Netflix Inc: an Important Concept in Marketing
An important concept in marketing is the four P’s, product, place, price, and promotion. Product is the first P of the four P’s in marketing. You have to have a product before you can continue with the next steps. The product is important because you need to create something that satisfies people’s needs. Netflix is an over the top media services provider. Its primary business is its subscription based streaming service which offers online streaming of movies and television programs which also includes original content produced by the company. Netflix also offers subscriptions for DVD and Blu-ray rental by mail which can be combined with the streaming subscription or offered as a separate subscription. Netflix’s initial business model included DVD sales. Within a year of launching, they dropped DVD sales to focus on the DVD rental business. Netflix is a well-rounded product that satisfies many people’s needs as well as wants.
Price is the second P. This is a very important part of marketing your product. You have to decide how much to price your product at that people will be willing to pay. The reason this is so important is because you could have a great product but if it is priced too high, not as many people will use it. If it is priced too low, you will most likely have a hard time raising the price when you get a customer base. Currently Netflix has a couple of different pricing tiers. You can pay more for more screens that can be used at once on an account to watch something. Or you can pay the minimum amount and just receive the basic options. Of course with the tier, the more you pay per month, the more benefits that come with it. Netflix has three different plans when it comes to streaming: Basic, Standard, and Premium. The Basic plan starts at $7.99/month, the Standard plan for $10.99/month, and the Premium plan for $13.99/month. They also offer three types of plans for either Standard DVDs or HD Blu-ray rentals. The Starter, Standard, and Premier plans. Each plan determines the total number of discs per month and total number of discs out at once. Plans also differentiate in price depending on DVD rentals vs. Blu-ray rentals.
The third P is place. All products success is determined by a bunch of little factors but a big factor is whether or not you have a good enough product at this point in time to survive in the market. It is truly critical to evaluate different locations, how big you plan on growing, and the clients you plan on working with. Netflix was founded in 1997, in Scotts Valley, California. Their place is on the internet. Netflix is one of the world’s leading Internet television networks reaching over 137 million members worldwide.
The final P of marketing is promotion. Promotion is the process of getting the product information to consumers by showing how it differentiates from similar services. Promotion includes any and every way to reach a targeted audience such as advertising through social media, press, TV, radio, billboards, etc. Instead of spending advertising money on paid media such as those examples, Netflix chooses to boost awareness by posting through social media sites such as Instagram and Twitter. Netflix uses digital and email marketing to promote their original content. Once the audience is drawn in, they need to be attracted to subscribe as Netflix users and after that is completed the website does the rest. Netflix also offers a one month free trial to new users which helps draw the targeted audience in and allows the website to “do the rest”.