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CASE STUDY: Netflix Develops and Defends Its Brand (Chapter 6: E-Commerce Marketing Concepts)

CASE STUDY: Netflix Develops and Defends Its Brand (Chapter 6: E-Commerce Marketing Concepts). Dale Earle Kwaku Morgan-Arhin Latoya Nelson Group F

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CASE STUDY: Netflix Develops and Defends Its Brand (Chapter 6: E-Commerce Marketing Concepts)

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  1. CASE STUDY: Netflix Develops and Defends Its Brand(Chapter 6: E-Commerce Marketing Concepts) Dale Earle Kwaku Morgan-Arhin Latoya Nelson Group F Heloisa Tiberio MGS 5040-01 Jessica Awa 3 / 22 / 2010 Matthew Norton Dr. Melworm

  2. NETFLIX COMMERCIALS http://www.youtube.com/watch?v=mkxzXfKtgtU&fmt=18 http://www.youtube.com/watch?v=5nW609P8usA&fmt=18 CASE: “Netflix Develops and Defends Its Own Brand”

  3. NOTABLE CASE FACTS Netflix is the largest online entertainment subscription service in the U.S. In 2009, it provided more than 10 million customers access to over 100,000 DVD titles Their basic business is renting DVD and Blu-Ray titles on a subscription basis CASE: “Netflix Develops and Defends Its Own Brand”

  4. NOTABLE CASE FACTS • Its website attracted at least 194 million viewers by 2008; it’s about 5 times that of the amount of people that visit Blockbuster currently • The DVD format, along with the success of the Playstation 2, led to more than 70% of homes in the U.S. having a DVD player, which also helped Netflix’s success • They currently have an exclusive deal to stream movies to Xbox 360’s, but will eventually expand to iPhone and iTouch devices; certain cable boxes are also soon to follow

  5. BRIEF HISTORY OF NETFLIX Started out as a regionally based online movie store in Los Gatos, California in 1997 Rentals were mailed out and charged the usual late fees, etc., kind of like instead of you going to a video store, the video store comes to you Offered a simple list of videos arranged by title and lead actor CASE: “Netflix Develops and Defends Its Own Brand”

  6. In 2000, it changed its business model from a “mailing service” to a nationally based subscription model They also changed from assessing late fees to implementing their monthly service charges for unlimited rentals Video warehouse operations now not only materialized in several cities, but also saw the entrance of new deals with the U.S. Postal Service BRIEF HISTORY OF NETFLIX (cont’d) CASE: “Netflix Develops and Defends Its Own Brand”

  7. NETFLIX WEBSITE • How it works… http://www.netflix.com/HowItWorks • Browse selection of movies… http://www.netflix.com/BrowseSelection CASE: “Netflix Develops and Defends Its Own Brand”

  8. STATISTICAL FACTS Subscriptions ranged from $4.99 - $16.99 / month At one point in 2009, they had 55 million DVD’s in stock Since 1999, the number of subscribers grew at an annual rate of 79% and its revenues, 113% 2008 annual revenues reached $1.3 billion and delivered its 2 billionth movie in April of that year CASE: “Netflix Develops and Defends Its Own Brand”

  9. SECRETS TO SUCCESS Very customer friendly attitude (24/7), late fee elimination, free trial periods, and high conversion rates Focus on business partnerships with movie companies led to quick turn arounds from theater release to DVD Gave personalized video rental advice, such as recommendations CASE: “Netflix Develops and Defends Its Own Brand”

  10. RECENT PITFALLS Expansion of rival companies, such as Amazon, YouTube, etc. has hurt some of their profits Blockbuster has put a lot of energy into mimicking some of their strategies Other companies have looked into linking customer’s accounts with Tivo and DVR devices CASE: “Netflix Develops and Defends Its Own Brand”

  11. QUESTIONS??

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