1.Introduction and company background
For more than nine decades, the name Walt Disney has been preeminent in the field of family entertainment. From humble beginnings as a cartoon studio in the 1920s to today’s global corporation, The Walt Disney Company continues to proudly provide quality entertainment for every member of the family, across America and around the Disney is an American diversified multinational mass media corporation headquartered in Walt Disney Studios, Burbank, California, United States. It is the largest media conglomerate in the world in terms of revenue. Founded on October 16, 1923, by Walt and Roy Disney as the Disney Brothers Cartoon Studio, Walt Disney Productions established itself as a leader in the American animation industry before diversifying into live-action film production, television, and travel. Taking on its current name in 1986, The Walt Disney Company expanded its existing operations and also started divisions focused upon theatre, radio, music, publishing, and online media. In addition, it has created new divisions of the company in order to market more mature content than it typically associates with its flagship family-oriented brands.
•Strong and well known brand name that has a good reputable image. •Market oriented corporation that targets entire family with different products. •The effective use of brand extension strategy
•Has first mover advantage as a pioneer company in the entertainment industry since 1923. •Provide high quality entertainment to different consumers •Strong positioning and high brand equity.
•Increasing cost of capital as the past several years Disney has seen its cost of capital steadily increase, which reduce the range of possible investment. •Lack of Corporate Control over Divisions
•Expand into new areas to reach other uncovered consumers’ segments. •Keep up with technological advancements in the industry to allow for more
effective product development and to keep current consumers and attract new ones 2.4Threats:
•Change in consumers’ interests due to the increase of product variety •The increase of competition which is increasing with the dramatic technological changes.
3.Segmentation, Targeting, Positioning and Differentiation
Disney offers different products that target different consumers as they produce films, labels, theatrical performance, parks, resorts and other consumers’ products that target different consumers not only specific segment as follows: •Geographically: Some of their products have no geographic boundaries such as films and others such as parks located in United States. •Demographically: Target consumers age from five and above, both genders, educated and uneducated people with different income levels as there are products target low income people and also higher levels and also people from all professions •Psycho graphically: Target consumers who have outgoing personality, love fun and entertainment whether a child, teen or parent from different social classes •Behaviorally: For usage rate there are heavy consumers who are addicted to Disney and also medium and law usage rate specially for low income consumers the same for awareness and loyalty level. 3.2Targeting:
It’s a “segmented market” using the “Differentiation strategy” (by offering different product for different segments targeting different customers). Disney for example target customers with high income with products like Resorts and Theme Parks; as targeting customers for medium and low income with toys for kids and films.
Disney positioning is “trust, fun and entertainment that resonated with children, families and adults”. This positioning comes from the company’s focus on its brand history to create consumers’ trust and the continuous use of product and market development strategies to position itself as a fun and entertainment brand that target all family members with variety of products.
Points-of-Differences (P.O.D): They have “a value-creation dynamic based on high standard quality and recognized that set Disney apart from its competitors.” Disney leverages all aspects of its businesses and abilities to touch its audiences in multiple ways, efficiently and economically.
5.Product/Market Expansion Grid:
Same MarketMarket Penetration
McDonald’s sell more happy meals with Disney more promotions.
The company had expanded Disney brand in to film, television, and consumer products; where families could experience the magic of Disney in real life. Developing 3D technology.
New MarketMarket Development
Expanding in new areas like Hong Kong, India, China, and Russia.
The “Disney Sunday Night Movie” and sold Classic Disney films on video at extremely low prices in order to reach a whole new generation of children. Disney Hannah Montana provides an excellent example of how the company took a tween-targeted television show and moved it across its various creative division to become a significant franchise for the company, including millions of CD sales, video games, popular consumer products, box office movies, concerts around the world, and ongoing live performances at international Disneyland resorts like Hong Kong, India, and Russia.
Disney has a high brand equity and has developed strong global brand that by time create loyal consumers who value the brand not only for its history but also because it satisfies needs of all family members with its continuously updated product variety and by being keen to build long-term relationship with its consumers through using social networks and interactive marketing. Also, Disney has build and created a brand equity based on the core values (trustworthy brand), brand essence (magical family fun), and brand promise (where only Disney can deliver a fantasy experience for families and others to share) emphasizing wholesome, kid-friendly, family-oriented fun and entertainment.
7.Buying Behavior Concept:
Consumer behavior is a crucial study and has several aspects such as: cultural, social and personal factors that can affect the consumer buying behavior. In Disney, cultural factors such as nationalities and social classes can affect how customers could be influenced, as for example different social classes have different perspectives to be influenced through. According to research, upper class consumers prefer magazines and books and lower class often prefer television. Successfully Disney was able to reach these categories with the most efficient way to influence their buying behavior. Word of mouth, previous experience , family and friends ; as well as, the different personality types, occupation and the economic situations are both social and personal factors that can affect how Disney customers can behave towards different products and services offered by the company. Family is a major influence, because parents are liable to buy different products of Disney, and it could be targeted easily and positively by Disney.
Researches have shown that more than two-third of 13- to 21- year olds influence family purchase decisions on audio/video equipment, software and vacation destination. As well as T.V which is powerful in reaching children; Disney marketers are using it to target children with product tie-ins for everything, as an example for that “Disney character pajamas, and further developed T.V channels such as: ABC, ESPN, and the Disney Channel. According to research and studies, it was found that certain personality types are affected positively with the whole Disney experience; such as: (sincerity: wholesome and cheerful, and the Excitement personality which is characterized by being spirited and imaginative) this is according to the classification that was done by Jennifer Aaker.
8.Building customer Value, Satisfaction and Loyalty Concept: Creating loyal customers is at the heart of every business. The only value that a company can truly get is the value that comes from the customers, the ones that you have now and still have in the future. Disney has been able to make their customers their major goal and concentration by offering them the best entertainment experience. Disney has been working on customer satisfaction since 1980. Satisfaction is the feeling of pleasure or disappointment that Disney customers get from comparing their expectations with Disney’s products or services perceived performance. Due to the nature and the quality of the products and the services that Disney offers, it’s hard to have dissatisfied customers; which their feeling is already positive, and they have previous assessments that are positive towards the performance of the whole company. Disney is trying to keep customer satisfaction through caring about customer’s recommendations and high quality products.
Over and above they worked hard to have different activities to build customer loyalty such as, involving kids in creating new characters they prefer, as building strong relationships with their favorite characters. In Disney has been able to attract and retain customers through; distributing their characters in Kid meals like McDonalds. As well as attracting teenagers by producing T.V shows like Hanna Montana; and the company have been able to improve CDs ,Video games and concerts which proves that the company has took a teen-targeted television show and had the ability to move it across its various creative decisions to be a significant franchise for the whole company . The greatest challenge now for Disney as mentioned in the case is to be able to keep a 90 year old brand relevant and current to its core audience while staying true to its heritage and core brand values.
From above analysis we can conclude that Disney is one of the most successful companies globally which was able with its effective and creative strategy to break all boundaries and be recognized as number one entertainment company and its historical characters who will live forever, also it is a great example of how company can keep itself always updated and developed to meet its consumers’ needs.
Although Disney is successful globally but it can use its huge resources whether financially or technologically to increase its presence in the Middle East as it has huge potential for such a company specially that Disney’s products has proved success in this market.