This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Akilah Young Aminah Mc Gill Jeannelle Pierre Netflix Case 3/21/11 BA 3103 Sec 6 Netflix: All you can Eat Netflix encountered numerous problems as a new company servicing emerging technologies not yet fully adopted. Serving an infantile market has its automatic drawbacks. Netflixs task was to appeal to potential customers through the three core characteristics of a flourishing online merchant: value, convenience and selection. Each core principle presented its own problem and threat to the success of Netflix as a company. Offering any new product creates the issues of convincing your market not only that your product works, but is worthwhile and needed. Netflixs scenario was even worse because their service could only be used to those with DVD players which at the time were not in every household. Although the presences of DVD players were drastically increasing, only 37% of U.S. television households contained one. This was a major limit on how vast Netflixs target market could expand to. The success of Netflix was directly related to the success and emergence of DVD players which neither Hastings nor Netflix had control over. Problems with value continued to grow even as Netflix developed. There was no residual value for online DVD rentals due to Netflixs imitated pricing model. Netflix priced their rentals the same as a brick and mortar retailer yet lacked the instant deliverance. This weakness encouraged customers to choose competing video rental services over than Netflix. Once Netflix noticed this issue, a different approach was established. An alternative to renting videos at $4 each, Netflix offered a customer subscription service, which would then provide a much greater unique value over their leading competitors. This was seen as a solution to the pricing model that had previously left customers unsatisfied and unwilling to return as customers. Netflix then attempted to balance the value of its delivery time by instilling the idea that one could have movies in their possession at all times. They also tried to adjust the pricing model by offering unlimited movie rentals. Customers were allowed to have multiple rentals out at once being reeled in by Netflix marketing technique. Netflix knew the usage of the word unlimited would draw customers in. In our consumerist society, customers want the best bang for their buck; they want to buy the most yet dont want to...
View Full Document
This note was uploaded on 04/15/2011 for the course BA 3103 taught by Professor Wertherguntram during the Spring '11 term at Temple.
- Spring '11