Renting and Price

Corey Allen BA504 February 19,2013 Abstract In 1997, Netflix became the first online movie by mail Rental Company. Hastings and Randolph co-founded the company. By 1999, they had come up with a $19. 99 per month price plan for customer to rent as many movies that they wanted with no late fees. In 2011, Netflix shocked their customers with their new price plan by splitting the streamlining of movies to one price and DVD by mail with another price. With the change, Netflix lost one million customers. Pertinent facts in the caseThe pertinent facts in this case study are that in 1997, Reed Hastings and Marc Randalph co-founded Netflix. Hastings was upset due to late fee’s he received when he went to return movies that he had rented six weeks earlier. At first, when Hastings came up with the idea, VHS tapes were used for rental, so the cost to ship VHS tapes was too expensive. Then one of Hastings friends advised him of the new DVD technology. With the new DVD technology, Hastings packages the DVD’s in a single envelope and shipped it to himself to see if the DVD would be damaged.When he received the DVD and found that it was undamaged, he began to create mail-order movie rental business. When Netflix first started, the price to rent a movie was $4 with a $2 shipping fee. With this new service, customers were able to have movies mailed to them, but they had to be back by a certain date or they would be charged late fees. In 1999, Netflix launched a new subscription service, which gave their customers unlimited rentals for a monthly fee of $15. 95 per month. With the subscription, subscribers were able to rent four movies per month.Within a year, Netflix improved the unlimited movies subscription plan and changed the price to $19. 99 per month. With the new plan, customers were able to rent as many movies as they desire and they could keep them as long as they wanted, but they could only keep four movies at a time. By 2007, Netflix had him a major miles tone by hitting one billion movie rental deliveries. That same year, Netflix introduced streamlining of movies directly to either the customer’s home computer. By 2008, customers were able to stream movies through their game consoles.With customers now able to stream movies directly to their computer or game consoles, Netflix came out with a price plan of $9. 99 per month for streamlining and DVD rental by mail. What is the situation? In 2011, Netflix announced that they would be separating the streamlining of videos and DVD by mail into two subscription prices. The price for streamlining would be $7. 99 per month and DVD by mail would be $7. 99 per month, so if you wanted to both stream movies and rent movies by mail, you would have to pay two different subscription fees.Netflix also announced that the movie by mail service would be run through qwikster. com. With the price increase of 60% and the announcement of the new website, Netflix lost one million subscribers, taking there subscription total of 25 million, down to 24 million subscribers. Along with the loss of subscribers, Netflix’s stock price dropped from a value of $298 to $169, which is a 40% loss in value. Who is involved? Reed Hastings was who was involved with the price change and he released a statement on September 18, 2011 stating that he had messed up with the way the price change took place.He went on to try and explain why the price change took place. What are the pertinent issues? The pertinent issues are that when Netflix announced the price change, they made the change fast and did not give their subscriber a chance to decide what they wanted to do. Basically Netflix announced the price change and made the change. By not giving their subscribers a chance to think about the new price change, they just went with it. By doing this, Netflix lost one million subscribers. These price changes not only affected the subscribers, it also affected their stock price.If Netflix would h ave gave more of a notice and the reasoning behind the price change, maybe they would not have lost as many subscribers. Recommendations for Netflix The actions that I would recommend for Netflix to recover from a marketing misdirection are that they should have eased into the new price plan or offer a promotional price to their current subscriber. For example, Netflix could have announced the new price plan and at the same time with the new price plan, they could have given their current customer a free trial so that they had the option of either paying the $7. 99 for either the stream lining or the DVD by mail.By allowing their customers the free trial, Netflix would be showing their customers that they appreciate their business, but they needed to make the price change to fit all customers need. I believe the theory break from reality for Netflix hit hard when they lost so many subscribers. With the price change and loss in subscribers, it opened the doors for Amazon to retain so me of the Netflix subscribers. How the arrived to their decision? Netflix arrived to the decision to split the membership in two when they realized that even with the streamlining of movies; customers were still renting movies by mail.Netflix also realized that not all there subscriber were taking advantage of the streamlining and the subscribers were only renting movies by mail. So by splitting the subscription into two price plans, customers had the choice of streamlining, renting by mail, or both. Conclusion I think the price change was necessary for Netflix, but I think they approached it the wrong way. I was one of the million subscribers who canceled their subscription due to the price change. But even with that said, after about two year, I’m now back with Netflix and I’m subscribing to the streamlining of videos.

