Walt Disney Company Market Segmentation

The Walt Disney Company is an American entertainment company that has its headquarters at Burbank, California. It is important to note that the company renders its services through mass media corporations enabling it to deal with North America, Latin America, Europe, and the Asia Pacific. The company was founded in 1923 and has over time expanded owing to its marketing strategies (Santoli, 2015). Therefore, its marketing environment has enabled the company to diversify into theatre, online media, radio, publishing, and music among others. For this reason, it has expanded its target market and currently has an audience that features both adults and children audiences. Walt Disney in recent years has not placed efforts on a single target market but rather has used multi-segmenting marketing. Apart from its primary target being children and families within the United States, it has proceeded to target potential consumers of its products who come from various parts of the world (Wasko, 2013). Hence, the vast array of brands of the Walt Disney Company has played a significant role in targeting multiple segments.

Concerning the demographics, the company has separated its target market into specific units depending on age, marital status, gender, education, and level of income. Therefore, the company has chosen products that are most suitable for its target market and meet the consumer needs. However, age, gender, and income are the primary elements used in market segmentation. The demographic segmentation targets specific age groups and selects products, marketing efforts, and programs that will be appealing to them. For example, the company adopted Disney XD that targeted teens and children in the age group of between 6 years and 14 years (Auster & Mansbach, 2012). On the other hand, Walt Disney utilizes psychographic segmentation whereby they select the target market depending on values, personality characteristics, social class, or lifestyle preferences. It is important to note that the company chooses the target market by considering the obvious characteristics and proceeds to develop innovative products, entertainment, and technology that will see their consumers have the best experience. Lastly, the company uses geographic segmentation to understand target markets around the world. The focus of the Walt Disney Company has mainly been on emerging markets such as China, Latin America, India, and Russia (Barnes, 2013).

SWOT Analysis

Strengths

Walt Disney is the leading content producer owing to its innovativeness. Therefore, the company has managed to get a good reception whenever it is venturing into new markets. It is important to note that innovation has been one of the company’s priorities since its inception. Besides, it is through innovation that the company leverages the risk that comes with introducing new products in the market (van Wormer & Juby, 2016). On the other hand, the strategic management of the company has played a significant role in market segmenting, especially when it comes to evaluation, understanding, and meeting customer needs. Hence, the company has solidified its market presence despite stiff competition. Lastly, the Walt Disney Company has distinctive business segments that have over the years undergone tremendous growth. The cooperation between these segments has contributed to the growth of its revenues.

Weaknesses

The major weakness that Walt Disney faces stems from the return on investment when it comes to studio productions. It is important to note that the issue of piracy has persisted in the film industry over the years. Therefore, the company losses substantial revenues whenever there are instances of piracy (Santoli, 2015). On the other hand, the loss of revenues through poor ratings of its products weakens its competitive advantage when compared to other players. Besides, the poor reception of its productions has been the primary challenge that the management of the company has been facing over the years.

Opportunities

The content production industry is an intricate environment full of opportunities. In particular, the vertical advantage that Walt Disney has is that it can expand into new markets with ease owing to its popularity (Barnes, 2013). However, there is a need for a modernized approach to expansion. On the other hand, the innovativeness of the Walt Disney Company has seen the company successful introduce Disney World which is a good indicator that it has a potential in real estate.

Threats

Walt Disney faces external threats that are quite sophisticated. It is important to note that there are potential risks that arise whenever the company engages in certain productions. Besides, most of the movies by the company portray the American culture, and this may have detrimental effects when launching the productions in other countries (Auster & Mansbach, 2012). Therefore, it becomes a challenge for the company to strike a balance when coming up with a variety in its productions. In a move to avoid any adversity, the company needs to make a quick response to avoid tarnishing the name of the company. There has been a change in values whereby children have grown with the perception that they can shoot monsters in the comfort of their houses. Hence, this poses a threat to the future of Disney.

Mission and Vision Statement

The mission of Walt Disney is to be an outstanding company in the provision and production of information and entertainment. In particular, the company considers its portfolio of brands, consumer products, and services as the primary drivers for its financial success. Besides, the optimal earnings from its products will pave the way for the initiation of growth ventures that will over time generate value for its stockholders.

Interpretation of its Future Initiatives

The Walt Disney Company plans to ensure environmental sustainability through pushing for meaningful agendas that will be beneficial to its consumers. It is important to note that the company campaigns for minimizing waste when producing content for families and communities in general. Additionally, the company advocates for the creation of safe productions that suit children while still promoting cultural diversity. For example, Walt Disney has initiated parks to promote this agenda. Therefore, the program will have long-lasting and positive impacts on its target market. The current goals entail reducing the company's carbon emissions to 450 ppm. Alternatively, the company had planned on halving their emissions to the environment from the 2012 figures, thus attaining efficiency when it comes to waste management (van Wormer & Juby, 2016). By 2020, Walt Disney anticipates it will have created opportunities for families and kids that will see the proceeds going to the needy communities.

