There are four essential items to consider when formulating a successful marketing plan. The first thing to consider is the product or service. The product of service that you are offering has to be something that fills a void in the consumer’s life. The next thing to consider is how the product or service will be priced. This answer can be reached after analyzing the competitive, socio-cultural, economic, demographic, natural and political environments in which the company and the product or service competes.
The third decision requiring deliberation is the place that the consumer will have access to the product. The product may be on the shelves in Home Depot, online at Amazon.com or sold by door-to-door salespersons. The last item to consider is how the product is promoted. The product will need an advertising plan that may consist of online ads, television commercials, newspaper ads, magazine ads or a combination of these (Ebert.R., &Griffin.R. 2009).
Netflix is a company that provides a service catering to the consumer that enjoys watching movies and/or playing video games. A customer may sign up for a monthly plan and a corresponding flat fee based on how many movies and games that consumer believes he or she is capable of viewing and playing in a month. The consumer has the choice of renting either the standard DVD or Blu-ray Disc format of their favorite movie. This company has moved away from the standard movie-renting model of the past. In the past, a customer would rent a movie and would pay for a specified number of days in advance. If the movie was returned after the agreed number of days, the customer would be charged a late fee. Netflix does not charge late fees and the consumer can keep the movie or video game as long as they wish. Netflix has approximately 100,000 titles in its inventory and will ship titles to the consumer upon request. Netflix ships requested movies and games the same day if the request is early in the business day. If the request is late in the business day, the item is shipped the next business day. Customers may choose to watch movies via their computer or Netflix ready device thereby eliminating the wait time (http://www.netflix.com/MediaCenter/).
Netflix’s marketing plan would have to consider the technological environment. Similar services like Blockbuster, DVD Avenue, Cafe DVD and eHit provide competition and would be a factor when considering prices, product, promotion and place. Although these companies are providing a similar service, Netflix’s product or service appears to have more of what the consumer desires. Netflix has 25,000 more titles than its closest competitor Blockbuster and 75,000 more than its second closest competitor DVD Avenue does (http://www.netflix.com/MediaCenter/).
Netflix would also have to consider pricing. Netflix provides a better bargain than it’s closest competitor by offering the same service for four dollars less. Blockbuster offers a plan that allows the consumer to rent one DVD at a time for $8.99 per month while Netflix offers the same plan for $4.99 per month. Four dollars in savings would allow the consumer to purchase a package of popcorn to consume with the movie (http://www.blockbuster.com/corporate/companyOverview/).
Another consideration for Netflix would be the place in which the product or service would be accessible to the consumer. It would have to evaluate a plan that was either solely online, a physical store, sold by door-to-door salespersons or a combination. Netflix has decided to conduct business solely online. Its closest competitor, Blockbuster, does business using a combination of physical and online stores. Netflix currently ships 1.9 million DVDs daily and has approximately 11 million subscribers. Netflix has sought to offset the disadvantage of the lack of physical stores through its higher inventory of titles and the lower priced membership plans (http://www.netflix.com/MediaCenter/).
Netflix promotes its service through online ads, coupons, television commercials, and magazine and newspaper ads. Netflix also maintains its share of referrals. This happens when a satisfied customer discusses his or her experience with a friend or coworker and compels them to do further exploration (http://www.netflix.com/MediaCenter/).
Blockbuster.com. (n.d.). Retrieved from http://www.blockbuster.com/corporate/company
Netflix.com. (n.d.). Retrieved from http://www.netflix.com/MediaCenter
DvdAvenue.com. (n.d.). Retrieved from http://www.dvdavenue.com
CafeDvd.com. (n.d.). Retrieved from http://www.cafedvd.com/cgi-bin/new/index.html
Ebert.R., &Griffin.R.(2009). Business Essentials [Online Textbook]. Retrieved from AIU Online
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