Netflix Consumer Behavior Joel Janke, Katie Lorig, & Alissa Rauh

Overview  History & Marketing Plan  Relationship With Consumer  Perception of Netflix  3X3 Dynamic  Influences Utilized by Netflix  Psychology  Maslow’s Hierarchy of Needs  Emotions

Netflix Marketing Plan  Consumption method is becoming outdated.  Consumers want good content without hassle.  Easy to control & navigate.  Internet TV apps taking over  Prominent channels following trend  HBO, ESPN, BBC and more  Creating their own internet-based viewing options  Internet becoming faster, more accessible, portable.  Netflix ahead of trend, continuing their positive developments.

COMPANYCOMPANY  1997  founded, focused on providing a service for the need.  Online movie rental service, one low monthly rate.  2002  Initial Public Offering on NASDAQ  600,000 members in US  2005  4.2 Million users  2007  Introduced streaming on TV & computers.  2009  Available as integrated function on some computers, gaming systems. HISTORYHISTORY

Company History  2010  Availability on most hand-held devices  2011 – 2012  Emerged in Latin America, the Caribbean and most European countries  2013  First Netflix-exclusive shows introduced (House of Cards, Orange is the New Black)  Exclusive new seasons of previously discontinued TV programs.  2014  50 million worldwide users

Future Expansion & Goals  Expand globally to provide service to more diverse customers.  Remain TV & Movie streaming service  Provide best in each category  Want to be in the Evoked Set of their users  Allow users to enjoy content what they want, when they want  Flexibility & Ease  No hassle with cable companies; no contract, one monthly subscription fee  Will spend $600 million on marketing  Strive for operational excellence

Relationship with Consumer

 CEO Reed Hastings takes customer phone calls.  Ties in strong desire to fulfill consumer interest.  126-slide presentation generated by company  Hire based on behaviors and skills  Values admired by fellow employees and customers  Judgment  Communication  Impact  Curiosity  Innovation  Courage  Passion  Honesty  Selflessness

“You Gotta Get It, To Get It.”

Perception of Netflix  Perceived Image  Perceived Price  Increase last May  Perceived Quality  HD  34% of America’s Internet  TV Quality Better  Perceived Risk  Poor Communication and Management  Stock

3x3 Dynamic Companies are often:  Convinced their innovations work  Likely to see a need for the product  Dissatisfied with the existing substitute BASED ON INVENTION  Set on seeing the new innovation as the benchmark Customers are Usually:  Skeptical about a new product’s performance  Unable to see the need for it  Satisfied with the existing product  quick to see what they already own as the status quo 3 x x Effect Companies overweight the new products benefits by a factor of THREE Consumers overweight the current products benefits by a factor of THREE

Hurdles of the 3X3 Dynamic  Consumers  Is it really worth the price?  “We have TV, movies, and YouTube”  Netflix  We have thought of every possible issue.  “Who wants to buy all of those movies and pay for cable?”

Influences Utilized by Netflix  Family  Friends  Culture

Psychology  Company Values/Personality  Public Perception of Netflix’s Ideals  Cultural Aspects of Netflix

Maslow’s Hierarchy of Needs  Netflix’s Use of this system  “Happiness” Needs  Knowledge and Understanding, Self Actualization, and Transcendence

Emotions  Color Use  Absolute Threshold Stimuli  Effect they have on Consumer’s Emotions  Sight, Sound, Touch