Policies and Strategies
Working for the pricing strategy consulting firm My Couther, INC has been one of the best opportunities for my young career. I have been at the company now for a few months, but have yet to take on a job by myself. Today marks the first client I will receive and work alone with. My first client will be Netflix the streaming media company that specializes in movies and television shows. The issue Netflix is having right now is an increase from a few of the networks that supplies the streaming application with the movies that keep the company profitable. The increase is causing Netflix to either lose profit or lose channels. I have been called upon to offer them the best solution possible. Without the movie channels the streaming web site will not have the broad selection of movies to choose from. If few movie distributors that deliver content to Netflix raise prices, the company has to raise subscription fees of their customers.
The key to an application that streams media content like Netflix is the price of services. The price of services is what lures a customer, which provides income for the company. Many customers will not pay over a certain amount for the application, because the movie selection is good, but not that wonderful. Customers might as well have available Cable TV, or satellite TV if prices go any higher. That is the mind frame of paying customers. Now my job is to create a plan that keeps Netflix with as many movies as possible, without raising the price on the loyal customers already signed up with the company. (Melicher & Zale, 2011).
"Pricing policies are rules or habits, either explicit or cultural, that determine how a company varies its prices when facing factors other than value and costs, that threaten it’s the ability to achieve its objectives" (Nagle, 2011, p. 96). Based off of Netflix's normal low price I have