Running head: Integrated Communication Plan and Measures Plan
Netflix: Integrated Communication Plan and Measure Plan
Marcus Celestin
MBA 525 – Applied Marketing
City University of Seattle
1
Running head: Integrated Communication Plan and Measures Plan
2
City University of Seattle MBA525
Instructor: Dr. Bari Courts
Student Name: Marcus Celestin
Date: February 17, 2019
Netflix Positioning and Strategies
Introduction
Netflix uses position and differentiation strategy to compete against Hulu, Amazon Prime
and countless other competitors in the market. Netflix product differentiation incorporates
attributes such as multi-channel digital content distribution, competitive pricing, and exclusive
content. They've been able to optimize the customer experience to separate it from the pack
further. This paper discusses the positioning and differentiation strategies of Netflix.
Integrated Communications and Measures Plan: Students will develop and identify:
• Push and Pull Strategies
• Messaging
• Communication Channels
• Costs
• Key Performance Indicators to assess success
• Projected revenue and rationale for that projection
Target Profile:
Running head: Integrated Communication Plan and Measures Plan
3
Netflix continues to grow at a rapid pace and dominate the paid online streaming
entertainment segment. According to Netflix Q4 results, paid membership rose 26% by adding a
record 8.8 million subscribers (1.5m in the U.S. and 7.3m internationally).
Key Netflix Statistics:

51% of US streaming subscriptions are to Netflix;

In the US, there is gender parity in the Netflix subscriber base;

Netflix demographics mirror the overall US population in terms of wealth, education, and
age;

Netflix currently supports 23 languages;

