I m p a c t O f M a r ke t i n g
Environment
On Corporate Enterprises
-Case Study
TEAM MEMBERS:
KANIKA YADAV 23/COM/O60
KHUSHI BHARTI 23/COM/063
KIRTI JAIN 23/C0M/068
MAHAK PANTHRI 23/COM/069
MAHEK RATHOR 23/COM/070
TOPIC COVERED
KANIKA KRITI MAHEK MAHAK KHUSHI
YADAV JAIN RATHOR PANTHRI BHARTI
23/COM/O60 23/COM/068 23/COM/070 23/COM/069 23/COM/063
• INRTODUCTION • MICRO • POLITICAL • IMPACT OF
OF MARKETING • NETFLIX ENVIRONMENT REGULATORY
ENVIRONMENT
ENVIRONMENT OVERVIEW- • TECHNOLOGICAL ENVIRONMENT
AFFECTING NETFLIX
• OVERVIEW OF HISTORY • MACRO ENVIRONMENT ON NETFLIX
MICRO AND CURRENT POSITION • NETFLIX’s
ENVIRONMENT
MACRO • ECONOMIC STRATEGIC
AFFECTING NETFLIX
ENVIRONMENT ENVIRONMENT • ECONOMIC RESPONSES TO
• PRICING STORY ENVIRONMENT THE MARKETING
OF NETFLIX • CONCLUSION ENVIRONMENT
MARKETING ENVIRONMENT
KANIKA
The marketing environment refers to the external and internal
YADAV factors that influence a company's marketing strategies and
decision-making. It consists of two main components:
• The Micro Environment includes factors directly related to
the company, such as customers, competitors, suppliers,
and distributors.
• The Macro Environment encompasses broader societal
forces, including political, economic, social, technological,
environmental, and legal factors .
Understanding the marketing environment is crucial for
businesses to adapt to changes, seize opportunities, and
mitigate potential threats. It helps in aligning marketing efforts
with the dynamic market conditions and consumer needs.
NE T FLIX
KRITI
JAIN
HISTORY OF NETFLIX
• Netflix, founded in 1997 by Reed Hastings and Marc Randolph,
started as a DVD rental service, delivering DVDs by mail. In 1999,
it introduced a subscription model, allowing customers unlimited
DVD rentals for a flat monthly fee, which fueled its early growth.
• The pivotal moment came in 2007 when Netflix launched its
streaming service, enabling users to watch TV shows and movies
directly online. Initially offering a limited library, the convenience of
on-demand content revolutionized media consumption.
• In 2013, Netflix entered original content production with House of
Cards, marking its evolution from a distributor to a creator. This
transition established Netflix as a leading global streaming platform,
reshaping the entertainment landscape.
NE T FLIX
KRITI
JAIN
Current Position
As of 2023, Netflix remains a global leader in streaming with
over 230 million subscribers worldwide. It offers a vast library
of content, including original productions like Stranger Things
and Squid Game, alongside licensed shows and films. Despite
strong competition from platforms like Disney+ and Amazon
Prime Video, Netflix continues to dominate with its investment
in original content and international programming. Facing
challenges in saturated markets, Netflix is exploring new
strategies, such as ad-supported tiers and cracking down on
password sharing, to maintain growth and revenue.
NE T FLIX
MAHEK
RATHOR
Micro-environment Factors Affecting
Netflix:
•
Customers: Netflix faces evolving customer preferences, with
increasing demand for original content and a shift towards
streaming over traditional media.
•
Competitors: Intense competition from platforms like Hulu,
Amazon Prime, and Disney+ challenges Netflix's market share and
content differentiation.
•
Suppliers: Netflix relies heavily on content producers and licensing
agreements, making negotiations critical for securing popular
shows and movies. Content availability can significantly impact
subscriber retention.
NE T FLIX
MAHEK
RATHOR
P S T L E
POLITICAL SOCIAL TECHNOLOGY LEGAL ECONOMIC
ANALYSIS
NE T FLIX
MAHEK
RATHOR
Macro-environment Factors Affecting
Netflix
(PSTLE Analysis):
Political: Netflix must navigate content regulations, censorship, and
policies on global expansion, varying by region and country.
Economic: Subscription pricing and global economic trends, such as
inflation or currency fluctuations, influence consumer spending on
streaming services.
Social: Changing viewing habits, including the rise of binge-watching
and on-demand content consumption, shape Netflix's content strategy.
NE T FLIX
MAHEK
RATHOR
Macro-environment Factors Affecting
Netflix
(PSTLE Analysis):
Technological: Advancements in streaming technology and
increasing internet penetration globally enable better user experience
and broader access to Netflix's services.
Legal: This includes regulations around content licensing, copyright
laws, data privacy (like GDPR), and compliance with international
broadcasting standards. It also involves adhering to regional laws on
censorship and content restrictions, impacting its operations and
content availability across different countries.
