Question 4: Discuss how the steps of the Buyer Decision Process are being used by Netflix to satisfy existing and prospective customers by their product offerings. (10 marks – allow ~15 minutes)

Netflix Case: Netflix Uses Technology to Change How We Watch Videos

When Netflix was founded in 1997 in the United States, the movie rental giant Blockbuster had thousands of stores from coast to coast, filled with video cassettes ready for immediate rental to customers (Pride et al., 2018). Netflix had a different vision from this well-established, well-financed competitor. Looking at the recent development of DVD technology, Netflix saw an opportunity to change the way consumers rent movies. The entrepreneurial company built its marketing strategy around the convenience and low cost of renting DVDs by mail, for one low monthly subscription fee.

Instead of going to a local store to pick out a movie, subscribers logged onto the Netflix website to browse the DVD offerings and click to rent. Within a day or two, the DVD would arrive in the customer’s mailbox, complete with a self-mailer to return the DVD. And, unlike any other movie rental service, Netflix customers were invited to rate each movie on the Netflix website, after which they’d see recommendations tailored to their individual interests (Pride et al., 2018).

Fast-forward to the 21^st century. Video cassettes are all but obsolete, and Blockbuster, once the dominant brand in movie rentals, has only one remaining shop in the US as consumer demand has shifted to digital distribution for entertainment (Porter, 2019). In Australia, both Blockbuster and Video Ezy still had a brand presence in 2018 (Pride et al., 2018). Since then, Blockbuster’s last Australian shop closed in March 2019 (Porter, 2019), and Video Ezy exists in the form of vending machines (kiosks) after its shops closed (Rosenberg, 2018).

Both brands have been prompted to reassess their distribution channels. You may notice more DVD rental kiosks such as “Video Ezy Express” popping up in convenient locations, including outside supermarkets and shopping complexes, in a bid to improve brand reach and accessibility. DVD rental kiosks, like online services, are accessible around the clock and reduce many store costs, including wages.

In contrast, by completely eliminating the need for brick-and-mortar stores or kiosks, Netflix has minimised its costs and extended its reach to any place that has postal service and Internet access (Pride et al., 2018). The company still rents DVDs by mail (Monahan & Griggs, 2019), but it has also taken advantage of changes in technology to add video streaming on demand.

Now, customers can stream movies and television programmes to computers, television sets, videogame consoles, DVD players, Smartphones, and other web-enabled devices. One advantage to the company is that streaming a movie costs Netflix less per customer than paying the postage to deliver and return a DVD to that customer.

Netflix’s Use of Technology: From Data-Tracking to Streaming

Netflix made technology a core competency from the very beginning. Because the business has always been web-based, it can electronically monitor its customers’ online activity and analyse everything that customers view or click on.

With this data, Netflix can fine-tune the website, determine which movies are most popular among which market segments, prepare for peak periods of online activity, and refine the recommendations it makes based on each individual’s viewing history and interests. The company also uses its technical know-how to be sure that the website looks good on any size screen, from a tiny Smartphone to a large-screen television.

A few years ago, planning for a significant rise in demand for streaming entertainment, Netflix decided against investing in expanded systems for this purpose. Instead, it arranged for Amazon Web Services to provide the networking power for streaming (Pride et al., 2018).

By 2018, on a typical night in the US, Netflix streaming occupied up to 20,000 servers in Amazon data centres (Pride et al., 2018). Demand was so strong by that time, in fact, that Netflix streaming accounted for about one-third of all internet traffic to North American homes during the evening (Pride et al., 2018). This percentage is only expected to increase. The Australian market, however, may pose technological hurdles, as the National Broadband Network is still being rolled out and is not available in all areas, meaning that accessibility may not be as straightforward as it is in America (Department of Infrastructure, Transport, Regional Development and Communications, n.d.).

Although Blockbuster and Video Ezy are no longer a competitive threat in their traditional form, Netflix does face competition from Amazon’s own video streaming service, Amazon Prime Video, which headed to Australia and New Zealand’s shores in 2017 (Pride et al., 2018).

