Case Study: Marketing Strategy of Walt Disney Company

What started out to be nothing more than a dream of Walter Elias Disney, with the release of Alice in Wonderland, a series of short film comedies, the beginning of a world renowned global corporation Walt Disney had evolved. Walter and his brother Roy were equal partners in what was originally the Disney Brothers Cartoon Studio in 1923 and with the suggestion of Roy, it soon was renamed The Walt Disney Studio. After four years of success and profit, Walter and Roy experienced a business set back when they found their film distributor M.J. Winkler had stolen their cartoon characters and animators in attempt to undercut them. With the help from their chief and loyal animator, Ub Iwerks, Walt created Mortimer Mouse, which was renamed Mickey Mouse by his wife. The first cartoon with synchronized sound was released at the Colony Theater in New York, November 18, 1928. Walt Disney won its first Academy Award for Best Cartoon in 1932 and continued to be honored with an Oscar every year for a decade. Walt Disney consumer products started when Walt and Roy accepted $300.00 from a man that insisted Mickey should be applied to paper towels for school children. The company became public in 1940 and followed with the release of five successful feature films, including Snow White, Fantasia, Pinocchio, Bambi and Dumbo. In turn they revolutionized animation forever. In 1955, the first of many Disneyland theme parks were opened. At the same time, television became a new, huge, and successful avenue for its fans.

“I can never stand still. I must explore and experiment. I am never satisfied with my work. I resent the limitations of my own imagination.” -Walt Disney

Due to this dream with determination, The Walt Disney Corporation became an international powerhouse. Today, the company has four main business ventures: consumer products, theme parks and resorts, media networks and studio entertainment. The first being consumer products encompasses the development, advertising, promoting, licensing and selling of products that represents all of the new and old Disney characters. The theme parks and resorts that once started in California grew to one of the most profitable and loved venues internationally. Television, radio, and cable properties are the core of the media network. The driving force of the entire enterprise is the motion pictures and animated cartoons which are managed by Touchstone, Pixar, Walt Disney Pictures, Buena Vista, and Miramax.

Marketing Strategy of Walt Disney Company

The Walt Disney Company’s Target Market

Before a company even begins to look at its objectives, and marketing strategy, they must first decide what they are selling, and who they want to sell it to. A successful marketing plan requires a clearly defined and well researched target market, without knowing the desires and needs of the people you are selling to, you can not create a product that meets those needs. The well defined target market represents one reason why the Walt Disney Company has been so successful since their public start in 1940. Walt and Roy Disney started this company not to satisfy every consumer’s needs, but simple “To make people happy.” This quickly segmented the Walt Disney Company’s market into children till the age of about twelve. After many years, it was soon realized that the target market is not only young children, but often includes the decision makers. These are usually the parents that take their kids to the movies and buy the merchandise. Disney knows that it’s one thing to make a great movie that kids are excited about but the efforts often fall short if parents don’t approve of it.

The Walt Disney Company’s most recent, slight change in the target market has come from their new ideas of marketing and expanding. To reach kids and teens to promote Disneyland’s 50th anniversary this year, Walt Disney Co. will use one of the hottest – and most controversial – gimmicks in the media business: “advergaming.” Seeing as how the age-range of people that play video games are a little older than kids, they will be targeting at a teenager level. The attempt to expand Disney into a wireless network also stems the interest of an almost different type of target market. “The Walt Disney Co.’s decision to launch a wireless service aimed at its best customers – pre-teen children and their families – have focused a spotlight on two significant industry trends: the growing segmentation of services marketing and a fascination with the hottest of those segments, the youth market.”

The Walt Disney Company’s Marketing Objectives

Every company, whether a service enterprise, a retail shop, a restaurant, or a theme park must have one objective in order to be in business. It is the sole reason one goes into business, no matter how much they may have wanted to improve the lives of others. The foremost goal of every business is to make money. In an article published by the London Times, former Chief Executive Officer Michael Eisner was quoted as saying, “We [The Walt Disney Company] have no obligation to make art. To make money is our only objective”. At the time Eisner was CEO of Disney; from 1984-2005 he nurtured Disney from a $3 billion company to a $60 billion dollar company, a testament to the primary goal of the business.

