Product differentiation is a business strategy used by firms to gain a competitive advantage by providing reasons for consumers to purchase their products or services. Netflix has product differentiation by means of offering old products (movies) in new ways. When Netflix first entered the movie market, they offered customers movies by mail. Netflix has expanded to the ability of streaming movies through various technological devices by means of the internet. Netflix still offers movies through the mail, which makes them different from other movie businesses in the market. This is called product mix. This is defined as the linking of functions within a firm. They have a high degree of product mix due to the fact that their products and services are technologically linked.
To see how Netflix focuses on the relationship with its customers, go here.
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