Other direct competitors include well-established Hulu, YouTube, Nine Entertainment, and

Fairfax media’s joint-venture Stan, and Foxtel’s movie-streaming service Presto. It also competes with other entertainment providers, including cable, satellite, and broadcast television. Foxtel, for example, has dramatically reduced its basic cable packages in an effort to retain its share of the market in face of increasing competition from on-demand services (Pride et al., 2018).

Netflix Offers Exclusive Programming to Customers

To differentiate itself from its competitors, Netflix commissioned exclusive programming such as House of Cards, Arrested Development, and Orange is the New Black. The cost to produce such programs runs to hundreds of millions of dollars (Pride et al., 2018). Between May–December 2019, Netflix added 179 original programmes to its American streaming service, or an average of 30 new shows a month, or about one show per day (Fruhlinger, 2019). Netflix plans to continue pouring money into exclusive content because of the payoff in positioning, positive publicity, and customer retention.

The way that Netflix releases its exclusive programming reflects its in-depth knowledge of customer behaviour. The company found through its data analysis that customers often indulge in ‘binge watching’ for a series they like, viewing episodes one after another in a short time.

Based on this research, in 2013 Netflix launched all 13 episodes of the inaugural season of House of Cards at one time, an industry first (Pride et al., 2018). Executives gathered at headquarters to monitor the introduction, cheering as thousands of customers streamed episode after episode. By the end of the first weekend, many customers had watched the entire series and shared their excitement via social media, encouraging others to subscribe and watch. When Netflix won multiple Emmy Awards for House of Cards, it was another first—the first time any Internet company had been honoured for the quality of its original programming.

One key measure of Netflix’s growth is the strong increase in the number of monthly subscribers. In 2015, Netflix had about 70 million subscribers worldwide, of which 26 million were located outside the US (Pride et al., 2018). In 2019, Netflix had 151 million paid subscribers worldwide (158 million if free trials are included) (Kafka, 2019).

Despite the brand only launching in Australia in March 2015, it already has close to 2 million subscribers in 2018 (Pride, 2018). By July 2019, Netflix had more than 11.6 million subscribers in Australia, up 18% from the year prior (Gruenwedel, 2019) Its closest direct competitor, Stan, had 2.6 million subscribes in early 2019 (Knox, 2019).

Netflix will not say how many subscribers that it has in New Zealand, but a recent survey of 1,000 people, commissioned by the Office of Film and Literature Classification and carried out by UMR Research, found that 72% of respondents subscribed to Netflix. Of the same respondent sample, 77% said they watched television shows and movies using a paid online service (Kenny, 2019).

Keys to Netflix’s successful launch include offering free-trials and access to stripped-back free versions, as well as continued investment in original programming. It appears that streaming is the new broadcasting, and that ‘on-demand’ spells the demise of scheduled entertainment.

Listed below are the amounts of net worth​ (in millions of​ dollars) of the ten wealthiest celebrities in a country. Construct a 95​% confidence interval. What does the result tell us about the population of all​ celebrities? Do the data appear to be from a normally distributed population as​ required?

What is the confidence interval estimate of the population mean muμ​? ​$ millionless than<muμless than<​million

​(Round to one decimal place as​ needed.)

Listed below are student evaluation ratings of​ courses, where a rating of 5 is for​ "excellent." The ratings were obtained at one university in a state. Construct a confidence interval using a

95​%confidence level. What does the confidence interval tell about the population of all college students in the​ state?

3.93.9​,

3.03.0​,

4.24.2​,

4.84.8​,

3.13.1​,

4.04.0​,

3.73.7​,

4.94.9​,

4.14.1​,

3.93.9​,

4.44.4​,

3.83.8​,

3.63.6​,

4.04.0​,

3.53.5

What is the confidence interval for the population mean

muμ​? less than<muμless than<

​(Round to two decimal places as​ needed.)