In 2017, Netflix subscribers streamed one billion hours of content per week (Iqbal, 2018).
Netflix target audience is male and female between 17-60 years old with a household
income of $30,000 and up. The domestic audience varies in races and ethnicity. The median age
of Netflix subscribers is between 35-44 bracket, shifting from 2015, the median bracket of 25-34.
Overall, the 2017 study shows that subscribers are beginning to fall with the proportion of the
general populace – reflective of Netflix successful market penetration (see Figure 1). The female
subscribers make up over 50% of Netflix viewers (see Figure 2). Further analysis of these
demographics concludes why some shows are more successful when catering to the female
market on Netflix.
Positioning Strategies
Netflix is a global subscriber video on demand service providing movies, television
series, and original content via the internet. The platform is accessible on TVs, mobile devices,
game consoles, and tablets for a low monthly payment without commitment. Members can binge
watch, anytime, anywhere, on any Internet-connected screen. All without commercials and you
Running head: Integrated Communication Plan and Measures Plan
4
even download content on mobile devices. In addition, the company offers DVDs and Blu-ray
titles to subscribers, apart from a separate library of movies. The domestic DVD segment derives
revenues from monthly subscription fees for services consisting of DVD by mail. However, even
as the service sheds members, Netflix has no motivation to phase out the DVD business
formally. After all, it still pumps out a profit — $62.7 million last quarter — which the company
can inject into its fast-growing streaming business ( (D'Onfro, 2018).
Netflix has a large audience both domestic and international, men and women, of all
ages, various ethnicity, and languages, Netflix has position itself to gather data and produce
content exclusive to its audience by segmenting its audience. Netflix has also expanded its
streaming content offering to include more exclusive and original programming, including
several Emmy, Golden Globe, and Academy Award-winning original series and documentaries.
Netflix is sharpening its focus on original content because it gives the company creative control
and savings on licensing other studios' content while allowing it to retain lifetime licensing
control over its own films (Rama-Poccia, 2018). Netflix investment in original content is to
generally replace its other content deals, justifying the move with subscriber growth, since
shifting away for exclusive licensing (Marketline, 2018). The increased content provides the
customer with a more extensive selection, thus a better experience.
Pricing Strategies
Netflix goal in terms of pricing is to increase perceived value and benefits of its
streaming platform to its subscribers. With a value-based approach, pricing power is an output
that you can measure based on how much value you deliver to customers relative to alternatives
on the market. Netflix’s most popular plan, which had cost $10.99 a month for two HD streams,
Running head: Integrated Communication Plan and Measures Plan
5
will now cost $12.99. The basic $7.99 non-HD plan will now be $8.99, while the premium plan
allowing four concurrent streams and access to 4K content, will increase $2 to $15.99 per month.
The product line pricing strategy creates various quality in the minds of subscribers. Subscribers
to streaming video services are sensitive to pricing – sensitive enough that Netflix's planned
price hikes could lead to some defections (Snider, 2019). However, having a choice makes the
customer feel in control. Also, Netflix has invested $12 billion in content in 2018 (Spangler,
2019). Drastically increasing content and providing consumer price plan choices, Netflix will
continue to fortify its value-based approach.
The market condition for subscription video-on-demand (SVOD) services is rapidly
increasing. In addition to Netflix, significant players include Amazon's Prime Video and Hulu as
well as live streaming services such as Sling TV and Direct-TV Now, which air dozens of cable
channels in real time. Amazon offers two versions of its Prime subscription, either $119 annually
or $13 per month. Both versions provide you with the same perks, including two-day shipping,
cloud storage, shareable account, and both on-demand video and music streaming. Ultra High
Definition and High Definition comes standard on all tiers, and at no extra cost. However, there
are movies and tv shows that require an additional cost. Hulu made it own pricing changes,
currently starting at just $6 for the ad-based service (down from $8) or $12 for the ad-free option.
Hulu also has a streaming live-TV package for $45 per month, which includes over 50 channels
on top of the on-demand library. In comparison to its peers, Netflix pricing is consistent with
industry standards. Spending approximately $12 billion on content last year (Spangler, 2019),
Netflix value driven will continue to pay dividends.
Product Strategies
Running head: Integrated Communication Plan and Measures Plan
6
Netflix provides videos on demand, streaming movies and shows over the internet to
TVs, computers, and mobile devices. Delivering content in HD and Ultra – HD to satisfy the
quality consumers demand. They also offer DVDs and Blu-ray movies delivered directly to the
subscriber. However, due to the growth of their streaming division and internet accessibility, the
DVD to mail service has continued to decline.
Netflix, in its letter to its shareholders, stated that it would work on a wide variety of
content to satisfy the diverse tastes of its global audience. The company's strategy is to focus on
original content to drive growth, and it is not currently looking to stream live events or sports
(Netflix, 2018). Netflix partners with content providers to license streaming rights for a variety
of TV shows and movies. They produce in-house or acquire exclusive rights to stream content
such as Orange is the New Black, Stranger Things, House of Cards, and many more. These
productions are called Netflix originals. Netflix can gather extensive data about its subscribers’
behavior to cultivate its library and provide users with likely desired content. Netflix is
notoriously tight-lipped about what data it collects, but its ability to gather viewing data from a
global audience has enabled the service to recognize micro-genres and then patterns of viewer
interest (Lotz, 2017).
Place (Distribution and Channel) Strategies
Netflix is the world’s leading internet streaming service providing TV series,
