About the company
§ Provider of Internet television network
§ Enables members to watch original
series, documentaries and feature films
§ Allows users to watch TV shows and
movies directly on their televisions,
computers and mobile devices
All this, without any commercials
The Domestic and International streaming segments derive revenues from monthly
membership fees for streaming content. The Domestic DVD segment derives
revenues from monthly membership fees for digital video disc (DVD)-by-mail.
The Company has three
§ Domestic streaming;
§ International streaming;
§ Domestic DVD.
§ Incorporated on August 29, 1997
§ Started subscription-based digital distribution
service in 1999
§ IPO on May 22, 2002
§ Introduced instant streaming in 2007
By 2009 Netflix was offering a
collection of 100,000 titles on DVD
and had 12.3 million subscribers. In
2010, they began international
§ Positioned as a national brand
§ Logo and website
§ No consistent use of symbols, jingles or characters
§ Pricing is a major factor to attract customers
Netflix targets a mass market without any segmentation as the
service offered is highly tailored to individual needs using complex
prediction algorithms and a recommender system. Further, since
the price per person is low it will not be profitable going after a
single segment. Apart from that the customer base is extremely
diverse to be able to achieve any meaningful segmentation.
Watch what you want,
when you want, and at
an affordable price
In 2011, in an attempt to create individual brands, Netflix
decided to charge separately for DVD by mail and online
streaming leading to price increase and loss of customers.
Further, it split it’s streaming service
and home delivery service and
It was a major FAILURE
In October 2011, Netflix announced it would
revert to providing a combined service
under one brand.
Their Facebook page received 66,000
negative comments, 5000 comments went to
By November, the company’s market cap
had dropped by 70 percent and more
than 800,000 subscribers had fled.
“I messed up. I owe
you an explanation.
- Reed Hastings
CEO & Founder, Netflix
BRAND ARCHITECTURE LEARNINGS
First, right timing is very
important. Netflix rightly
judged that its mail
business was going to be
cannibalized by streaming,
but it acted to EARLY.
Second, customer’s reaction
to any change in a
company’s value proposition
is difficult to know a priori.
MARKET RESEARCH is very
Third, the customers can
have intense loyalty to a
Customers were outraged
when the company took
“THEIR” original name away.
§ Cross-promotional programs
with the manufacturers and
sellers of DVD players
§ Theater Tickets
§ Commercial and radio spots
§ Banners and popups
§ Netflix affiliate program
Its primary marketing tool is offering Free trials to convince
potential customers to try the service.
It shows high value of services before committing to it.
§ Personalization of the website–
‘Recommended for you’
§ Adding originals such as House of Cards
and Orange Is the New Black without
sacrificing licensed content
§ A higher production as well as licensing
§ Trying to add content in local language
Social Media & Internet Advertisement
The biggest advantage is that the customer is taken right to the
service with just one click.
Netflix has recently decreased the
advertisement spending from $143
million in 2013, to about $121 million in
2014 across media like television, radio
and Internet display ads.
N e t f l i x i s m o v i n g m o r e
marketing dollars online where
it can better target audiences.
bold tone in
They encourage binge-watching to help to market the
hype of new shows.
SOCIAL MEDIA PRESENCE
communications on “Big
Regular tweets about the
“Netflix” and “Next Month” in
order to make the customers
renew subscription every
month and minimize the drop
Growing and sustaining brand equity requires a proper brand
management strategy. Changes in brand architecture
without careful planning can lead to a disaster.
About Netflix, it’s growth
Failed attempt to
reposition using Qwikster
Services Offered are online
streaming and DVD by mail
Brand revival and
These slides have been created by Arushi Goel,
during the PGP Brand Management course
taught by Prof. Sameer Mathur at IIM Lucknow