• Change in prices – consumers in this segment are very sensitive to price change. Streaming online is convenient and relatively cheaper than paying for cable services; however, if for some reason the prices of internet services or relevant products would go up, this change would be unfavorable for Netflix. For past decade, there was a shift in TV industry where prices dropped for TVs and the quality has improved greatly. Smart TVs overtook the market, which had a favorable effect on online streaming. As a result, consumers are more likely to spend on a good quality rental services that provide newest on-demand movies.
NETFLIX MARKETING PLAN OUTLINE Name Institution NetflixMarketing Plan Outline 1.0 Company Description Netflix, Inc. is a provider of online movie rental subscription service that has over 40 million subscribers in more than 40 countries within parts of Europe, South America and North America. The company provides its members with three different services that include domestic streaming, international streaming and DVD by mail services. Domestic and international streaming entails offering its subscribers within the United States and other countries access to a variety of DVD and Blu-ray titles and other streaming content choiceson nearly any internet-connected screen. It also provides flat rate DVD mailing services using Permit Reply Mail within the United States. 1.1 Company History Netflix, Inc. was founded in California in 1997 by Reed Hastings and Marc Randolph.
Therefore, their strategy places them in a position to win buyer favor by means of a lower-priced product offering.Redbox is trying to achieve a low cost competitive advantage. However, this advantage may not be sustainable. It is only sustainable if it is an advantage over market rivals that persists despite efforts of rivals to overcome it. The low cost advantage may be easily copied by vendors who can find other ways to lower their costs. For example, a vendor may offer movies at .95 cents if they can cover their operating costs and make a good profit from the price.
Low-cost provider * Redbox is using the low-cost provider strategy by offering DVD’s at roughly a 75% discount compared to their competitors * Also by placing their kiosks in areas of different industries that also use the low-cost strategy such as McDonald’s the kiosks are surrounded by their market 1c. What type of competitive advantage is Redbox trying to achieve? Redbox is trying to obtain a low cost and convenience advantage in the DVD rental industry. By offering the same product for roughly 75% less than competitors they have an advantage in cost. Also by partnering with corporations such as McDonalds, they have made their product very convenient to the industry which has allowed them to take a competitive advantage in that category as well.
State one advantage and one disadvantage of this course of action. (5 marks) • Using the ‘Saving and Borrowing Calculator’ (on the DVD-ROM or online), calculate the monthly repayments required and the total amount of interest paid if Panna used a loan from the store’s finance company, at an APR of 9 per cent, to fully fund the purchase over both (a) one year, and (b) three years. What factors would Panna need to consider in deciding between the one-year or three-year payment period? (8 marks) • What would be the advantages and disadvantages of using each of the three forms of debt available to Panna to purchase the furniture? (12 marks) (Total: 25 marks) Question 2 Adan (26) and Jane (25)
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The company has more than 55 million discs and, on average, ships 1.9 million DVDs to customers each day. Customers pay a monthly fee allowing them to have a set amount of DVDs out at a time, prices ranging from $4.99 to $16.99. The customer creates a list of the movies they wish to receive by going to the online website and creating what is
Redbox is in a highly competitive environment that is evolving quickly. Redbox differs in this competitive market because it offers consumers convenient, quick, and hassle free access to affordable movies. Compared to Netflix and Blockbuster, Redbox offers more physical locations as well as the lowest price available to rent a DVD or Blu-ray in the very competitive marketplace. Redbox, Netflix, and Blockbuster represent the major market share holders but the movie industry has a bigger connection with direct competitors as well as new entrants and suppliers and other substitutes. New entrants would consist of GameFly and Blockbuster Express.
The movie into instant-delivery movie rentals has made it so that a lot of companies cannot enter into a lucrative industry without high fixed costs. Due to the centralized organization of online entertainment companies, there is an economies-of-scale effect even for relatively new companies as compared to their brick-and-mortar competitor’s such as Blockbuster. Due to the low cost for business to enter this industry, there are a lot of options that consumers may choose from when looking to purchase movie rental products. With companies such as Apple and Amazon entering this marketplace, the consumer’s bargaining power is extremely high and results in a lot of price competition between companies. The threat of new entrants into this industry is extremely high due to the low amount of capital needed to enter into the industry as compared to others.
If this attempt is deferred, more suitable earnings of renting movies will take over such as “On Demand”. This is probable because the low-priced entry barriers in the DVD industry linked to streaming content due to the huge amount of streaming content that could become obtainable to possible distributors. d) Bargaining Power of Consumers The industry of movie rental is an active industry. In times of slower economic growth where customers have a less amount of optional income their ability of expenses in the industry will be reduced. In times of a wealthy economy, customers might spend more money on the industry.