Netflix Inc Case Study

Netflix Inc.

Chris Kluka

Ashlee Knouse

Dean Salmon

Caroline Spignesi

Jackie Williams

Marketing 340.02

Prof. C. Haririan

Business Maniacs

Report 2

Report 2: Promotional Program Situation Analysis

I.  Buyer Analysis/User Profile (Chapter 4)

A.    Provide a description of the consumer.

a.     What are the demographic, geographic, psychographic, and/or behavioral factors that describe your target consumer?

When purchasing Netflix the main demographics would be anyone over the age of 18 years old that has a credit card to be able to purchase the monthly membership. The use of Netflix isn’t just contained to the United States it has branched out to countries worldwide (Netflix Promotional Campaign). The psychographics of Netflix would be broken down into opinions, attitudes, interests, lifestyles and values. Behavior factors would include people who enjoy spending leisurely time watching their favorite television programs (Netflix marketing plan).

b.     Who buys the product or service?

        People who buy this product are specifically anyone that would be able to purchase the monthly membership. These future and current customers are interested in keeping up with their favorite shows (Netflix Promotional Campaign).

c.     Who is the decider?

        Anyone who would like this product and service and has the income to purchase.

d.     Who is the influencer?

        Depending on if they have a family the children could be the influencers in convincing their parents to buy it. This situation is present for younger individuals who live at home. Then there are people of our generation who can purchase it during college years. Due to the large range of Netflix viewers many people can be reached with this spectrum. Netflix doesn’t break it down by age, they just have the available videos and television shows so that anyone of all ages can participate and have an account (Netflix marketing plan).

B.    What is the decision process for the product/service including the important factors influencing brand selection?

a.     What are the important decision criteria?

Netflix decision criteria can be broken down into strategic, tactical, and operational. We all recognize that some decisions are more important than others (Decision Making Techniques).These decisions either have an immediate impact or are more on the long term. To understand the decision to be made and how much time is spent on it is broken down into the following:

1. Strategic. 

Strategic decisions are the highest level. This decision is based off of long term ways, one’s personal values, and shows concern in a general direction. These decisions are the least structured and most imaginative (Decision Making Techniques). For Netflix, this would be the decision to purchase a monthly membership or yearly one. Where you like the product, you are in the general direction, and your values support and want to have a Netflix account to watch shows and movies.

2. Tactical. 

Tactical decisions support strategic decisions. These decisions are the medium range with average significance and consequences. If a person in the Strategic decision process decides to purchase then the tactical process will support that and would be what television shows specifically would you like to follow or what genre would be most important to you as a Netflix customer (Decision Making Techniques). This is where all of Netflix product lines come into play and gives each and every customer various options to pick from.

3. Operational. 

These are everyday decisions, used to support tactical decisions. These ideas are made with little thought and structured. These are also short term and or immediate. Operational decisions are preprogrammed or pre-made. They are in everyone’s heads as ideas. For Netflix they reach this decision process with all of their customers every day for when they log in and watch their show or season weekly. These decisions are when they for example finish their homework and decide to watch a movie. Netflix is a company that not only adds value and is a source of entertainment, but also allows people to incorporate their own account into their busy and or daily lives (Decision Making Techniques).

b.     Who is the influencer?

Since Netflix’s target market is so broad and offers such a large range of movies and TV series, the influencer could almost be anyone. Whether it is a single person, any age couple, or a family; the influencer can be someone of any age or gender.

c.     Is buying behavior characterized by extended or limited problem solving?

The buying behavior for a customer who has a Netflix account falls under extended problem solving. Netflix due to its customer’s high involvement with each of their accounts as well as has extensive searches and with their surveys and interaction a lot of information is processed daily. There are multiple outlets on the website and it is very desirable which makes for extended problem solving to take place.

d.     Is the product/brand a high-involvement or low-involvement purchase?

Purchasing Netflix is a low-involvement purchase. It is an inexpensive monthly subscription. The decision just needs to be made whether it is yearly or monthly subscription. Purchasing Netflix is made easy for the customers to do so Netflix can easily gain more and more future clients.

II. Review of Existing/Past Promotional Programs

A.    What is the current promotional situation:

a.     Current Promotional Mix

        Netflix uses many different ways to promote themselves. One way is through online promotions. This includes pop up ads, email ads, and having social media accounts (ex. Facebook, twitter, etc.). Netflix also has free trials, in which after the trial expires the consumer is automatically enrolled as a paying subscriber unless canceled (Netflix's View). Doing the free trials, 90% of subscribers continue using Netflix after their free trial expires. Another thing Netflix does, is that it has promotion insertions with leading electronics and video software dealers (Financial Web). More recently, Netflix has an app which allows customers to watch content on their smartphones or other electronic devices.