Refer to the accompanying data set and construct a 95​% confidence interval estimate of the mean pulse rate of adult​ females; then do the same for adult males. Compare the results.

Click the icon to view the pulse rates for adult females and adult males.

Construct a 95​% confidence interval of the mean pulse rate for adult females. bpmless than<muμless than<bpm

​(Round to one decimal place as​ needed.)

The mean playing time for a large collection of compact discs is 37 minutes, and the standard deviation is 4 minutes.

(a)

What value (in minutes) is 1 standard deviation above the mean? One standard deviation below the mean? What values are 2 standard deviations away from the mean?

1 standard deviation above the mean  

1 standard deviation below the mean  

2 standard deviations above the mean  

2 standard deviations below the mean

(b)

Assuming that the distribution of times is mound-shaped and approximately symmetric,

approximately what percentage of times are between 29 and 45 minutes? (Hint: See Example 3.19. Use the Empirical Rule.)

Less than 25 min or greater than 49 min?

Less than 25 min?

-------------------------------------------------------------------------

2)

Data on weekday exercise time for 20 females, consistent with summary quantities given in the paper "An Ecological Momentary Assessment of the Physical Activity and Sedentary Behavior Patterns of University Students,"† are shown below.

Calculate the values of the median and interquartile range.

median interquartile range

Interpret the values of the median and interquartile range.

The median exercise time of indicates that half of the exercise times were below, and the remaining half were above. The interquartile range tells us that the middle fifty percent of exercise times had a range of.

Three different companies each purchased trucks on January 1, 2018, for $50,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 42,000 miles in 2019, 40,000 miles in 2020, and 60,000 miles in 2021. Each of the three companies earned $40,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

b-1. Calculate the net income for 2021?

Company A:

Company B:

Company C:

c-1. Calculate the book value on the December 31, 2020, balance sheet? (Round "Per Unit Cost" to 3 decimal places.)

Company A:

Company B:

Company C:

d-1 Calculate the retained earnings on the December 31, 2021, balance sheet?

Company A:

Company B:

Company C:

An insurance company charges a​ 21-year-old male a premium of ​$500 for a​ one-year $ 100 comma 000 life insurance policy. A​ 21-year-old male has a 0.9985 probability of living for a year. a. From the perspective of a​ 21-year-old male​ (or his​ estate), what are the values of the two different​ outcomes? The value if he lives is nothing dollars. The value if he dies is nothing dollars. b. What is the expected value for a​ 21-year-old male who buys the​ insurance? The expected value is nothing dollars. c. What would be the cost of the insurance if the company just breaks even​ (in the long run with many such​ policies), instead of making a​ profit? nothing dollars d. Given that the expected value is negative​ (so the insurance company can make a​ profit), why should a​ 21-year-old male or anyone else purchase life​ insurance? A person who buys a​ one-year policy will expect to make a profit. Insuring the financial security of loved ones compensates for the negative expected value.

reflection paper on how you can contribute to the ideals of the University.

Apply DMAIC to improve the following at any university.

Course registration.

How do I pass the University of Indiana plagiarism test??

