Marketing Analysis of the Walt Disney Corporation

Marketing

Analysis of the Walt Disney Corporation

Marketing Mix

Industry Influences

Environmental Influences in Demand

The Walt Disney Corporation started out as a small animation studio in 1923. Originally named Disney Brothers Cartoon Studio, after the founders Roy and Walt Disney, the firm grew and diversified, moving first into live actions films and diversifying with different leisure and entertainment interests either developed internally or acquired (Disney, 2013). A great deal of the firms success sis based in the way in which the firm has been able to market itself and satisfy customer needs. The firm adopted the current name in 1986, reflecting the vast nature of their interests, and the way in which they were continuing to grow. To appreciate the strength and adaptability of this firm the way in which the firm competes and is able to respond to differing environmental pressures may be examined.

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Marketing Mix

The marketing mix refers to the 4 P's; product, price, placement and promotion (Kotler and Keller, 2011). The Disney marketing mix reflects the high level of related diversification and its' strong market position.

The first P. is product; this is highly diversified, with different products that are related meeting the needs of different markets, and multiple segments within each market. The firm itself is divided into five divisions defined by product type (Disney, 2013). The first division is media networks, which includes the different broadcasting interests such as the television and radio stations, as well as the publishing products. Television stations include the Disney/ABC Television Group, the Disney Channel which is broadcast in many countries as well as children's magazines (Disney, 2013). The second division is the parks and resorts, with the firm owning or having interests in 11 theme parks across 5 countries, with another resort being built in Shanghai, as well as 43 holiday resorts located in North America (Disney, 2013). The firm has developed its own time share model with the sales of Disney Vacation Club membership (Disney, 2013). The firm has also entered the cruise market, founded in 1996; the company operates 4 luxury cruise ships (Disney, 2013).

The third division is the Walt Disney Studios. This is the creative division, where the movies and television programs are made. The firm has a number of different studio's including the core Disney Animation which acquired Pixar, and is responsible for the latest release; Wreck it Ralph, other studios include Marvel Studio's, Touchstone Pictures, and DreamWorks, each producing their own style of entertainment. The firm has recently acquired Lucas Arts for $4.05 billion (Seeking Alpha, 2013), which adds to this illustrious line up.

Disney Consumer Products is the fourth division, responsible for the consumer goods which are branded with the Disney name or any of the brand names it own. This includes the Disney retail stores as well as the design, sales and licensing of Disney related merchandise (Disney, 2013). The last, and newest, of the divisions is Disney Interactive, which deals with the internet applications and interactive entertainment such as the provision of the online virtual worlds (Disney, 2013).

The second P. is price (Kotler, 2011). The price will indicate the products positioning and support the competitive advantages which is used by Disney; differentiation targeting the mass market, focusing on families. The firm has a premium pricing point for many of its products, emphasizing high quality experiences that are associated with the brand, for example the cruise line has prices above many of its competitors, including Royal Caribbean International and Carnival cruises. However, many the products offered with different pricing points, with products adapted to meet different consumer markets. For example, the Walt Disney theme park in Florida offers five-star hotel accommodation for a luxury experience, but also offers a range of three and four-star hotels at lower pricing points; a pattern which is also seen at Disneyland Paris (Disney, 2013).

The merchandising follows a similar approach; the products sold in Disney stores tend to have a premium compared to other similar products, but with different types of product offered at different pricing points. While a parent may not be able to walk into a store and afford a large Mickey Mouse toy for their child, smaller toys, or less complex toys are available with a lower price tag. The Disney television channels are usually part of the page packages for different satellite television and cable companies across the globe, but in many cases there are included in packages, so the price becomes more obscure. Overall, the pricing supports the proposition of superior and wholesome entertainment, supporting differentiation.

The third P. is that of placement; looking at where products are placed, and how they are accessible (Kotler and Keller, 2011). The Walt Disney Corporation has its products placed in prominent positions on a global basis, with the different company divisions controlling their own marketing and placement to their best advantage (Disney, 2013). Placements of the Disney stores are invariably in very high, prominent, foot fall areas, the Disney movies, which may be argued as a key element of the organization from which many other demands will be stimulated, are initially placed in cinemas or movie theatres, with marketing and advertising in those areas, as well as in the mass markets, such as television, billboards and magazines. The parks resource, as well as the cruise lines, are easily accessible on the Internet, and can be booked through travel agents. The television channels are leveraged, and will advertise other Disney related products, facilitating benefits of cross marketing in the placements. In all cases, all placements are in areas where children and their parents are likely to see and efficiently received the message regarding the products.