entire 30 seasons of "The Simpsons, which was Netflix
series and Netflix no longer owns the show. Many contents start showing
up on other websites after they expire after a year on Netflix. Also, Netflix
does not release its films in theatres with large screens, which alienates
major actors from participating in Netflix films and series, the company is
not permitted to enter the official selection of the international film

 OPPORTUNITY

Niche Marketing: Netflix has demonstrated that creating content that is

specific to a given region in its native tongues is advantageous and adds
value to the company. As an illustration, La Casa del Papel The series is in

9
Spanish etc. Also, A variety of platforms, including PCs, TVs, tablets,
smartphones, and even browsers, have agreements with Netflix. SONY,
Panasonic, Philips, Samsung, and others are TV brands that allow Netflix
streaming.

 THREAT

Netflix has lot of competitors now and war between streaming platform
has begun. Disney Plus will be available for streaming on November 12.
Disney Plus will host a selection of Netflix original series and films, such as
"Despicable Me," "Sofia the First," "Coco," and many more, after their
contracts expire. In terms of money, the Disney share is rising by $130,
while the Netflix share, which is $283, has decreased by 23% since mid-
July.

4. KEY CUSTOMER CONSIDERATION (5WH)

According to (Potluri et al., 2014), Understanding consumer behaviour is

getting harder because the rise of technology due to the frequent changes
in cultural, social, and economic factors. Understanding why consumers
watch Netflix and why they are willing to pay for subscriptions to the
streaming service is important, particularly considering the abundance of
other comparable VOD services. Then, because technology is influencing
how consumer behaviour patterns flow, customers interact with the brand
(Indahingwati, 2019).

Moreover, according to (Jung et al., 2014) Instagram content is one of the

ways Netflix Indonesia uses to get more people to interact with their
brands. However, one of the key elements that persuades people to
purchase a good or service is price. The impact of price varies among
consumers; while some are price-sensitive, others do not take it into
account when deciding what to buy.

10
Additionally, Netflix provides premium content that is exclusive and in-
demand, particularly live coverage of well-known and original films that
are only accessible to subscribers to maximise customer choice.
Motivation shapes expectations about media content, leads to subsequent
satisfaction, and affects how selectively and actively the audience finds
and uses media. Based on the research presented in this paper, it will be
possible to determine why millennials choose to subscribe to Netflix.
Customer trust elements have a major impact on customer engagement,
according to earlier research (Islam & Rahman, 2016).

Netflix use surveys to see if they really had customer consideration by

giving out One hundred Millennial Netflix subscribers questionnaires,
which were distributed along with a framework created to support the
research goal. Structural Equation Modelling-Partial Least Squares (SEM-
PLS) was used to verify all the respondents' responses. According to this
study, the exclusivity, motivation, and willingness to subscribe of
Instagram content all positively impacted customer engagement. On the
other hand, customer engagement was not significantly impacted by
perceived price. It also finds that among Netflix's millennial subscribers,
behavioural engagement is the most effective positive form of
engagement. Via word-of-mouth, customers enthusiastically suggest
Netflix to their loved ones (friends or family).

5. Netflix brand creation to their Segments

 Three-Level Pricing Structures

Over $2.5 billion was spent on marketing by Netflix in 2021. One of

Netflix's main brand value creations to it user is experience
personalization Netflix offers a significant level of differentiation to its
customers that its competitors do not match thanks to its creative and
financial investments in its services. Orange Is the New Black and House
of Cards, two Netflix original series, have garnered praise and recognition
from viewers for their 2013 saw extraordinary Emmy victories. Netflix
original shows are of far higher calibre of original series offered by other
streaming providers. Amazon's Alpha House serves as one illustration to

11
put it mildly, inadequate. Using Tired pricing will be beneficial for Netflix
which will increase their NIAT.

 campaigns in major markets that emphasise brand building

Netflix has Facilitated increase in price, trust, and brand recognition. To

supports price justification through differentiation.

