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Introduction History SWOT Analysis


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Strategic Marketing Goals Consumer Behavior Strategy Targeting and positioning strategies Product strategies Pricing strategies Distribution strategies Promotion strategies Recommendations Annexure

I am working as an External Consultant for Walt Disney Corporation., and I have given the task to do the strategic analysis of Disney Company. When I had gone through the case I found many flaws and flawless points which I will discussed in the coming sections of the report. I have collected primary data by interviewing the key officials of Disney and secondary data from available published data. First I will discuss the history and SWOT Analysis of Disney. Afterwards, I will provide the Strategic marketing goals, consumer behavior strategy, and targeting, positioning and marketing mix strategy. Finally, I will give my recommendations to the Disney Corporation.

Walt Disney Company, a $27 billion a year global entertainment giant is the pioneer in providing a fun experience and homespun entertainment based on old fashioned family values. One of the key success factors of Disney is that it responded very efficiently to its customers preferences by leveraging the brand across different consumer markets. A family went to Disney movie together said that they had a great time and they wanted to continue the experience. Disney consumer products are specifically designed for specific age groups. In 2003, in order to promote a movie like Pirates of Caribbean, Disney had launched a theme park ride, merchandising program, video game, TV series, and comic books. Disneys strategy is to build consumer segment around each of its famous characters like Mickey Mouse and Snow White to new hits like Kim Possible. Each brand was created for a special group and distribution channel for example Baby Mickey and Co. and Disney Babies both target infants, but the former was sold through department stores and specialty gift stores where as the latter is a low priced option sold through mass market channel. Disneys Mickeys stuff for kids target both boys and girls, while Mickey Unlimited target teens and adults. Disney has significantly understood the behavior of its target consumer and it also designed the specific marketing programs according to its target market. For example on TV, the Disney Channel is the top primetime destination for kids age 6 to 14, and Playhouse Disney is Disneys preschool programming targeting kids age 2 to 6. Disney has successfully examined the general market trends of its entertainment industry and also identified its competitive advantage. It analyzed that consumers wants a package of valuable entertainment but at reasonable price. Disney is the pioneer in providing such value to its customers. Like Disneys co-branded Visa card, target adults. Cardholders earn one Disney dollar for every $10 charged to the card, up to $75,000 annually, and then exchange the earnings for Disney merchandise or services, including Disneys theme park and resorts, Disney Stores, Walt Disney Studios and Disney Stage Productions. Disney is even in Home Depot, with a line of licensed kids room paint colors with paint swatches in the signature mouse and ears shape. Disney has also licensed food products with character brand tie-tins. For example, Disney Yo-Pals Yogurt features Winnie the Pooh and Friends. The four ounce yogurt cups are aimed at preschoolers and have an illustrated short story under each lid that encourages reading and discovery. Keebler Disney Holiday magic Middles are vanilla sandwich cookies that have an individual image of Mickey, Donald Duck and goofy imprinted in each cookie The integration of all product lines can be seen with Disneys Kim Possible TV program. The series follows the action adventures of a typical high school girl who, in her spare time, saves the world form evil villains. The number one rated cable program in its time slot has generated a variety of merchandise offered by the seven Disney Consumer Product divisions.

1. 2. 3. 4. 5. 6. 7.

Disney Hardliners-stationery, lunchboxes, food products, room dcor. Disney Soft lines- sportswear, sleepwear, daywear, accessories. Disneys Toys-action figures, wrigglers, beanbags, plush, fashion dolls, poseables. Disney Publishing-diaries, junior novels, comic books. Walt Disney Records-Kim Possible soundtrack. Buena Vista Home entertainment- DVD/ video. Buena Vista Games- Game Boy Advance.

In 1928, Walt Disney created Mickey Mouse and in 1937, they created Disneys first feature-length musical animation, Snow White and the Seven Dwarfs. In 2004, the responsiveness of Disney product offerings was staggering; all in all, there were over 3 billion entertainment based impressions of Mickey Mouse received by children each year. But as Walt Disney said I only hope that we dont lose sight of one thong-that it was all started by a mouse.

Strengths Walt Disney is maintaining formidable position vis--vis their immediate competitors. Company is maintaining good company relationships with suppliers. Company is maintaining healthy relationships with collective bargaining agent (CBR). Walt Disney is financially strong. The operational system inclusive of procedures, processes and operation management reflect the element of that the company is meeting the desired standards.

