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Current Marketing Conditions of Disney

Disney, the common name for The Walt Disney Company, is an American multinational media company and entertainment giant. Its headquarter is located in Burbank, California. Disney holds the second position among the largest media conglomerates in revenue. Disney is the market leader in entertainment industry. The Disney brothers, Walt Disney and Roy Disney founded this company in 1923, and named it the Disney Brothers Cartoon Studio. The iconic Disney product, Mickey Mouse, was created by Walt Disney. Mickey Mouse has become the mascot of Disney. Over the years, the company has become the market leader in the animation industry. For more than fifty years, the company  only focused on making animation films for the children. 1986 onwards, the company changed its name to its present name and started diversifying its business into other forms of media and entertainment (The Walt Disney Company, 2017).

Disney has started making live action films, television series, theme parks, theatre production, radio, publishing, music, online media, production of franchises, across the globe. It has become one of the biggest multinational companies of the world. In the past two decades, it has started making teen programs also, such as Hanna Montana.

After the Disney brothers passed away, the company struggled to maintain its market position. In the late 1980’s the company made a major comeback with many hit animation films such as Aladdin, Beauty and the Beast, The Lion King etc. It also acquired major animation firms such as Pixar; launched television channels like the Disney channel, ESPN; owns the ABC broadcast television network, produced Disney branded merchandise and owns 14 theme parks across the world (Papadopoulos, 2014).

Disney’s core concepts were to dream, to believe, to dare and to do. The company appeared as a small cartoon making company and from there it has become a major multi-billion dollar industry of entertainment in the world.

Disney is involved in multiple business projects and ventures around the globe in the fields of media, animation, technology and theme parks, and it is also involved in many small business projects. In the past few decades, Disney has been dominating the markets for television and children films. In the recent past, with the acquisition of Pixar, it has excelled in 3D animation. To revive the company’s business in the late 80’s, the company has adopted many innovative strategies, especially capturing the emergence and spread of the television to the mass (Unruh, 2012).

Innovative Strategies by Disney

The innovative strategies by Disney have made the company king in the entertainment industry. The strategies can be classified into the following types.

  • Brand identity: Disney has focused on creating youthful, fun, magical and family oriented entertainment. The company works according to its tagline ‘happiest place on earth’. Hence, people can trust this brand for quality entertainment. Disney aimed to put forth idea of entertainment based on relationships, which became the brand for them (Digital Spark Marketing, 2017).
  • Content marketing: Disney has put emphasis on the content marketing. It has made its business personalized for each customer, along with continuous promotion, building excitement for the potential customers, and promising to build a lifetime value for all the customers.
  • Attractive website: the website is one of the major parts of marketing for Disney. In the era of online marketing, Disney is able to pull the crowd through its convenient and attractive website, which also provides some special online deals. The main feature is that they do not push sell the products, rather the products do their marketing themselves in the local language (Weinstein & Cahill, 2014).
  • Story is the king: in order to provide quality entertainment, Disney does not compromise with the stories and presentation. They make it in such a way that people can relate to them.
  • Customer immersion: Disney always provides something new for the customers so that they do not drift away (Baker, 2014).
  • Adoption of changing demand: with times, the pattern of demand changes, and Disney follows that. With the technological advancement, Disney is incorporating the special effects and 3D animation into its projects. The Disney theme parks are bigger examples for this.
  • Social media: like other entertainment companies, Disney utilizes the social media platform for promotions o reach out to a bigger customer pool (Digital Spark Marketing, 2017).