The Ethical Temperature in Arcticview

Mary Benninger had sought out her old friend, Tom Chu, to discuss her employment situation. Mary and Tom had both graduated in 1985 from Mackenzie King University, and then studied together to attain their CMA designations in 1988. Soon thereafter, Tom was promoted quickly within his division of a large multi-national auto supply company, and now held the position of vice-president/controller. Mary, on the other hand, had temporarily removed herself from full-time employment in 1990 to raise her young daughter. She kept herself up-to-date professionally and handled the occasional short-term consulting assignment. Six months ago, Mary had re-entered the workforce, her return accelerated by the fact that her husband, Frank, had been stricken by a debilitating illness. It had surprised Mary somewhat that she was able to land a position quickly as controller and office manager for Hewsen Chemical Inc., a small, privately-held producer of specialty chemicals used in testing labs and other manufacturing firms. Hewsen was a relatively new and growing company with innovative ideas, and Mary was pleased and excited to have had the good fortune to join its management team. Today, however, meeting with her CMA colleague and trusted friend, Mary was troubled. "I don’t know what to do, Tom. I thought I was taking on an ideal position, an emerging company, with flexible working hours, decent pay and a good benefits package to help with Frank’s medical expenses. But the situation sure turned sour quickly. I really don’t know who to talk to. In fact, Tom, I’m not sure that I should be talking to you." "Nonsense," said Tom, "You know you can count on me after all we’ve been through together. Tell me what’s going on." "Well," said Mary, "Initially, things were going very well for Hewsen Chemical. None of the larger companies were interested in the small niche market that Hewsen had carved out. Sales grew rapidly and, because of our success, Dusque, the big integrated chemical conglomerate, set up a subsidiary to compete with us. Since then, we’ve taken a real hit in sales and profits. Our business is down 30 per cent, and the new plant that we built in Brampton three years ago is operating at 50 per cent of capacity." "That’s certainly not good news," said Tom, "Have you got your expenditures under control?" "I gather we were never very good at cost control and internal controls were virtually non-existent. When we were growing so quickly, sales were more important than costs. When things got tough, they dismissed my predecessor and hired me. They told me that I could have free rein to implement whatever I thought was necessary. And boy, are some changes ever necessary! Our senior staff really don’t know the difference between personal and corporate spending, and I think our sales and marketing expenses are double what they should be. It will be a challenge to sort that out, but I’m pretty sure I can get this under control. The really big problem that has me worried is our northern development grant." "I don’t know a lot about government grant programs," cautioned Tom, "but tell me more." "When business fell off, Brian Hewsen, our president, attended a seminar on how to get government grants. He discovered that a matching program was available for firms to establish northern manufacturing facilities. So, Brian and our V.P. of operations submitted a grant proposal for us to manufacture chemicals in Arcticview, a remote village with about 2500 people, where the mines have been phasing out. The proposal was simply an adaptation of an earlier unsuccessful grant application for our Brampton operations. The government must have been real anxious for someone to locate in Arcticview, because the new proposal was accepted in a wink this time. Moreover, both levels of government have provided matching funds of $750,000,a total of one and a half million in government money. They also guaranteed a bank loan for us of $750,000, and we used the loan proceeds as our contribution." "Well, that sounds great, Mary. What’s the problem?" "After the funds were provided, we rented a temporary facility in Arcticview and we hired a few staff there to maintain the building. However, we told the Ministry of Northern Development that the new equipment needed to be tested and the manufacturing process needed to be developed further. So the equipment was delivered to our Brampton facility. The equipment is currently being used there to streamline our manufacturing of a new line of chemicals that should allow us to regain much of the market share we lost to Dusque. The problem is that the grant requires us to use the funds in Arcticview." Tom jumped in, "But will anybody check on how the funds are really being used?" "That’s what I’m worried about, Tom. At the present time, one of my tasks is to ensure that optimistic reports are sent about how the development work is coming. In the short run, I could handle this because there was a real need to shake down this new equipment. The supplier had suggested two months, but we have already been ‘testing’ the equipment for six months in Brampton, and Brian is hoping that we can continue to ‘test’ it for a full year." "Well, after the year, they’ll simply move the equipment up to Arcticview and your problems will be over!" "No, Tom, that’s when my problems will really start. You see, there is absolutely no way that we can turn a profit up in Arcticview. We would have to transport all the raw materials up there, and then ship the finished product back here. Dusque will soon be competing in our new line of chemicals and, even though they don’t have our advanced technology as yet, they will be able to beat us on cost