Netflix seems to be in a stage of constant product development, as well as market development. While it originally started as a U.S.-based service, the company has moved aggressively into new geographies and now streams its programs in 190 countries and territories. The company now serves more than 100 million subscribers outside of the U. S.
ix has a complex business model in that it must secure content agreements by region and country. Regulatory restrictions also limit what content can be made available. Also, many international viewers are not fluent in English and prefer local-language programming. Such is the case in sub-Saharan Africa where Netflix is producing original content. The region has 1.1 billion citizens and is a largely untapped market. Streaming in Africa is estimated to grow from 3.9 million subscribers in 2020 to 13 million in 2025.
While Netflix is investing in African programming, it faces challenges in piracy, expensive mobile data, slow Internet speed, and a high rate of poverty. There is also plenty of competition in the market from both local and global providers. Pricing and sales requiring U.S. currency are issues as well. Netflix is testing a mobile-only subscription at $4.03 per month (59 South African rand).
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Group Activities and Discussion Questions:
- Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
- Which strategy is Netflix using? Why?
- Show video on Netflix global expansion: https://youtu.be/JdtnX_P-4Qc
- Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market Netflix.
- Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats (internal and external factors).
- Divide students into teams and have each team build a SWOT analysis grid.
- Strengths: what is company good at?
- Weaknesses: what needs work?
- Opportunities: what is going on in marketplace?
- Threats: what should company be wary of?
- Based on the analysis, what are the issues and risks that might occur?
Source: Wall Street Journal; other news sources