Case Study: Walt Disney World
Question 1: Suppose competing attractions, such as Sea World and Universal Studios, lower their prices of adminission. How should WDW respond? The issue of competitive price is close to the supply and demand one. As long as people willing to pay whatever the price parks set, especially WDW, why would they change? WDW provides such a high-quality offer than it is impossible to lower his prices; it could try to keep them steady. Even if the company decides to lower prices, it should do it in a significant way in order to attract more customers. For instance a $5 reduction in the price of admission would provoke any major changes. They would probably have to drop price below their competitors to make true gain. Besides, from a branding stand point, lowering prices sends a mixed message to consumers (adults with purchasing power) : indeed in customers mind, it would signal something goes wrong. Actually the price is an essential part of firms positioning and it would be difficult for WDW to position itself as the premiere theme park with lower prices than competitors; it is also un-strategic to re-position. WDW strategy has not to do with the credo “cheapest always win”. The corporation has to play on differentiation and keep playing its leadership positioning; it means making your product unique in some ways to maintain your competitiveness. The following paragraph deal with all WDW differentiation factors. WDW uniqueness criteria
-Marketing: WDW propose a complete offer for adults and/or children (families). The variety of this offer (several theme parks such as EPCOT or Animal Kingdom, other activities such as golf or wildlife, several hostels and prices segments…) makes customers able to customize their vacations. WDW provides multi-experience. -Communication: the firm must keep using a multi-channel and multi-media strategy to spread its marketing messages including as many new technologies as possible. -Innovation & Ideas generation: WDW must preserve the“environnement for supportive conficts” it created through its meetings: Gong Show, Charettes with architects and theme park designers, Movie Development meetings. - Common sense & Discipline: This is the practical part of WDW uniqueness because necessary to test ideas, especially from a fiscal and financial point of view. Indeed good ideas need time that is the reason why WDW creative process goes against quick actions and audience research. -Creativity: As M.Eisner said “Together conflict & common sense yield creativity”. We can add that WDW culture of diversity and fun take parts in the creative process: diverse point of views and individualism lead to frictions, conflicts, debates that are essential to get great solutions. -Facilities and Employees: in facts, WDW employees competent, well-trained and friendly. That is a crucially important factor because most of them are directly in contact with customers. No need to justify how essential the sense of contact is in business. Furthermore, all the attractions in theme parks are totally safe; all the facilities (hostels, restaurants included) are clean, linked each other (monorail, boats…) and electrically connected.. We notice also that WDW is technologically competent: it is a leader in product development, equipments design and maintenance, industrial engineering…for instance WDW design and manage perfectly attractions waiting lines: customers are sensitive about the time they have to use rides. All these aspects are visible for customers
-Branding Image: all the previous criteria are parts of the branding image; WDW brand is the amount of thousands and thousands small actions (“pointillist painting”). In particular Mickey and Disney characters, the castle are the symbol that contains all the stories the company created, the dreams and thoughts it suggest to children. Thus, if competitors lower their prices, WDW should not change its prices and by the same...
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