NE T FLIX
MAHAK
PANTHRI POLITICAL ENVIRONMENT
1. Compliance with National Laws
European Union (EU): The EU has enacted regulations requiring
streaming platforms like Netflix to include at least 30% European content
in their libraries to promote local culture and talent
China: Netflix is not officially available in China due to the government's
strict regulations on foreign media.
NE T FLIX
MAHAK
PANTHRI POLITICAL ENVIRONMENT
2. Geopolitical Risks and Market Entry
Russia: In early 2022, Netflix suspended its service in Russia following
the invasion of Ukraine, citing concerns over the war and increased
censorship laws requiring media companies to broadcast pro-
government channels.
•China: Netflix has struggled to enter the Chinese market due to heavy
censorship and stringent regulations.
SOCIAL ENVIRONMENT
NE T FLIX
MAHEK
RATHOR SOCIAL ENVIRONMENT
1. Shifts in Media Consumption Habits
With the rise of on-demand content, consumers increasingly prefer streaming
services over traditional cable TV. This shift has fueled Netflix's growth, as the
platform offers an expansive library of content that can be consumed on various
devices. The “binge-watching” culture has also become popular due to Netflix's
practice of releasing entire seasons at once, allowing users to watch shows at their
own pace.
2. Globalization and Cultural Adaptation
Netflix operates in over 190 countries, so its
success depends on adapting to the unique cultural
preferences of each region. The company has
invested in localized content by producing shows
and movies that reflect the languages, customs,
and interests of different markets. For example:
•Money Heist (La Casa de Papel) in Spain
•Sacred Games in India and Lupin in France,
NE T FLIX
MAHEK SOCIAL ENVIRONMENT
RATHOR 3. Changing Family Structures and Viewing Preferences
In modern society, traditional family structures are evolving, and entertainment
consumption patterns are changing accordingly. Many households now consist of
single-parent families, childless couples, or blended families, with varying
viewing preferences. Netflix caters to these diverse groups by offering a wide
array of content, ranging from family-friendly programming to niche genres like
true crime and adult animation.
4.Youth-Centric Content
Millennials and Gen Z are primary drivers of
Netflix's audience growth. Netflix has catered to this
demographic by producing shows and movies that
resonate with younger audiences, including:
•Sex Education, which tackles issues like sexual
identity, relationships, and mental health.
•Euphoria, dealing with issues of adolescence,
addiction, and trauma.
•To All the Boys I've Loved Before, a romantic
comedy aimed at teen viewers.
NE T FLIX
MAHAK
PANTHRI
TECHNOLOGICAL ENVIRONMENT
1. Streaming Technology and Adaptive Bitrate Streaming
Netflix uses adaptive bitrate streaming to ensure smooth
playback, regardless of the user’s internet connection speed. This
technology allows Netflix to adjust the quality of a stream in real-
time based on bandwidth availability, providing the best possible
experience with minimal buffering.
2. Global Reach through Localization
Netflix uses technology to localize content for different markets.
This includes subtitling, dubbing, and even creating original
content in various languages to cater to diverse audiences
NE T FLIX
MAHAK
PANTHRI TECHNOLOGICAL ENVIRONMENT
3. Mobile Streaming and Compression
To serve regions with slower internet speeds or data restrictions,
Netflix has optimized its service for mobile users by employing
video compression technologies. These allow users to stream
videos even on low bandwidth connections without
compromising too much on quality
4. Automation and DevOps
Netflix is known for its culture of DevOps and automation. It uses
tools like Chaos Monkey, which randomly disables systems in its
production environment to test the resilience of its
infrastructure.
NETFLIX
KHUSHI
BHARTI REGULATORY ENVIRONMENT
1. Content Censorship and Cultural Sensitivities
• India: India has strict content regulations and a diverse cultural landscape.
Netflix has faced significant scrutiny over its content, particularly related to
religion, politics, and societal issues.
• Saudi Arabia: In countries like Saudi Arabia, Netflix has complied with
governmental demands to remove specific content.
2. Compliance with Local Laws and Media Regulations
• China: Netflix is not available in China due to strict governmental regulations
controlling foreign media content.
NETFLIX
REGULATORY ENVIRONMENT
KHUSHI 3. Political Pressure and Nationalistic Regulations
BHARTI • Brazil: In Brazil, Netflix has faced political backlash, particularly from
conservative and religious groups.
4. Self-Regulation and Adaptation
In many markets where direct government censorship is less overt, Netflix is
still pressured to self-regulate. In response, Netflix has implemented various
strategies:
•Age Ratings
•Content Filters
PRICING STORY
OF NETFLIX
NE T FLIX
KANIKA PRICING
YADAV • Price Increases Began (2014-2017)
As Netflix’s streaming service grew, Price increases became more frequent during this
period:.
•2014 Price Increase: This was a relatively modest increase, but it set the tone for
future hikes.
•2015 Increase (Standard Plan): This tiered system allowed Netflix to cater to different
types of users, based on their needs for HD quality or multiple streams.
