Business Marketing - The marketing of goods and services to individuals and organizations for purposes other than personal consumption. The key components that distinguish business products from consumer products is intended use, not physical form.
Disney's Strategic Alliance
A strategic alliance is defined as a cooperative agreement between business firms. In 2002 Disney formed a strategic alliance with Bank One and Visa Form for the Disney-Branded Visa Card. They announced a two multi-year alliance that will create the first Disney Card as well as providing Visa with joint marketing opportunities across Disney's various business units. This Visa Card would be issued by Bank One's credit card subsidiary. The benefits that came with Disney's first Visa Card was allowing consumers to earn rewards that can be used toward the purchase of Disney Park vacations, videos and other Disney related merchandise.
Major Categories of Business Customers
The four major categories of customers in the business market are; producers, resellers, governments and institutions.
Institutions are the fourth major segment of the business market that consists of institutions seeking to achieve goals other than the standard business goals of profit, market share, and return on investments.
The Disney Institute is the professional training of the Walt Disney Company showcasing "the business behind the magic" through workshops, seminars, presentations and programs for professionals from many different industries including health care, aerospace, government/military, food/beverage and retail. An example of Disney's Institute achieving goals is with The Boeing Company. They worked with the Disney Institute to develop a customer service training course specifically for their airline customers. The Disney Institute helped them to understand how their service standards can have a drastic impact on the experience they can provide for their customers.
Buying Centers
A Buying center is defined as all those people in an organization who become involved in the purchase decision. Typically for the Disney company their CEO is in charge of making the decision of purchases for the company. Recently CEO Bob Iger made the decision to purchase LucasFilms for $4 billion.
A Market is defined as people or organizations with needs or wants and the ability and willingness to buy. Since there can be many similar characteristics with similar product needs we have a market segment, which is a subgroup of people or organizations sharing one or more of these characteristics that cause them to have similar product needs. Different categories of segmentation includes geographic, demographic, psychographic, benefit and usage-rate.
Walt Disney's Market Segmentation
The Walt Disney Company's market segmentation has included geographic, demographic and psychographic. A geographic segmentation markets by region of a country or the world, market size, market density or climate. Some of their Walt Disney Theme parks are located in California, Florida, Tokyo, Paris and Hong Kong which are all tourist hot spots. Aside from these areas being tourist hot spots, California and Florida are known for their warm climates increasing their vacation rates.
According to the 2009 theme park attendance report, Disney has ranked at the top dominating theme park attendence wordwide.
Demographic Segmentation is segmenting markets by age, gender, income, ethnic background and family life cycle. Disney uses demographics in order to decide how to market their products and services. An example of the demographics used is age and ethnic segmentation through their movies and shows. Disney recognizes that their audience range in age so they have distributed entertainment accordingly. Their Disney Junior network markets to toddlers with shows aiming to teach them skills such as counting and spelling. As oppose to The Disney Channel which appeals to tweens and teens in which the shows depict life situations that relate to them like dealing with friendship and school while using comedy and music.
Disney's ethnic segmentation has been shown through their movies which target different cultures. To meet the needs and wants for the vast ethnic population Disney has aimed at representing various ethnicity's so their movies can be more relatable. Earlier this year Disney released their movie, "Brave" featuring their first Scottish princess which debuted at number 1 with $66.7 million. Over the years Disney has shown interest in creating story lines with characters from different cultures examples include Native American and Arabian.
Psychographic Segmentation is defined as the market segmentation on the basis of personality, motives, lifestyles, and geodemographics. One of the variables in this segmentation is motives in which Disney uses emotional motives, bringing out the happiness and kid inside everyone through their entertainment. Disney has been known not only to provide entertainment for children but for the whole family.Walt Disney once famously said, "You're dead if you only aim for kids. Adults are only kids grown up anyway."
A New Product is defined as a product new to the world, the market, the producer, the seller or some combination of these. There are different categories of New Products including new to the world, new product lines, additions to existing product lines, improvements or revisions of existing products, repositioned products and lower-priced products.
Disney's New Product
An example of one of Disney's new product strategies is improvements or revisions of existing products. This strategy is the new and improved version of the product that may be significantly or only slightly changed. Recently Disney announced new itineraries and ports for their cruise line for 2013.This improvement will expand to new destinations such as Venice, Italy and Greece. Also the Disney Cruise Line will utilize a second home port in Florida with Caribbean Sailings in Miami for their first time. With this improvement Disney is now able to to take more families to more destinations around the world.