because of the transportation factor." "I see. Then you’ll have to shut down operations and return the funds?" Mary’s reply was terse. "We can’t. If we shut down operations here, we don’t have enough funds to repay the loan and, apart from Dusque, I doubt we could find a buyer for the equipment. Besides, we would be operating below break-even on the balance of our operations." "Wow! Major problems. Does management have any ideas on how to work things out?" "Well, the size of this new equipment is quite portable as only small quantities of the chemicals are produced in each batch. Brian would like to ship the equipment to Arcticview for a startup phase, and temporarily move workers up there from the Brampton plant, while the government publicity photos are being taken. After a discreet period of time, he’ll return the equipment to Brampton, and bring the workers back down. We’ll continue to ‘produce’ chemicals in Arcticview with a few local workers, but the real operations will be here in Brampton. The grant contract states that the company is obligated to produce in Arcticview for a minimum of three years. So, Brian figures that if we can last for two years past the testing period, we will be able to keep the equipment and keep the company viable." "But surely some government audits are necessary, Mary. What will you do then?" "Believe it or not, Tom, the only audited statements the government requires are our financial statements from our external auditors. Brian figures that the auditors aren’t particularly concerned about where we manufacture but, to give the impression of a high level of activity in Arcticview during the audit, he’ll temporarily ship some people and equipment up there. Our auditors don’t really know the technical aspects of our business and, as long as we can document all the equipment, labour and inventory, we’ll probably be okay with them. One of the things I could do as well, is to bill as much of our supplies as possible to the Arcticview plant and minimize the amount billed through to Brampton. Some of our labour costs down here might even be billed through to Arcticview when you consider that a few of our Brampton workers will, in effect, serve as consultants to the northern facility." "Brian and our V.P. of operations will have to submit an annual written report on how the grant is being used, but for my part, all I have to do is contribute a brief statement on the ‘testing and setup’ along with the financials. I’m hoping that I won’t even have to see their finished report!" "Gee, Mary, I can see why you’ve got a bit of a worry here," Tom injected. Mary continued, "Brian and the other senior managers tell me not to worry. They say that everybody does this for tax reasons. They also figure that nobody could really operate a manufacturing facility in Arcticview anyway, because suppliers and markets are just too far away. They speculate that training costs alone up there could blow our grant budgets and, you know, I agree with them that the government just wants to wave the flag a little bit for votes. Besides, we are giving a few local people employment as custodians of the northern plant, and we are managing to keep Hewsen Chemical afloat during this tough time. Brian is also particularly miffed that Dusque got a major government supply contract away from us, and argues that this government grant merely puts us back on a level playing field." "Tom, I’m really bewildered here. On the one hand, as I think about it, the financial statements will be perfectly accurate and consistent with previous years, so I don’t believe that anyone could nail me on an ethics question there. But I did sign a very restrictive employment contract (see insert) that states that I can’t talk to anyone. I’ve violated it already by talking to you, and of course Frank. And I’d surely be violating it, and perhaps my professional code of ethics, if I talked with the government. Heaven knows that Frank and I need the money and Hewson’s health care package,and there are 60 other employees in Brampton that need their jobs too. I’m having difficulty sleeping at night, but Frank keeps telling me to simply ignore the issue and do what I’m told. In all other aspects, this could be a great job and, if we pull this off, Brian says he’ll cut me in for equity participation. If I quit, it won’t be easy to get another job and you can be sure that Brian would not be helpful in getting me placed." Employment contract, Hewson Chemical Inc. The Employee expressly covenants and agrees that he/she will not, at any time during or after his/her employment with the Company: a) reveal, divulge or make known to any person, firm or corporation, the contents of any formula, chemical compound, product or other substance owned or developed by the Company; or the method, process or manner of manufacturing, compounding or preparing any such formulae, compounds, products or substances; or sell, exchange or give away, or otherwise dispose of any formula, compound, product or substance now or hereafter owned by the Company, whether the same shall or may have been originated, discovered or invented by the Employee or otherwise; b) reveal, divulge or make known to any person, firm or corporation, any secret or confidential information whatsoever, in connection with the Company or its business; or anything connected therewith; or the name of any other information pertaining to its customers or suppliers; c) solicit, interfere with or endeavour to entice away from the Company, any customer or supplier or any other person, firm or corporation having dealings with the Company; or interfere with or entice away any other officer or employee of the Company. If you were Mary, what would you do?