Disney's Marketing Strategy And Market Analysis Assignment

ESSAY 2
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Disney's marketing strategy and market analysis
1.0 Introduction
Disney is a famous company that produces films which targets people who are young at heart such as some adults, children, and teens. The firm has its headquarters at Burbank in the US. More so, Disney is a multinational diversified company that focuses on music, theatre, radio, online media, and publishing (Pine and Gilmore, 1998, p99). Disney has a sizeable number of theme parks globally including Hong Kong, Japan, Florida, Paris, and China. However, the firm has not fully entered the Chinese market and it is consideration for various strategies to acquire the market because there are several well-established companies in the country. Apart from producing anime movies, the company also manufactures electronic products, bags, watches, home furnishing supplies, accessories, petticoats, and plush toys. The firm has become famous over the years and gained greater economies of scale since most of its customers are people who grew up watching its movies (Grant, 1999, p19). Over the years, people have known Disney to be offering anime movies that mainly target the young in heart such as children. The marketing strategies of Disney have aimed at creating attention and interest (Miao & Kim, 2017, p29). This has raised questions as to its success since it should diversify the type of films that it produces and target different types of people such as adults who are not weak in heart to increase its market share. No firm can work without working strategy. Firms need strategies to help them in making key marketing decisions (Grant, 2016, p17).
Nowadays, several firms have emerged that compete with Disney in the anime movie industry, which has decreased the amount of revenue and profitability that Disney previously made. For Disney to improve its economies of scale, I would suggest that it diversifies the kinds of films that it produces that will not only target the young at heart but also the gown-ups. Also, Disney should consider expanding its market to countries that it has not previously entered such as China. Targeting various audiences such as the grown-up and children as well as expanding its market to other nations that it had not previously operated in will improve its economies of scale and enable it to gain a competitive edge over its rivals. In addition, the firm should merge with small companies to improve its production and market share.
This essay is a continuation of the first essay that described how the Disney Company was established and how it has operated over the years including the improvements which it has made and the gaps that it still needs to exploit. Therefore, this work will analyze the various strategies that Disney has adapted to increase its market share and any improvement that it should make to increase its production and have a competitive advantage over its rivals (Grant, 1999, p19). The work analyzes the various factors that affect the company in nations where it operates such as the political condition and technical environment, its brand, target customer, and new markets before giving an opinion on the best strategy that Disney should use.
2.0 Why Disney Should Change its Marketing Strategies to Specific Countries
Disney should change its marketing strategies from targeting specific nations to targeting other countries irrespective of whether they are tourist destinations. The company targets mostly tourist destination sites for its products such as Hong Kong, Shanghai, Tokyo, and Paris which limits its market share. In 2016, the company expanded to China through an investment of $5.5 billion theme park in Shanghai which was a success to the company and in the year 2017 they first celebrated the success to the Chinese market. This is indicative of the success that the company can have when it expands to other countries across the world. Therefore, to increase its economies of scale, it should diversify to other nations to make its products famous globally. More so, the products of the company are made in line with the Japanese culture (Isomura et al., 2015 p36). This means that the business is targeting majorly the Japanese population. However, there are various people from different ethnic groups globally that the firm should consider when designing its products. Incorporating various cultural groups in its products will enable it to gain greater market share.
Disney uses three factors such as demographic, geographic, and psychographic segments to locate its market. Demographic segmentation includes family life cycle, gender, ethnic background, and income. The factor is used to determine where to locate their stores, determine the type of next movie to produce, and distribute the movies (Rolston et al., 2015 p345). However, psychographic segmentation refers to motives, geodemographics, lifestyle, and personality. Finally, geographic segmentation is used to locate Disney parks and resorts such as Disney World and Disneyland. The geographic segmentation refers to a region of a nation or the world, market density, climate, and market share (Rolston et al., 2015 p356). The factors three factors limits Disney from considering other elements of the market that are essential for its success because there are some countries that have a potential market for its products but lack the factors. Hence, the firm should change its marketing strategies to include every factor that can increase its market share and prevent other competitive companies from taking away its potential clients in other nations.
