Netflix is an internet television network that allows users to stream TV shows and movies. It has grown significantly since starting in 1997 as a DVD-by-mail service. In 2011, Netflix attempted to reposition by splitting its DVD and streaming services into separate brands but it was a major failure that led to a loss of 800,000 subscribers. The company reverted to a single combined brand and services. The document discusses Netflix's branding strategy over time including its positioning, promotions, and lessons learned from the failed repositioning attempt.

1. BRAND MANAGEMENT
Submitted by- Arushi Goel
Submitted to- Prof. Sameer
Mathur
IIM Lucknow

2. 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

3. All this, without any commercials
or commitments

4. 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
operating segments:
§ Domestic streaming;
§ International streaming;
§ Domestic DVD.

5. HISTORY
§ 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
operations.

6. § Positioned as a national brand
§ Logo and website
§ No consistent use of symbols, jingles or characters
§ Pricing is a major factor to attract customers
BRANDING STRATEGY

7. 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.
BRAND
POSITI-
ONING

8. Watch what you want,
when you want, and at
an affordable price
BRAND MANTRA

9. REPOSITIONING ATTEMPT
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
launched Qwikster.
It was a major FAILURE

10. 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
their blog
By November, the company’s market cap
had dropped by 70 percent and more
than 800,000 subscribers had fled.
Goes QWIKLY

11. “I messed up. I owe
you an explanation.
“
- Reed Hastings
CEO & Founder, Netflix

12. 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
important.
Third, the customers can
have intense loyalty to a
particular product.
Customers were outraged
when the company took
“THEIR” original name away.

13. PROMOTIONAL STRATEGY
§ Cross-promotional programs
with the manufacturers and
sellers of DVD players
§ Theater Tickets
§ Commercial and radio spots
§ Banners and popups
§ Netflix affiliate program
§ Word‐of‐the‐mouth.

14. 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.

15. CONTENT MARKETING
§ 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
budget
§ Trying to add content in local language

16. 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.

17. Maintaining
unique and
bold tone in
their social
posts
Netflix
on
Twitter

18. They encourage binge-watching to help to market the
hype of new shows.
SOCIAL MEDIA PRESENCE

19. Planned social
communications on “Big
Releases”
Regular tweets about the
“Netflix” and “Next Month” in
order to make the customers
renew subscription every
month and minimize the drop
outs.

20. SUMMARY
CONCLUSION
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
and history
Failed attempt to
reposition using Qwikster
Services Offered are online
streaming and DVD by mail
Brand revival and
promotional strategy
Brand’s traditional
positioning strategy

21. DISCLAIMER
These slides have been created by Arushi Goel,
during the PGP Brand Management course
taught by Prof. Sameer Mathur at IIM Lucknow
THANK YOU