Netflix Case Study

Topics: Renting, Video on demand, Innovation Pages: 3 (1131 words) Published: March 2, 2013
Elizabeth Patrick
When Netflix first started the technology of DVD was just getting into the market. This posed a limited market as most people still had VHSs. One of their competitions, Blockbuster carried DVDs also, but customers saw it was a convenience that Blockbusters were generally ten minutes away from at least 70% of U.S. populated homes. It had not hit customers yet, that they would not have to leave their homes to rent movies, and that it was actually an advantage for customers, which Netflix was trying to get them to see. It was easy for customers to go to Blockbuster because of the number of them available. Netflix realized that they had to be perceived more as having the competitive advantage. Money, particularly saving money would get most peoples’ attention, so Netflix implemented a no late fee policy. Customers were finally being attracted to Netflix’s model of value, convenience, and selection. They were gaining customers based on this, as Blockbuster charged late fees. Netflix realized that it would cost more than was needed to have excellent customer satisfaction. Instead of obtaining and stocking a lot of new releases, they created a movie recommendation system. This helped Netflix by only suggesting titles, which were available and by elimination the “bait and switch” perception. It was a personalized service for customers, recommending films, which they would have not otherwise seen, based on their preferences and the past movies they rented. Hiring new chief – exapand

The shifts were driven from the top. They used surveys to create a profile of each customer, investigating their tastes and preferences to be able to recommend similar features. Netflix worked closely with the USPS to minimize delivery time while using easily recognizable red Netflix envelopes. They did not only fully rely on the USPS, but Netflix would sometimes intercept and truck them for more fast and prompt delivery. Before, customers had been dissatisfied...
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