Though the multi-segment marketing strategy used by the firm of targeting families and their children seems more appealing, the strategy has not been properly implemented. The company targets middle class families which allow other rival firms to acquire the upper class and the lower class families (Sandlin, Jennifer and Julie, 2016 p77). More so, there are certain nations that may be interested in the company’s products and can for a potential market. However, the countries may either have a large number of low class people or upper class individuals which discourages the company from utilizing the opportunity. This allows other companies to have an easy access to the markets as Disney will not utilize the opportunity due to income disparity. Therefore, Disney should change its marketing strategy and cover people of all income levels in various nations. The adoption of the strategy will give it a chance to diversify its operations to nations that it had not previously acquired.
Notwithstanding, Disney can expand to international market through partnership and equity share holding with the local population or the government of the region that it intends to establish a branch. The strategy will build its reputation in that people from the nation will feel that they are also benefiting from the operations of the company, thereby, they will become its loyal customers (Saginova et al. 2015 p790). Moreover, the strategy will be seen as a positive externality as the firm will also contribute revenues to the states exchequer through taxation. The revenue collected will then be used to start other projects and offer employment opportunities to the youth. High income per capita in a nation improves their spending as a result most people will be able to afford its products which ultimately improves its market share.
3.0 How Disney Should Change its Marketing Strategies
Like McDonald’s that operates in various nations irrespective of the three factors considered by Disney such as demography, psychographic, and geography, Disney operates majorly in tourist destination sites. McDonald’s maintains product standardization as its major marketing strategy and allows people all over the world to license their products with the brand name (Gülcan, 2017 p3). In return the firm collects royalties from those who operate under its name and also buy properties then lease them to franchisees. It have been estimated that the company generates approximately 82% of revenue from the franchisees. The strategy acts as a marketing technique for making its products famous internationally as it will be present in almost every nation globally. Moreover, the firm will be able to gain a greater market share as it will target people of different income levels all over the world.
Similarly, Disney should adopt a strategy that will enable it to be present in every nation. Like McDonald’s, Disney should allow people to open businesses that are licensed under its brand name to act as an advertising strategy. McDonald’s sells its trademark to various people globally but still maintains its standards. The managers of the leased businesses are commanded to operate their businesses in line with McDonald’s requirements (Ater & Rigbi, 2015 p152). . The strategy is in line with the concept of limited resources in that a firm cannot afford the needed initial capital outlay needed to operate in every nation. Therefore, the strategy does not limit McDonald’s from opening various restaurant branches internationally irrespective of its limited initial capital outlay.
Nevertheless, McDonald’s targets everybody. The company offers a fun and friendly atmosphere for everyone to enjoy. McDonald’s products are designed in a way that makes them appealing to a wide range of individuals (Jaggi & Bahl, 2015 p59). The target groups range from workers who intend to purchase their products for breakfast to families who love its meals. The strategy enables the company to gain a greater market share as its products will be enjoyed by a greater group of people unlike Disney that targets only families and their children. Targeting only a small number of a population limits the amount of sales that a company collects. Therefore, Disney should diversify its consumers to include other income groups in a nation to improve the amount of profits that it receives.
Also, McDonald’s has an autocracy style of management. The strategy enables it to command how its branches are operated to maintain its standards globally. Similarly, Disney uses authoritarian system of leadership where the leader controls all the decisions and to be made and allows little input from the workers (Malcolm, 2017 p1). The system of leadership has been used well by McDonald’s to maintain the same standard in all its restaurant branches. However, Disney still has a problem in utilizing product differentiation as a technique to gain access to other nations because they are not sure whether their standards will be maintained. Therefore, to operate in other nations apart from only the tourist destination sites, the firm has to utilize its system of leadership to allow other private firms to use its trade mark in opening other businesses globally which will improve its reputation.
Finally, McDonald’s charges approximately the same price for its products but people are still driven to its goods and services because of product differentiation. Designing products uniquely makes consumers to be insensitive of the price charged because they will believe that the products are the best irrespective of the cost charged (Meyer, 2015 p7). The same should be applied by Disney. Though Disney has tried to differentiate its products, it has not achieved the strategy fully. Hence, the company cannot charge higher prices to its products but targets the middle class people who can afford its goods and services. Therefore, Disney should charge constant prices to make them available to everyone irrespective of their level of income.