 Investing on Internet going Globally

Netflix promoted its business and increased global connectivity by

working with other e-commerce companies to invest in infrastructure in
developing countries. In 2014, 60% of people on the planet did not have
full access to the Internet. By the end of 2014, almost 3 billion people
worldwide were having access to the Internet, according to a United
Nations report. However, 4.2 billion will continue to be disconnected
(Rodriguez, 2014). As a good corporate citizen.

The business tracks a variety of "events," or user behaviours, including

the time and date of viewing, pausing, or ending a show, and more using
sophisticated strategies. Netflix utilises this information to offer precise
and pertinent content suggestions to individual users. Also, another
finding from the Netflix brand analysis is a distinctive and imaginative
marketing strategy for promoting series and content. For instance,
Netflix's marketing campaign for the political drama series House of Cards
proved to be highly effective during the 2016 US election season.
Throughout the live Republican debate, the company aired a "political
campaign commercial" for the popular show's fictional president, Frank
Underwood. After just one hour of launch, the Netflix campaign went viral
and became a trend on Facebook and Twitter. The diagram below shows
the demand for Netflix services Globally.

12
Figure 1: Stephanie, P (2020) ‘Netflix Share of Streaming Originals Dropped in Q1 as Competition
Increased’ Parrot. 19 April.

6. Netflix evaluation of marketing Strategies, tools and

techniques

Since the addition of Hulu, Amazon Prime, HBO, Apple Plus, and Disney
Plus, which is posing a serious threat to Netflix, this market has become
extremely saturated. Will Netflix maintain its position as the leading
provider of both streaming and DVD rentals? And what about Netflix's
future? How much of a market share does it hold? All these Questions will
be answered with the use of a Marketing mix.

6.1 NETFLIX Marketing Mix

 PRICE Strategy

13
With 10 or more price increases across tiers in each of the top three
markets since 2016, the United States (29.8%), Canada, and Mexico,
Brazil (7,6%), and United Kingdom (7.5%) have been the most aggressive
with Netflix's price increases in its ten largest subscriber markets.
Between 2016 and 2022, there have been at least five price increases in
every major market—apart from South Korea. Netflix's Standard and
Premium tiers saw price increases more frequently than its Basic tiers,

 Promotion Strategy

According to Do Hai (2015) promotion is the strongest part of Netflix and

Netflix spend more than $203 on marketing Netflix promote their product
on different social media platforms. According to Ramakrishnan (2019),
Netflix has more than57 million fan on Facebook with the use of all these
platforms it helps Netflix to have interaction and engagement base on
hashtags games to help their audience with upcoming movies or shows.

 Place Strategy

Majority of Netflix subscribers are from the U.S (39 million subscribers)
and 18 million is outside the U.S which are European countries such as
France, Luxembourg, Germany and others. Netflix in 2015 first attempt
was to invade Australia, New Zealand, Austria and their second attempt is
taking over Asian because the lack the market of internet TV provider.
Netflix believe that if they expand their market in Asia in countries like
South Korea, Japan, China, it will fortify their brand.

 Product

Netflix content can be viewed on different devices such as TV,

smartphones, computers, laptops, gaming consoles, tablets. Consumers
can purchase their plans on one, two or multiple HD screens depending on
the price, the rice ranges from $7.99 to $11.99 a month and was recently
increased to $9.99. Netflix due to its expansion all around the world will
have high competition with other companies like Amazon prime and
BSKYB in Europe especially in the UK which will lead to an increase in
price.

14
6.2 MARKET PENETRATION

Netflix takes advantage of opportunities to boost margins and profitability

by leveraging the products to grow within the specified market. Netflix
maintains competitive prices and drives market penetration through a
strategic partnership with telecom companies (o2, EE, Vodafone, and
Three) and UK broadband services (Virgin Media, Now TV, and Sky).
Comparing 2017 to the previous two years, market analysis indicates that
the annual operating margin projection increased by 3% to 7% (Netflix,
2017). Given the correlation between revenue, subscriber growth, and
margins, the "profitability metric" consequently calls for higher margins
(Walters, 2017). Netflix delivers content that people love for a profitable
target segment, Netflix Inc. can take advantage of this market by
producing original content and capturing imagination.

