Netflix Case Study

In todays society, consumers are constantly bombarded with advertisements and merchandising campaigns. Consumers have a million and one options of different brands, products and go to choose from. Marketers know this which is why, in order to gain customer value through sales and profit; they must cover value through their products and services. Was co-founder and chief executive officer of Netflix, vibrating reed Hastings, aware of this when he publicly announced an increase in fees on July 12th, 2011?
Netflix e mail-clad its U.S. subscribers announcing that the monthly fee was increasing from $9.99 to $15.98 and that they would be separating the videodisc rental and online streaming services into two separate entities. This carry out resulted in a loss of 805,000 subscribers.
In this study, we will research why both these decisions proved to be disastrous for the company. lets first take a look at Netflixs journey up to this point. Netflix was established in 1997 by co-founders, Reed Hastings and Marc Randolph. The California based company provided online videodisk rentals. Members could rent three DVD discs at a time, which were mailed to them along with a postage-paid return envelope, for a fee of twenty dollars per month.



Members had a wide variety of movie selection and could carry on the DVDs for as long as they wanted without any out-of-pocket dates or late fees. In 2004 Netflixs biggest competitor, Blockbuster, decided to cristal DVD mail-in services as well. However Netflix had an edge in the market, no late fees. Blockbusters unwillingness to put across late fees, along with other factors, forced them to file for failure protection in 2010 while Netflixs membership had cock-a-hoop to 4 million.
Netflix however took a hit in 2005 when consumers began lawlessly downloading movies. In response, Netflix launched a streaming service in 2007 that offered unconditioned movie rentals for a monthly fee of ten dollars which to a fault included their already existing mail-in DVD services. This marketing...If you want to father a full essay, order it on our website: Orderessay



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