Marketing position refers to the procedure of the establishment of the identity or image of a particular product in a certain way to beat the rivals’ products. The empire of Disney is vast. It has spread its wings in various sections of the media and entertainment industry. There are some competitors of Disney in various markets, such as Time Warner, Viacom, CBS, Comcast, 21st Century Fox etc. These companies compete through cable, tv, video games, CD, DVD or Blue ray. In the theme parks sections, the rivals are Six Flags, Universal Studio, Sea World and Cedar fair. Disney has included the Harry Potter section in its Orlando park, which is drawing more customers. It has an average annual growth in revenue by 8.79%, while its rivals had a growth of 6.12% in the same period. However, the net income of this company increased by 17.86%, while that increased by 31.43% for the rivals (Csimarket.com, 2017). The profits of the company majorly depend on the season and release times, but it still holds the position of the market leader in this massive industry.

Disney has captured the market by positioning as a quality and family oriented entertainment provider. It business is based on the characters and animations. Initially it positioned its products for the children, and over the years, it also introduced products for the teens and adults. Disney holds a higher position in terms of high revenues, high market capitalization regarding media networks and broadcasting, high in locations and visitors for the parks and resorts, and high quality product with high sales volume for consumer products (Sandlin & Garlen, 2016).

 

Figure 1: Market position of Disney for Media Networks and Broadcasting

(Source: Unruh, 2012)

 

Figure 2: Market position of Disney for parks and resorts

(Source: Unruh, 2012) 

Figure 3: Market position of Disney for consumer products

(Source: Unruh, 2012)

The strategic planning, marketing mix, marketing plan, competitive advantage, all contributed in the high positioning of the company in the entertainment industry.

Market segmentation is a very important part of the marketing strategies of the companies. It helps in the understanding of the customers’ needs and preferences more accurately. The company uses demographic, psychographic and geographic segmentation for their target markets (Leighty et al. 2015). Demographic segmentation is implemented on the basis of age, income, gender, culture and ethnicity. Disney uses this segmentation to decide the store locations, release of the movies, and the kind of movie they would make next. Psychographic segmentation takes place on the basis of personality, lifestyles, and motives. This helps in determining the market for their products and the type of products to sell. Lastly, geographic segmentation helps Disney to choose the locations for the theme parks. They have opened their parks and resorts in the most visited places of the world, such as Europe, Singapore, UK apart from U.S.A. (Slack, 2015).

Marketing Position of Disney

The target markets for Disney are the children and their families. This strategy falls under the category of multisegment targeting. It has products for all ages and for all members of a family. It has products for small children such as toys, animation films and playhouse Disney channel and many more; for the older kids they have various channels, radio, music, and live action films etc; the theme parks are meant for everyone, they also have made movies for the adult members of the families such as Pirates of the Caribbean. The Disney stores have a home décor section also. When the children browse through the toys, their parents can go through the home décor section (Bharadwaj et al., 2013).

Hence, it is evident that Disney does not target one specific market. The target income segment is the average income earners living in urban areas. The company have opened its stores in the malls and supercenters, they are making films and programs for all ages for an average price. In U.S.A. their theme parks are located in the most visited places of Orlando, Florida and Los Angeles, California. Disney believes in the saying of Walt Disney that adults are just the grown up kids, hence, they think not only about the kids, but for their families as well.

The key issue of Disney is maintaining the relevance of the 94 years old company with its primary customers and at the same time, staying true to the fundamental brand values and its heritage and tradition. It plans to achieve this balance with innovation. Achieving quality, recognition and more market share is another issue for the company. With the broad range of products and services all over the world, it is difficult for the company to manage its operations efficiently. At the same time, the cost of operation is extremely high in Disney, which posses a big challenge to maintain so many theme parks and stores across the world (Cross, Belich & Rudelius, 2015). In few places, the parks incur losses. When Disney could not innovate its products, the demand for the parks or products fell, leading to a fall in the revenues. Along with that, the major revenue generating areas are the parks and stores in the U.S.A. The other challenges of the company include the financial turmoil and recession in the international and domestic market; increase in the piracy of CDs, DVDs, blue ray; strong competition from the rivals in all the business areas; constant and growing need for technological updation and innovation; changing pattern of the demand and tastes and preferences of the customers; and negative publicity arising from any unexpected events such as accidents in theme parks. The further expansion of the company requires to meet all these challenges along with the  proper market targeting and segmentation (Wilkinson, 2013).

