1.0 Executive Summary
Netflix recently embarked on a mobile-only subscription plan in Malaysia and selected emerging markets in Asia. The U.S firm announced the program on a trial basis in November 2018 (Faull, 2018). The subscription plan allows users unlimited access to Netflix content from hand-held devices such as mobile phones and tablets (Faull, 2018). Moreover, the organization plans to introduce Asian material in the new plan. It aims to win over a substantial portion of the clientele in the continent.
Several problems about the plan are inherent in the new product. Firstly, the company decided to launch the latest category of subscriptions relatively quietly. The lack of advertisement was because the mobile-only plan is still at a trial stage. Second, the program only offers its customers content that is standard definition quality. Third, Netflix plans offer the Asian market more localized content, but the product fails to provide this commitment. The product contains a good avenue for reaching a substantial market in Asia only after implementing specific recommendations.
Improving the current situation demands the introduction of subtle changes in the product. First, investment in advertisements is necessary to create the required awareness. The mobile-only subscription platform is a relatively new venture, hence the need to create awareness. Second, the company could be flexible with the price and introduce an option for high definition content. Also, Netflix could consider adding more local content in the Asian market.
In summary, the mobile-only product in the Asian market is an opportunity for Netflix to serve its substantial segment of customers abroad. However, the company needs to introduce specific changes to ensure it maximizes the potential of its products. Additionally, marketing metrics are necessary to make accurate inferences from the promotional efforts.
2.0 Situation Analysis
Netflix recently unveiled trials for a low-cost streaming plan in Asia targeting the mobile-centric market segment. The marketing objective is to test the market response to an exclusive mobile based plan. The product only allows users to stream entertainment content via handheld technology devices such as mobile phones or tablets. The move is in response to a growing number of users with access to high-speed internet. The costs of the package offered by Netflix is about $4 (Faull, 2018). The amount is the lowest in among the plans currently offered in the Asian market. Key features of the product include unrestricted access to the entertainment content originating from the American firm. Additionally, the company has made commitments to increase its allocations of Asian material. The mobile-only product is a response to a growth of internet coverage in the emerging markets and consumer the need for low-cost subscription entertainment plans.
Netflix uses several marketing tools to publicize its products to the prospective consumer. For example, it uses the direct marketing communication tool to help get its promotional message across. In Malaysia for instance, they quietly launched the mobile-only plan on a trial basis (Faull, 2018). The organization later communicated to the media regarding the trial program. Also, the firm effectively uses public relations to highlight its reasons for undertaking the trial. For instance, Hastings announced that the new subscription tier would run in a “few other countries” on the same trial basis.
Strengths, Weaknesses, Opportunities, and Threats Analysis
|· Netflix is already a market leader in the entertainment streaming industry. The company has therefore leveraged its first-mover advantage by moving into the Asian market (Bowen et al., 2014).
· Expanding to Asia provides an opportunity for Netflix to serve a significant chunk of its customers outside the U.S.
|· The rigid pricing embraced by the American firm is higher than what other competitors offer in the Asian market. The mobile-only plan costs half of the lowest subscription tier that Netflix provides. However, rivals in the market offer lower rates
· The product only gives viewers a chance to stream the movies in a standard definition mode.
|· The decision to introduce the mobile plan in Asia is an opportunity for the organization to expand its growth. The new access to the Asian market facilitates diversification
· The expansion of areas in Asia under cover of high-speed internet will suit the Netflix business model. Bowen et al. (2014) estimate that mobile data traffic grew by 15.9 exabytes a month in the year 2018.
· Introducing Asian content within the mobile-only plan present the company with a chance to maximize subscriptions in these countries.
|· The entertainment industry is highly fragmented
· . Netflix has to compete for viewership with gaming companies, besides traditional competitors such as Warner Bros and Disney.
· The emerging markets in Asia are also ripe for competition. Netflix, therefore, faces the threat of its profits dwindling over time
Conclusion. The decision to undertake a marketing strategy based on a growing market segment of mobile phone and tablet users is potentially rewarding. Netflix has an opportunity to maximize its robust network coverage around the world to gain a significant market share in Asia. The mobile-only plan could be a successful venture as an alternative form of entertainment for the phone-centric target market in Asia. However, threats arise from the company’s penchant for rigid pricing. Additionally, its reluctance to upgrade the content to high definition is a potential threat.
3.0 Recommended Marketing Strategies
Netflix should modify its existing marketing strategy to achieve certain objectives. The first objective is to increase the number of customers subscribed to the mobile-only plan. The second one is to ensure the effectiveness of marketing communications. The current low-key marketing plan which Netflix has adopted is redundant and ineffective. In addition, the company should deviate from its quiet strategy. Firstly, it should advertise the mobile-only plan via the traditional marketing channels in print and mass media. Secondly, Netflix should target a specific market segment while advertising; in this case, those aged between 18 to 24 years (Kotler & Keller, 2006). Thirdly, it could consider outsourcing a public relations firm to generate positive publicity in the Asian market. The firm should avoid using a quiet approach to enhance product reception.
