One of the marketing issues that Netflix is facing arises from the expansion attempts. The company spends vast amounts of money and the power of marketing in marketing strategies that cover a single country before moving to the next. Due to such a strategy, it fails to make all services available at once in any given country. Classifying customers, according to a geographical location, only leads to limited services offered as people have become diversified with globalization. For example, shows and movies provided in the United States could be very different or more compared to those offered in other countries where it is currently developing (Jenner 161).
This massive investment in marketing also has cost implications for the company because it does not match subscriber growth. In most countries, it is going to take time for Netflix to grow its subscribers because most households are from the low-income class. Therefore, the significant funds used in marketing are to generate long term benefits. As a result, the company is incurring substantial content costs that have forced it to raise prices, and this has led to a reduction in the rate of subscriber growth. This has taken away the pricing power of the company (Jenner 161).
Another challenge is the rising competition from new companies that offer the same service. These competitors are Disney, Apple, and WarnerMedia, and other existing freely accessible services that only require an internet connection. Disney presents the greatest threat to Netflix (Raymond n.d.). The company offers exclusive Disney shows and other content from Pixar, Star Wars, Marvel, and National Geographic. The competition threat facing Netflix is to market its limited services, which are similar to those offered by Disney. These competitors are pulling content from Netflix, making it already available for many people who are streamliners online (Jenner 161).
Solutions suggested helping Netflix in handling these issues include efforts to fill in the company's talent gaps, changing the organizational design, and formulating other policies that will fight pulling of content by other companies (Leeflang et al. 1). These measures will offer the company opportunities for growth and dominance in the industry. For instance, filling the talent gaps can be done through convincing experienced and skilled producers of movies and television shows to join the company (Jenner 161). This will increase the subscriber growth rate since followers of the favorite shows offered by such producers will shift to the company's platforms to continue viewing.
Secondly, the company needs to change its organizational design. The design is different in foreign countries, and it is closely related to the content offered, which is very different from plans offered in the united states. For instance, it should introduce a universal database that constitutes of all materials provided in all platforms to ensure that subscribers can access any content from any part of the globe. On content also, the company needs to increase efforts in production to ensures that the most streaming series are updated after a short time to keep the viewers subscribed (Jenner 161). The company should also invest in offering a wide range of content, like the most significant competitor, Disney.
2a. Advantages of the suggested solutions
The benefits of the ideas suggested, as mentioned above, including content protection, the attraction of subscribers, reduction of marketing costs, restoration of price control power, and organizational reformation. All these advantages will move the company ahead in terms of increasing subscriber growth.
2b. Disadvantages of the suggested solutions
On the other hand, disadvantages include increase short term losses because the company will take time to match profits with the benefits of low pricing. Also, acquiring new talented personnel may be costly. Increasing content also requires large investments; hence the company will have to incur these huge costs with the target of long-term benefits (Jenner 161).
3. Alternative solutions
Alternatively, the company may use strategies such as low pricing and increasing copyright requirements for shows that are exclusive to the company. As witnessed, the recent increase in prices has stalled subscriber growth for the company. Therefore, lowering prices with the expectation of raising them in the future may help the company to restore its pricing powers. This will attract many subscribers who prefer using services offered by other companies at a bit lower price than Netflix (Leeflang et al. 1).
The use of copyrights for shows that are exclusive to Netflix will ensure that other companies do not pull content from Netflix for their platforms. This will prompt clients who watch those shows to seek subscription with Netflix hence raising the subscriber growth rate. Also, copyrights and policy enforcement will help fight piracy reducing illegal access to content offered by the company (Leeflang et al. 1).
Conclusively, the company needs to keep increasing its operationalization to other countries but a lower marketing cost. This will increase the subscribers from the new operating zones. This will increase profit margins hence help in recovering losses incurred each year. The efforts to increase international coverage should focus on efficiency and recovering the operating leverage that is necessary for increasing the operating margin (Leeflang et al. 6).
Leeflang, Peter SH, et al. "Challenges and solutions for marketing in a digital era." European management journal 32.1 (2014): 1-12.
Raymond, Lauren. "Netflix Case Study Louisiana State University Shreveport MKT 701 Dr. James February 5, 2017." (2017).
Jenner, Mareike. "Netflix Marketing: Binge and Diversity." Netflix and the Re-invention of Television. Palgrave Macmillan, Cham, 2018. 161-182.
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