Even though when Walt Disney first opened Disney Land in 1955 he coined the phrase, “The happiest place on earth,” the real reason for opening his entertainment park was to attract fans of Disney Studio Productions, promote his characters, and make money. Without a profit the Walt Disney Company, or any other company for the matter, would not be in business for long. Companies, especially large, well established companies like the Walt Disney Company, use their profits to do many things: expand their market share; research and development; expansion; new product lines; and various activities that help attract more customers. The Walt Disney Company has many fields in which they participate to make money: television; studio productions; theme parks; consumer products; and cruise lines, to name a few.

Disney consumer products and theme parks are very essential to Disney’s ultimate goal of making money. The placement of Disney products on school supplies, lunchboxes and backpacks, in malls across the country, and within the walls of their marketing-giant theme parks themselves is, “a daily advertisement for our cartoons, [that] keeps them all [consumers] Mickey Mouse minded,” as stated by Walt’s brother Roy Disney. No matter the means behind the ultimate goal, the goal never changes.

As stated in the Walt Disney Company’s Mission Statement, another of their goals is to be, “one of the world’s leading producers and providers of entertainment and information”. For the accomplishment of this goal Disney already has a substantial foot in the door with organizations in studio entertainment and theatrical productions for children, teens and adults of all ages; television stations targeting a wide variety of audiences – ABC for news and families, the Disney Channel for children, ESPN, ESPN2, ESPNEWS, and ESPNU for the sports fanatics and even SOAPnet for the stay at home mothers and fathers; theme parks like Disneyland, Disneyworld and the Disney World Resort to attract families with younger children looking for a good vacation; and one of their newest additions is the Disney Cruise Line that tour the Bahamas and Caribbean Islands and even make a stop at Disney’s privately owned Castaway Cay Island.

Disneyland in particular, the first park ever to construct rides, shows and attractions around separate themes-the themes of Walt Disney’s motion pictures -was constructed and dedicated by Walt Disney to those people who want to “relive memories of the past and [that] youth may savor”. Disneyland itself was not just built to entertain young children, but also to give their parents a vacation in a place that they could remember from their pasts and relate to in a way for them to enjoy the experience.

With this impressive display lineup and many more to support the Walt Disney Company’s goal of being a leader in entertainment it is safe to say they are well on their way to accomplishing this feat. Disney’s reach is global, with theme parks in China, France, Japan, and all around the United States. They also have Disney stores across the globe selling Disney consumer products throughout the United States and also globally, both within their Disney resorts and theme parks and in globally placed retailers. The Disney trademark is recognized all over the world, once again keeping consumers “Mickey Mouse minded,” and showing what kind of a leader Disney can be simply through the reach of its grasps.

To become a leader in information Disney has constructed a team of people and engineers and tasked them for this assignment. They call the process of developing new technology Disney Imagineering. This is basically the research and development section of Disney which thinks up, designs, and implements all aspects of the Walt Disney Company. From developing rides and attractions of Disney’s theme parks, water parks, and cruise ships to their Disney resorts, Disney Imagineering is involved in all development.

The goal of the Disney Imagineering section is to continuously design and implement new, fun and exciting products for the Disney Company that will attract, amaze, and excite their customers. By developing fun new rides for Disneyland parks that drop you faster than gravity, new movie technologies offering cutting edge visual effects, or even combining the two into one gut wrenching, heart stopping, scream-of-a-good-time they have realized their goal.

The latest example of innovation at the Walt Disney Company is discussed in an issue of Business Week on November 12, and it outlines plans by Disney to release a mobile phone service in Japan. Disney will be involved in the phone from the ground up, from developing the handsets to dealing with subscriptions. In order to stay true to Disney practices, they will be offering content dealing with their characters and distributing cartoons to their subscribers. The cell phone market is one of the fastest growing markets in the world, growing in leaps and bounds–from 110,000,000 people in the United States in the year 2000 to 159,000,000 people in just 2003. As the use of cell phones continues to increase at an exponential rate it becomes more clear how important it is to have a stake in them, and Disney, realizing this, has become a player in the market and is using cell phones to spread their company name. To do this they offer many things that are popular among cellphone users, such as ringtones, graphics for wallpapers, games, and text message updates. Disney offers a cellphone in the United States, however Disney has recently announced it will be discontinuing their cellphone service as of the end of the year, December 31, 2007. They did not give any specific reasons for the cessation.