New Product Strategy links the new product development process with the objectives of the marketing department, the business unit and the corporation.
Disney's New-Product Development Process
This process follows as :1. New Product Strategy
2. Idea generation
3. Idea screening
4. Business analysis
5. Development
6. Test Marketing
7. Commercialization
8. New Product
1. One of Disney's New Product Strategies was to expand their cruise line
2. New Product ideas evolve from many sources including customers, employees, distributors, competitors, vendors, research and development and consultants. The idea of the expansion of the Disney Cruise line has evolved from customers and competitors. In order for customers to reduce air fare costs they have decided to expand their ports and destinations closer to more consumers. Also while adding to their locations they will build stronger brand loyalty against their competitors.
3. Idea screening eliminates ideas that are inconsistent with the organization's new-product strategy or are inappropriate for some other reason. Ideas on Disney's new fantasy ship ranged from appropriate concepts on the boat to the exact designs that emulate scenes from their movies. The Walt Disney Company CEO Bob Iger and his management devise weekly meetings to discuss every aspect of the $1 billion dollar boat.
4. Business Analysis is the stage where preliminary figures for demand, costs, sales and profitability are calculated. In order to estimate the financial numbers for this billion dollar Cruise Disney had to calculate the demand, cost, sales and profitability.
5. Development is the stage in which a prototype is developed and a marketing strategy is outlined.The expansion of more cruise lines will lead to the development and outlined strategy of expanding and modifying the port facility to accommodate for the extension of the dock, enhancements to the terminal building allowing for additional luggage and passenger capacity and a multi level parking structure. Also the development for new entertainment and activities. In order to expand their entertainment Disney has developed the first ever Disney's Pixar Toy Story Musical.
6. Test Marketing is the limited introduction of a product and a marketing program to determine the reactions off potential customers in a market situation. Disney has noted they are continuing to test new markets as part of their growth. By operating in centers such as New York and Texas they are providing a convenient way for residents, testing new markets as to whether they enjoy the Disney Cruise Line Vacation.
7. Commercialization is the decision to market a product. The initial commercialization for the introduction of a product can vary from a few weeks to several years. After Disney has finished their development of the cruise line they introduced the expansion early in January of 2011.
8. New Product is at the end of the cycle bringing the product to the market which Disney has undergone with their Cruise Line
Integrated Marketing Communications is the careful coordination of all promotional messages for a product or a service to assure the consistency of messages at every contact point where a company meets the consumer.
Disney's Promotional Strategy
A promotional strategy is a plan for the optimal use of the elements of promotion which includes advertising, public relations, personal selling and sales promotion.
The most common form of advertising is traditional media including television, radio, newspapers, magazines, books, direct mail, billboards and transit cards. The Walt Disney Company advertises their theme parks, television shows, movies and toys through traditional media.
As shown to the left there are Disney billboard advertisements leading to the arrival at the Walt Disney Park building up the excited anticipation to visit the park.
Disney's Public Relations
Public relations is the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn understanding and acceptance. Also it helps an organization communicate with its customers, suppliers, stockholders, government officials, employees and the community which it operates. Recently with the devastating outcome of Hurricane Sandy Disney has donated 2 million dollars to relief efforts and has consistently broadcasted public service announcements on their ABC, ESPN and Radio Disney Networks encouraging viewers to support relief and rebuilding efforts. Disney presents a community minded image which consumers notice.
In 2009 Disney used a publicity campaign to promote their movie "Disney's a Christmas Carol". The Disney's Christmas Carol tour was a train tour that visited 40 cities with a multi car exhibit showcasing different aspects of the production. It was described as a rolling Disneyland exhibit but its free. The movie was top in the box office with $31 million in sales.
Disney's Sale Promotion Approach
Sales promotion contains all the marketing activities other than personal selling, advertising and public relations that stimulate consumer buying and dealer effectiveness. An example of one of Disney's many promotions is their vacation giveaways through their sweepstakes and contests.
The Sender and Encoding
The sender is the originator of the message in the communication process. Encoding is the conversion of a sender's ideas and thoughts into a message, usually in the form of words or signs. Disney's most famous campaign is "Let the Memories Begin" using photos and videos of real consumers visiting the parks and resorts, which will encourage even more people to visit the park. Disney noticed that consumers have a higher level of trust toward user generated content and the messages that come through as oppose to traditional advertising.
