MARKETING MANAGEMENT PROJECT ON
“NETFLIX”
GROUP-9
SECTION-D
2019-2021
SUBMITTED TO:
DR. RAMBALAK YADAV
SUBMITTED BY:
ADITYA NEMA (18A3HP643)
DIGBIJAY SINGH (19A1HP015)
KARTIKEY NIGAM (19A1HP096)
P SAI ANJANA (19A1HP012)
RUPAL GOEL (19A3HP609)
TABLE OF CONTENTS
S.No.
Topics
Page No.
1
Introduction
1
2
Market Research
2
3
Changing Customers Behavior and Customer
3
Relationship Management
4
Segmentation, Targeting and Positioning and
Perceptual Mapping
4
INTRODUCTION
Netflix Inc. a company formed by Reed Hastings and Marc Rudolph in the year 1997 after the
former had incurred a $40 late fine as he forgot to return the video rental copy of the movie
Apollo 13. The problem he faced, was faced by others as well and he thought of providing a
solution to this. Thus, Netflix was founded, and it offered DVDs and Blu-ray titles to
subscribers, apart from a separate library of movies. Netflix developed its working model from
selling and mailing DVDs to Video on Demand service over a period of years, it provided its
customers with award winning Netflix originals, feature films, documentaries, Tv shows and
more. Until 2003, Netflix wasn’t profitable and in 2003 it reached 1 million subscribers of its
subscription-based service called marquee program. Since its inception they used smart
suggested algorithms, which suggested the titles that would interest the customers once they had
bought enough movies. Netflix entered India in 2016 and with the release of Sacred Games
created a huge uproar in the Indian market. The company had already by them producing original
content and this was the first regional content for India. The response it received was more than
any Indian content and its popularity showed more viewers are lined up and more revenue
generation opportunity for the Netflix. Netflix created a new behavior among its customers the
idea of “Binge- Watching”, they follow a typical consumer science approach where customers
reviews, and suggestions influence the content of the videos they want to see. The library of
regional content is a huge demand in India apart from International content and the company
knows well that India is a price sensitive market and it has to change its strategy to gain a huge
market share when a lot of other players are in the market.
MARKET RESEARCH
According to Media Partners Asia, the country’s online video market valued at $700 million and
is expected to grow to $2.4 billion in value by 2023
•
Improvement in internet infrastructure: In India, people had access to video content only
through cable operators and DTH (Direct to home) service providers but with the
increase in the internet bandwidth, internet users significantly increased, and people
became familiar with online video streaming. By July 2016, India had 462 million
internet users making it the largest new market for Netflix.
•
Internet on mobile: In a study done in 2016, with deep smartphone penetration, users
grew from 68 million to 320 million. It was estimated that 60% of the internet users were
accessing web from mobile so it was important that Netflix comes out with initiatives that
are mobile-friendly to capture the market.
•
Local content: India is an important market for Netflix and to lure consumers the
company has to produce more regional content. Also, the number of Indian films and TV
shows is insignificant, so to grow its number of subscribers Netflix needs to invest in
local content. Most of the content on Netflix is in English, even though there are subtitles
available it could pose a problem in a country like India where Hindi is the most spoken
language.
•
Price-sensitive market: Indian consumers do not want to pay to watch videos since a lot
of options are available online for free. Also, there are other on-demand video steaming
platforms like Hotstar, YouTube which provide some amount of content for free whereas
Netflix offers a subscription-based service. The fee that Netflix is charging is 500 which
is high as compared to its competitors, Hotstar with 299 for a month and amazon prime
with 199 for a month.
•
Competitive dynamics: In India, Hotstar, the star owned on-demand streaming services is
the market leader with 70% market share catering to sports fanatics and regional
language content viewers. There are many other competitors in the market like:
ALTbalaji, SonyLIV and Amazon Prime are producing popular content.
•
Censorship: There is a cultural difference between the two countries so the content with
strong words and racy scenes could be a problem for the viewers here.
Changing Customers Behavior and Customer
Relationship Management
CHANGING CONSUMER BEHAVIOUR
The real legacy of Netflix is not of its market capitalization but its capability to change Human
behavior, providing its consumers more personalized experience which is different from other
consumers and creating a direct relationship with the consumer.
