Extra Credit # 1
Case Study: The Netflix Rollercoaster
1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several ...view middle of the document...
99 per month, no streaming and only one-disc-at-a-time cost $7.99 per month, and finally, if someone wanted both streaming and DVDs it would cost $15.98. These first set of changes, cost the company one million customers and a ton of negative press in social media; including 12,000 comments of dissatisfaction. However, at this point, Netflix’s stock prices still rose. Unfortunately, on September 18, 2011, Hastings posted a new announcement to the company blog, trying to separate and over-complicate the two services. He then reversed the changes, in yet another memo, on October 11, 2011. By this point, however, it was too late; more displeased customers had left and Netflix’s stock prices had plummeted. Personally, I believe this situation caused a short-term public relations nightmare; to the customers who were affected at that time. Netflix retained over thirteen million subscribers; given time, I believe the new generation of customers will still be interested in the services they provide.
3. Strengths: If Netflix can maintain consistency in the services they provide, their product is worth purchasing (subscribing to). No other companies offer streaming and DVD delivery, to their members, with such convenience.
Weaknesses: The early customers will remember the inconsistent changing and modifying of the prices and service options; done back in 2011. This caused the loss of many members, who may remain reluctant to re-join their subscription to Netflix.
Opportunities: Our current generation seems to embrace and encourage the sedentary...