The Goals and Tasks of Promotion
These goals and tasks includes informing, persuading and reminding. Disney consistently broadcasts their upcoming attractions for their theme parks including a description for the ride and videos of what the experience will be like to inform consumers on whats new to come. Persuasion is an important factor for Disney because they appeal to the emotional needs and inner kid feelings to persuade consumers to continue visiting their parks. The reminding promotion keeps the product and brand name in the consumer's mind.
AIDA Concept
The AIDA Concept outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. AIDA stands for attention, interest, desire and action. The Disney Cruise Line can be showed as an example for the AIDA concept.
1. Attention - The Disney Cruise Line began operation in 1998 so it was unknown and the company needed to create awareness. They created awareness through extensive ads on television and magazines.
2. Interest - Disney demonstrated the features of the cruise and the benefits for both kids and adults while sailing to various locations to create interest for their new cruise line.
3. Desire - Disney had to convince consumers their cruise was the best option for a family cruise by creating a game room, lounges, outdoor spas, casino, live shows, treasure hunts and more to show the idea that there's something for everyone in the family.
Action - To motivate customers to attend the cruise they consistently advertise the features and benefits.
What is a Product -A product is everything, both favorable and unfavorable, that a person receives in an exchange. A product can be defined as a tangible good, services or ideas or a combination of these. The types of consumer products include, convenience products, shopping products, speciality products and unsought products.
Disney's Consumer Products -
Consumer Product - A product bought to satisfy an individuals personal wants.
Disney's consumer products includes speciality products. A speciality product is a particular item that the consumers search extensively for and are very reluctant to accept substitutes. To market speciality products status-conscious advertising is used to maintain the product's exclusive image. Brand names and quality of service are very important for speciality products. Disney products can be considered speciality products because of the company's exclusive image. Disney's merchandise is inspired by the popular characters from their animated films which produce toys, apparel, home decor and books.
Disney's Product Line and Product Mix
A product line is a group of closely related product items. An example of Disney's many product lines is their Cinderella line for all ages after the release of Cinderella The Diamond Edition. The collection of products includes toys, fashion, makeup, nail polish and home decor which are available at department and speciality retailers nationwide.
Product Mix-A product mix is all the products that an organization sells. All of Disney's apparel , television shows, toys and theme parks constitute its product mix
Repositioning-The change of consumers' perception of a brand. Disney typically targets to younger kids but in 2010 Disney repositioned by changing the family friendly movie Alice in Wonderland 19 years later to a dark live action adventure. The new look of Alice in Wonderland now targeted 12-22 years old with their merchandise in Hot Topic aimed at Gothic style.
Branding
A brand is a name, term, symbol, design or a combination that identifies a seller's product and sets them apart from competitors products. Disney's most famous brand symbol is their Mickey Mouse character. The benefits of branding is product identification, repeat sales, and new product sales. The Disney company has relatively high brand equity which is the value of company and brand names. Disney is a global brand that is very well known and wants to continue expanding "the Disney experience". Disney has also achieved brand loyalty which is the consistent preference of one brand over others. Their history and success of being a family brand has resulted in children favoring Disney products the most in comparison to other brands. The popular character Mickey Mouse is also one of Disney's trademarks. A trademark is the exclusive right to use a brand or part of a brand.
Sales Promotion-The marketing communication activities, other than advertising, personal selling, and public relations where a short-term incentive motivates the consumer or members of the distribution channel to purchase the good or service immediately, by either lowering the price or adding value. Sales promotion targets two different markets, consumer sales promotion and trade sales promotion.
Consumer Sales Promotion-The sales promotion activities that target the ultimate consumer.
Trade Sales Promotion-The sales promotion activities that target a marketing channel member, such as a wholesaler or retailer.
Disney's Sale Promotion
The Walt Disney Company has been engaging in consumer sales promotion targeting their ultimate loyal customer, children and their parents. Some of the ways Disney has offered sales to their consumers is through coupons, promo codes, contests and sweepstakes. You are able to find a vast selection of coupons and promo codes online for Disney products and vacation trips on sites such as, mycoupons.com, mousesavers.com and many others. You are also able to get a chance to win Disney's contests and sweepstakes through various sites as well as through their radio station, Radio Disney AM 1560. Radio Disney for example offers contests and sweepstakes to children each week, you can participate by either calling Radio Disney or submitting an online entry. Some of these prizes includes attending concerts, a free Disney vacation and money to sponsor a birthday party.