Currently, the target market is the phone-centric people in the selected Asian countries. The recommendation is to enlarge the age bracket to accommodate everyone who owns a mobile phone as a marketing strategy. Moreover, the firm should gather information about the customers and use it to provide customized content. In addition, the mobile plan should have a provision to show users the current trends in society regarding content available (Kotler & Keller, 2006). In that way, users would know what to choose as guided by what is most popular during the day. Also, customizing the notifications on mobile phones according to the age profile of the subscriber is recommended to boost the company fortunes. Specifically, notifications aimed at specific market segments will revitalize the subscription plan so that the company updates users continuously on available content.
Netflix should slightly alter its product offerings as they exist at the moment. It should consider providing customers with the option of upgrading their plan to a high definition at a higher price. As noted in the SWOT analysis, the standard definition resolution is a weakness in the business model. Therefore, the firm could consider making minor tweaks on the pricing mechanism to differentiate between a high definition resolution and a standard one. It could also improve the content to avail an extensive collection of Asian entertainment options available for selection. Subsequently, consumers in the Asian market will feel that Netflix is innovative and part of their society (Kotler & Keller, 2006). The attitude of empathy will likely increase viewership in the market. Apart from higher profits, the high number of subscriptions assists the company to make conclusive findings.
The mobile-only subscription is only accessible from a handheld device such as a phone or tablet. The firm could seek to incorporate changes to the product to make the mobile experience fulfilling. For example, it could provide options for the user to dim the lights on their screen, alter the sound quality, and offer a choice of downloading the content. The user’s mobile experience should be close to watching from his or her family television. In that way, it will be easier for the firm to market the product as comfortable on the go with the same cinematic experience. The company would also introduce provisions to help users have a list of pre-selected content. When the entertainment material is available, it could alert the user through a pop-up screen. Any proposed product differentiation will focus on improving the experience of portable devices.
The balance between making charging good enough to make profits and attracting customers is delicate. Presently, the pricing for the mobile-only subscription product stands at $4. Netflix should not change it despite competitors having lower prices. However, it could consider increasing the value of the service as explained earlier. The plan is also available in selected Asian countries apart from Malaysia owing to its trial status. The distribution channels are the traditional Netflix online-based subscriptions. To the marketing communication element, the firm should encourage massive segment-oriented advertisements. The advertising promotions will involve a highly publicized PR campaign to promote awareness of the product. Overall, a lack of investment in advertising suppresses the potential of the mobile-only product in the Asian the market.
3.1 Marketing Research
Netflix could employ two marketing research techniques to help refine its promotional research. First, it would utilize the phone surveys to gather information and views from a specific focus group about its quality of service (Kotler & Keller, 2006). Phone interviews could be randomly selected. Alternatively, the firm could ask the customers to rate the quality of service after a month. Secondly, it could use a focus group to further gain insights on the performance of the product in the market setting (Kotler & Keller, 2006). The groups will comprise selected individuals from a variety of demographic groups in the Malaysian society. Afterward, Netflix may organize regular meetings, say once a month, to understand their views on what it needs to change in its mobile-only subscription product. Gathering data based on varied research processes will ensure its quality and reliability.
3.2 Marketing Results
Measuring the returns of the investment made in marketing will demonstrate its effectiveness. I intend to employ three marketing metrics to measure the effect of the promotional efforts regarding the mobile-only subscription service. I aim to utilize the demographics metric, which is gathering personal information such as age, location, and gender of the people interacting with the product. Also, I will measure user interactions while visiting my site. Interactions metrics will assist me in getting information about which content the customers prefer. Lastly, I will use the search trends metrics to gauge customer preference and determine possible patterns.
The mobile-only subscription product holds massive potential for substantial revenues in the Asian market for Netflix. Its current marketing structure provides means that it is necessary to introduce specific changes to the model to maximize its potential. Use of more aggressive advertisement, flexibility with the pricing, and incorporating customer feedback is critical towards improving the product for Netflix.
Bowen, R., Daigle, R., Dion, T. & Valentine, S. (2014). Netflix case study. http://robertdaigle.com/wp-content/uploads/2014/01/BowenDaigleDionValentine_NetflixCaseStudy.pdf
Faull, Jennifer. (18 November 2018). Netflix trials mobile-only streaming plans. The Drum, https://www.thedrum.com/news/2018/11/18/netflix-trials-mobile-only-streaming-plans
Kotler, P., & Keller, K. L. (2006). Marketing management 12e. Upper Saddle River, New.