Netflix is an American company, which uses technology to enhance film distribution. The company started its operations in 1997, in California, headed by three social entrepreneurs Randolph, Reed, and Mitch. It started as an online-based film-rental company where consumers could rent an item and have it posted to their destination. During this time, Netflix charged its customers for postage and late return of borrowed items.
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Later on, the company introduced a flat fee for unlimited rentals without imposing extra fees such as shipping and late fees. The company has continued to grow its customer base and distribution network. By 2007, Netflix distributed over 35,000 different films sending over a million DVDS a day. Netflix has expanded into Canada, Mexico, Europe, the Caribbean, and South America. Netflix continues to experience phenomenal growth in all the markets that it has expanded to (Keller & Kotler, 2011).
There are a number of cultural factors, which have contributed to the phenomenal growth in the company’s market share. Cultural factors are a number of values and beliefs held by a community or collection of individuals. People pass on culture from generation to generation and roots deep in the lives of these generations.
This influences their buying decisions greatly. For instance, certain cultures buy more than other cultures. Others only buy an item during certain ceremonies such as burials and weddings (Kashima et al, 1995).
All cultures also have a number of subcultures such as age sets, gender status, and religion. For instance, whereas Christians lavish on beef, it is a taboo for a Hindu to eat the same. On the other hand, it is unheard of for a Muslim to think of eating pork, a common delicacy with the Hindu. During a wedding ceremony, a Christian bride adorns a snow-white flowing gown. On the other hand, a Hindu bride must adorn a red cloth during a wedding.
For this reason, in an all-Christian subculture, white gowns will be on demand during wedding seasons, with red clothes having no demand. Another aspect of subculture is gender. A case in point is the fact that women buy more cosmetic products than men do (Keller & Kotler, 2011).
Since man is a social animal, social factors also influence the buying behavior. Such factors as, an individual’s roles in the society, status, immediate family members influence a consumer’s decisions. Every person has a number of people whom he compares with. This could be friends, coworkers, or relatives. Take for an example, for the case of Anthony who is pondering over which brand of a computer to buy.
Anthony will choose a brand according to the brands that his friends recommend to him. As well, people’s stages in life will influence their spending habits. For instance, bachelors will spend more on partying and luxury items whereas newlyweds will invest in a house or a new car. Those with children will spend in a way that secures their children’s future (Kashima et al, 1995).
Another social factor is an individual’s role in society. Take for a case two personalities, one heading a blue chip company and another one heading a local garage. The one heading a prestigious institution will spend more on clothing as compared to the one heading a garage irrespective whether the two have an equal income.
Netflix has succeeded in capturing the market by understanding the cultural and social factors influencing its customers in all the areas that it has expanded to (Kacen & Lee, 2002).
Kacen, J.K., & Lee, J. (2002). The influence of culture on consumer behavior. Journal of Consumer Psychology 12(2), 163-176.
Kashima et al. (1995). Culture, gender, and self: A perspective from individualism- collectivism research. Journal of Personality and Social Psychology, 69(5), 925-937.
Keller & Kotler. (2011). Marketing Management Package-Liberty University. New York: Pearson Publishing