Ch. 8 - Segmenting and Targeting Markets

Market segmentation is very important since it enables businesses to segment their target market into meaningful groups with similar wants and needs, allowing them to produce products and services that will satisfy the groups targeted. Like many other businesses Netflix uses segmentation and targets different groups of customers. In order to do so, its segmentation must have some criteria such as substantiality, that is, be large enough to keep the business going; identifiability and measurability, which consists in knowing the target market and data of the people targeted; accessibility, which is the ability to make contact with the customers in the segmented area; responsiveness which is the need to have the same responds from the same target markets. 

Lately, due to its expansion outside the U.S., Netflix has a new segment to target: the geographic segmentation. The geographic segmentation relates to segmenting and targeting markets by regions, countries, and market density. Obviously, Netflix cannot buy all the same movie rights that buys for the U.S., for other countries. Even acting different from one country to another, Netflix must be aware of demographic segmentation as well, and to do so it needs to gather the data of the potential customers that intends to target. Age and gender play an important role in this and it requires precise information in order to satisfy needs and wants. Finally, the usage rate information is also important, in fact it allows Netflix to know who is most inclined to watch its streaming program and who is not, allowing it to make decisions about streaming or not streaming in that segment.

Ch. 11 - Developing and Managing Products

When we talk about new products, we are talking about something new to the market world, to the customers, to the sellers and producers; a product can be defined new in more than one circumstance, and in this case, Netflix reflects the new product line definition, with their introduction of movie streaming added to the rental of DVDs. It also reflects the lower priced definition, because being the broadest streaming program of the competition, its prices are really low compared to other streaming programs.

Netflix's new products are with no doubt the new releases and new movies that we find in the service. New products are really important and need to be chosen very carefully for a wide customer satisfaction. The ideas that Netflix generates come mostly from customers' ratings and comments about movies already available in the library, but ideas are also generated from employees, distributors, competitors and researches. Once Netflix has its own ideas, since the choice is very wide, it screens and filters all the products it found, remaining with a fair amount of new entries that can be added to the contents of its library. Once the products are chosen, Netflix conducts a business analysis calculating costs, demands and profitability. Finally, comes the test marketing, where Netflix can determine whether the new movies and Tv Shows are being successful or not, evaluating this from customers' reactions and feedback. 

Thanks to the global opinion of watching Television, Netflix presents no problem in broadcasting all around the world. Movies and Tv Shows are something that almost nobody can live without, even if once in a while. Netflix had a great success in the U.S. and now people around the world are eager to receive the same services that offers. 

Ch. 12 - Services and Nonprofit Organization Marketing

Being the result of applying mechanical efforts to people, Netflix can be defined as a service that is intangible, inseparable, heterogeneous, and perishable. Netflix cannot be touched

or felt like goods, but customers can evaluate its service through an experience quality. Being inseparable, Netflix sells a service that involves customers in the production of what they are buying: when you subscribe, you won't go anywhere else to watch movies or to rent DVDs; once you buy it, you can see it right away, and anywhere.

Service quality is not the same as good quality, but it still can be defined. Customers evaluate service quality by reliability, responsiveness, assurance, empathy, and tangibles. Netflix is definitely reliable because it has the proficiency to perform the service with accuracy and consistence from the beginning, and almost no one complains about its service. It also has responsiveness, with its fast and satisfying customer service. Netflix has also assurance, with very polite and helpful employees that can answer your questions with promptness. For empathy, Netflix is always surveying customers and analyzing their answers, so to make sure that what they are looking for or not looking for can be accomplished. Finally, Netflix is tangible, because of its building, the equipment, and employees that contains. 

The marketing mix's elements, need to be adjusted to meet the needs created by the service characteristics. In product strategy, Netflix takes place in a mental stimulus processing because it addresses customers' minds. Talking about place strategy, being an online service Netflix can distribute its service all over the world with very little effort. No need to schedule appointments for its services, no need to go somewhere else to consume it. In the promotion strategy, Netflix creates a strong organizational image due to its now very popular brand. And then for price strategy, Netflix decided not to make customers pay for every movie they watch, but opted for a monthly subscription that allows them to watch anything they want with no additional price. 

The relationship that Netflix has with its customers is real. Customers are loyal to its service and prefer it to other competitors it may have. This is due to the company's ability to gain their trust, give them what they want, solve possible problems, and treat them very well. But Netflix doesn't just treat customers very respectful; indeed its employees are all treated fairly as they are customers themselves. Very positive feedbacks are in fact,

given from all its employees about the way they cooperate, they find themselves very useful and keep the service one of the best. 

Ch. 10 - Product Concepts

The Netflix streaming program can be considered a favorable product that a person receives in exchange of a paid subscription. Unlike other products like shoes, cell phones and clothes, the streaming program is not tangible, but can be defined as a service; at the same time the DVD rental option that Netflix offers, can be considered as a tangible product. In the classification of products, Netflix is classified as a consumer product, which in its case, is the option to be sold to individuals for personal wants and needs. 

Due to its low cost subscription, Netflix sells a convenience product, that requires not efforts from customers and satisfies them by being affordable; this makes Netflix a very valuable service even between competition. Netflix started as a small DVDs rental service, but grew stronger and requested over time; in its product line it now presents not only DVDs, but an online streaming program. 

Finally, Netflix, like all the businesses, presents its own brand, which is very important as it identifies the product, it helps and promotes sales. Netflix's brand has value, and customers are loyal to it, they make it valuable; moreover, Netflix's brand is going to be a global brand pretty soon, due as the expansion of the service outside its home country; soon the service will obtain its earnings from all around the world.  

