Monday, September 5, 2011
Chapter 2: Strategic Planning for Competitive Advantage
The Walt Disney Company is a market oriented corporation, meaning they assume that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product. 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 driving force of the entire company is the motion pictures and animated cartoons which are managed by Touchstone, Pixar, Walt Disney Pictures, Buena Vista, and Miramax. Disney Imagineering does all of the strategic planning for The Walt Disney Company as well as the marketing planning. According to http://corporate.disney.go.com, 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 doing so, the company uses its product/service differentiation competitive advantage.
The company clearly has developed a very strong and well known "brand-name and image" over many years. In addition, Disney has one the most recognized and powerful brand names in the entertainment industry according to Datamonitor 2007. Because of this, selling all of their movies are almost never a problem. Yes, a lot has to do with advertising but the Disney name has so much history that it has given them an advantage of instinct and familiarity when it comes to selling their products.
As you all may know, the term marketing mix refers to a unique blend of product, place, promotion, and pricing strategies (often referred to as the "four Ps") designed to produce mutually satisfying exchanges with the target market.
The Walt Disney Company is very good at the product and placing aspects of the four Ps. Again, because of their brand name they have the ability to sell their products easily. As new theatrical productions are released, it allows for new product lines based off the feature’s characters to be made and sold in strategically placed stores throughout the United States. The stores are located in malls and super centers, in urban locations in order to for them to be visible by the public eye.
The next two Ps are promotion and pricing. The Walt Disney Company promotes their films in almost every way possible varying from McDonald's toys to Billboards and posters all over buses and trains. Disney wastes so much money on advertising, that you see their upcoming previews all over TV as well as the internet. Movie ads are displayed on various websites like YouTube, Facebook, and Twitter and many more. As for pricing, new DVD releases are usually relatively cheap due to the fact that Disney is a family oriented company that wants to be able to attract families of median incomes.
The most basic goal of The Walt Disney Company other than profit is, “To Make People Happy”. Their ability to make children as well as parents feel warm-hearted and full of joy after just one animated movie is what truly makes them successful. Disney is always advertising with key words such as "Love", "Magic", and "Happiness" because that's what their films are all about. Their unique ability to capture their audiences hearts is what separates them from other companies in the film industry. I believe that this is Disney's secret to success and true competitive advantage.