The initiative by the Walt Disney Company, VoluntEARS, seeks to have allocated 5 million hours by 2020 of its workers that will assist in delivering community services across different parts of the world (van Wormer & Juby, 2016). Thus, the company will have played a role in ensuring there is environmental sustainability. Concerning the business goals of Walt Disney, the company aims at becoming the leading entertainment brand. In particular, the company seeks to improve its online and mobile portfolio as this will enable it to take control of a bigger market share. For example, the company seeks to launch more games on its True Global Games Software. On the other hand, it is the objective of the company to improve its earnings per share every year. For this reason, the firm has projected that it will need to produce an average of 15 films every year with the primary focus being a return on the budgets approximated at 10 percent.

Main Competitors

The success achieved by Walt Disney over the years was through maintaining a competitive edge in an industry full of rivals. Besides, the competitors have also adopted innovative products, but those by Walt Disney have proved more lucrative. It is important to note that the mass media channels controlled by Walt Disney include ABC, ESPN, Freeform, and Disney Channel among others (Auster & Mansbach, 2012). On the other hand, Walt Disney Pictures, Pixar, and Disney Animation have become big production houses for films. Apart from the film industry, the company also has travel companies that include Disney Cruise Line, Disneyland, and Walt Disney World. The competitors that Walt Disney faces when it comes to mass media include Viacom, Comcast, Time Warner, CBS, 21st Century Fox, and Sony. The growth of cable networks and multi-channel video programming has over time seen the rivalry between the key players increase.

On the other hand, the Walt Disney Company has managed to successfully compete in the sports streaming industry as it has ESPN under its flagship. There is also stiff competition in the theme-park market where the main rivals Walt Disney faces include Six Flags Entertainment, Comcast, Cedar Fair, and Universal Studios (Santoli, 2015). It is important to note that Universal, being the main competitor of Walt Disney, managed to earn huge revenues from the Harry Potter series. However, Walt Disney managed to counter the competition through the profits it earned from the Marvel series that include Spiderman, Ironman, and Batman among others. The Walt Disney Company also engages in licensing, retailing, and publishing where it faces stiff competition from Universal. The growth that Walt Disney has undergone over time has enabled it to approach some of the competitors such as 21st Century Fox for the acquisition of some of its shares. Hence, Walt Disney has a strong market presence in the content production industry that has enabled it to maintain a competitive edge over the years.

Marketing Strategy (4Ps)

The Walt Disney Company’s marketing strategy entails the four Ps that include product, promotion, price, and place. Regarding the product, the company's production house is the primary product. The production house specializes in movie and cartoon production. Moreover, there is a product mix that includes broadcasting, movies, merchandise, theme parks, and toys. The main characters of Walt Disney products are Mickey Mouse, Spiderman, and Donald Duck (Barnes, 2013). The production house is popular for its movies such as Aladdin. In a move to improve customer experience, the corporation has managed to come up with products that have an international audience. On the other hand, the company has over 14 theme parks spread across the world but Disneyland is the most outstanding (Santoli, 2015). Lastly, there are Disney stores which retail merchandise like watches, toys, and clothing that bear the themes of its main characters. Walt Disney also has interests in internet marketing but their shareholding is relatively small compared to other players in the industry.

The price adopted by Walt Disney is mainly affordable by the middle-class families. It is important to note that the pricing strategy by the Walt Disney Company relies on the product an individual is purchasing. Whereas broadcasting and movie production are relatively expensive, others such as toys are quite cheap. The packages offered by Walt Disney encourage the entire family to purchase a product. Therefore, the pricing strategy by Walt Disney entails a wide variety for inclusivity. On the other hand, the company employs seasonal pricing whereby prices increase during holidays. In a move to encourage visits to its theme parks, Walt Disney offers affordable prices to stimulate regular visits by customers. Thus, the customer experience makes the company have a competitive price compared to its rivals.

When it comes to the place, Walt Disney has its outlets spread around the world. In particular, they are strategically located in shopping centers and malls. Besides, the Disney stores are easily visible. On the other hand, the theme parks are in specific countries and can accommodate the entire family given the flexibility of the services offered. It is important to note that the theme parks are large and expansive. Moreover, the cruise lines are found in the theme parks and they include Disney Magic, Disney Fantasy, Disney Dream, and Disney Wonder (Wantasen, 2015). Owing to the increasing demand from the customers, Walt Disney continues to introduce more cruise lines. The personnel responsible for the smooth running of the theme parks are fully qualified as they have successfully completed the Disney Traditions course at Disney University.