Moreover, Disney Plus has been and will continue to be a massive threat
to Netflix because Having begun production in the 1920s, Walt Disney Co.
has been successful in creating films that have taken home multiple
awards. Disney Plus will always have an advantage over Netflix because it
is shown in large-screen theatres. Therefore, when the opportunity arises,
more well-known actors will jump at the chance to work on television
shows Furthermore, the premiere of new seasons of its top series, such as
"Strangers Things" (season 4), "Peaky Blinders" (season 5), "Walking
Dead" (season 9), will contribute to increasing the number of subscribers
prior to the intervention of new entrants from Apple and Disney Plus. Elon
Musk, the CEO of Tesla, cars will soon be able to stream Netflix and
YouTube while in park. Drivers can also find entertainment on this
platform.

6.3 SEGMENTATION

15
Netflix Inc. concentrates on the widespread appeal of purchasing, and this
approach continues to yield results. With 14% more subscribers than in
2015, 58% of Netflix Inc.'s B2C market in the UK is made up of users aged
16 to 24 (Deloitte, 2017). According to PW (2016), the average age of a
Netflix subscriber is between 17 and 65. The benefits that consumers are
seeking in a product should be identified, according to segmentation
expert Russell Haley (1968a), since these factors influence consumer
behaviour than demographics or volume of consumption (Haley, 1995b.
P30-35)

Segmentation Method Data Analytic Segment

Geographical continents: North America, Asia, Europe,

Africa Within the United States: Pacific,
Netflix Inc. groups its mountain, central, south, mid-Atlantic,
members based on their northeast
preferences for
programming.
Demographic Age, Gender, Income

Psychographic Self-concept, Lifestyle, Self-values

Figure 2: Adapted using Pervez & Cateora Segmentation (Pervez & Cateora 2014)

6.4 TARGETING
According to Goode (2017), Netflix Inc.'s goal is to identify groups of
people who share your interests in these subjects and figure out how to
integrate and match them. It takes a combination of mass-market appeal,
tremendous content diversity, and exclusive programming to draw in a
diverse user base to the platform (Armstrong and Kotler, 2000). The
diagram below shows the different continents Netflix targets.

16
Figure 3: Adapted from Netflix & Statista 2022 (Netflix & Statista 2022)

6.5 POSITIONING

Figure 3: Adapted by Isabelle Taylor (2021)

Netflix's standing in relation to social and personalised service features.

According to analyses, Netflix is a more social app with more
individualised content depending on users' viewing lists and interests.
Netflix's algorithms present new shows and make recommendations
based on past viewing and search activity of its users.

17
7 NETFLIX MARKET STRATEGY RECOMMENDATION

7.1 Blue Ocean Strategy

Despite Netflix's approach to entering the on-demand streaming of films

and TV shows is a prime example of the Blue Ocean Strategy. The
company is presently operating in the Red Ocean and requires immediate
assistance to obtain an edge over their rivals. To create blue oceans,
Netflix can choose to pursue differentiation, innovation, low cost, which is
why I recommend the Blue Ocean Strategy (Agnihotri, 2016). The pursuit
of differentiation and low cost in combination to carve out new market
space and generate demand is known as the "blue ocean" strategy.

OPTIONAL ADDs

it would be preferable if the advertisements were optional for subscribers,

Netflix is presumably considering allowing them to increase revenue
potential. While non-ad streamers can keep paying the full subscription
fee, they ought to offer an additional discount to those who don't mind
seeing ads. Netflix and its users will benefit from this in equal measure.

LOWER COST or PRICES

Netflix ought to provide a discount for quarterly payments or reduce the

cost of the subscription because Costs associated with Netflix
memberships has increased for subscribers. According to (Forbes, 2022)
The Netflix basic plan increased from $8.99 to $9.99 per month in January
2022; the standard plan was going to increase by $1.50 to $15.49 per
month, and the premium plan was going to increase by $2 to $19.99 per
month. In comparison to other competitors, this is pricey, and to top it off,
the cost is only for entertainment, most likely many subscribers will cancel
their subscriptions.

