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VIET NAM NATIONAL UNIVERSITY HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND LAW MARKETING PRINCIPLES Report: Analysis of Netflix's marketing strategy Lecturer: Mr Phùng Thanh Bình Course code: 222FB9108 GROUP NAME: NHÓM 06 MEMBER’S NAME: 1 Truong Cong Minh Khang (K214132027) 2 Tran Thi Phuong Lan (K214132031) 3 Nguyen Thi Hong Loan (K214132032) 4 Tran Thi Thao Tien (K214132047) 5 Nguyen Thanh Tan Tue (K214132051) HO CHI MINH CITY – 2023 Table of Contents I OVERVIEW 3 1 Overview of Netflix 3 2 Goal, Vision and Mission .5 3 Business model Canvas 8 4 Overview of Netflix website and app 8 II ANALYSIS OF ENTERPRISE .10 1 Netflix's market analysis 10 1.1 Market Segmentation of Netflix .10 1.2 Targeting of Netflix 16 1.3 Positioning of Netflix .18 2 SWOT model analysis 19 2.1 Strengths 19 2.2 Weakness 20 2.3 Opportunities 21 2.4 Threats .21 3 Competitor analysis 22 3.1 Amazon 23 3.2 Hulu 24 3.3 Disney + 25 III MARKETING STRATEGY ANALYSIS 27 1 Netflix's Marketing Strategy on Product 27 2 Netflix's Marketing Strategy on Price 31 3 Netflix's Marketing Strategy on Place 34 4 Netflix's Marketing Strategy on Promotion .35 IV NETFLIX ISSUES 37 1 Quality issues 37 2 Issues with customer experience 39 2.1 Lack of local television programs 39 2.2 Dependence on internet connectivity .40 2.3 No support for Vietnamese subtitles or dubbing .40 2.4 Payment methods are still quite "Western" .40 V CONCLUSION 41 VI REFERENCE 42 1 Preface This is the result of my group's self-research and not plagiarized from any source Team leader TRAN THI PHUONG LAN 2 I OVERVIEW 1 Overview of Netflix Brief Introduction Netflix is an American entertainment company founded by Reed Hastings and Marc Randolph in 1997 in Scotts Valley, California The main purpose of Netflix is to provide online streaming media (streaming refers to compressed data being continuously transmitted, allowing web users to watch immediately without waiting for files to download), video-on-demand, and DVD rental through mail In 2013, Netflix expanded into producing, programming, and distributing online As of 2017, Netflix's headquarters are located in Los Gatos, California, USA Netflix's initial business model included selling and renting DVDs, although Hastings stopped DVD sales about a year after realizing that Netflix would focus on DVD rental through email In 2007, Netflix expanded its business by introducing online streaming media, while retaining its DVD and Blu-ray rental services In 2008, the company expanded globally, marking the provision of streaming services in Canada As of January 2016, Netflix's services operate in more than 190 countries worldwide The history of formation and development Netflix was founded on August 29, 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings The idea came to Hastings after he had to pay a large fee to rent a movie He wanted to provide a rental service that was not only low-cost, but also easy to access Randolph suggested applying the internet to Hastings' idea They agreed to rent DVDs over the internet, and send the discs through the mail or email They started a business with that idea, along with 30 employees, and gradually forced the modern entertainment industry to adapt to the new model Netflix was first introduced on April 14, 1998 with just 925 DVDs available through a pure rental model: rent first - pay later, with fees similar to their competitor BlockBuster Just one year later, in September 1999, Netflix 3 launched a monthly subscription service and at the beginning of 2000, Hastings decided to cut the single rental model Since then, Netflix has gained a reputation for its business model that not only offers unlimited access but also free shipping, rental for each individual viewing In 2000, Reed Hastings proposed selling Netflix to Blockbuster for $50 million, but the offer was rejected by John Antioco, the then-CEO of Blockbuster On May 29, 2002, Netflix went public, selling 5.5 million common shares at a price of $15 per share On June 14, 2002, the company sold an additional 825,000 common shares at the same price After several years of losses, Netflix announced its first profit in 2003, earning $6.5 million in net income on $272 million in total revenue By 2005, Netflix had a library of 35,000 different films and was shipping millions of DVDs each day Netflix developed and maintained a personalized video recommendation system based on customer ratings and reviews On October 1, 2006, Netflix awarded a $1 million prize to the first developer of a video recommendation algorithm, beating out the Cinematch algorithm at the