Netflix Case Study: Marketing Strategy, Product Portfolio and Pricing Strategy

The entertainment industry has changed a lot with time. Earlier, watching a movie in a theater cost a lot, as food and tickets were both enormous expenses. On-demand viewing changed that as the customer base of cinema halls started binge-watching movies and web series at their homes.

In this blog, we will shed some light on Netflix and discuss its marketing and pricing strategies.

Netflix Overview

Netflix is an American company that offers its customers subscription video-on-demand OTT streaming services. Netflix was launched in 1997 by Reed Hastings and Marc Randolph. Originally, the company provided its customers with DVD rental services. The business offered its customers the option to order more than 900 movies from its DVD rental and sales website. In 1999, the company began offering online subscriptions to their customers, which gave users several other benefits, such as unlimited DVD rentals with no due dates, late fees, shipping fees, etc.

The business began offering video streaming services in 2007. The customer can use it to directly access movies, TV shows, and other content on their devices. Beginning in 2010, the company expanded internationally, offering its services in Canada, Europe, Asia, and other regions. The company decided to start producing content in 2013, and its first production was the political drama House of Cards. As of 2024, the company has a customer base in more than 190 countries, and the corporation is still investing a significant amount of money in producing unique content. 

The COVID-19 pandemic helped the corporation increase its user base because the lockdown caused a record surge in subscriptions. The company’s main office is in Los Gatos, California, USA.  

Marketing Strategies of Netflix

The business uses innovative marketing techniques, with an emphasis on customized campaigns that are driven by customer preferences. Netflix uses sophisticated algorithms that gather information about a user’s past internet activities and use that information to recommend movies or other content specifically tailored to the customer’s preferences, which increases customer engagement.

The business makes significant investments in the production and promotion of content. With various teasers, trailers, and a focused marketing effort, it generates interest in its original content. The company also posts memes and trending content on social media channels to interact with younger people. Netflix uses two approaches to release its content. Firstly, it introduces a binge-watch model, in which it releases all the episodes at once so that users can watch the entire season. Secondly, it releases the episodes on a monthly or weekly basis to generate buzz and prompt discussion on social media. 

The organization also works with a range of influencers and celebrities to promote its platform and content, which helps the business grow its subscriber base. The company routinely notifies its subscribers about new releases through emails and mobile applications. If an existing client leaves the show midway through, they are reminded to finish it. 

Pricing Strategies of Netflix

Over time, the corporation has modified its price strategy and has implemented a range of pricing tactics to fortify its position in the market and broaden its consumer base. The organization offers a tiered subscription plan to serve the needs and interests of each customer. Different subscription plans are available with different video qualities and the number of devices that can use the service simultaneously. For instance, the user can stream the highest video quality on up to four devices with their premium plan. In contrast, a basic plan only allows the user to view content in a lower quality on a single device. 

Additionally, they differentiate their prices based on the worldwide market, charging lower membership costs in developing nations than in developed ones. For instance, they only offer a mobile subscription model in India, where consumers are particularly sensitive to pricing. 

Conclusion

Netflix’s business model of providing content to consumers’ laptops and mobile devices has revolutionized the entertainment sector. Its platforms have integrated cutting-edge processes that provide customized content recommendations. Both Netflix’s original series and other content are available for binge-watching on its platforms. The company, which began as a DVD rental service, has emerged as a leader in the entertainment industry. 

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