The provided consumers with original and own content (Netflix Originals) differing from what
other networks provided. The Released all the episodes of its new tv shows simultaneously
instead of giving one show at a time thus creating “BINGE WATCHING” phenomenon among
the viewers in which people go through the shows they like for hours and feel like they are
reading a book.
They came up with personal profile feature in which a consumer could choose up to five themes
which they would prefer to help Netflix customize its content for that user according to the liking
sand recommendations they give.
CUSTOMER RELATIONSHIP MANAGEMENT
The team would discover what delights the customer through its machine learning process and
after going through the data collected, form hypotheses do qualitative, surveys and A/B testing
the ideas to see what works. The changed the strategy from consumer focus to consumer
obsession and to consumer science. Consumer obsession is a healthy preoccupation and it helps
to anticipate the future needs of the consumer keeping consumer at the center of everything it
does. The use of social media created a great data and was a great technique to understand the
consumer and their preferences.
SOCIAL MEDIA
•
They created a new way for consumers to experience entertainment on demand. The
reason why Netflix is winning on social media is because it engages with its audience by
its ability to process the database it has generated from the consumers and providing them
personal recommendations based on their preferences watch history and ratings &
demography. They use the data gathered to help them improve their content and gain
insight about which new Tv series or movies they should create. Phrases such as “Netflix
and Chill” and putting them in the shoes of their consumers Netflix is a success on the
media channels platform because of their strategy to use social media content.
•
New shows generated 30 percent more mentions on twitter when compared with other
new shows on cable networks.
•
Although Netflix posts once/day on Instagram, less than once/month on Facebook, but it
only posts content that is extremely relevant to its users.
•
Netflix posts on twitter is very frequent (every three hours), but the Twitter feed, by
nature, is much faster at consuming content than other social channels.
Segmentation, Targeting and Positioning and
Perceptual Mapping
SEGMENTATION:
Marketing segmentation is of 4 types; geographic, demographic, psychographic, behavioral.
Netflix has a dynamic and diverse market. They need market segmentation to segment its
subscribers to different groups based on needs and wants.
•
Geographical: Netflix has expanded its market to more than 190 countries. Each country
has different cultures and tastes, this will fetch them extreme and costly research to focus
on the preferences of the locals. High internet speed may not be available at rural areas;
this can cause them hurdle to expand their viewership.
•
Demographic segmentation: they have a diverse consumer base and offer variety of titles
that appeal to all age groups. Netflix have contents from children’s programs to thrillers.
The older generation who lack knowledge of technology may not prefer Netflix. The
teenagers and young adults who go online at the rate of 93% makes them the primary
targets. But Netflix believes that stereotypes and brand assumptions on demographic
targets may not work for Netflix. For example, a teenager in India may have the same
taste and interest profile as of a grown man in UK.
•
Psychographic segmentation: this type of segmentation provides viewers different
categories of content at different time at every single day. This segmentation can help to
know the dominant content in a category that is preferred by the viewers of Netflix. This
will help Netflix to engage with viewers with the recommendations of their preferred
category. They optimize their performance to ensure that they are reaching the right
targeted audience with right content at right time.
•
Behavioral segmentation: it is dividing the market to homogenous groups based on
consumer buying behavior. Netflix follow behavioral segmentation. From the moment a
user subscribes Netflix, it uses a special algorithm to track their viewing behaviour. They
track the genre or films a viewer prefer to watch and the time they watch. By knowing the
preference of audiences, Netflix recommend content to their viewers. This customized
approach helps them to increase their viewership.
TARGETING:
Netflix users are targeted corresponding to their respective segments. The millennials are
targeted with an advertisement free experience whereas middle-aged adults with high quality
video streaming at reasonable price on up to 4 screens. At different geographies, it dedicates a
certain percentage of content as local content appealing to the people of that place. Apart from
targeting different segments through different characteristics, Netflix also tries to appeal to the
mass by communicating its selling proposition to every individual which could add value for
them.
POSITIONING:
One of the Netflix’s core value is to entertain and make people happy.
•
They gave their customers the liberty to construct their own personalized experiences by
analysing customers behaviours.
•
They also adopted a customer centric brand strategy by which they focused on providing
a positive customer experience both before and after the payment.
•
To increase the user experience, Netflix goes through a rigorous A/B testing during every
product change.
• Their main competitors are Amazon Prime, HotStar, SonyLIV, voot, ALTbalaji, etc.
PERCEPTUAL MAPPING:
Personalization/Selection
Content/Price