Learning from Mass Media Campaigns for Hiv/Aids Prevention

Learning from Mass Media Campaigns for HIV/AIDS Prevention Reviews of mass media campaigns have a special interest for me. They demonstrate what can be done, and as importantly, what cannot be done, by relying on a 1P approach. I have talked about the 5% Solution before, and noted another review of mass media campaigns for changing health behaviors. This post focuses on the findings from a review of recent campaigns to prevent HIV/AIDS. What is interesting in this report are the comparisons it draws to reviews of earlier campaigns in this area as well as the current state of the art and science.The authors used seven principles to guide their analysis: (1) conducting formative research on and about the target audience; (2) using theory as a conceptual foundation; (3) segmenting one’s audience into meaningful subgroups; (4) using a message design approach that is targeted to the audience segment(s); (5) utilizing effective channels widely viewed by and persuasive with the targe t audience; (6) conducting process evaluation and ensuring high message exposure; and (7) using a sensitive outcome evaluation design that reduces threats to internal validity and allows causal inferences about campaign impact to be made.The question they explore is: to what extent have recent HIV/AIDS campaigns in the literature adhered to these principles? Noar et al (2009) began with a search of peer-reviewed articles appearing from late 1998 through October 2007. Mass media had to be a central or prominent part of a campaign that focused on increasing safer sexual behaviors, reducing risky sexual behaviors, or encouraging HIV testing.At least one outcome measure had to be reported; 38 articles were identified that met these criteria, representing 34 different campaigns. The results on the variables of interest were: Formative research – 16 of the 34 studies (47%) reported any type of research with the audience or pretesting of messages. the most commonly reported activity was research about campaign messages, including pretesting messages or examining message preferences of members of the target audience.Only two studies used formative research to develop or test their outcome measures (a neglected part of the research process in too many studies). Using theory – 44% reported using theory, most often the Health Belief Model, Reasoned Action and Planned Behavior, Social Cognitive Theory, the Transtheoretical Model and Stages of Change and the Information-Motivation-Behavioral Skills Model. Audience segmentation – 94% (all but 2) described an approach to audience segmentation.Message design – very few campaigns used theory to guide development of persuasive messages. The authors note that while behavioral theories can suggest the type of content to include, HOW that content is formed into messages is often approached without explicit reference to relevant theoretical models such as message framing, emotional appeals, sensation-see king, elaboration likelihood model and the use of narratives.Channels – 21% used a single media channel with television, radio and print media being the channel of choice. The remaining campaigns used other channels (billboards, brochures, Internet, newsletters) and a variety of promotional materials such as baseball cards, postcards, condom packs; a variety of interpersonal strategies including peer education and skill-building workshops and hotlines; and some also included community partners, coalitions and community mobilization in their activities.Process Monitoring – 82% of the campaigns reported audience exposure to messages, with a mean exposure of 77% of the targeted audience (a range of 35% – 100%). There was little reporting of frequency of exposure to campaign messages, and when those data were reported, it was difficult to make comparisons across studies. Outcomes – Pre-Post test designs using independent sampling were employed by a plurality of the campaigns (13 of the 34, or 38%). Eleven studies used only a post-test measure.The authors note that this means that 70% of the campaigns used weak outcome evaluation designs. In 24 of the campaigns (71%) behavioral outcomes were reported, most often either condom use or HIV/STD testing. Among the studies that used stronger designs (the other 30%), only 2 of the 10 found no statistically significant effects. Six studies reported significant changes in outcomes including talked with others about safer sex, continued abstinence, initiated condom use, increased condom use, reduced number of sexual partners, or were tested for HIV.The other two reported changes in behavioral intentions (for example, to use condoms and shifts in stages of change). The authors conclude that, when compared to another review of this literature in 2000, HIV/AIDS mass communication campaigns are increasingly: (1) targeting defined audiences developed through audience segmentation procedures; (2) design ing campaign themes around behavior change (rather than solely knowledge or attitude change – though given their selection criteria, this is hardly surprising); (3) using ehavioral theories to inform campaign design; (4) achieving higher message exposure to campaign messages; (5) using stronger quasi-experimental designs with control groups for outcome evaluation (although still far too few studies use these stronger designs); and (6) including measures of behavior change (or behavioral intentions) in outcome assessments. This review highlights how mass communication efforts for HIV/AIDS prevention have shifted from general awareness and knowledge outcomes to ones more tightly focused on achieving behavioral changes among defined segments of the population.While formative research has become commonplace, there are relatively few studies that use research designs that allow for drawing strong conclusions from their findings. This latter point does not mean that research design s must be randomized controlled studies, but as the authors note, even the addition of control groups or using time-series with control communities help address the question of whether there are alternative explanations for the observed effects (for example, that the respondents are not simply placating researchers with favorable or socially desirable responses to their questions).Social marketing is more than mass communication campaigns, but we often use mass media in conjunction with products and services, providing incentives and reducing costs of engaging in new behaviors, and increasing access and opportunities to perform these behaviors. Learning what works with mass media is important, but as other reviews have pointed out, it is not enough to achieve public health outcomes.Some marketers will note that health communication planners have adopted our practices of segmentation, targeting behavior change and using formative research. However, the importance of using theories th at fit the problem of designing persuasive messages is one important takeaway. The other takeaway is the challenge of designing better studies to assess outcomes.Thinking about using comparison populations, or simply delaying intervention among some priority groups while continuing to assess important outcomes, can help us demonstrate that we have more than a very elaborate, and perhaps even effective, placebo. Reference: Noar, S. M. , Palmgreen, P. , Chabot, M. , Dobransky, N. & Zimmerman, R. S. (2009). A 10-year systematic review of HIV/AIDS mass communication campaigns: Have we made progress. Journal of Health Communication, 14: 15-42. 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