Marketing Plan Netflix

Topics: Renting, Rental shop, Blu-ray Disc Pages: 3 (1182 words) Published: February 11, 2012
Marketing Plan 1
Situation Analysis
Company Background:
Netflix, Inc. is the world's leading DVD rent-by-mail company. The Company was created by Reed Hastings and Marc Randolph in 1997 in Scotts Valley, CA. The idea came to Hastings after he turned in Apollo 13 in late and had to pay $40 in late fees. When originally started business, they started out with only 30 employees and 925 DVD’s for rent. The plan that was originally offered was a seven-day DVD rental for $4, plus $2 shipping, with the cost going down when additional discs were rented, if preferred customers could keep discs longer for an additional fee. Another product offered was customers could purchase new DVDs at a discounted price of up to 30 percent. Consumers could also decide to purchase a rented disc once they got it home by having the balance of the retail price charged to their credit card. By 1999, the company had more than 250,000 discs and 110 employees. It was September of 1999 when a new plan emerged; a Marquee program, customers could pre-select four DVD’s with no late fees or due dates for $15.95 per month. In February 2000, Netflix introduced a new service, CineMatch, this service compared rental patterns among its customers and looked for similarities in taste and then recommended similar titles based on these patterns. By the year 2000, Netflix was distributing over 100,000 DVD’s per week, had a customer base of 250,000 and now had over 7000 titles. This is also the year they started streaming video. December of 2000 was a pretty big deal for Netflix because they signed a revenue sharing agreement Warner Home Video and Columbia Tri-Star in exchange for a percentage of rental receipts, the movie studios gave Netflix better prices on large quantities of DVDs. Dreamworks and Artisan weren’t far behind in signing the revenue sharing agreement with Netflix. In early 2002, Netflix reached their anticipated subscription figure of 500,000. By this time, they...
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