time By February 2007, Netflix had shipped billions of DVD discs, and from here, the company began to shift away from its core DVD disc business model to introduce on-demand video streaming over the internet However, in 2011, Netflix faced a serious crisis Prior to that, over a span of 4 years, internal disagreements between Hastings and many senior leaders within the company led to Netflix losing a series of dedicated and talented personnel, who were the "cong than" who contributed to building the Netflix empire from the beginning The company's stock price fell by 77%, and they lost 800,000 subscribers Things started looking up when Netflix decided to expand its investment into the production of exclusive TV shows and movies In 2013, the 13-episode TV series "House of Cards" produced by Netflix was nominated for 9 Emmy Awards and won 3 Moreover, it is the highest-rated TV show in the United States up to this point All 13 episodes were released at the same time, and viewers were not interrupted by any advertisements In Netflix's January 2013 report, an additional two million U.S customers had signed up for Netflix in Q4 of 2012, bringing the total number of users to 27.1 million globally out of 29.4 million customers 4 Additionally, revenue increased 8% to $945 million during the same period That number increased to 36.3 million subscribers (29.2 million in the U.S.) in April 2013 As of September 2013, Netflix reported in its Q3 report that the total number of global subscribers had reached 40.4 million (31.2 million in the U.S.) By September 2014, Netflix had subscribers using their service in over 40 countries and was planning to expand to countries worldwide At the 2016 Consumer Electronics Show, Netflix announced that it was expanding its service to 150 more countries Netflix stated that with this expansion, the company would operate in most countries in an official and legal manner Also in January 2016, Netflix announced that it would begin blocking virtual private networks (VPNs), which are networks used to connect computers with each other via a public Internet network Computers that participate in a virtual private network will "see each other" as if they were on an internal network Netflix reported having 74.8 million subscribers and predicted that this number would increase by 6.1 million by March 2016 By the end of 2016, Netflix had added a new feature allowing customers to download and stream selected movies and TV shows even when offline In February 2017, Netflix signed a music publishing contract with BMG Rights Management, where BMG would oversee Netflix's audio copyright issues outside the US On April 17, 2017, the number of Netflix subscribers reached nearly 100 million On April 25, 2017, Netflix announced that it had reached a licensing agreement in China with Baidu's online service iQiyi, allowing for the distribution of Netflix's original content on the platform On August 7, 2017, Netflix announced on its website that it had acquired the publishing company of comic book author Mark Millar According to The New York Times, Netflix announced that they had signed an exclusive development deal with Shonda Rhimes in mid-August 2017 2 Goal, Vision and Mission Goal Netflix's main goal through its marketing campaigns is to increase sales revenue However, increasing sales revenue is not just about selling more Netflix needs to attract new users by introducing new features, exclusive movies 5 Document continues below Discover more fHràonmh: vi khách hàng HVKH19 Trường Đại học… 43 documents Go to course [HVKH] NỘI DUNG THUYẾT Trình 45 100% (1) Tiểu luận mẫu - HJBKNKMKHB 8 None Key 10-11glish grade 9 100% (2) 22 Giao dịch thương… [MOC Huong TEA CO., LTD]… 100% (1) 2 Giao dịch thương… 3.2 2019 0823 Fiin Group Vietnam Col… 14 Giao dịch 100% (1) thương… Trading HUB 3 and TV programs, and pricing that is appropriate for customers At the same Xác suất time, the company also needs to enhance interaction 3w6ith current customers 9b6y% (28) thống kê meeting and providing for their entertainment needs To increase brand awareness, Netflix needs to focus on building a reliable and reputable brand, while conveying the company's values and vision Creating a strong brand will help Netflix attract potential customers and retain current customers Driving user engagement through marketing campaigns, the company can use marketing campaigns to encourage users to sign up, download the app, and order movies, TV shows, and other online content Additionally, Netflix can also use marketing campaigns to increase reach and strengthen sharing Netflix can introduce new, prominent content to