Weaknesses Walt Disney needs more rigorous analysis in understanding the consumer behavior. Walt Disney needs improvement in tracking the changes in cultural values. Walt Disney does need strategic improvement in conducting the segmentation and applying the more soft techniques namely psychographics / life style. The mission of the company strategic direction and long term objectives needs improvement. Marketing improvement. management management needs needs

Human resource improvement.

Opportunities The economic conditions prevalent in U.S.A reflect moderate positioning. Walt Disney is reasonable equipped to internalize the social shift. Walt Disney is implementing all the related laws concerning entertainment industry. U.S.A is maintaining favorable strategic directions towards entertainment industry. The company is reasonable proactive in both sensing and implementing the new technology. International component fun Walt Disney apparently seems favorable.

Threats The entertainment industry is experiencing social shift where by members of society are seeking out value, more leisure activities and have become savvy also. Entertainment industry is subject to various legislations which are passed at reasonable base. The foreign politics of U.S.A is not based on objective analysis and judgment. Technological advancement shift is quite significant resulting in impact on entertainment industry.

The strategic marketing goal for the company is to increase a profit which is the ultimate goal of every organization. They also need to target some more segments like they have to operate in kids shoes and jewelry items. They can also retarget infant segment by offering some feeder or cereals foods item. They can also segment adults on the basis of specific featured cell phones for them, in which there will be some restricted functions that are unavailable in normal cell phones and parents can also get relaxed from their kids side. Even Disney can also start some sort of Schools and educational systems for kids, where they will not only enjoy with Disney toys but they will also learn something from them. The instructor should be wear Mickey Mouse or Snow White dress because kids like to learn from their favorite cartoon character but not from their traditional angry or strict teachers. So, Disney need to target 4-5 more segments and they will have to maintain these segments. Thus, in this way the ultimate marketing goal to maximize profit will also achieved.

In order to determine consumer behavior strategy, Disney needs to consider many areas. They need to understand the relationship between consumer behavior and marketing management. Disney has to significantly understand the behavior of its target consumer and it also need to design the specific marketing programs according to its target market. For example on TV, the Disney Channel is the top primetime destination for kids age 6 to 14, and Playhouse Disney is Disneys preschool programming targeting kids age 2 to 6. Similarly, on Internet, where the kids are now become the regular visitors, Disney needs to launch a website having games and learning quiz for children. Disney has not only to identify the needs and wants of its target consumer but it should be aimed is to create value in delivering those goods and services. Like if a consumer has a favorable experience with a product or service he will definitely purchase the product again but he also suggests it to others through word of mouth. Disney has also need to identify the psychographic characteristics of its target market. It not only needs to define their AIO (Activities, Interests and Opinions) but it can also apply VALS 1 and VALS 2 on its consumer market. They have to develop the life style patterns of their consumers so that they can modify or bring some new products for them. Disney can also use usage or benefit segmentation strategies. For example on the basis of light users, heavy users or medium users, they can target different segment. They are also targeting on the basis of loyalty and situational segmentation, since they are currently targeting some segments on brand basis, but this segmentation needs some improvements. They can use research analysis techniques for benefit segmentation Identifiable and measurable segment criteria: the target segment should be clearly identified like either they are targeting kids, adults, teens or whole family. Since some of their programs are specifically designed for kids age between 2-6 or 8-14 but is the size of this segment is measurable or not? Either their other target segments like for teens they have any differentiating offers available or not?

As Disney only followed one of the characteristic of demographic segmentation which is the age for targeting and segmenting the market and ignored rest of the demographic characteristics like gender, race, income, population e.t.c. following is the description of those aspects of Disney Company which are important for targeting also: Population: from where the target audience belonged? Either they all from U.S.A or some other regions? Are the downtowns people also like to come to Disney Land? Where the audience is geographically located? Either all metropolitan people want to come to Disney or some non metropolitan also? Education: what is the education level of its target audience? Either more women educated in our audience or men? Either they are functionally literate or not? Occupation: what is the occupation of our target audience; either they are blue collar or white collar? Whether rich class families preferred Disneys products or middle class also? Income: what is the income level of our target audience? Either they have subjective discretionary income or total family income? Expenditure: either the target audience planned to save some portion of their expenditure in some recreational activities like to visit Disney land once a year or they have less expenditure to only purchased Winnie the Pooh food products for its customers? Willingness to buy: either consumer is willing to buy as well as able to buy Disneys products? Will they continue like to buy the products or will bore from our existing products? Although Disney is targeting adults on the basis of their age and its each brand is created for a special group and distribution channel but it should also focused on MICROMARKETING. For example, as they started on TV, the Disney Channel is the top primetime destination for kids age 6 to 14, and Playhouse Disney is Disneys preschool programming targeting kids age 2 to 6. Similarly, they have to do micromarketing for their other product lines like for food products, video games, toys e.t.c For positioning strategy, we know that company needs to consider the USP (unique selling proposition) so that it will register the product in the minds of customer by using its marketing mix efforts. As in Disneys case, Kim Possible is the unique selling proposition for company so it needs to use it for its positioning strategy. It needs to find some more unique aspects for Kim Possible so that the interests of the kids will maintain or will more increase .This can be done in the ways like by finding new areas in which Kim Possible can be positioned like seasonal clothes can be offered to children by Kim.

