Netflix’s marketing mix establishes strategic decisions for the company’s products, prices, places, and promotion (the 4Ps). The company’s effective development and implementation of the 4P ensure profitable operations in the global market for entertainment and streaming services. This marketing mix and related marketing strategies and tactics revolve around Netflix’s mission statement and vision statement, which establish goals for entertaining the world. Trends in regional entertainment markets are also considered in aligning the company’s marketing mix to match market variables, including consumer demand, supply, customer preferences, and competition. Netflix’s marketing strategy and marketing mix are continually adjusted to account for trends and changes in the dynamic entertainment market.
The specifications of the marketing mix are for business success despite competitive rivalry, which is a strategic factor detailed in the Five Forces analysis of Netflix. Content and streaming competition reduces the effectiveness of the company’s marketing strategy. In this 4Ps context, Netflix competes with the media and entertainment operations of NBCUniversal, Walt Disney, and Sony, as well as the content production and streaming services of YouTube (Google (Alphabet)), Apple TV Plus, Amazon Prime Video, Microsoft Movies & TV (Films & TV), and Facebook (Meta). Netflix’s marketing mix actively pursues target customers despite these competitors and their respective marketing strategies.
Netflix’s Products
The product lines in Netflix’s marketing mix are based on the goal of providing entertainment. For this 4P element, the company’s marketing strategy involves a product mix designed for the international entertainment market. The following are the categories of Netflix’s products:
- Online digital content distribution service (streaming service)
- Movies, series, other videos
- Games
- Other content and media
Netflix’s main business is content distribution through its streaming platform. This online service generates revenues from customers’ payments for their subscriptions. This component of Netflix’s marketing mix influences the development of other products, as well as the other 4P elements (place, promotion, and price). For example, movies, series, and other videos are developed based on the market reach of this streaming service. The product lines in this marketing mix relate to product development and cost-based competitive advantages applied in Netflix’s generic competitive strategy and intensive growth strategies. The company’s product development strategy produces new entertainment content, as well as games, on top of content from other companies. Other content and media included in this marketing mix are music, comic books, and other entertainment programs. Based on the interrelated nature of these products, such as games based on Netflix’s original movies and series, the company’s marketing strategy presents the product mix as a whole package for entertaining target customers.
Price & Pricing Strategy in Netflix’s 4Ps
Netflix’s price points and price ranges are limited. The pricing limitations in the company’s 4Ps are based on the digital form of products and the strategic focus on the entertainment market. In this marketing mix, the following are the strategies for setting Netflix’s prices:
- Market-oriented pricing strategy
- Tiered pricing strategy
Netflix uses a market-oriented pricing strategy to set subscription prices based mainly on location. For example, the company’s plans and prices differ between the United States and Asian markets. With market-oriented pricing, Netflix’s marketing mix accounts for market-specific variables, including distribution fees and taxation. Tiered pricing is also used to provide subscribers with different price points for this 4P element. For example, Netflix offers premium, standard, and ad-supported standard plans for subscribers in the U.S. market, while customers in Belgium can choose among premium, standard, and basic plans. This pricing approach means that the company’s marketing strategy accounts for local and regional market conditions, including demand and customers’ price sensitivity. The business competencies, strengths, and competitive advantages discussed in the SWOT analysis of Netflix enable competitive pricing and influence the price points used for the pricing strategies in this marketing mix.
Place in Netflix’s Marketing Mix
The places, venues, or channels in Netflix’s marketing mix mainly use the internet and customers’ online connectivity. Digital product distribution and online channels are extensively used in the company’s product distribution for markets around the world. For this 4P element, the following places are used in Netflix’s distribution strategy:
- Online sites and apps
- Kiosks, stands, and booths
Online sites and apps are the main digital and virtual places for product distribution in Netflix’s marketing mix. These sites and apps allow users to select and view their preferred movies and series, or to select and play games. On the other hand, kiosks, stands, and booths are occasionally used in Netflix’s marketing strategy. The functions of these places are to disseminate information and, in some cases, to offer merchandise and provide online access to content on the company’s platform. Considering this 4P element, online operations and the physical locations used for implementing the marketing strategy align with the divisions in Netflix’s business structure (organizational structure), which determines resource availability for departments, divisions, offices, and teams. However, the primary significance of online distribution means that physical limits are minimized in the company’s marketing mix implementation. Netflix’s operations management and productivity measures influence the success of the distribution strategy in this marketing mix. For example, operations management determines logistics and supply chain management involved in content production and processing, as well as distribution of resources in the case of kiosks, stands, and booths.
Promotion in Netflix’s 4P
Marketing communication strategy and tactics ensure that Netflix’s marketing strategy reaches and persuades customers to take interest in the company’s movies, series, games, and streaming service. The company’s marketing strategy has a multi-pronged approach for multinational audiences in this element of the 4Ps. Effective communication with target audiences and potential subscribers is achieved through the following promotional activities in Netflix’s marketing mix:
- Digital and television advertising
- Word-of-mouth marketing
- Sales promotion
- Public relations
Advertisements are the main expense in Netflix’s marketing mix. On the other hand, word-of-mouth advertising is free promotional activity that supports the company’s marketing strategy. For example, existing subscribers promote Netflix originals and the streaming service to their non-subscriber friends. This 4P element also includes sales promotion, such as promo codes for discounts or time-limited free subscription in some countries. Moreover, public relations help create a positive brand image and a more attractive streaming service. This marketing mix and related marketing strategies and tactics involve support from strategies used for Netflix’s sustainability, ESG, CSR, stakeholder management, and corporate citizenship. For example, the Netflix Fund for Creative Equity supports underrepresented communities in entertainment while promoting the company’s brand and products.
Strategic Implications of Netflix’s Marketing Mix
Public relations in Netflix’s marketing mix prompts the company to address stakeholders and the promotion of the company and its products. As a result, the marketing strategy accounts for the company’s programs for sustainability, CSR/ESG, and stakeholder management. This condition means strategic interdependence between Netflix’s marketing mix and CSR/ESG strategy.
Demand for Netflix’s entertainment content and streaming services depends on customer perception and sociocultural preferences. This factor is included in the specifications of the company’s marketing mix. This marketing mix and related marketing strategies consider the various industry and market trends detailed in the PESTLE/PESTEL analysis of Netflix, such as social trends that influence customers’ perception of movies, series, and games. The 4Ps are continually adjusted to account for these factors in the entertainment market. Adjustments applied to the marketing mix require adjustments in other areas of the business organization, such as film production, product design, marketing campaigns, and human resource management.
References
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