Netflix Marketing Essay Example

could be effectively targeted and was expanding alongside technological advancements. The product offering was positioned to present various benefits to buyers, all of which contributed to the development of Netflix's brand. Product positioning primarily centered around unlimited rentals, no late fees, free delivery and return services, an extensive inventory, efficient selection process, and personalized service. These distinctive features were integrated into Netflix's marketing mix in order to establish a unique impression in the minds of consumers.

The innovative approach of the company to the movie rental business was based on a tailored product offering, pricing plan, distribution method, and promotional techniques. These elements formed Netflix's marketing mix, giving the company an edge over competitors by setting it apart. Additionally, Netflix utilized its marketing strategy to establish a strong brand that would not be threatened by rival industry players.

Regarding the product, the Netflix service comprised a four-step procedure. Initially, customers utilized the company's website to select the movies they desired to watch. Afterwards, Netflix delivered the DVDs to customers via traditional mail, usually within just one day. Subsequently, subscribers could conveniently view the movies at their leisure without concerns about late fees.

Finally, the DVD is mailed back in a prepaid envelope. Furthermore, Netflix provided a wide range of independent films and titles not typically available in brick-and-mortar stores. Collaborations with movie studios allowed customers to have early access to new releases, thus enhancing the Netflix experience. Netflix's revenue model based on subscription fees revolutionized the pricing strategy in the movie rental industry. By eliminating due dates, late fees, and shipping charges, and instead offering unlimited monthly rentals, customers enjoyed increased flexibility. The company also offers pricing

options that can be customized based on the number of movies the member wishes to receive.

Netflix significantly reduced the opportunity cost of timely returns by creating a centralized online store and maximizing inventory through regional distribution centers. Instead of multiple local chain stores, Netflix operated from a single virtual store that provided customers with new rental options. The web services platform offered customization and a user-friendly design to make movie rentals easier. By using a proprietary application called "CineMatch," the virtual store was personalized for each subscriber, providing customized rental suggestions and optimizing inventory availability.

"CineMatch" revolutionized the movie recommendation system by incorporating a subscriber rating system based on past rentals. This feature allowed for more efficient and personalized future recommendations. Additionally, the web-based services of Netflix improved selection by providing an easy browsing experience through their extensive catalog. Customers could also create a personalized "Queue" where they could add movies they wanted to receive. This eliminated the need to navigate through traditional genre and alphabetical catalogs. Furthermore, Netflix introduced the "Community" feature, which allowed members to share ratings, reviews, and movie selections with each other. In terms of promotion, Netflix utilized various marketing strategies such as advertisements, sales promotions, marketing alliances, direct marketing, and public relations. These strategies extended beyond traditional media platforms like television and included innovative forms of internet advertising. Affiliate networks were used to direct customers to the official website ("www.").

Netflix.com allowed customers to easily access their website by clicking a web link. Netflix paid affiliates for each click and used this method to track profitable internet partnerships, gaining valuable market information about consumers. Popular web portals like Yahoo, Google, and AOL

provided easy access to Netflix through banner ads. In an interview with Netflix's Chief Marketing Officer, Kris Oser reports that Ms.

Kilgore claims that Netflix aimed to have a widespread online presence, covering the entire Web with banner ads. A significant factor in the company's ability to gain new customers was the use of sales promotions. Netflix collaborated with electronic manufacturers like Apple, Toshiba, and HP to promote DVD players or computers with DVD-ROM capabilities. According to a press release from the company, individuals who purchased an Apple Powerbook with a DVD-Video PC card could now access the extensive collection of DVDs offered by Netflix, either for rent or purchase at NetFlix.com.

"This specific promotion provided customers with two free movie rentals when they purchased an Apple computer. The most effective sales promotion strategy was offering potential customers free trials, which allowed them to experience the movie rental service before committing to a year-long subscription. This approach proved successful in winning over skeptical buyers. Netflix formed marketing alliances with retailers such as Amazon.com, Best Buy, and Circuit City to leverage cross-selling opportunities and increase publicity. A press release was issued to describe the partnership with Amazon."

Netflix.com and Best Buy have formed an alliance to introduce millions of Amazon.com customers to Netflix's DVD rental service. Netflix.com expressed its excitement in offering exclusive special offers and promotions to Amazon.com customers.

Consumers were advised to use Netflix for rental services and Best Buy for DVD purchases. Internet technology provided new avenues for direct and personalized consumer interaction. Customer Relationship Management (CRM) systems and databases enabled Netflix to utilize innovative marketing techniques. Customized direct email campaigns were used to enhance consumer trust.

The company was able to manage information and generate business intelligence through CRM and databases. This technology helped Netflix maintain its existing customer base and effectively target new clients. Additionally, web applications like blogs allowed for direct interaction with consumer opinions.

Works Cited

1. Nicholas Thompson, Netflix's Patent May Reshape DVD-Rental Market, The New York Times, June 26, 2003, at Section C, pg 4.
2. Blockbuster and Netflix settle online DVD rental patent suit, The Toronto Star, June 28, 2007, at B07.
3. “Best Buy and Netflix Offer Co-Branded Online DVD Movie Rental Service; Cross- Channel, Joint-Marketing Alliance Makes Purchasing and Renting DVDs Easier than Ever.
4. ” Business Wire. Septmber 2001. Wal-Mart Follows The Netflix Model. ” Newsbytes. June 15, 2003. ;www.netflix.com; Kris Oser; Netflix; Leslie Kilgore;
5. Advertising Age; November 1, 2004.

"NetFlix.com to Provide Free DVD Rentals When Purchasing Apple Powerbooks With DVD-Video PC Cards." Business Wire. July 9, 1998.

"NetFlix.com Introduces Three Promotions to Accommodate Anticipated Increase in Online Shopping During the Holidays."

"Business Wire. November 11, 1998.

"Business Wire. December 1998."