Lastly, promotion by the Walt Disney Company entails ways that will make them a leading brand. It is important to note that the promotional strategy focuses mainly on the target market. The avenues used to promote the Disney brand include online advertisements, television programs, billboards, movie teasers, commercials, and competitions among others (van Wormer & Juby, 2016). Therefore, the captivating promotions by Walt Disney make the customers anticipate the release of movies. Moreover, the promotions offer the customers the opportunity to buy tickets earlier, and this acts as an effective sales strategy. On the other hand, Walt Disney utilizes the huge following they have on social media channels to carry out promotions. In particular, they use their common phrases such as “where dreams come true” to attract the attention of followers (Auster & Mansbach, 2012). The company also carries out online promotions to boost their merchandise sales that are retailing in various stores. Thus, they partner with companies Sephora that handle a wide range of products.

Addition of Value to Customers and Wholesalers

The Walt Disney Company creates value addition to its customers through the best customer service they offer. It is important to note the company has adopted a well-executed plan that facilitates good customer service. Moreover, the customer service is not centered in one area but rather virtually every segment of its businesses. The company continues to exhibit values that the founders, Walt and Roy Disney, advocated when they began the business (Padilla‐Walker, Coyne, Fraser, & Stockdale, 2013). In particular, the personnel of the company acknowledges that the customers play a vital role when it comes to the success of Walt Disney. The company makes it clear that its primary objective is to create a magical experience for its customers. Besides, it is the responsibility of the Walt Disney personnel to cultivate a happy, cheerful, and helpful attitude when serving customers. Moreover, employees are encouraged to value their work as it is through this effort they will manage to obtain feedback from the customers. Thus, taking an initiative to exceed the expectations in Disney does not necessarily mean one wants to rise through the ranks but rather ensuring customer satisfaction.

Concerning value addition to its wholesalers, it is important to acknowledge that it is the largest media company in the globe. Therefore, the wholesalers of the company play a vital role in ensuring its amusement parks and production characters receive world-class recognition. Walt Disney has its suppliers distributed across the world in a move to satisfy its media needs. One of the suppliers is Point.360 and offers archiving, distribution, captioning, vaulting, subtitling, and restoration services to Walt Disney. In a move to create value for Point.360, Walt Disney has enabled the supplier to expand its market capitalization as it has invested heavily in their digital and physical assets. Secondly, there is Globant which is a software producing company. Walt Disney has closely worked with Globant and this has seen the company grow its number of employees spread across nine nations (Wantasen, 2015). Third, there is the National Basketball Association which is known to have its matches broadcasted on ESPN. Therefore, the Walt Disney Company has enabled the association to increase its league revenues through widespread coverage around the world. Lastly, there is the National Football League that has also reaped increased revenues from the ESPN broadcasts that Walt Disney offers to its wide array of viewers.

Mass Customization and Mass Marketing by Walt Disney

Walt Disney employs mass customization in a move to improve customer experience. In particular, using the transparent customization approach, the company has introduced products such as toys that show the customers that the product was specifically modified to suit their needs. Moreover, the personnel working at the Disney stores and the theme parks in different places around the world speak the native language but customers are unaware that the company did it intentionally to attract more visitors. Transparent customization also applies when it comes to the wearables that customers put on when visiting the theme parks (Padilla‐Walker et al., 2013). It is important to note that customer experience in the future will focus on meeting the customer needs without them giving any details. Therefore, mass customization by Walt Disney aims at obtaining the consumer behavior information and trends. Subsequently, the company will be in a position to customize promotions that ensure there is an increase in revenues. However, owing to the issues surrounding the infringement of privacy, Walt Disney conducts controlled tests before using mass customization in different outlets around the world. Similarly, Walt Disney uses mass marketing as the company benefits from the power of customer suggestions. For example, the company charges approximately $100 as an entry pass that allows individuals to have access to the available attractions in the park.

Survey Questions

What is your age?

Have you ever visited any Walt Disney Park?

Which specific Disney Park did you visit?

What was the entrance pass fee?

Were you satisfied with the price?

How easily accessible was the Disney Park?

Would you like to recommend a transit system?

Where did you hear of Disney Park before your visit?

Did you visit alone or with a colleague(s)?

Did you visit the different points within the Disney Park?

What points did you visit in the park?

Have you ever heard of the Magic Kingdoms of the Park?

If yes, did you like the Magic Kingdoms of the Park?

Are there different areas within the Disney Park you would like to visit in the future?

Have you ever heard of the water parks within the Disney resort?

If yes, did the water parks impress you?

Has anyone ever inquired about Disney parks from you?

If yes, would you recommend your friend to visit the Disney Park?

What is the remaining attraction you had visited in the earlier period?

Do you intend to visit Disney Park in the future?