7.2 MARKETING, PLANNING AND STRATEGY

 STRATEGY

18
Products substitution like "sports" could be added to achieve market
leadership like other Streaming platforms e.g. Paramount +, Sky Tv. Also,
Substitute threat by forming partnerships and strategic alliances with
telecom providers and bind them to exclusive contracts in advance of
Apple and YouTube's will be good recommendation for Netflix

 TACTICS

Netflix should actively promote the installation of the Netflix app on iOS
platforms. Use social media to promote their product offerings, and use a
well-planned, large-scale media campaign to supplement their efforts to
raise brand awareness. Creating more original "content people love" and
sell new releases to publishers (BBC iPlayer, ITV Hub, & My5) to create
new revenue streams that will offset the money that competitors pay for
TV licences, or the money made from ad-supported content.

CONCLUSION

As a result, information regarding its profitable African expansion into 54

countries is either non-existent or very limited. As a result, additional
study and careful observation are required to comprehend strategies and
business cases in the African market. The key takeaway is to use non-
traditional techniques to draw in new users while segmenting, targeting,
and aligning the user experience through content. The demand for
products has grown because of investments in original content or the
creation of regionally and linguistically focused content.

19
 REFERENCES

Adetokunbo, B. (2020) ‘The Stratec Analysis of Netflix’ Research Gate, pp. 12,13,15,16

Agnihotri, A. (2016). Extending boundaries of Blue Ocean Strategy. Havard Business Publishing

Anna, G. (2021) Complete Analysis of Netflix, inc. Honors Thesis. University of Mississippi.

Annisa, A. and Hidayat, Z. (2021) ‘Netflix in Indonesia: Influential Factors on Customers Engagement
among Millennials Subscribers’. Academia, 19(1): p.90

Amstrong, G. and Philip, K. (2000) Marketing, Fifth, Prentice Hall, p. 488

Chenyiny, Y. (2023) ‘A Case Study of Netflix Marketing Strategy’. Business & Management 44 (42):
pp. 187-188

Debra, L. and Gordon, B (2020) ‘Netflix’. In: Merskin and Schmidt. (eds). The Sage International
Encyclopaedia of Mass Media and Society. Thousand Oaks: P 2

Deloitte, T. (2017). Pay-tv for Pocket money, the Deloitte United Kingdom. Available at
<https://www.2.deloitte.com/uk/en/pages.technology-media-and-telecommunication/articles/pay-
tv-for-pocket-money-the-proliferation-of-customers.html> [Accessed 13 December 2017]

Haley, R. (1968) ‘Benefit Segmentation: A Decision-Oriented Tool’ Journal of Marketing, vol.32, pp.30

Isabelle and Corey, S. (2015). Netflix International Business Strategy Plan. Available at
https://slideshare.net/Isabellesmith2/netflix-internation-business-strategy-plan. Accessed at [April
27, 2015]

Jessica. F et al (2020) Netflix global pricing strategy 2022. S & P Capatall Q pro, Kagan. S & P Global
Market Intelligence.

Mohamed, K. (2019) Swot Analysis-Netflix. BMKT510. Rafik Hariri University.

20
Ramakrishnan, V. (2019). How Netflix’s social media strategy dominants the online streaming
industry. Available at https://blog.unmetric.com/netflix-social-media-strategy. [Assessed at Nov
2019]

Start.io (2020) Netflix Target Market & Consumer Segmentation- The Complete Brand Analysis 2022.
Available at https://www.start.io/blog/netflix-target-market-consumers-segmentation-the-
complete-brand-analysis/ [Accessed: June 6, 2020]

Tajudeen, O. (2017) ‘Marketing, Strategy, Planning. SCRIBD, pp: 26,27,32

Taylor, I. (2014) A diligent and precise business assessment of Netflix. Available at: https://assign-
menthelp4me.com/strategic-analysis/netflix.html [Assessed: 26 March 2021]

21