Netflix Inc Case Study: Emily Heath Part 3- Alternative Solutions

Netflix Inc. ,: Streaming Away From DVD’s Case Study: Emily Heath Part 3- Alternative Solutions To ensure the company will achieve stability by maintaining customer appreciation and satisfaction, Netflix must invest their time and finances into new alternative solutions. The solutions are based on what problems have presented themselves and are in best interest of the customers and the company. The main concerns at the moment seem to be the unreliability and instability of the company as the guidelines for prices and methods of delivery are constantly changing.

There are a few possible suggestions that are up for experimentation to resolve Netflix’s problems. 1. Incorporate commercials before and after everything that is viewed on Netflix. One of the greatest features about Netflix is the commercial free streaming that is available. However, to generate more income, including commercials before and after each video and movie will assist with that. Doing it at the beginning and the end still keeps that commercial free feel, as its not interrupting what’s being watched every five minutes the way regular TV does.

Also, keeping the commercials to a minimum will allow for a quick message from the advertiser to the viewers. Although commercials are reoccurring and usually disruptive, if the customers know they are getting a better movie selection, they will be satisfied. By airing these quick commercials, we are generating more income from advertisers. Solution: Seek potential advertisers that will pay to advertise their products briefly before and after viewing videos.

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Advantages: Generating income for the company, potentially the reason Netflix may be able to expand its selections Disadvantages: Netflix will not be considered commercial free. 2. Expand the target market. Netflix is directed towards younger viewers (not by choice, due to the selection available, a target market was formed). By adding in a variety of older selection movies and TV shows that may appeal to different age groups will broaden the customer base. Also, extending the variety to younger markets.

As of now, the limited variety of movies and TV shows do not accommodate extremely young and older potential subscribers. If there is more selection incorporated, we can include all age groups. By incorporating cartoons and shows for young children, we are opening up a door for new customers. Young children will be able to tune in and watch their favorite shows, making it a favorite for parents. By adding in older movies and TV series like Coronation Street that target the older market, we are opening the door to potential customers in an older age group.

Solution: Incorporate more variety for a broader age group. Include child friendly TV shows and movies, to increase viewers at a younger age. Incorporate some of the older, less common TV shows and movies that target the elder customer base. Advantages: Opens the door for even younger and older customers Disadvantages: May be costly for the company to initially start and will rely completely on the outcome. Netflix must be sure they will gain this extra customer base before making the investment. 3. Create a Customer Base (Expand Social Network) to improve the services of Netflix.

The entire business relies on subscribers. If they don’t feel as if they are important, they will hesitate to continue paying their fees. Also, being able to communicate with the customers will create a more friendly and personal atmosphere. Starting up a chat room on Netflix to discuss what movies and episodes the subscribers want is a great option to explore. Also, by doing this we can get first hand information and opinions from the source. Letting the customer know we care about them will improve the bond they have with the business.

With a way to communicate to the customers, Netflix will be able to expand their customer appreciation and make better decisions to satisfy the consumers. Solution: Create a chat room to incorporate customer feedback. Advantages: This will create a bond with customers, will allow for opinions based completely on the consumer and will allow for Netflix to make accommodating changes to any issues affecting the subscribers. Also this may save some potential investments down the line because with a better understanding from the customers, the company will know which areas to splurge on. Example: knowing what the customers want, allows Netflix to purchase more of the popular demands rather then take the risk with less popular options. Disadvantages: It may be costly to start up. Also, it will require someone always on hand to review the feedback. 4. The biggest problem that is associated with Netflix is the unstable price and payment plan. The reason Netflix is so popular is because that is what the people love. The fact there is a flat rate to watch unlimited movies is the greatest selling point for consumers.

Every time Netflix announces a change to their flat rate, the amount of viewers decline along with the reputation of the business. It is the smartest idea to combine everything into one flat rate. A slight increase may allow for a newer and greater selection on Netflix. If customers are aware of the slight price change and understand it will be beneficial for them rather then the company, they will be a lot less hesitant to pay it. Solution: set a fixed price rate and plan for the customers. Advantages: With a straightforward price and plan, it becomes easier to account for.

Consumers enjoy simplicity and are more willing to invest/continue paying for something that seems organized and permanent. Disadvantages: Loosing the separate effect of DVD’s and TV shows. Rather then support what Reed wants by keeping it separate, the company must support what the customer wants as it relies on consumer satisfaction. 5. Creating a rewards program for customers will encourage viewers to continue using the service and will potentially increase the time spent on Netflix by the consumers.

By incorporating a reward for using the product, it will increase daily views by already existing customers and will open the door to a large amount of new ones. If consumers know that their time spent is valuable to the company, they will be more willing to continue subscribing and potentially increase their viewing times. Solution: Create a reward system that is based on views. (The more videos viewed, the better the reward) For example, if customers view over 30 hours a week on Netflix, a 5% decrease on the monthly payment may take effect. Not an actual set price and reward system for Netflix). Advantages: This increases weekly views and will assure the company a certain amount of views is always being accounted for. This also encourages people to spend more time using the product and attracts new customers. Disadvantages: a potential loss in the beginning for the company if they don’t have the sufficient funds. This is also time consuming for the company and will require attention to be spent primarily on rewarding the customers. Fixing Netflix With the 3 P’s (Conclusion)

Price: Solution 1 and 4 (above) focus on the price. Netflix must erase competition by fixing a competitive price. Also, they need to make sure they are offering the most for the cost. Promotion: Solutions 1, 3 and 4 (above) focus on the promotion. By promoting itself with a new approach, Netflix can gain new customers and continue building relationships with the previous ones. Distribution: Solution 2 and 5 (above) focus on the distribution. Netflix must make sure its available to everyone and that it is a high demand.

Using the solutions suggested will expand the customer base and improve distribution, allowing Netflix more control than other companies. Netflix has the capability to be a great dependable DVD rental and online video streaming service. A few slight changes and improvements made will ensure the business will stay striving for years to come. Netflix must settle on a fixed rate to offer customers. As a completely customer reliable business, it is necessary to involve them in every way possible. As a company, it should and will be Netflix’s goal to show the customers what they want to see.

By opening this two-way road, company workers and everyday customers will be able to discuss and potentially vote for what shows and movies they would like to see more of. Another thing to take into account are the opportunities for advertisements. The more advertisements Netflix can show throughout a day without interruption will improve the variety of TV shows and movies that they can air due to a budget increase. Netflix needs to become dedicated to its customers in order for it to be successful. Following these suggested solutions may help increase overall yearly sales and customer satisfaction.

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