Marketing Research

Fall semester 2022/2023

Group 2

Student names & ID:

Rana Hijjawi 20200563

Rita Hussein 20200659

Heba 20201006

Ali Mehyar 20191087

Dr. Ammar Qasaimeh

Research Topic

The Impact of Inflation on Digital

Marketing Platforms:

Impact of Inflation on Netflix marketing

Introduction:
Inflation- is a rise in prices, which is a decline in purchasing power, there’s inflation everywhere
in the world, which greatly impacts everything from housing to food to digital platforms. The
impact of inflation on digital marketing, in short, digital marketers are cutting on spending and
doing more with less, and focusing on lower-cost efforts and existing customers, and that’s
what a lot of big companies are doing in this inflation crisis, Big digital platform of streaming
services company’s like Netflix is one of the main companies that got affected by this inflation,
and that shows on a study that been made recently (pandemic vs endemic) found out that
inflation is having a real impact on streaming service subscription numbers.

Netflix and the history of Netflix:

Netflix is a streaming service that allows customers to watch a wide range of TV shows, Movies,
and documentaries, Netflix was founded by two American entrepreneurs Reed Hasting and
Marc Randolph in 1997, and ever since Netflix has been leading the way in digital content.

DVDs were new in the market and Hastings felt that they would travel through the mail, in 1997
Hastings conceived the idea of a subscription-based movie rental. in 1999 Netflix began offering
online subscriptions through the internet and the shows were mailed to customers in the form
of DVDs. 2001 Netflix hits 1 million subscribers and continues to grow, and in 2007 Netflix
began streaming and went live in 130 countries simultaneously, through the years Netflix had
massive success with DVD rental and reach a revenue of $4.2 billion, In 2011 Netflix splits its
DVD service off from its streaming. Netflix changed its activities and started online subscriptions
through the website without shipping DVDs. Netflix began producing its original content which
made Netflix gain more popularity than ever, Lily hammer is the first Netflix original series that
premiered in 2012. Netflix became bigger and bigger by creating original content that was
never made before series like House of cards, money heist, and stranger things are the most
popular original series produced by Netflix. In 2020 when covid-19 hit Netflix gets 16 million
Sign-up in the first three months of the year due to the lockdown which is almost double the
subscriptions in 2019, but that success came to almost an end for Netflix at the begging of
2022.
statement of the problem:
After the huge success of Netflix for the last decade 2022 was not a very lucky year for them,
for the first time in 10 years Netflix lost 2,000,00 subscribers in the first quarter of 2022 and 1.3
million subscribers in the United States and Canada in the second quarter of the year and which
led to Netflix shares falls of more than 30%. and value fell by more than $45 billion, Netflix fell
off because of its competition such as Disney+, HBO, and other competitors, sluggish economic
growth and increasing inflation is the actual main problem of Netflix.

Netflix is rising their prices and people are already frustrated by the price rising even on life
essentials, which led people to cancel their subscriptions.

Research Objective:
The aim of this research is to:
1. identify consumer behavior toward Netflix.
2. identify Netflix’s reasons for rising their prices
3. identify Netflix’s future plan to overcome their subscription loss

Research Questions:
1. How will Netflix gain back its market value?
2. Will the consumers resubscribe if Netflix lowers its prices?
3. How will Netflix change its marketing plan and make new decisions ?

Literature review:
In the field of economics, inflation is defined as an increase in the average level of prices for
goods and services over time. When the overall price level rises, each unit of money may
purchase fewer products and services. The often-used adage "inflation is money in motion"
captures this relationship between inflation and money. a result of too much money pursuing
too few available commodities.
Since current clients are less expensive than acquiring new ones, some marketers are cutting
back on expenditure or working harder for less. This has an influence on digital marketing. The
optimal course of action, however, does not necessarily include cutting back on marketing and
advertising investment. It appears that marketers might still benefit even in times of
turbulence.
One of the industries that have suffered the most is still advertising and marketing. Many large
and small firms are reducing their advertising expenditures, particularly their offline marketing
costs, in an effort to survive in the market. But the digital sphere has not only become
extremely important in the advertising industry, but it has also proven to be a lifeline for many
companies.
The debit on the impact of inflation on Netflix marketing is limited according to the positives
and negatives of it:
Negative impacts:
- Not only that Netflix’s subscription fees went higher, but at the same time
subscribes were affected by inflation as well and they felt the need to cut off
unnecessary fees which caused a huge downgrade in subscription rates
- Many platforms started offering the same services at lower prices and some have
free access as well. so more people started looking for those alternatives.

Positive impacts:
- Netflix started using message reminders that were sent out before subscription
dates were due.
References:
https://www.makeuseof.com/how-when-netflix-start-brief-company-history/

https://papersowl.com/examples/netflix/

https://www.theguardian.com/media/2022/apr/20/netflix-shares-fall-losing-subscribers

https://www.whats-on-netflix.com/news/first-netflix-original/

https://www.fool.com/investing/2019/02/02/netflix-still-has-2700-stubborn-dvd-
subscribers.aspx#:~:text=Netflix%20actually%20split%20its%20DVD,%2C%20dvd.netflix.com

https://bootcamp.uxdesign.cc/case-study-evolution-of-netflix-3b078201f925

https://mountain.com/blog/new-on-netflix-ads/
https://mountain.com/blog/inflation-streaming/

https://www.telecomtv.com/content/digital-platforms-services/netflix-suffers-a-subs-rewind-as-
inflation-hits-consumer-wallets-44221/