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.

Ch. 6 - Consumer Decision Making

A very important matter that any marketing manager should understand is the consumer behavior, which is understanding what and how a customer wants in order to buy. Thanks to the rating characteristic available in every single content on Netflix, Netflix knows what customers think and what they like. By being aware of this important factor, Netflix is able to introduce more movies related to the ones that have been rated higher, and limit movies that have lower rates or that customers never finish watching. 

Netflix recently added a new feature on the website; it's called Play Max, and it's a tool that helps you find movies that you will like in less than two minutes. Play Max asks you some questions, asks you to rate some movies that you might have seen, and then shows you a list of movies based on your preferences and grades. Being sometimes difficult to find what we want in an enormous library full of contents, Play Max is the easiest way to find more movies that you would like to watch, so that customers won't get bored by an infinite search.

Like every other market, Netflix has competence, and like in every other market, Netflix has to beat the competence. One of the characteristics Netflix owns, is the low price; customers always like low prices, but for a customer satisfaction, the low price needs to be accompanied by a good product and a good impression. Not only Netflix offers a low price membership, but costumers are satisfied with the product and are now loyal to the company. Something customers were looking for and found on Netflix, is the formidable commercial free streaming program; you cannot find a single commercial while watching a movie or even in their webpage; this is something customers were tired of seeing: commercials everywhere, from YouTube to Google, from Facebook to Yahoo. Being a commercial free website, means being visited more frequently and more happily. Another characteristic that the business owns, is the Netflix app, available in many dispositive; indeed customers can watch movies on IPads, IPods, IPhones, Play Station4, AppleTv, Computers and so on. It is so easy to just click and start watching, and this is something customers love.

Netflix is also improving its subscription by asking the already members to suggest movies and shows to other people through Facebook; once you click on the movie you want to suggest, and the friend you want to send it to, Netflix sends a request to that friend, with a tempting 30-day-free trial option that has low chances to be turned down. 

Ch. 5 - Developing a Global Vision

Being an on demand streaming company, Netflix doesn't have the option to literally export its products to other countries, but this doesn't mean it can't show and sell its subscriptions all over the world; indeed, being an online company makes it easier to spread the products it has to offer. 

Netflix knows to have a unique product. Nowadays many people spend their time watching TV instead of doing something else. Even more kids are watching TV not only because there are several educational shows, but also because TV keep them calm somehow, and the situation is the same almost in every nation. 

From the outside world, Netflix is now seen as something unique with a price accessible for everyone. After the great success Netflix did in the United States, Netflix expanded its services in Canada, Latin America, UK and Ireland. It has recently expanded in France and plans to expand in Germany, Austria, Switzerland and Belgium at the end of the current year.

Netflix is trying to become the best distribution service of global entertainment, also promoting movies and shows all around the world, giving more audience to the movie makers.

Obviously, this expansion will take some time, but for now the company seems to be at maximum speed and with no intentions to stop. People are eager to subscribe, and to see all the movies available for all generations; this is Netflix's objective and goal, and I can see how soon they will be expanding throughout the whole world.

Ch. 4 - The Marketing Environment

Netflix's target market is oriented for almost everyone, from boys to girls, from toddlers to elderly people, but most concentrated on tweens and young adults; on streaming, you can find educational cartoons to show to your little kids or old movies to remember your youth. Netflix is literally designed for everyone with its high content of movie choice, and the customers seem really satisfied.

To do so, Netflix studied carefully the customers' preferences and the demography; the company wasn't trying to win over an audit of only adult people or an audit of only kids; Netflix was trying to attract as many people possible to what now became an addiction of the website: there is a section for kids, new Disney cartoons, old-fashioned movies, and even foreign movies in different languages. Netflix knows that the United States is not only populated by American, but also French, Hispanic, Italian and Asian people, and even if it doesn't provide several of the foreign movies, people are interested in this new release. Netflix is trying to attract as many people as it can, and we can actually see that is being successful.






Netflix improved very much during its existence and all the improvement is due to the fact that the company analyzed the external environment, understanding customers' needs, decisions, and competition. You don't need to have a certain age, or live in certain places, or have a different culture; on Netflix you have plenty of choice.

Ch. 3 - Ethics & Social Responsibility

"Ethics are the moral principles or values that generally govern

 the conduct of an individual or a group."

Like many other businesses, Netflix adopted a Code of Ethics, which is a guideline of written principles that needs to be respected from directors, managers and employees. With their Code of Ethics, Netflix helps its employees to make the right decisions, to understand what is wrong or what is right, and to help them understand what the firm really needs from them. Netflix promotes honest and ethical conduct, the respect of rules and respect of the law, with the full and accurate disclosure in the company's documents. 

Because Netflix started in California, now the schools and Universities of California have the advantage to watch movies or documentaries for free. This is not only because that is where Netflix was created, but even because some school needed help and some had financial problems.

In addition, Netflix is now recycling old DVDs from its library and collection and instead of getting rid of them, it is now donating them to libraries and even to services that provide DVDs for troop overseas. Doing this Netflix is not only making a very good decision and improving its reputation, but it is also improving and safeguarding the environment.

Ch. 2 - Strategic Planning for Competitive Advantage

Every month, Netflix comes out with new Tv Show episodes, new movies and even more cartoons for kids. It is true that maybe Amazon or Hulu can have the newest movies in less time than Netflix, but Netflix offers more and more besides latest movies. It doesn't only give entertainment to little kids, or young teenagers, or adults, but it gives the possibility to oldest people to watch old movies that were probably there when they were young. Who wouldn't want that?

With Netflix, we are talking about Cost Competitive Advantage, because being a low-cost competitor, it keeps maintaining satisfactory profit margin. Netflix is expanding its limits, now with the recent introduction of Disney movies, who does need cassettes and piles of DVDs anymore? Everything is in our devices, to watch while traveling, to watch while having a dinner with friends, to watch while taking a bath. 

What is Netflix planning to do? Netflix is planning to start adding more recent movies, increasing his team of customer service and simplifying even more the access through apps and website. Netflix is even trying to go worldwide, reaching the European customers, who already are waiting to explore this new easy on-demand website. 

Ch. 1 - Overview of Marketing (Brief History and Mission Statement).

Thursday, September 4, 2014

If you are television or movies addicted, then you know for sure about Netflix, an American company that provides on-demand movies and DVDs rental by mail.
Netflix was born in 1997 from an idea of Reed Hanstings, and it started with 30 employees and a $2.5 million budget in a small town situated in Los Angeles, then moved to the current location in Los Gatos, where after seventeen years gives job to 2045 employees.
At the beginning Netflix offered the option to rent DVDs, reaching the billionth DVD rented after mere seven years. Then in 2007, Netflix promoted a huge service of on-demand movies and is right now leading the market with thousands movies and more than 20,000 Tv Shows episodes.
Netflix members can have the comfort to watch movies and Tv Show episodes not only from the computer, but from mobile devices, Ipads, Apple TV and even from the new Playstation. With an Internet connection they are able to watch wherever they want, whenever they want without troubling so much about the usual commercials they find anywhere. They have the ability to watch a movie and pause it, resume it, rate it, subtitle it at any time.
Their mission statement is based on growing their memberships not only in the United States, but trough the entire world, listening to what customers want and improving where they need to.
The company has now more than 50 million subscriptions, offering a free trial month with a possibility of subscription for only $8.99 monthly afterward and with the intention to expand more and more, embracing new genres and reproduction ways. 

"At Netflix, we think you have to build a sense of responsibility where people care about the enterprise. Hard work, like long hours at the office, doesn't matter as much to us. We care about great work." 

 Reed Hastings