Natisha Patel Mr.

Wailes
11/02/15 MYP

Netflix - Marketing Mix

Action Plan

Date Tasks To Be Completed Resources Required Evaluation / Follow Up Action

28/01/15 - After receiving the task, - I will need to use the - I completed working on this,
the first thing I want to internet and my and chose three products that I
do is to start researching knowledge of existing researched from the internet,
on a few potential products or chose products that I had
products so that I can already known of. The
narrow it down to one products that I’m considering
product which went are Volkswagen Beetle,
through the most Nintendo Wii, and Netflix
changes which will
allow me to expand on
my essay.
29/01/15 - - For these days through - I will be using the - After the research, I’ve
01/02/15 the weekend, I want to internet to research over decided on choosing to talk
begin researching over the different products. about ‘product’ as I feel it
the products more underwent more drastic
thoroughly so I can changes to it’s original core
narrow it down to one product, which will allow me
product. to talk about more things
throughout my essay.
02/02/15 - The next step will be for - I will be using my - I have decided on my research
me to begin working on research that I carried question, which is “To what
my research question. out before to devise a extent did Netflix change their
research question. marketing mix to generate profit
from 1999 to 2010? “ making
sure to keep the year range not
too large.
03/02/15 - Once that has been - I will be using the - I started working on the
complete, I will being internet for this, as well product section today, and
working on gathering as possibly different finished all of it, collecting
information. Starting books or videos. information on the
today, I’ll start to work background of Netflix and
on researching on the 4 made sure to include as many
P’s, starting with dates as possible.
product.

04/02/15 - I’ll start to work on the - I will be using the - I started to gather some relevant
promotion section for internet for this, as well research links to give me
Netflix. as possibly different information on the strategies for
books or videos. promotion that Netflix used and
began to write that section.
05/02/15 - I’ll finish off my - I will be using the - I finished writing the promotion
research done for the internet for this, as well part of my report from the
promotion section of the as possibly different references collected yesterday,
report. books or videos. and found some videos that were
useful as well .
 Date Tasks To Be Completed Resources Required Evaluation / Follow Up Action
06/02/15 - - Over the weekend, I’ll - I will be using the - During the weekend, I was able
8/02/15 start to work on the internet for this, as well to complete the price section,
price section for Netflix, as possibly different making sure to find the dates in
and finish it. books or videos. which changes to the prices
where made.

9/02/15 - I’ll start to work on the - I will be using the - I started to work on the place
place section for internet for this, as well section, and also finished it. I
Netflix. as possibly different talked about the different
books or videos. platforms that Netflix is on, and
in which year it took place. Since
I finished this section quicker
than expected, I worked on
tomorrows task which was the
conclusion which I completed.
10/02/15 - Finish conclusion - link - I will be using the - Today, I had more time to
back to question internet to gather images focus on other aspects of my
- Since all the 4 P’s - Use my knowledge and task, as I completed my
would be complete by information in the report conclusion yesterday.
now, I’ll start to look up to build my conclusion - I was able to successfully
some images and data gather images to go along with
tables to add into my my report, gathering a total of
report. 5 images.
- Read over report, and - I also completed all of
do MLA referencing referencing if I hadn’t already,
and double checked that my
in-text referencing was
correct.

Research Question: To what extent did Netflix change their marketing mix to
generate profit from 1999 to 2010?

Introduction
Netflix is one of the worlds leading
television streaming networks,
allowing the viewing of television
shows and movies on a variety of
platforms (Netflix). It was founded by
Marc Randolph and Reed Hastings in
1997. This network allows for video
rentals as well as streaming of videos
online which has attracted more than
57.4 million subscribers worldwide as
a result of their collection of more
than 100,000 videos on their network
Daniels, Guy. "Netflix Reveals the Secrets of Its Big Data Analysis."
(“Netflix”, Wikipedia). Throughout all
these years, Netflix have introduced different ways of changing their marketing mix in order to
boost sales and generate profits, to their success. Over the years, Netflix have had competitors such
as HBO GO, Vudu and Hulu who have all failed to surpass the success of Netflix, and Netflix has
also perished some companies such as Blockbuster ("Top Three Netflix Competitors: Who's
Challenging the Industry Giant?"). Netflix profits have skyrocketed over the years and has
established itself as one of the best forms of television streaming.

