MM ASSIGNMENT 5 DISNEY

Ali Asghar
Q1) Ans) Disney runs a customer-oriented business that brings the company much profit.
At the same time, it also has developed several ways to target its core consumers. In
my opinion, what Disney has done to connect with them is quite essential. Firstly,
Disney starts to involve new business. As soon as Disney realizes their demands, it
introduces Disney Channel, Touchstone Pictures and Touchstone Television. Many
movies have been published in the name of Touchstone Pictures since 1984, such as
splash, Armageddon and so on. It’s the pricing policy of Disney that has successfully
reached a whole new generation of children. For example, classic Disney films on
video are sold at extraordinarily low price, so that the majority of family can afford to
watch these movies. Once Disney attracts those children’s attention, they will become
its customers sooner or later. Secondly, Disney concentrates on the Disney Difference.
Taking advantage of Disney Difference can make customers easy to distinguish Disney
from its rivals, which leaves Disney a competitive advantage. Some high standards of
quality and recognition movies are unique assets of Disney. For instance, one of the
most popular situation comedies Hannah Montanais developed into a series of products,
such as popular consumer products, live performance and so on. The diversification of
its strength enhances chances for customers to reach Disney and its products, and
ultimately attains their loyalty. So, Disney Difference arouses customers’ recognition and
beefs up ties with them. Thirdly, Disney adopts the latest technologies. With the
development of new technologies, Disney also upgrades its techniques to connect with
its core consumers. Podcasts are a popular tool for people to communicate. Disney is
one of the first companies to start frequent podcasts. The high exposure of Disney and
its products results in deep impression on consumers. Web site takes customers to a
tour of movie trailers, Broadway shows and On-line theme park experiences. This
would make their journey to Disney more special and joyful. Now Disney makes
efforts to enrich online resources and brings its previous cartoons including Mickey
Mouse to the internet. The newest technology could make the cartoons cuter and gain
their popularity again. The above steps make Disney recover from declining. Customers
begin to come to Disneyland and enjoy Disney movies again. Nevertheless, it’s not
enough for Disney to connect with its core consumers. Disney should build strong
economic, technical and social relationship with customers and deliver more than what
they have expected. Thus, high customer satisfaction makes the whole business boom.
Disney can contact its customers by advertising. Advertising plays an important role in
informing and influencing customers. There are a lot of competitors in the market and
consumers have many alternatives. When they decide which products they should
choose, advertised goods come to their mind at first. Besides, creative advertising
causes brands to be viewed as more elegant, more stylish, more prestigious, of higher
quality, and so on Delivering messages is an effective way to advertise. Disney can also
launch membership card program to keep in touch with its customers. By analyzing
customer profiles, Disney delivers its new product information, discount information and
campaigns to customers easily. It’s cheap to do message advertising, so that Disney can
cut the operation cost. Disney can contact its customers by promotion. Sales promotions
can hold current consumers by encouraging repeat purchases. A little bonus will give
consumers an incentive to come to Disney frequently. Coupons are an effective tool to
attract customers. Normally stores wouldn’t provide discounts to customers. But coupons
considered as bonus offered to consumers will encourage them to buy more. Although
some of the coupons are designed to buy certain products, it’s a great benefit for
customers and arouses their desire to shop. In addition, it’s easy to deliver coupons to
customers by direct mail, newspaper, magazines and electronic devices. Disney can
provide coupons to promote some products. Meanwhile, Disney also offers extra value
to them, which will result in long-term relationship. The other tool is premium.
Premiums are offered to consumers as a form of gift. That will reinforce purchasing
impulse and benefit the company. After playing in the Disneyland, customers will buy
some toys and decorations to their children. So, it’s a good chance to offer them free
gifts. They will be very surprised to receive these and come back to Disney again.
