Marketing mix of Netflix
This is a detailed analysis of the marketing mix of Netflix. It explores the 7Ps (Product, Price, Place, Promotion, Process, People, and Physical Evidence) of Netflix and explains the company’s business & marketing strategies. Netflix, Inc. is the world’s leading provider of the Internet entertainment, headquartered in California, the USA.
Products of Netflix
Netflix offers its customers an extensive list of programmes e.g. features films, TV shows, documentaries, Netflix originals and many more. It has three major categories of contents i.e. licensed non-first-window content, licensed original first-window content, and owned original first-window content (Netflix, 2019). There are three plans available for anyone wishing to take Netflix membership i.e. basic plan, standard plan, and premium plan.
Netflix adds new TV programmes and movies every week to meet the growing demands of the subscribers. Many people perhaps do not know that Netflix was a simple DVD-by-mail rental service before it transformed itself as the most powerful online content provider in the world. DVD rental service is still available and is expected to continue as long as it makes some profits for Netflix.
Price and pricing strategies of Netflix
Netflix subscribers can watch TV shows, movies, and other services without having to download them as long as they have an Internet connection. And this comes up with a price! Customers pay a monthly subscription and plans start from £5.99 a month in the UK with no extra costs or contracts. Netflix has two other plans i.e. £8.99 per month and £11.99 a month and offers subscribers one month free trial as well. In January 2019, it increased the cost of its standard plan in the USA from $10.99 to $12.99 a month (BBC, 2019).
Some analysts argue that Netflix has a value-based pricing strategy. Others argue that it pursues a competitor pricing strategy. However, it is worth mentioning that Netflix is not the cheapest one out there. For instance, in the USA, Amazon Prime Video costs $8.99 a month, and Hulu costs $5.99 a month. As mentioned above, the cost of Netflix standard plan in the USA has gone up from $10.99 to $12.99 a month.
Place/distribution channels of Netflix
Netflix is available virtually anywhere and anytime as it is an online streaming business. It is available in over 190 countries and as of June 2019, only a few countries and territories such as Crimea, North Korea, and Syria where the service is not available due to U.S. government restrictions on American companies (Netflix, 2019). People can watch Netflix on their smartphones, laptops, tablets, smart TVs, streaming devices, and game consoles.
Promotional strategies of Netflix
Netflix has adopted a number of promotional strategies to attract and retain its subscribers. For instance, it spent over $1.8 billion on advertising in 2018. Likewise, it spent 1.09 billion in 2017 and $842 million in 2016. This makes Netflix one of the biggest advertising buyers in the entertainment industry in the world (Weprin, 2019).
It is not surprising that Netflix uses almost all media channels to take its message to its target audience. Celebrity endorsement, advertising on billboards and print media, word of mouth, and extensive use of social networking sites are some of the ways Netflix promotes itself. Netflix’s first month free trial policy is also a promotional activity to persuade potential customers to subscribe and use its services.
People of Netflix
Netflix has grown in both size and scope over the years to become the major player in the entertainment industry in the world. As of May 2019, it employs approximately 7,100 full-time workers (Watson, 2019). It focuses on hiring talented people with diverse backgrounds, cultures, and perspectives. As long as the membership is concerned, Netflix has 148 million subscribers globally as of January 2019.
Process in Netflix
Process refers to a set of activities that need to be carried out in order to achieve a particular result. Different business functions may have different processes. For instance, signing up with Netflix is a straight forward process. Netflix is free for 30 days for new members. If new members enjoy the service and would like to continue, they need to do nothing as their membership will automatically continue. However, membership can be cancelled online anytime.
Physical evidence of Netflix
Physical evidence is the last element to address in the Marketing mix of Netflix. As Netflix is a streaming service, its website and app are its primary physical evidence. Its offices and data centres are also part of the physical evidence. No doubt that Netflix has a very user friendly website and a mobile app. It also has offices and data centres in many countries e.g. the USA, the Netherlands, Brazil, India, Japan, and South Korea.
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Last update: 25 June 2019
BBC (2019) Netflix raises prices for US customers, available at https://www.bbc.co.uk/news/business-46881977 (accessed 20 June 2019)
Fiegerman, S. (2019) Netflix adds 9 million paying subscribers, but stock falls, available at: https://edition.cnn.com/2019/01/17/media/netflix-earnings-q4/index.html (accessed 24 June 2019)
Netflix (2019) Netflix Corporate Information, available at: https://help.netflix.com/en/node/2101 (accessed 20 June 2019)
Watson, A. (2019) Number of Netflix employees from 2015 to 2018, by type, available at: https://www.statista.com/statistics/587671/netflix-employees/ (accessed 24 June 2019)
Weprin, A. (2019) Netflix Spent $1.8B On Advertising In 2018, available; https://www.mediapost.com/publications/article/331426/netflix-spent-18b-on-advertising-in-2018.html (accessed 22 June 2019)
Photo credit: Pixabay
Author: Joe David
Joe David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.