Product
A product is something that is produced in order to satisfy customers (Kotler, Philip, and Gary
Armstrong, 51). Since 1999, when Netflix became more popular, they have established themselves
clearly, today, as a successful service through their creative selling proposition, and what they have
to offer as a business. They give customers the chance to access thousands of different movies and
television shows which are updated daily to meet the customers wants. In addition to online
streaming, Netflix also offers mail-in DVD which gave them a huge advantage to competitors
within the years 1999 to 2007 where they were hugely successful starting off with the creative idea
of mailing DVD’s to the homes of customers.

It is presented with three different subscriptions which are: online streaming only, DVD’s which
exclude online streaming, and the DVD in addition to the streaming which was introduced in 2012
("Netflix."). With it’s subscriptions, each come with different features, such as the different HD
quality levels, and how many screens you can watch the content on simultaneously (Netflix).
Netflix is both a tangible and intangible product; it is tangible because of the mail-in DVD’s which
you can physically see and touch, but Netflix is also an intangible service because of their online
streaming which cannot be made contact with. This product is accessible on Xbox, Playstation, and
Wii which is available to almost everyone. As well as that, it is also compatible with Apple products
which gives customers the benefit of using the service almost anywhere as long as they have
internet connection.

Promotion
Promotion is different forms
of communication to the
customers in order to increase
the awareness of the product
by persuading others to use
the product or service (Kotler,
Philip, and Gary Armstrong,
51). Promotion is one of the
strongest areas when it comes
to the marketing mix for
Netflix as they are constantly
promoting and advertising
their service in different ways.
Firstly, the main basis for "Your Images Have Never Looked Better." ImageShack. Web. 10 Feb. 2015.
their promotion is through
social media websites where it attracts teenagers, as well as a range of adults. However, mainly
during 2006, while maintaining advertising on media websites, they gradually switched more
towards personal marketing videos which allowed them to be creative in their promotion for the
service (“Netflix Commerical”). Nowadays, as they are already globally known, there is no need for
intense advertising, so instead, they are now sticking to pop-up ads, banners and other static ads on
websites. Over these past few years, in their marketing videos, to further promote their product,
they featured high ranked celebrities to star in the videos to boost sales and profits. Overall with
promotion online, to attract the customers, it was noticeable how they would constantly make
reference to their free trial for a month to lure customers to try their service.

During different types of the year, Netflix would create different advertisements to correspond with
different seasons or events which helped to increase their sales and audience during those most
popular times of years. For example in 2013, Netflix created a winter advertisement to promote
their service and which showed how Netflix had a range of genres for family shows for the holidays
(“Netflix - Holiday Tree Topper - Full Version (HD)”).

Since they started this service, they’ve

promoted their product since the beginning
upon joining as they give you the first month
free in the means of promoting the product as
the customer can decide whether or not they’d
like to continue with the subscription. If the
customer decides that they like the product,
they could choose from three subscriptions
offered, which leads into the price of the
marketing mix.

In 2001, Netflix made a brief partnership with

Best Buy in which they promoted their new
streaming on new Insignia TV models which
were sold through Best Buy, which allowed
Netflix to promote their product through
Goodwin, Hannah, and John Vanderhoef. "Policy and Politics
almost 1,800 Best Buy stores ("Best Buy and
Dictate the Growth of the European SVOD Market." Carsey-Wolf Netflix Announce Partnership..."). As Netflix
Center. Web. 10 Feb. 2015.
became more widely popular and as they
started to introduce their online platform, they promoted it by partnering up with Xbox, PlayStation,
and a variety of Apple products as well as Nintendo Wii within the years 2009-2010, and as they
slowly switched more from a rental service, to an online streaming service, although rentals were
still available ("Netflix."). Another way they are able to promote their service are through different
popular events such as Sundance, Emmy and Golden Globe awards ("How Netflix Is Winning at
Content Marketing.").

Price
A price is set on a product or service which customers will pay to purchase it (Kotler, Philip, and
Gary Armstrong, 51). Upon joining the Netflix subscription since 2010, the customer has the choice
of choosing one of three different subscription offers, the first offer being $7.99 per month, second
being $8.99 per month, and the last one being $11.99 per month. The cheaper ones are not open to
some of the other features that the higher priced subscriptions have, which is a strategy that Netflix
used to generate more profits, by luring customers to join higher paid subscriptions by offering
different appealing features ("Choose the Plan That's Right for You."). Netflix underwent a few
price changes, for example in 2007 which is when they introduced their online streaming, where
customers would have to pay $10 a month for that service. However, in 2011, struggles to maintain
the transition of customers going from DVD rentals to online streaming caused Netflix to raise their
prices by almost 60%, so that customers were spending $16 per month for a DVD, as well as online
streaming, as a result of splitting the two services. After 2011, the prices dropped down as the
founder of Netflix decided to merge the two services once again, reducing their prices down to
$7.99 ("5 Business Lessons From the Netflix Pricing Debacle.").