Especially the children, they have high impression towards free gifts and want to get
them again. Although Disney has done its best to connect with its core customers, it
has to synthetically apply all the methods to obtain better interaction. Customers are
intangible assets of Disney. As long as they receive more than what they expect, high
satisfaction will be created. It’s a great advantage for Disney to compete with other
companies.
Q2) Ans) After the death of two founding brothers, Disney stumbled for several years.
The company is eager to absorb new blood to be on the right track. So, it plans to
expand the brand into different areas. At the same time, brand expansion has brought a
number of benefits as well as setbacks. While Disney takes the expanding opportunities
to target its core customers and enrich its products, it has to deal with the challenges
properly. As far as I’m concerned, expanding the Disney brand brings more benefits
than risks. There are several benefits of expanding the brand including mass coverage,
brand strength, maximum margin and low risk of operation. First of all, expanding into
new areas can cover as many customers as possible. The core customers of Disney are
children, families and adults. There are no products designed for the older audience. In
the western countries, the number of senior citizens is growing bigger and bigger. Many
of them have retired and they have time and high purchasing power. So, it’s a great
loss for Disney to ignore these customers. But now Disney has launched some special
concerts and programs for them. Not only does Disney provide a good platform for
these elder customers to enjoy the concerts, but also a good place to chat with their
friends. Secondly, Disney can make the most of its brand strength. Before stumbling,
Disney has already involved film, television, consumer products, Disneyland and theme
park. The two brothers have successfully established the brand concept of “trust, fun
and entertainment”. Consumers around the world hear a lot about Disney. So, it’s good
time to stretch the brand into different areas, such as clothes, decorations, cups and so
on. These new products which bear the brand of Disney are easy for consumers to
recognize. Disney can take this opportunity to extend its brand and get the company
back on track. As Disney enjoys a great reputation in the market, the expanded
products will be popular under the influence of publicity. In addition, taking advantage
of brand strength is cheaper than creating a new brand. So, the company doesn’t have
to invest much on advertising and marketing. Next, Disney can obtain maximum
margin. Brand expansion enriches the products for sale. Customers come to Disney to
ride the roller coaster, and buy these products like clothes, toys and decorations. Since
Disney establishes its own Television and Channel, all the movies and comedies can be
printed by its own companies. That means Disney don’t have to pay extra money to
agencies for publicity and playing. It will save a lot of money. What’s more, the theme
park was built in California at first, but now it expands to Japan, France and German.
Customers in these countries are richer and would like to take their families to have
fun at weekends. The new expansion benefits the company a lot. Finally, brand
expansion can lower the operation risk. In the past, much income of Disney relied on
theme parks, cartoon studio, television and consumer products. As time went by,
consumers were tired of existing elements. So, the company stumbled for a few year.
By expanding the brand, the new business brings Disney back to life. New platforms
and products have been launched. Customers start to restore their confidence in Disney.
The diversity of businesses and products can meet different kinds of demands and earn
profits. Disney doesn’t have to depend on one or two programs to support the whole
corporation, but on various businesses. On the other hand, there are also some risks of
expanding the brand. One is that brand expansion may confuse the customers. All the
new products bear Disney brand, such as watches, clothes and decorations. These
products have no relationship with its main business. Consumers don’t realize when
Disney expands into those areas. So, it’s easy to confuse them. Even though they have
seen these new products on shelves, probably they won’t buy. Another is that brand
expansion may damage the parent brand. The company has engaged in many products.
Because of management and quality control problems, there will appear defective
products. Once these products are in the market, consumers might have high
dissatisfaction towards Disney. That will harm the image that Disney has created “trust,
fun and entertainment” Last but not least, brand expansion affects financial balance. In
order to launch new products as soon as possible, Disney has to invest a great amount
of money on development, advertisement and marketing campaigns within a short
period. The payment becomes larger than usual, which may pose great pressure on
finance situation. It’s likely to break the balance between revenue and payout.
Nevertheless, with appropriate publicity, consumers won’t feel confused. When Disney
decides to expand its brand, proper marketing techniques should be adopted ahead.