Loyalty Marketing Programs
Loyalty marketing programs or frequent buyer programs rewards their loyal customers for making multiple purchases. The objective of this program is to build long-term, beneficial relationships between a company and its key customers. An example of a popular loyal marketing tool is co-branded credit cards. The company Chase has released the co-branded Disney credit card with reward earnings and redemption perks. All of the Disney card members are eligible for a private character meet and greet, 10% off merchandise of $50 or more on the Disney site, store and resorts as well as 20% off guided tours.
The Disney company believes in constant advertising, online and offline to always remain in the consumers mind. Disney believes they can uniquely connect with their fans through social media and increase customer loyalty; they have more than 38 million likes on facebook, over 1 million followers on twitter as well as over a million views on YouTube promoting the company and their rewards.
Personal Selling is a purchase situation involving a personal, paid for communication between two people in an attempt to influence each other. Personal selling becomes important when the number of potential customers decreases as the complexity of the product increases as well as the price. The Walt Disney Company does not participate in personal selling because most of their products are at low value and easy to understand and the number of their potential customers steadily increases.
Advertising is defined as an impersonal, one-way mass communication about a product or organization that is paid for by a marketer; this is a popular form of promotion. Advertising has an effect on consumers’ daily lives by constantly informing them about products and services as well as influencing their attitudes, beliefs and purchases. The major types of advertising include Institutional Advertising and Product advertising.
Institutional Advertising- Designed to enhance a company's image rather than promote a particular product.
Product Advertising- Advertises the benefits of a specific good or service.
Disney's Product Advertising
In The Walt Disney Company corporate responsibility report they state that their guidelines have high standards that require advertising to children to not be deceptive, inappropriate, unfair or explicit. Their guidelines include maintaining the appropriateness of products and services being advertised, accuracy of descriptions of features and benefits and fairness of tactics given the child's age, maturity and emotional vulnerabilities. Disney has dedicated their company's advertising to be both truthful and respectful of the unique sensibilities of children. Disney may be one of the most popular brands for children, but they are not the only brand which will lead the company to use competitive advertising. This is a form of advertising that is designed to influence demand for a specific brand. The promotion will appeal more to emotions while creating a favorable attitude toward the brand. As The Walt Disney World theme park expands to different states and countries they are now in competition with other theme parks and must be able to show their unique magical qualities that set them apart from the other theme parks. Below this Disney ad shows the excitement that comes to kids’ faces when they find out they are going to Disney as well as showing the magic and happiness associated with each Walt Disney World experience setting them uniquely apart from the other theme parks.
Advertising Campaign and Advertising Objective
An advertising campaign is a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. An advertising objective is a more specific communication task that the campaign should accomplish for the target audience during a specified period. Disney's common theme and well known slogan, "Where dreams come true" have been incorporated in their advertising. Disney's advertising objective has been to continually remind the consumers of the happiness and magic that happens at Disney.
Disney's Sponsorship
A sponsorship is a public relations strategy where the company spends money to support a cause, issue or event as well as improving brand awareness or enhancing corporate image. The Walt Disney Company announced their plans to only advertise healthier foods to kids on its TV channels, websites and radio. Disney has been the first major company to set a standard for food advertising. The chairman and CEO of Disney, Robert Iger stated, "Parents can be confident that foods associated with Disney characters or advertised on Disney platforms meet our new, healthier guidelines." The Walt Disney company has now been supporting the awareness of bringing healthier food to kids diets.
A strategic alliance is defined as a cooperative agreement between business firms. In 2002 Disney formed a strategic alliance with Bank One and Visa Form for the Disney-Branded Visa Card. They announced a two multi-year alliance that will create the first Disney Card as well as providing Visa with joint marketing opportunities across Disney's various business units. This Visa Card would be issued by Bank One's credit card subsidiary. The benefits that came with Disney's first Visa Card was allowing consumers to earn rewards that can be used toward the purchase of Disney Park vacations, videos and other Disney related merchandise. 
Buying Centers