Target Market And Bases of Segmentation

To meet the challenges, Disney can utilize its strong points and formulate strategies. The strength of the company is based on the high brand value. Along with the brand reputation, there is high diversification in its portfolio. Disney has business in all the major spheres of the entertainment and media industry. It has made some strategic acquisitions of big animation companies such as Pixar, Lucas Films and Marvel and this was a big tactical move to capture a bigger market. Apart from these, the company can enjoy the benefit of global expansion, loyal customers, strong financial positions and economies of scale (Guo et al., 2013).

Therefore, the company must follow the below recommendations to face the challenges.

  • It must concentrate on developing the gaming industry for mobiles and tablets
  • It must build a more environment friendly image, products and services.
  • Disney must spend more for technological innovation to launch new products in short intervals.
  • It should expand its business in emerging economies and keep the pricing affordable.
  • Disney should focus on the development of the stories and characters in a more attractive way so that the productions are more flawless and more people gets attracted to the films, and products and services (Hollensen, 2015).

Conclusion 

The Walt Disney Company, more famously known as Disney, is the market giant in the entertainment industry. Over the last 94 years, this company has managed to stay at the top of the industry. It has its business in media network, amusement parks, resorts, motion pictures, merchandise, design studio and many other things. Disney has made Mickey Mouse its mascot. The company has used geographic, demographic and psychographic segmentation policies for market segmentation. It has not only targeted the children, but it has targeted the families of the children too. The success of the company reveals that their marketing strategy has been successful over the years. There are some rivals of Disney in all the business sections, but in terms of popularity and revenue, Disney is at the top of the chart. However, it needs to make innovations and further expansions in the new emerging markets to stay at the top in the coming years.

References:

Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan.

Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N. V. (2013). Digital business strategy: toward a next generation of insights.

Bohas, A. (2015). Transnational Firms and the Knowledge Structure: The Case of the Walt Disney Company. Global Society, 29(1), 23-41.

Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer International Publishing.

Csimarket.com. (2017). Walt Disney Co Comparisons to its Competitors, Market share and Competitiveness by Segment - CSIMarket. Csimarket.com. Retrieved 10 June 2017, from https://csimarket.com/stocks/compet_glance.php?code=DIS

Digital Spark Marketing. (2017). 10 Secrets to the Innovative Disney Marketing Strategy. Digital Spark Marketing. Retrieved 10 June 2017, from https://digitalsparkmarketing.com/innovative-disney-marketing/

Guo, X., Ling, L., Yang, C., Li, Z., & Liang, L. (2013). Optimal pricing strategy based on market segmentation for service products using online reservation systems: An application to hotel rooms. International Journal of Hospitality Management, 35, 274-281.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Leighty, K. A., Valuska, A. J., Grand, A. P., Bettinger, T. L., Mellen, J. D., Ross, S. R., ... & Ogden, J. J. (2015). Impact of visual context on public perceptions of non-human primate performers. PloS one, 10(2), e0118487.

Papadopoulos, G. (2014). Walt Disney - An analysis of the strategic challenges. Presentation.

Sandlin, J. A., & Garlen, J. C. (Eds.). (2016). Disney, culture, and curriculum. Routledge.

Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.

The Walt Disney Company. (2017). About - Leadership, Management Team, Global, History, Awards, Corporate Responsibility - The Walt Disney Company. The Walt Disney Company. Retrieved 10 June 2017, from https://thewaltdisneycompany.com/about/

Unruh, C. (2012). Strategic Management: Walt Disney Case Study. Presentation, https://www.slideshare.net/callieunruh/strategic-management-walt-disney-case-study.

Weinstein, A., & Cahill, D. J. (2014). Lifestyle market segmentation. Routledge.

Wilkinson, F. (Ed.). (2013). The dynamics of labour market segmentation. Elsevier.

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