> BRANDED
“Netflix is an internet-exclusive company with a unique delivery method. We deliver from distribution centres in multiple sites. We still ship DVDs but all our marketing efforts are put into streaming now. This is the growth area – it’s well documented that stream- ing is the future. Currently 65pc of our members are watching instantly.”
‘Netflix’s customer base looks like America. There are single parents, college kids, grandparents
Famous red envelope One of the ‘wow’ factors of Netflix’s proposition over the years has been its famous red envelope. From the outset, Reed Hastings knew that if the company didn’t find a way to work with- in the US Post Office’s systems, it wouldn’t succeed. He spent hundreds of hours in regional postal centres observing and ask- ing questions. The result was an envelope with a design that was critical, not only for the customer experience but also for its operations and business model.
38 Marketing Age Volume 4 Issue 4 2010 ’
It had to meet several criteria, from effectively holding and pro- tecting the DVD to transforming into a return envelope. Above all else the envelope was Neflix’s ‘product’, the item that customers would touch and see, so it had to have all the key features of a marketing piece. There have been at least 150 iterations of the Netflix envelope since 1998. It evolved so many times as Netflix tested and learned what worked best – for example, one change was a little cut-out on the outside of the package that allows staff check the discs back in by ‘seeing’ the inside disc barcode without having to open the package. Aside from the envelope, Netflix has used traditional vehicles for advertising and marketing. “As a mainstream consumer com- pany we use TV, the internet, direct mail, free-standing inserts in newspapers and public relations. We spend about $200m a year on advertising. However, word of mouth is still the most important way of generating and keeping business. Netflix is one of those brands that people say they love – for example, if they see some- one wearing a branded T-shirt, they will say, ‘Oh I love Netflix’,” says Swasey.
“As a brand, Netflix achieves very high satisfaction ratings. It is
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