A pricing strategy that Netflix uses is called value-based pricing. Value-based pricing is different
from cost plus pricing which prices the products based off of production costs. Value-based pricing
focuses on the value of the product, and the features that it poses which is what Netflix uses. The
subscriptions mentioned before are an example of value-based pricing as each subscription have
different appealing features, for a higher price ("Value-Based Pricing Definition."). As a result of
this pricing strategy, Netflix has an advantage over competitors who charge per show/movie as
opposed to having subscriptions.

Product Placement
Product placement is where the product or service will be available in order for customers to
purchase it (Kotler, Philip, and Gary Armstrong, 51). In terms of mail-in DVD that Netflix has
where the DVD is mailed directly to your home, it is through a direct distribution channel, which
means that the product goes directly from the producer, Netflix, to the customer. With their online
streaming system, that service is a multichannel distribution which is when a business has more
than two channels to reach out to customers ("Multi-Channel/Hybrid Distribution Systems."). In
this case, Netflix has a multichannel distribution as this service became available on multiple
platforms like Playstation in 2008, Xbox in 2009, and Nintendo Wii in 2010, in which Netflix is
distributed by those firms. Netflix is also a hybrid channel which is when the product or service is
not directly distributed from, in this case, Netflix. It comes from the production companies, as
Netflix needs to get permission from those companies to use their films, and then it is distributed to
the consumers ("Distribution Systems: Multi-Channel (Hybrid)."). As well as those platforms,
Netflix was also made available in 2010 for download on various Apple products such as the
MacBook’s, iPhone’s, and iPad’s ("Netflix."). The placement of this service was very important to
Netflix when increasing their sales as the platforms it is distributed on allowed their product to
reach out to different target audiences to appeal those to join Netflix. From 1997 to 2011, Netflix
was only available in America, until 2011 where it started to expand to multiple countries in most
continents, which resulted in an increased their market share greatly, which allowed them to
generate more profits ("Netflix.").

Conclusion
In conclusion, to answer my research question which is, “To what
extent did Netflix change their marketing mix to increase profits from
1999 to 2010?” Netflix used various forms of promotion such as
advertising on popular websites, or through partnerships which
allowed others to become more aware of the service, and to join it.
They used different pricing strategies such as value-based pricing to
lure customers in to join their service through added value and
features to each subscription package. They also made the product
accessible on multiple platforms and products to make it easier to use.
All of those main tactics are what allowed Netflix to increase sales,
and therefore profits, which has now made them the worlds leading R., Maxwell. "Netflix Posts a Profit,
television streaming network. Surprises Everyone." Phone Arena. 23
Jan. 2013. Web. 10 Feb. 2015.

Word Count: 1,500

Works Cited

"5 Business Lessons From the Netflix Pricing Debacle." Forbes. Forbes, 28 Dec. 2011. Web. 10
Feb. 2015.

"Best Buy and Netflix Announce Partnership..." PR Newswire. Web. 10 Feb. 2015.

"Choose the Plan That's Right for You." Netflix. Netflix, Inc. Web. 10 Feb. 2015.

"Distribution Systems: Multi-Channel (Hybrid)." KnowThis. Web. 10 Feb. 2015.

"How Netflix Is Winning at Content Marketing." Pace. Web. 10 Feb. 2015.

Kotler, Philip, and Gary Armstrong. Principles of Marketing. 5th ed. Englewood Cliffs, N.J.:
Prentice Hall, 1991. Print.

"Multi-Channel/Hybrid Distribution Systems." KnowledgeBrief. Web. 10 Feb. 2015.

“Netflix Commerical”. YouTube. N.p., 21 Jul. 2006. Web. 10 Feb 2015.

“Netflix - Holiday Tree Topper - Full Version (HD)”. YouTube. Netflix, 28 Nov. 2013. Web. 10 Feb
2015.

"Netflix." Netflix Media Center. Web. 10 Feb. 2015.

"Top Three Netflix Competitors: Who's Challenging the Industry Giant?" FierceOnlineVideo. 12
Nov. 2012. Web. 10 Feb. 2015.

"Value-Based Pricing Definition." Investopedia. 19 Nov. 2003. Web. 10 Feb. 2015.