Will Netflixs localization marketing strategy prove to be successful in capturing the on demand video market segment in India?

3.1  The conclusion for SWOT and PESTLE analysis 

As seen in the SWOT analysis above , Netflix is a highly popular movie and tv streaming service, they have a high customer base and brand recognition. But Netflix struggles to compete in the Indian market due less regional content and overall high prices , companies such a Amazon Prime take advantage of this situation and provide regional content along with low prices , thus reducing the customer base of Netflix. The above PESTLE analysis shows that company has high global reputation, with the advance technology to provide user friendly service for the best movie experience; But Netflix faces economical pricing problems which are suited for the US along high acquisition costs for Movie rights. India’s growing digital literacy and growth in Smartphone usage can enable Netflix to expand its shores in indian market segment. Furthermore, Netflix can employ Big Data and Artificial Intelligence technique to deliver personalized local content to the customers.

4. The 4ps - marketing mix analysis

Product - this is the good or service that is offered in the market, which aims to satisfy the needs and the wants of consumers. The consumer’s preferences are taken into account. Netflix provides on demand video streaming services that allows its users to watch content on screens ranging from a smartphone to television. Netflix is a product on its own and provides a high quality streaming service for both TV shows and movies. In this case product deals with product itself.  Netflix in India as a product has failed to attract and satisfy the preferences of the indian audience due to lack of regional content. The service has failed to take in the consumer’s interests into consideration.  Netflix has implemented a new feature called as the smart download feature which downloads episodes automatically, thus allowing the users to watch the show offline. However this feature works only when the users stays connected to the wifi network.

Price-  price deals with the financial amount that customers have to pay in order to obtain the good or service. Netflix in india charges Rs.500 for its service which is much similar to its US counterpart price , this problematic in the Indian region where the disposable income one makes in not as high as in the US. But whereas it rival firms such hotstar, Amazon charges only Rs 200 per month. The indian customers are highly price sensitive and conscious which becomes a hindrance to the firm. The firm is striving to take into account the issue of indian customers  being a price sensitive country and  has different tiers of price levels for different levels of service that suits customers needs and wants.

Promotion - this refers to the various ways in which consumers are informed about and persuade a the product. Netflix does this through the form of advertisements via tv , and newspapers. Along with this the business has ties up with companies such as Marvel productions which allow more users to use the content as they would be interested . To increase the customer base netflix in india has made use of the famous indian actors for its offline events to promote and  make a richer local content, to suit the preferences and needs of the viewers. The use of these indian actors help them promote and create more of the regional content preferred by the indian viewers.

Place - Netflix is an online streaming service , this means that the platform will work on all internet enabled devices. As india is a growing market its smartphone industry is ever expanding which means that more people will have access to Netflix's service . Netflix india mainly focuses on the tier I and II cities only, leaving the rural areas, whereas its rival firms such as hotstar and amazon focuses on Tier I, II, III and rural cities, which enables them to have a larger customer base.

5. Guerilla Marketing 

Guerilla Marketing is a form of marketing that businesses employ, the strategy uses unorthodox techniques to bombard their customers with relative information about the service or product.  Netflix conducts Guerilla market with its Original content , such an example is their tv show Narcos. For this company created dollars bills on stickers and stuck on them on public areas and nightclubs and the tagline on the stickers read - .’Pablo Escobar was here’ and on the bottom it read - watch Narcos season 3 on Netflix. This prompts and bombards the viewer to watch the show. The Issue that Netflix has with India regarding this technique is that the company does not have an regional content which will connect with its audience to perform such a marketing technique.

5.1 Conclusion of 4ps and Guerilla marketing

The 4ps presents the view on how the business is selling its products and how it is being informed to the customer. The above 4p test shows that the business has a strong product and promotion and place but its pricing strategy is relatively to high for the Indian market. In the case of its Guerilla marketing the business will not be able to conclusively setup such marketing techniques due to the fact it does not have regional content that customers can relate to.

6. Ansoff Matrix

Ansoff matrix is a strategic growth tool used to understand a companies product in various markets it is placed in. In using this tool we can garner understanding into Netflix’s service in different markets.

figure : 1 Ansoff matrix

Source:  ““Diagrams.” Use Case Diagrams - Use Case Diagrams Online, Examples, and Tools, www.smartdraw.com/diagrams/.  Accessed 29 july. 2018 

6.1 Market Penetration  

Market penetration is the first quadrant in the Ansoff matrix. Market penetration refers to existing products in a known market. Netflix’s online streaming service, Netflix’s streamings services and its USP are not entirely new to the consumers in various markets.Certain qualities which remain a common between its competitors are the similar content and UI. This indifference that Netflix and lack of further innovation leads to the company’s eventual downfall overseas and in India

6.2 Product development

Product development refers to Products or services which have a relatively good market share in an existing market. Due to this the company generally creates new , or re-imagined products in order to boost further demand.Netflix’s downfall lies in the  absence of innovation which companies such as Amazon prime take the upper advantage of this by innovating in different ways. Amazon prime offers a low price and added with prime membership allows individuals to access its music services as well as free shipping. This puts Netflix at a relative loss. Netflix would be able to rectify this issue if it were able to if it were to create additional products , services or installments to its existing product.

6.3 Market development

Netflix's introduction in India is the quintessential example towards the  idea of an existing product in a new market. Netflix’s introduction into the Indian market was seen to be very promising with an introduction of a plethora of movies from the US. This popularity quickly dwindled when many competitors started entering the niche market

6.4 Diversification

Diversification refers to a completely new product in a new market. Netflix's services don't come under diversification as its service is not new nor is it present in an entirely new market.

6.5 Conclusion for Ansoff matrix 

The ansoff matrix shows that for Netflix it has achieved market penetration but not the the other aspects of the Ansoff matrix due to the lack of innovation by the business. This has lead for more players to enter the Indian market making localization a more difficult task for Netflix.

7. Conclusion

Netflix is a multimillion dollar company operating in many areas around the world, with great amount of content and options it is one of the most sought out online services in the world. Netflix provides users with great features which allow them to personalize what they want, given this situation Netflix would have to be providing the best services all around the world, but the company is hindered in India by the competition of Amazon prime and Hotstar its rival company in the Indian entertainment Industry.

 As SWOT analysis presented , Netflix loses customer base due to high prices ( priced at Rs.599) along with this is issue is the lack of proper regional content , this puts Netflix in the position of losing customers to Amazon prime. But what sets Netflix apart from its rivals is seen in the Ansoff matrix, given the fact that company is one product, great amount of work and effort in technology is put into making sure that Netflix provides the best online movie services ever possible. By using artificial intelligence for providing customized suggestion for individual customers, can help them retain their customers. But the company faces high expansion costs in India which don't contribute to the overall profit of the business. The firm has failed to provide enough regional content which is most preferred by the indian viewers and subscribers.  Being there in the industry for a long period of time, having a large customer base and strong brand image and recognition, netflix will have to improvise it’s range of services provided that is regional series which can support netflix in surviving in the Indian entertainment industry. Considering the fact that the rival firms such as Amazon prime, hotstar are offering customer preferable regional content, give them a upper hand in the Indian entertainment industry. By improving their product portfolio and pricing strategy, Netflix has a fair chance of increasing its market share and customer base in the Indian entertainment industry.  

The limitations of this research is the financial aspect. The effect of the localization marketing strategy has not been quantified in this research. Financial analysis and comparative financial performance with respect to local marketing strategies has not been discussed. The recommendations for this research are that netflix in India could start a freemium service to further increase its customer base. Further research can be done where marketing strategies can be quantified  into firms growth.

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