4.0 Disney’s Strategies
4.1Theme Style
Disney’s parks and resorts have been designed uniquely to create individual experience for consumers. The unique design helps the company to differentiate its activities from those of rival firms. Similarly, the company continues to introduce new animated movies and new cartoon characters to make its products attractive to consumers (Croce, 1991, p102). The firm has easily discovered the value of music in Disney experience through shaping its function all over its history and applying the incarnations of soundtrack recording that were used in early comic. The new music connects the recent Disney experience with its past comics.
4.2 Disney Pricing Policy
The company targets the middle-class folks. Therefore, they design their pricing policy considering the mass population. Contrarily, the pricing policy in the marketing mix of the firm is dependent on the type of commodities or services that they offer (Vignali, 2001, p98). For example, products of broadcasting and movies involve a lot of capital, while theme park tickets and toys are affordable. The main aim of the firm in designing its pricing policy is to bring parents and their children together to experience the services that are offered by Disney. Hence, the company prices its products to enable everyone to enjoy their services. Apart from pricing their commodities depending on the age of a person, they also set different prices according to seasons.
4.3 Marketing Communication Strategy
Disney is the second largest multimedia company that communicates the same message in all its outward communications. Keeping message uniform is important to Disney because it has several theme parks, cruise ships, cable channels, retail stores, licensing partners, and production studios that need an efficient flow of information to manage (Carbone and Haeckel, 1994, p8). The communication extends to employees where they are trained to learn the best way of communicating with customers and to learn appropriate hygiene and attire. Moreover, full time workers receive continuous training that is specific to their section. Every offline and online operations utilize integrated marketing communication which is important in maintaining its brand image especially improving the satisfaction among customers (Hsieh, 2018). The online activities are carried out through Facebook and Twitter where the company displays its image using the same colors and images.
4.4 Positioning
Brand positioning is to make the products preferable to consumers than those of rival firms. The brand message has the potential to influence the decisions of customers (Kucuk, 2015, p15). Brand position ensures that the brand sticks into the minds of users so that whenever a family wants to watch a movie, they will give Disney cartoons a priority because they are suitable for people of all ages. Disney customers are very loyal to its products, which ranks the company as one the firms in the industry that have loyal consumers (Ghodeswar, 2008, p7). Walt Disney is an example of a company that understands its position and builds on it to offer a better customer experience. Disney brand name is strong and well known in the entertainment industry by people internationally. The company gives its consumers various branding strategies such as brand value, promise, logo, and slogan. The firm’s logo symbolizes quality which makes consumers loyal to its products. Also, the company slogan is indicated “where dreams come true’’ that is persuasive and interesting to several people (Ghodeswar, 2008, p8). Finally, the firm promises to make people happy and offers valuable products. Similarly, regarding positioning, the company is the leader in the media and entertainment industry. Currently, the entity has four major businesses such as theme resorts and parks, studio entertainment, consumer products, and media networks. In addition, Disney has different target groups and offers various products to its customers. The company majors on offering fun and happiness to its consumers.
4.5 Customer Groups
Disney primarily targets people of young hearts such as teens and kids. However, the major target group depends on their parents to provide them with money to purchase the movie tickets and most of them are accompanied by their parents. Hence, Disney has also designed some of its products for adults. The products are priced differently depending on the age of the consumer; adults pay high prices, while children pay low prices for tickets (Stone, 1975, p47). Notwithstanding, the company unveiled the first wireless phone service in 2006 to allow parents to monitor where their children are and control the people whom their children talk to. The technology is known as Disney MobileSM and it uses GPS capabilities. The strategy is to help the firm remain relevant in the contemporary family lifestyle. To add, the company continues to remain relevant to children and their parents by staying up to date with social media opportunities and digital gaming.
4.6 Disney Brand
Disney brand have been famous internationally for several years. The company started several years ago which has made it famous since most people grew up watching Disney movies. Most celebrities love bringing their family and friends to Disney because the firm has become closely associated with high end fashion, happiness, youth, and fairytales that celebrities have endorsed in the Disney brand building (Francoeur, 2004, p8). The price charged to the celebrities depends on their age and gender. Disney is one of the entertainment industries that create a happy atmosphere to its customers. The customers who come to Disney are more likely to return because of the joyful atmosphere that they experienced.
The firm bases the content of its movies according to the local culture and that is why the firm has a sizeable number of theme parks globally. Every product that they sell in a country has been designed uniquely and specifi...