•2017 Increase:. Netflix justified the price hike by emphasizing its growing investment
in original content.
• Frequent Price Hikes Amid Content Boom (2018-2020)
As Netflix became a global powerhouse, with increasing investments in original shows
and movies, prices continued to rise:
•2019 Price Increase: Netflix raised prices across all plans in January 2019. This was
Netflix’s biggest price hike to date, and it reflected the company’s focus on investing in
new content..
•Subscriber Response: Despite concerns about customer churn due to rising prices,
Netflix’s subscriber base continued to grow, thanks in part to its expansion into
international markets and continued dominance in the streaming space.
NE T FLIX
KANIKA PRICING
YADAV • As growth began to slow post-pandemic, Netflix implemented more price
increases:
•2020 Price Hike: In October 2020, Netflix increased the price of its Standard Plan and
its Premium Plan in the U.S., while the Basic Plan remained same.
•Subscriber Growth Decline (2021-2022): By 2022, Netflix reported losing subscribers
for the first time in a decade, shedding over 200,000 in the first quarter.
• Ad-Supported Tier Introduction (2022-Present)
Facing increasing competition and economic pressures, Netflix made a major shift in
its pricing strategy by introducing an ad-supported tier:
•Ad-Supported Tier (2022): In November 2022, Netflix introduced a cheaper, ad-
supported tier called "Basic with Ads".
• Global Pricing Strategies and Localization
As Netflix expanded globally, it implemented localized pricing strategies to cater to
different economic environments:
•India (2019-Present): In 2019, Netflix launched a mobile-only plan in India lower
than the global average price.
•Emerging Markets: Netflix has introduced tiered or discounted plans in other
emerging markets like Brazil and Southeast Asia.
NE T FLIX
KRITI
JAIN ECONOMIC ENVIRONMENT
1. Price Sensitivity and Subscription Tiers
•Introduction of Ad-Supported Tier (2022):
•In response to growing competition and economic
pressures, Netflix introduced a cheaper, ad-supported
subscription plan to attract customers who were more
budget-conscious.
•Price Increases and Customer Backlash
(2019):
• In 2019, Netflix raised its subscription prices by 13-
18% in the U.S. While this boosted revenue, it also
led to concerns over losing price-sensitive customers
2. Regulatory and Tax Pressures
As Netflix operates in different economic environments
Netflix is required to adhere to different locations different
regulations and tax practices which led to increase in cost.
NE T FLIX
KRITI
JAIN ECONOMIC ENVIRONMENT
3. Impact of Global Economic Slowdown
Global economic conditions, such as the COVID-19 pandemic and subsequent
slowdown, have had significant impacts on Netflix:
•COVID-19 Pandemic (2020-2022): During the pandemic, Netflix saw a massive surge in
subscriptions as people were confined to their homes.
•Post-Pandemic Slowdown: By 2022, Netflix faced a decline in subscriber growth, which
it attributed to macroeconomic factors like inflation and competition.
4. Economic Pressures on Competitors
The broader economic environment also affects Netflix through the challenges faced by
its competitors:
•Streaming Wars: Competitors like Disney+, Hulu, Amazon Prime, and HBO Max have
increased competition in the streaming market
•Merger and Acquisition Activity: The economic environment has led to consolidation
within the industry, these moves can create stronger competitors for Netflix, forcing it to
innovate or increase spending on content to maintain its market position.
NETFLIX
KHUSHI STRATEGIC RESPONSES TO THE MARKETING
BHARTI ENVIRONMENT
1. Global Expansion Strategies
Netflix’s global expansion has been one of its most successful strategies. Since
its launch, Netflix has steadily expanded into international markets and now
operates in over 190 countries. The key aspects of its global expansion strategy
include:
:Market Penetration :Tiered Pricing :Localized Marketing
2. Content Localization
Content localization is a cornerstone of Netflix’s strategy to appeal to diverse
global audiences. As Netflix expands internationally, it recognizes that global
success depends on creating and offering content that resonates with local
cultures and preferences. The main tactics here are:
1.Subtitles and Dubbing
2.Investing in Local Productions:
Netflix produces original content specifically for local markets.
Examples of this strategy include:
:Sacred Games (India) : Money Heist (Spain)
NETFLIX
KHUSHI STRATEGIC RESPONSES TO THE MARKETING
BHARTI ENVIRONMENT
3. Investment in Original Content to Reduce Dependency on
Licensing
To reduce its dependency on licensed content, which can be costly and
unpredictable, Netflix has made significant investments in original
programming.
Key initiatives in this area include:
1.Massive Spending on Original Content
2.Exclusive Content for Global Appeal
4. Partnerships and Collaborations
Netflix has also focused on strategic partnerships and collaborations to
enhance its offerings, drive market penetration, and improve content
production.
These partnerships take various forms:
1.Telecom Partnerships
2.Content Collaborations
MAHEK
RATHOR
CONCLUSION