attract the attention of audiences and encourage them to share their experiences with others This will help the company increase access to new customers, while enhancing the contribution and interaction of the user community with Netflix's content Creating motivation for users to try new products, one of Netflix's advantages is the ability to release new and exclusive movies, TV shows, and online content However, introducing these new products is sometimes not enough to attract new customers Netflix can use marketing campaigns to create excitement and passion for customers to try the company's new products Vision “Becoming the best global entertainment distribution service Licensing entertainment content around the world, creating markets that are accessible to filmmakers and helping content creators around the world to find a global audience.” The vision statement is all about what the company wants to achieve It stresses the desire to set a quality bar in the provision of on-demand video services The approaches adopted by Netflix in its operations confirms that the company is not looking to settle being a conventional entity In fact, it has already set itself a growth pace higher above the normal To stay abreast of this scale, Netflix remains vibrant adopting the latest user-friendly features that give its customers the best experiences with the content they love These are not limited to entertainment, as it also ensures investors are comprehensively covered through its investor tailored and transparent corporate governance 6 approaches In this way, Netflix has elevated itself as a company for the rest to emulate Through its integrated and customer-oriented approaches, Netflix has positioned itself as a global establishment as a way of fulfilling this component in its vision statement The major aspect that draws attention to this feat is the strategic incorporation of inclusion and diversity in its operations The understanding of the varied member base the company serves is a strength Netflix exploits in ensuring that the content it produces accommodates all the cultural backgrounds innovatively Mission “We promise our customers stellar service, our suppliers a valuable partner, our investors the prospects of sustained profitable growth, and our employees the allure of huge impact.” The statement resounds what the company is best known for providing outstanding and unparalleled video entertainment services It also shows how the company balances the satisfaction of its customers with the financial needs of its other stakeholders An analysis of this mission statement: Improving lives: The commitment towards having an impact on societies over and above entertaining them is a factor that Netflix holds with high regard The company links its operations to programs that ensure it satisfies its corporate social responsibilities by contributing to the overall improvement of people, environment, and economies For instance, Netflix has been recognized for stimulating a sustainable model adopted by other companies across the globe with worthwhile impacts on communities and the environment Exceeding expectations: It is true Netflix does not take its customers for granted The stability and reliability that characterize its platform, together with the accompanying services proves beyond doubt that Netflix is a distinguished company What’s more is that, in comparison to the subscription charges, the services it offers its customers are definitely a ‘bumper-like harvest’ for the clients And, there is no compromise on quality either Delivering excitement and entertainment: Netflix acknowledges the ever- changing dynamics of entertainment in the contemporary era, especially with a shift away from linear TV To fill this gap, the company brings its customers 7 and investors a dynamic system that meets all their entertainment needs For instance, Netflix brings a variety of entertainment options including internet entertainment apps and other online systems Through these channels, the company feeds its customers with limitless content to keep them excited and enjoying every moment 3 Business model Canvas 4 Overview of Netflix website and app Netflix on the Web Netflix's web interface adopts a dark background with white text and prominently features large media thumbnails, providing an elegant and easily navigable user experience The top menu sections include Home, TV Shows, Movies, Recently Added, and My List, while the upper right-hand corner offers search functionality, profile management, account settings, and access to Netflix's help center The account settings menu encompasses a range of 8