The utilization Disney has made of the mobile phone service brings to light their trend of target marketing. Cellphone users continue to grow younger as the devices become more popular and easier to afford, and Disney is trying to reach them. For years Disney has attracted young girls through the Disney Princesses Belle, Ariel, Sleeping Beauty, Snow White, Cinderella, and Jasmine. Now Disney is under continuous pressure to continue growing their Disney Princess Sector, and the result is the targeting of even younger girls – girls still in the crib. To accomplish this Disney will be making products such as cribs and various infant products picturing the various princesses and even some new princesses who are due to make their appearances in the near future.

The Walt Disney Company’s Industry Analysis

The Walt Disney Company is in the entertainment industry. This is a very simple way of saying something much more complicated: The Walt Disney Company is in business to produce entertaining theatrical productions that are family oriented and family friendly; they are in business to create products and toys that will promote their theatrical productions that are both entertaining and safe for children, and also stimulating enough to attract new customers; they are in business to entertain families with children who are looking for a fun, interactive and safe vacation spot both with resorts and parks, and also cruise lines; and finally they are in the business in keeping their name reputable and substantial in a growing business.

The Walt Disney Company has a long history and an established name, not only in the United States but throughout the world. Walt and Roy Disney founded the Walt Disney Studios in 1923, produced its first full length animated feature film, Snow White, in 1937, and the rest is history. From there they grew into an entertainment powerhouse acquiring TV channels, building theme parks based on their animated films and youthful dreams, and growing into one of the most recognizably-named companies in the world.

As generations change so do their goals and views of life. For example, the Baby Boomer generation is very work oriented and dedicated to their professional life, and sometimes their family lives suffered because of it. On the other hand, Generation X are more family oriented than their parents generation. Generation X like to take spur of the moment trips and are not necessarily as worried about the completion of their job tasks, which not only makes them more attractive to travel providers but also to companies who provide vacation resorts, or, more specifically, theme parks.

Because the generations are changing and families are more prone to taking vacations, the entertainment industry is a hot commodity. This produces a demand for entertainment and many opportunities for new players to enter the mix. This also creates a lot of competition, even for Disney, a well-established entertainment company. In Disney’s case, a lot of their competitors for their vacation spots are the same as their competitors for their theatrical productions: Universal Studios has theme parks and, like Disney, is a global organization with operations in the United States, Japan, Singapore, Dubai, and Korea; Paramount Parks is a more local example with many parks situated throughout the United States and one in Canada; and Disney’s most adverse competitor, and the leader in numbers in the industry of theme parks and amusement parks, is Six Flags Theme Parks who is also associated with Warner Brothers Studios. Disney however has the advantage in its global reach, where Six Flags is domestic. Also, industry wide, Disney’s name and history in the entertainment industry supersedes all of their competitors.

The history and name of Disney are very important when it comes to competition in terms of positioning their products and services in the minds of their consumers. The Walt Disney Company utilizes multiple positioning bases to their advantage, due to their long, successful history.

The attribute base is employed within Disney by the customer benefit–a family-friendly, safe, fun environment that is open for business all year. Disney offers specials for families, such as discounts on flights, car rentals and hotel rooms-many are seasonal-to attract more people to their parks, and this tactic is considered in the price and quality base indicating a value bargain to their potential customers. But the most important positioning base utilized by the Walt Disney Company is the one that distinctly sets them apart from any of their competitors: Emotion.

Emotion is, “how the product makes customers feel”. This is where the Disney history comes into play in a huge part because, being founded as a cartooning company in 1923 that produced widely popular children’s videos, the name Disney has been a part of people’s lives for a very long time. Entering a place called Disneyland, which embodies the characters every child has enjoyed since 1923, can have the effect of bringing the fond memories of their childhood back to them, producing a sense of eternal youth. Another advantage for Disney is that not only can it have an attracting effect on adults, but because Disney is now a powerhouse in the entertainment industry and recognized throughout the world, they can attract children of various ages. Disney can attract younger children who identify with the Disney characters and enjoy seeing them in full life form. Disney can also attract the older children who still identify with the characters in the form of knowing them and enjoying the movies they have seen them in, but also enjoy the themed rides that feature their favorite movies and characters in them.

To conclude the industry analysis the entertainment business is a growing business due to the change in demographics and the orientations of today’s generations. Disney has a strong foothold in the industry, a feat accomplished mainly due to their history and roots in the American culture. Their reach to the four corners of the United States and beyond has aided Disney’s stronghold on the entertainment industry.

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