Kim Possible

New products can fall any of the two categories (1) new to market (2) new to company. Since, Disney is bringing many new products each year ,so it needs to maintain the consistency in those new products and it will also needs to find some new target markets where they can offer new products also. Like each year in addition to the movie, they launched a theme park, story books, merchandise and related clothings. So, they can bring new products as for example, they can bring soups and cereals for kids group age from 6-14, this will consider as new to company. Disney can also bring kids shoes and jewelry items. They can bring shoes for all age groups of kids. Like for very small kids 2-6 years old, they can bring shoes having cartoon characters on it. For kids age 7-14, they can have shoes like school shoes in black or white color and for teen age kids, they can bring shoes which are more joggers or track shoes oriented. Similarly, they can bring jewelry items for young girls. For offering these new products, Disney needs to identify the external variables which include, Culture: what is the culture of its target audience? What are their values and attitudes? What material and non material cultures will be preferred by Disneys target market? Subculture: either the target audience is only white Americans or black Americans also prefer Disneys offerings? Social Class: what is the social status given by target audience to each other? Either they all consider themselves as equal or there is some distinction among them? Family: either all family members are satisfied by the Disneys strategies since it claimed itself for family entertainment? Personal influences: what are the other interests and opinions of its target audience? What activities they will do in their daily life? And what will be the effect of those activities on Disneys targeting and positioning strategies. Some individual determinants in designing new products are as follows: Personality and self concept: what will be the consistent pattern of behavior by those target individuals? What are the different aspects of their behavior? Either they preferred to come only on certain occasions or they are a monthly visitor of Disney? Motivation and Involvement: what are the factors that motivate an individual to buy Disneys toys? What is the degree of their involvement? Either they always preferred to buy Disneys toys or some competitive toys like Looney tunes also? Information processing: what is the source of our audience information? Either they are influenced by word of mouth or through exciting TV programs like Kim Possible? Learning and Memory: from whom the consumers learn the new offerings? Do they memorize are past cartoon character or they only want to learn something new about Mickey Mouse? Attitude: what will be the consumer immediate reaction towards our new product? Will they prefer to watch a new cartoon series or wanted to continue the old ones? What will be their reaction towards new food line like soups or cornflakes? Either they prefer to eat it or will reject it? They can also retarget infant segment by offering some feeder or cereals foods item. They can also segment adults on the basis of specific featured cell phones for them, in which there will be some restricted functions that are unavailable in normal cell phones and parents can also get relaxed from their kids side. Even Disney can also start some sort of Schools and educational systems for kids, where they will not only enjoy with Disney toys but they will also learn something from them. The instructor should be wear Mickey Mouse or Snow White dress because kids like to learn from their favorite cartoon character but not from their traditional angry or strict teacher.

Disney has a higher level of consumers who have associated themselves with the brand, and will pay the higher price point to own something with the Disney Cartoon character on it. When entering a new market or offering a new product or service, there are two basic strategies to choose from, penetration pricing or price skimming.

Penetration Pricing - The idea of penetration pricing is to charge a price below what the competition charges. Like if Disney is offering a new product at low price so it can gain high market share quickly and it can also establish volume sales with revenue from low markup but high sales volume Pr ice Skimming - The idea of price skimming is to charge a price that is higher than the competitors charge. Like if Disney is offering a new product at high price so it can recover the costs of developing the product, establishing its brand and cultivating the market. Secondly, Disney can establish an image of high quality and it can establish its brand name as the best. Following are the prices of some Disneys merchandise Disney Pix Click Digital Camera - High School Musical 2, Sale Price: $24.99, Disney Pix Click Digital Camera - Hannah Montana , Sale Price: $24.99 Disney Princess - Party Supplies - Stadium cup, Price: $0.98 Disney Princess - Swimwear - Ariel Pink 2-piece Swimsuit, Sales price $6.99 Disney - Books - The Ultimate Disney Sticker Book, Price: $6.95 Little Mermaid II - DVD - Return to the Sea, Price $26.99