documentary, and feature films across a wide variety of genres and languages. Subscribers can
stream movies over the internet via television, computers, tablets, and mobile devices. This
direct distribution channel allows Netflix to have complete control over its products, offer an
extensive selection, and most importantly provide customers with an individualized experience.
Running head: Integrated Communication Plan and Measures Plan
7
Netflix's intensive distribution ensures the most extensive distribution possible for their service.
According to Netflix’ 4th quarter report, they’ve acquired 139 million paid subscribers in over
190 countries (Netflix, 2018).
Process Strategies
Netflix is a data-driven company utilizing analytics to create content, gain insight on their
customers, optimizing their marketing to deliver a better product. The 139 million subscriber
permits Netflix to gather a tremendous amount of data in an effort to serve consistent experience.
Customer involvement has translated into better quality, faster delivery and content tailoring to
increase subscribers. Netflix is engaging subscribers and making them partners in creating
value.
People (Staff) Strategies
Netflix culture directly correlates with its human resource strategy. People find the
Netflix approach to talent and culture compelling for a few reasons. They carefully hire people
who will put the company’s interest first and who desire a high-performance work environment.
They prevent dedicating resources on low performance or problematic employees. Quickly
dismissing those employees whose skills or performance are not aligned with high-performance.
According to McCord (2014), managers are told that building a great team is their most
important task. Great teams accomplish great work, and recruiting the right team was the top
priority (McCord, 2014). Netflix only hires people who can work effectively in a team and
foresee how the candidate will fit into the team through a rigorous interview process to weed out
candidates they would deem unfit.
Netflix has embraced a high-performance culture to build a successful company. Many
organizations without distinct cultures continue to grow and expand. However, if you want to
Running head: Integrated Communication Plan and Measures Plan
8
develop an innovative, disruptive, high-performance, rapid growth company that attracts and
retains the best talent, then you need to be deliberate about the culture you create (Putter, 2018).
Netflix human resource strategy is aligned with its overall strategy and consistent with a rapid
growth company success.
Promotion Strategies
Netflix has gained a tremendous amount of marketing data in the past few years
redirecting its promotion strategy. Initially, by putting Netflix on a set-top box which they're
using to access a bunch of other video content and by including the Netflix subscription in a
package of either their mobile subscription or pay-TV subscription, Netflix propelled itself to
one of the most recognizable brands. Netflix has learned through its innovative marketing,
promoting its shows and films is even more advantageous, than promoting the brand. Both
original films became overnight hits that sparked widespread media coverage and comments
from various influencers.
A prime example of this is Netflix's break into the romance comedy category this year
with The Kissing Booth and To All The Boys I've Loved Before. Both original films became
overnight hits that sparked widespread media coverage and comments from various influencers
(Walters, 2018). By promoting its quality content, Netflix can increase viewership, while
expanding its brand.
Conclusion
Netflix has managed to position their brand at a competitive price, accessible across
several platforms, largest library with exclusive content. By using analytics, Netflix has been
able to segment its content over several categories and target its customers specifically based on
their habits. A number of competitors have entered the market, but Netflix maintains its edge by
vastly increasing quality original content. Promoting the content over the brand and allowing the
Running head: Integrated Communication Plan and Measures Plan
marketing to extend over multiple mediums. Netflix implements a position and differentiation
strategy solidifying its position in an ever-increasing market.
References
D'Onfro, J. (2018, January 23). What it's like to work at netflix's dying dvd business. Retrieved
from https://www.cnbc.com/2018/01/23/netflix-dvd-business-still-alive-what-is-it-liketo-work-there.html
Iqbal, M. (2018, November 7). Retrieved from http://www.businessofapps.com/data/netflixstatistics/
9
Running head: Integrated Communication Plan and Measures Plan
10
Lotz, A. (2017, April 4). The Conversation. Retrieved from https://theconversation.com/theunique-strategy-netflix-deployed-to-reach-90-million-worldwide-subscribers-74885
Marketline. (2018, July 30). Netflix, inc.: company profile. Retrieved from
http://proxy.cityu.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=
dmhls&AN=0F65E223-CCF4-4CBF-A37F-BA7C747C2040&site=ehost-live
McCord, P. (2014, February). How netflix reinvented hr. Retrieved from Review:
https://hbr.org/2014/01/how-netflix-reinvented-hr
Netflix. (2019, January 17). Netflix fourth quarter 2018 earnings letter to shareholders. Retrieved
from Netflix:
https://s22.q4cdn.com/959853165/files/doc_financials/quarterly_reports/2018/q4/01/FIN
AL-Q4-18-Shareholder-Letter.pdf
Putter, B. (2018, December 4). Netflix's company culture is not for everybody and that's exactly
how it should be. Retrieved from
https://www.forbes.com/sites/brettonputter/2018/12/04/netflixs-company-culture-is-notfor-everybody-and-thats-exactly-how-it-should-be/#509c6a611880
Snider, M. (2019, January 17). Netflix price increases could cause some subscribers to
downgrade, cancel streaming service. Retrieved from
https://www.usatoday.com/story/tech/talkingtech/2019/01/17/netflix-price-increase-maylead-subscribers-downgrade-cancel/2602458002/
Spangler, T. (2019, January 18). Retrieved from https://variety.com/2019/digital/news/netflixcontent-spending-2019-15-billion-1203112090/
Running head: Integrated Communication Plan and Measures Plan
Walters, N. (2018, October 27). Netflix clarifies 2 billion marketing strategy ahead of 2019.
Retrieved from https://www.fool.com/investing/2018/10/27/netflix-clarifies-marketingstrategy-ahead-of-2019.aspx
Appendix
11
Running head: Integrated Communication Plan and Measures Plan
Figure 1. Netflix demographics aligning with the general population in the U.S. Source:
CivicScience
Figure 2. Demographics of male and female subscribers. Source: YouGov
12