Marketing Plan Netflix
This cost $13. 95 per month and limited the customer to two rentals at a time. They also started opening more and more distribution centers to keep up with their overwhelming demand from customers at this time. This company just continued growing, by the summer of 2002 they had 670,000 subscribers, offered 11,500 different titles, and signed revenue-sharing agreements with more than 50 film distributors. By February of 2003, Netflix had one million subscribers. Finally, after more than five years in business, Netflix, Inc. ad its first profitable quarter in June 2003. It looks like Netflix, Inc. is going to be a business that stays around for a very long time. They have great customer loyalty, a large distribution system with many centers to keep up with their 1. 1million subscribers. Today Netflix subscribers can rent DVD’s unlimited and have the option of renting anywhere from one to three DVD’s at a time or unlimited streaming on the internet or through certain gaming consoles. The fee for the subscription ranges from $7. 99 to $29. 98 per month.
The company has more than 15,000 titles and keeps an inventory of more than 5 million discs to make sure customers are always satisfied. Netflix has more than 20 regional shipping centers around the United States; this helps customers to receive their DVDs a day or two after ordering them on the company’s Website. Market The Netflix market includes anyone who is interested in watching movies. It also includes anyone who has a gaming system like, PS3, Wii or Xbox. There are even some new smartphones that allow you to download a Netflix app on them to watch on the go. Competition
There are several different competitors of Netflix one of them is Hulu Plus, they offer online streaming for $7. 99 a month. There is also Blockbuster who came out with a similar online DVD rental system in 2004. Hollywood Video developed the Movie Value Pass in 2004, where customers were allowed to rent up to three movies for a flat monthly fee. Redbox has $1. 00 rentals for one night and also now offers video games for $2. 00 per night. Some other companies, like Wal-Mart and Amazon, tried an online model as well. SWOT Analysis Strengths The first strength is no long line ups and late fees.
Customers can select movies and put them into their rental queue, edit them anytime they choose and they can keep the movies as long as they want without the hassle of due dates. The second strength is very competitive prices. For as little as $7. 99 a month, people can watch as many movies as they want, either streaming or on DVDs. For just a bit more, a higher number of DVDs can be out at a time or both customers can have the option of both DVD and streaming, giving users more flexibility. This is less expensive than paying for cable movie channels, while giving the customer more selection. Weaknesses
One weakness is customers cannot get their movies immediately; they have to wait for the mail to arrive. Delivery normally only takes 1 or 2 days, but if it’s delayed by the post office this can result in longer waits. Another weakness is inventory costs. This is a problem again because the DVD’s are sent through the mail and might be broken or lost during delivery. In addition, because customers are able to keep DVD’s as long as they want it is hard to keep track of what might be available to customers or what might be needed and because of this there is a possibility of losing customers because of long wait times.
Opportunities With all the new development of network technology, NetFlix will soon provide the service of allowing customers to download movies on the Internet in the near future. This new feature will save NetFlix a lot of money in packaging and postage fees and will also give more customer satisfaction because of no wait times for movies. Another great opportunity is that Netflix will soon begin offering video game rentals to their customers. This is a very popular amusement in today’s world and has very big potential. Threats
One major threat is other streaming offerings such as Hulu and YouTube. Streaming is a pretty popular way of watching movies today. Just about anyone with a lot of money can get licenses on content and provide this service. Netflix needs to stay competitive in this area with pricing and with a good selection of movies to choose from. Another threat to Netflix is traditional rental stores. Some advantages that a traditional rental store has are that customers can get their movie on the spot and they do not have to pay a monthly fee. This is beneficial to people who do not watch a lot of movies.