As Disney is a multinational organization, so it needs a very advance and effective distribution channel. It can used any of the following distribution strategies in order to create a value chain; (1) direct distribution, (2) use of intermediaries. In direct distribution, Disney needs to consider the following aspects; Buyer Considerations. Disney need to look at the amount and frequency of purchases by buyers, as well as the margins over manufacturing costs that are available to pay for direct selling costs. Competitive Considerations. Distribution channels may be important aspects of how Disney differentiates itself and its products from others and this may decision makers toward increased emphasis on direct channels. Product Characteristics. Disney can also consider product characteristics in deciding whether to use a direct or distribution-channel strategy. Financial and Control Considerations. It is necessary to decide if resources are available for direct distribution, and, if they are, whether selling direct to end users is the best use of the resources.

Disney can also use push strategy in which company outsourced the distribution of products and can rely on third part suppliers. Like the product is moved from manufacturer either to retailer or to wholesaler. A push strategy is where the manufacturer concentrates some of their marketing effort on promoting their product to retailers to convince them to stock the product. A combination of promotional mix strategies are used at this stage aimed at the retailer including personal selling, and direct mail. The product is pushed onto the retailer, hence the name. Disney needs a very comprehensive strategy for its distribution channel. As it is a multinational, so it needs to find the local as well as multinational distributors for its products. Like, if Disneys program Kim Possible is seen by other countries children and they will also want to buy Disneys merchandise, so Disney can open a direct selling stores in those countries having all the related products of Disney. Secondly, Disney can also launched theme parks in that countries and it can also sell the DVDs for its famous movies and video games of its famous characters over there. Disney can also translate the programs of its Disney Channel into target countrys language and run that channel on to its cable networks. Thus, kids of all those countries will be enjoyed and will become the potential customers for Disney. Even they will prefer to buy Disneys products like school bags, lunch boxes, and other merchandise as soon as they become the viewer of that channel. Thus, Disney needs to adopt different alternatives in order to improve its distribution network.

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Disney can use any of the following promotional strategies in order to reach its target audience and to register its product in their minds. The strategies for promotion are as follows; Advertising: Disney can make different advertisements for different products and target audience. For example they can make a very sophisticated ad for classic cartoon characters like for kids age 2-4, they can offer Mickey Mouse shoes and they can make a very energetic and enthusiastic ad for Kim Possible. Thus, advertisement should be designed according to target audience. Sales promotion: Commonly used to obtain an increase in sales short term. It could also involve using money off coupons or special offers. As Disney offered co-branded Visa card that target adults. Cardholders earn one Disney dollar for every $10 charged to the card, up to $75,000 annually, and then exchange the earnings for Disney merchandise or services, including Disneys theme park and resorts, Disney Stores, Walt Disney Studios and Disney Stage Productions. Personal selling: Selling a product service one to one. Like Disney can offer its product by its well trained sales employees who demonstrate the products to different toy purchasing companies. Same for retail stores, like as soon as the kid enters in Disney store, the salesman wearing colorful cartoon character apparel can immediately respond to that kid and handle him very politely so that he will come again in future.

After thoroughly analyzing the case of Walt Disney Company, I have given my recommendations in the cross section of this report, but for the reviewing purpose, following are the recommendations to Disney Corporation. Disney has to develop the life style patterns of their consumers so that they can modify or bring some new products for them. Kim Possible is the unique selling proposition for company so it needs to use it for its positioning strategy. It needs to find some more unique aspects for Kim Possible so that the interests of the kids will maintain or will more increase. They can also retarget infant segment by offering some feeder or cereals foods item. They can also segment adults on the basis of specific featured cell phones for them, in which there will be some restricted functions that are unavailable in normal cell phones and parents can also get relaxed from their kids side. Disney can also start some sort of Schools and educational systems for kids, where they will not only enjoy with Disney toys but they will also learn something from them. The instructor should be wear Mickey Mouse or Snow White dress because kids like to learn from their favorite cartoon character but not from their traditional angry or strict teachers. Except age, they have to consider some other demographic characteristics like population, gender, race, income, occupation, education and willingness to buy which should be considered while segmenting a market. Positioning strategies should also be clearly defined like either they are positioning their different products on the basis of product features, benefits, usage, and user or against competition.

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Here are some of the new product lines which can be offered by Disney to different children groups.

New Food Products For Kids

Soups

Cereals

New Character and Accessories for young girls

Mickey Mouse Teachers in Disney Schools

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