Disney Pixar Marketing Strategy

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Marketing Strategy Disney Pixar

Text of Disney Pixar Marketing Strategy

Nashmin Hojatti 1

Nashmin Hojatti 2

TABLE OF CONTENTS EXEECUTIVE SUMMARY .............................................................................................PG #3 FINANCIAL OVERVIEW ...............................................................................................PG #3 CURRENT MARKETING SITUATION .............................................................................PG #6 SWOT ANAYLSIS .........................................................................................................PG #9 OBJECTIVES & ISSUES ..............................................................................................PG #13 MARKETING STRATEGY ............................................................................................PG #14 ACTION PROGRAMS ..................................................................................................PG #16 BUDGETS ..................................................................................................................PG #16 CONTROLS ................................................................................................................PG #17 REFERENCES .............................................................................................................PG #18

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Executive Summary Founded in 1923, with headquarters in Burbank, CA, The Walt Disney Company, or as it is more famously known Disney, is the worlds largest and most influential media conglomerate. Ranked 66th on the Fortune 500 list and first in its industry, Disney is a power house in the market.(Fortune 500, CNN) It is comprised of four segments that have combined earnings of $41B and net income of $4B in the 2011 fiscal year.(Hoovers) Disney has been in the market for more than 50 years and has been growing since its inception. In the past few decades, Disney has done a wonderful job of creating animated films with messages that resonate in the hearts and minds of their entire customer based. In the mid1990s, Disney paired up with Pixar to create even better animated films that have grossed huge revenues for both companies. In 2006, in a strategic move, Disney and Pixar merged. Pixar uses new age technology and animation to create reality in fantasy, so to produce an experience within the viewers heart and mind. This marketing plan is an all-inclusive collection of the current position that Disney-Pixar have in the market of animated films; a SWOT analysis; Market Strategy, Action Programs; Budgets; and Controls, that all lead to a better understanding of what Disney-Pixar want to

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achieve and also how to ensure that they stay on top of a competitive market in which with one failed project it can create massive losses for a company. Financial Overview Year Sep 2011 Sep 2010 Sep 2009 Sep 2008 Sep 2007 Revenue $40,893.00M $38,063.00M $36,149.00M $37,843.00M $35,510.00M Net Income $4,807.00M $3,963.00M $3,307.00M $4,427.00M $4,687.00M Net Profit Margin 11.76% 10.41% 9.15% 11.70% 13.20%

Current Marketing Situation Walt Disney Companys current marketing situation takes numerous amounts of characteristics into account: selling to existing customers, expanding their place in the market, tracking business processes, continuous promotion of Disney and its subsidiaries, and always finding ways to improve and/or add to existing products. Disney understands that by continuously offering goods and services to its customers via all of its different channels (website, parks, cruises, and visual entertainment), they can capture a better portion of the ever expanding entertainment industry. By expanding strategically into different parts of the world, by developing different entertainment opportunities that cater to the different cultures and customs, they ensure that their customers in those areas are comfortable with their products and more likely to invest in them. Disney also has another

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marketing strategy: continuous advertising. Disney never stops advertising. They know that it is crucial to keep the company the customers mind, even if it is in the back of their heads. Disney has enhanced this marketing technique by understanding its seasons and adapting their marketing to it. In downtimes, they know that they must heavily invest in advertising and marketing, knowing that at the years end, it will be made up. Additionally, Disney never stops. They embrace change. Constantly working to modify, create and expand the way that they can bring magic to its existing customers and potential customers. The entertainment industry is one of the most competitive industries that exist today. The movie industry is the number one segment of the entertainment industry with the most competition. People have always been attracted to movies. In 2011 alone there were 610 movies released, $10.2 billion dollars in domestic box-office sales and 1.28 billion tickets sold. (Hoovers) Total movie production costs seem to be climbing fast, currently it is higher than the $200,000 mark, and that does not include marketing cost which are also still on the rise. Given the number of movies each studio produces every year, it creates an extremely competitive market, in which a company must have the best movie of the lot if they wish to recoup the losses and gain revenue.( Ainslie, 2005) One small mistake or dud movie, and the company could face huge losses. Market Description Disney-Pixar is in the animated film segmentation of the entertainment industry and has about three different target markets. Disney uses geographic, demographic and psychographic segmentation. In other words, it uses multi-segment/differentiated

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targeting. (Armstrong, 2011) Although it may seem like Disney targets only kids, Disneys target market is the whole family. Walt Disney had once said, Youre dead if you aim only for kids. Adults are only kids grown up, anyway.(Company Overview, 2012) Their primary market is children because they drive the animated film market. Children are the ones that grow up watching these movies, collecting memorabilia and being whole-heartedly invested in the characters. Once they grow up, they will have jobs and families and want their children to experience the same love for Disney as they did and will bring their families to the movies and buy into the memorabilia again. This leads into their secondary market which is Parents. They are sub divided into two groups: parents that grew up on Disney and parents that did not. The parents that grew up on Disney know that wonderful ways of the Disney Corporation and all the wonderful memories, experiences and lessons that Disney has to offer their children via animated movies. The parents who did not grow up with Disney, which is a small population of Disneys target market, are the ones to which Disney has the most to say. All parents want their children to be exposed to educational information as well as entertaining. Disney has capitalized on this. Disney has found a way through animated shorts and films to create stories that are entertaining to the children so that their attention is held and educational so that their parents are happy. Disney has found a way to subtly sneak in educational information into their films that makes their films even more powerful. Disneys final target market is everyone else. Disneys core constituency is the urban, median-income family who wants to have fun but it goes beyond race, ethnicity and social status. Disney believes that everyone should feel the experiences of their movies. Disney creates movies that are enjoyable for all ages and all races.(Walt Disney, 2008)

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Product Review Disney Pixar offers exquisite animated movies, that not only keep the attention of children and adults alike, but they create masterpieces that even though are animated seem to come alive. They do this with their use of proprietary technology and creativity. 3-D computer animation--a rudimentary rendering of his left hand that could be rotated and viewed from all angles. It allows for you to see a person with more depth (Schlender, 2004) Render-Man Pro: creates more life-like 3-D images. It includes rendering mode feature that boots throughput but automatically harnessing multi-processor systems that lay idle. It also includes Irma, shading and lighting development rerendering tool and AlfServer, which enables distributing parallel rendering. (Ochiva, 2003) Developed new methods for animating multiple humans so that every characters hair, clothes, and muscles moved in a unique way. The company also applied techniques used in live-action films, recording real shadows and blending them with computer graphics (Palmquist, 2005). Competitive Review Disney has been creating animated shorts and movies since its inception. Before its strategic partnership with Pixar, it was one of its top competitors. Today, Disneys competitors are News Corporation, Viacom, NBC Universal and Times Warner. They compete with Disney in all the divisions of its company.(Morningstar, 2010) However,

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because Disney uses a marketing approach that is more focused on family, it calls for the children and the parents to have purchasing power instead of looking at the customers individually like other companies. Therefore, Disney has a marketing advantage while appealing to not only children but also for the parents. The leading competitors against Disney in terms of Pixar with animated movies, is Warner Brothers and Fox. Warner Brothers has their long standing animated television and movie characters that also hold strong places in the minds of consumer. Looney Tunes, Scooby-Doo and Tom and Jerry are just a few of the characters that have strong positions in the mind of Disneys audiences. Fox also has long standing characters that compete for a