Ch. 17 - Personal Selling and Sales Management

In personal selling, Netflix can be positioned in the relationship selling because of its connections to customers and the desire to maintain a long-term satisfaction with them; but Netflix does't only make connections with customers, indeed it spends time analyzing their needs and developing suggestions and ideas to meet those needs. Sales promotion is important for Netflix because the product they offer has a low value being accessible for everyone, there are many customers due to the advantages it offers, has a product easy to understand and its customers are spread all around the country and soon around the world. 

In sales management, companies need to define sales goals and process; Netflix's goal at the beginning was a wide subscription of DVD rentals, that it was soon accomplished; when its goal was achieved, Netflix set up new goals, kept achieving them and made improvements for its current and new customers. 

In recruiting and training the sales force, sales managers look for some characteristics in applicants such as ego strength, risk takers, creativity, capable of understanding concepts and ideas. Researching what Netflix looks for in an applicant I found nine skills and behaviors that it requires: Judgement, Communication, Impact, Curiosity, Innovation, Courage, Passion, Honesty and Selflessness. Netflix seeks excellence, high performance and cooperation, because like it says : "A great workplace is stunning colleagues".

Finally, the idea of technology taking over sales person arise, but experts say that sales people are necessary to make a link with customers and maintain a relationship; the technology, however, can help sales people to sell and look for information, improving themselves. 

Ch. 16 - Advertising, Public Relations and Sales Promotion

Through advertising, businesses find their way out in the world, informing people about their own service and the benefits that come with that service.The Internet advertising cost is moderate and through the Internet is easy to reach a certain target market. However, not everybody has Internet so Netflix needs to expand its advertising services using other media advertising. Being an online service, Netflix most places its advertising on the Internet, through ads in other website; but we can find Netflix's advertising in newspaper, magazine and the service is often mentioned on movies and Tv Shows. Now that Netflix has captured the attention of its target market, and it keeps growing stronger, the use of the advertising is addressed not only to new potential customers, but to its loyal customer, to remind them of the service expansion and new products. 

Netflix's advertising can be considered a comparative advertising since the comparison between its service and Amazon Prime, or Hulu, or Blockbuster is always made. Netflix is mostly chosen not only because its many advantages, but also because it doesn't present movies and Tv Shows with long and boring advertising: the infomercial, that is a very long advertisement that we can compare to a short movie rather than to a sale. For the media mix, Netflix uses mostly two factors: cost per click, meaning the cost associated with a customer that clicks on a display or a banner ad, and frequency, that is the number of times people are exposed to a given message for a specific period.

The publicity is granted not only for commercial and advertising, but also from people that talk about it or share articles and ideas regarding the product. Thanks to the product placement, Netflix is mentioned in movies and Tv Shows, songs and books, increasing the curiosity of new potential customers and the recognition of existing ones.  Finally, Netflix's sales promotion consist in allowing new customers to have a free 30 day trial while exploring the service, and at the end they can decide if keep the subscription or not. For loyal customers besides, the subscription cost remained $7.99 versus the $8.99 new customers need to pay. The increase of the cost may take aback new customers, but with the price higher, Netflix offers a wider choice of content, keeping the price worth it.

Ch. 14 - Marketing Channels and Retailing

After reading the chapter I decided which store to choose, and went out shopping. Since I am a fanatic of buying groceries, and I am very attracted from food stores, I chose to walk into Trader Joe's, located between 72 and Broadway in Manhattan. Trader Joe's started out as a small chain of convenience store in 1958. Now there are 418 stores in the United States, 4 in New York City. Trader Joe's belongs to the Supermarket type of retail operations, because is a departmentalized, self-service retailer that specialize in food and some nonfood items, like flowers and plants, toilet paper, house and body products. Talking about time utility, the customers are satisfied most of the time because products and goods are delivered daily in the store and exposed in the shelves, ready to be bought. I wrote most of the time, because so many people go there during the day, so if you go during late afternoon, you may not find everything you need. Like every other retailing, Trader Joe's has its own retail marketing strategy and mix. You can always find products on sale, and they print a weekly magazine made of 4 or 6 pages where you can see what's new. 

What most attracts me in the store, is the way everything is disposed. Every single item has its own hand made and colored tag, every aisle has indications made with art and design; nothing is made by computer. The store is clean, with a good smell that changes when you change the aisles, it is very colorful and it emanates happiness. It's a store where I find myself relaxed looking for everything new, even if it needs to be expanded cause too many people find themselves at the same time and it can be confusing sometimes. There is a good atmosphere throughout the entire store, the layout is so carefully done you find yourself wondering how do they made it. Above this, they don't only have a good width of product assortment, but they have good prices.

Once I get all my groceries, I wait in line, a long line that luckily moves very fast, due to the almost 30 cashiers that are in the store; the Trader Joe's employees are the kindest, friendly, fun and knowledgeable people I have never met in a store. Not only they ask you how you are, but they engage with you about the products you bought, talking about the day and the weather, laughing and trying to be as educated as possible. The first time I went in the store and the cashier started talking with me, I thought she was one of those people that usually talk to everybody around; but once I started seeing more and more, I understood that behavior was a strategy for marketing relationship, and I can say it works.

Even if the location isn't one of the best for me to reach, I always find the time to go at least once a week to buy groceries. I find it clean, with good food and good prices, organized and with various products, and I would recommend it to everybody.