Intellectual Properties

The Walt Disney Company has a wide range of intellectual properties that include Mickey and Minnie Monsters, Spiderman, Toy Story, Avengers, Planes, Iron Man, Winnie the Pooh, Disney Princess, Frozen, Star Wars, and Cars (Santoli, 2015). It is important to note that the intellectual properties have earned the company huge revenues from the retails sales. In a move to conserve the intellectual properties, the company has leveraged its various segments in a move to ensure they generate more to the company. Besides, the company puts efforts to ensure that their intellectual properties remain attractive to the intended parties. The addition of value to the Walt Disney intellectual properties has taken the form of production of sequels and short movies that are linked to some movies. On the other hand, Walt Disney has boosted the value of its intellectual properties by advertising them their stores and theme parks.

The Walt Disney Company has carried out various acquisitions especially through franchising. Therefore, there were new intellectual properties created in the process that will over time see the company expand its operations. For example, its intellectual property, Marvel, has conducted multiple mergers and acquisitions in the production of the animation in a bid to conserve the property. Similarly, Walt Disney acquired Pixar Animation Studios which have proven to be profitable after the company invested huge amounts of resources in the company (Auster & Mansbach, 2012). On the other hand, efforts to preserve the intellectual properties of the company have seen Walt Disney release more movies through their smaller production houses such as Lucas Film. Besides, with the wide array of intellectual properties, the company will benefit from the merchandise sold by its franchises.

Recommendations on Improving the Current Marketing Position

The Walt Disney Company in coming up with mass customization technologies should avoid obtaining invasive details of customers. It is important to note that the patent developed by the company opted to take pictures of customers’ feet without their consent in a move to acquire demographic information. Despite the fact that some details are non-invasive, mining customer data should be done in an ethical manner (Padilla‐Walker et al., 2013). Besides, the primary reason for taking the photos is to benefit the customers and making them aware will be prudent. On the other hand, the wristbands developed Walt Disney can enable them to authorize entry and exit into hotels and parks. However, more invasive information about the customer could be held by the company which interferes with privacy. Thus, Disney needs to come up with a well-executed plan on how they will handle customer information that will help them expand.

Regarding the strengths and weaknesses of Walt Disney, the company needs to place more emphasis on enhancing its competitiveness in most countries. The primary reason for this is because it will help facilitate its long-term growth. In particular, the focus should be on the threats the company is facing and address them (Wantasen, 2015). It is important to note that Walt Disney has an unexploited market in developing countries which can help boost its success. Moreover, the company should expand its diversity scope as it will come in handy when penetrating new markets.

Third, there is a need for Walt Disney to offer public-transit when visiting the theme parks. In particular, the form of transport should facilitate the movement of many people to the parks. Besides, it will serve as a way of encouraging tourists and travelers to visit the theme parks together with their families. Over time, the increase in traffic will require expansion of the transit system which has proven to be difficult for most tourists at the moment (Santoli, 2015). It is important to note that the transit buses that serve the Anaheim Resort and Orange County do not allow the visitors direct access to the theme parks. Thus, introducing arrival and departure transit systems will improve the number of visitors to the parks.

The entrance to parks is always congested due to luggage check. However, not all visitors carry bags with them. Therefore, Walt Disney should adopt an entrance point for visitors without luggage encourage light travelers to visit during holidays (Barnes, 2013). Besides, introducing a separate entrance will create a new category of pass-holders and thereby streamlining entry. Similarly, Walt Disney should introduce more options when it comes to the meals they serve their customers. In particular, the visitors only have the option of beignets which is a big constraint.

References

Auster, C.J., & Mansbach, C.S. (2012). The gender marketing of toys: An analysis of color and type of toy on the Disney store website. Sex Roles, 67(7-8), 375-388.

Barnes, B. (2013). At Disney Parks, a bracelet meant to build loyalty (and sales). Retrieved from https://www.nytimes.com/2013/01/07/business/media/at-disney-parks-a-bracelet-meant-to-build-loyalty-and-sales.html

Padilla‐Walker, L.M., Coyne, S.M., Fraser, A.M., & Stockdale, L.A. (2013). Is Disney the nicest place on earth? A content analysis of prosocial behavior in animated Disney films. Journal of Communication, 63(2), 393-412.

Santoli, L. (2015). Inside the Disney marketing machine: In the era of Michael Eisner and Frank Wells. New York, NY: Theme Park Press.

van Wormer, K., & Juby, C. (2016). Cultural representations in Walt Disney films: Implications for social work education. Journal of Social Work, 16(5), 578-594.

Wantasen, I.L. (2015). Walt Disney as the icon of the American popular culture. Retrieved from https://international.niu.edu/international/_images/Isnawati%20Lydia%20Wantasen.pdf

Wasko, J. (2013). Understanding Disney: The manufacture of fantasy. Hoboken, NJ: John Wiley & Sons.