The business I have decided to focus on for the marketing mix evaluation is the Disney Store. This organisation is an international chain which has both an online presence and over 310 stores across the world.
‘There are currently more than 200 Disney Store locations in North America; more than 40 Disney Store locations in Japan; and more than 70 Disney Store locations in Belgium, Denmark, France, Ireland, Italy, Portugal, Spain and the United Kingdom.’ (Prnewswire.com, 2018)
The Disney store is unique they not only sell their products alone but sell the Disney experience too so that every customer feels like a guest and in the store instead of a customer.
‘It was the Company’s first dive into the world of retail and had a unique position within the industry because of its concept and products – all Disney. With over 330 stores now open worldwide, as well as a lucrative online retail operation, Disney Store is the place for families to consume Disney’s products where they are; “to create magical moments for guests of all ages” as they like to say.’ (Staff, 2018)
‘The marketing mix is the way the business controls four elements, called the 4 Ps, to ensure the product is suitable to potential customers: product, price, place and promotion. The secret to a successful marketing mix is to ensure that it is well integrated across the four elements and that the whole mix creates the right image to match the marketing opportunity that has been identified.’ (Hage M, 2017)
‘However, nowadays, the marketing mix increasingly includes several other Ps like Packaging, Positioning, People and even Politics as vital mix elements.’ (The Economic Times, 2018).
‘The first part of the marketing mix is the product/design that the business has to take into consideration anytime they release a new product. ‘The design mix consists of the function, aesthetics (looks) and costs of creating and manufacturing the product. Good product design adds value and adds to brand image and loyalty. The three parts work together to create the product for the market as follows:
- Function is how effectively the product works
- Aesthetics are how the product appeals to the subjective views of customers in terms of how it looks, feels or smells. This can differentiate the product from others in the same market, creating more customer demand.
- Costs of creating the product mean the costs involved in its manufacture and production. The product must be designed so that it can be produced cheaply enough to make a profit from sales to customers. Adding value in the production process helps to make sure the design of the product is more likely to be profitable.’ (Hage M, 2017)’
The product is one of the most important aspects for any company, it’s how they will earn profits. They have to think about the type of product they want to produce, is there companies making these products already? How could they compete with them? What would keep the product current? The Disney store is quite unique in the way they sell in their stores, they sell the ‘Disney experience’ not just their products to their customers. Disney products are sold in other shops although there are products that you can only buy from the company themselves.
The Disney brand itself is very popular ranging from Disney movies to Disney theme parks. When a customer buys a Disney product whether it’s from the store itself or another store with a range of their products they know that they are getting good quality products. Another aspect of the Disney store is that they have a variety of different products such as clothing, toys and homeware etc. this helps them with their product life cycle, as they can produce new products for the different seasons such as Christmas tree ornaments for Christmas. They can also produce new products when new movies are released or remade by them such as ‘Frozen’, ‘Wreck it Ralph’ and the ‘Dumbo’ remake being released in March 2019.
‘The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products.
- Introduction Stage – This stage of the cycle could be the most expensive for a company launching a new product. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector.
- Growth Stage – The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage.
- Maturity Stage – During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage.
- Decline Stage – Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. This shrinkage could be due to the market becoming saturated or because the consumers are switching to a different type of product. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets.’ (Productlifecyclestages.com, 2019)
The second aspect of the Marketing mix is Place,
‘Place refers to distribution or the methods and location you use for your products or services to be easily accessible to the target customers. Your product or service dictates how it should be distributed. If you own a retail shop, for example, the distribution chain ends with you and you supply to your customers directly. If you own a factory, your options will be to either sell your products directly or sell them to retailers or vendors as your distribution strategy.’ (The Marketing Mix, 2019).
The first thing a company has to decide when they are planning to sell a product is how they will distribute it, will they make it and sell it to retailors or sell it from their own company.
‘A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. It can include wholesalers, retailers, distributors, and even the internet. Channels are broken into direct and indirect forms: A direct channel allows the consumer to buy the good from the manufacturer, and an indirect channel allows the consumer to buy the good from a wholesaler or retailer.’ (Investopedia, 2019)
For the Disney Store they sell their own products from their own stores, products that can only be purchases at the Disney Store although this is other store that would have a selected range of Disney products such as Primark have Disney homeware and Disney Pajamas.
Place for the Disney Store is both online and they have over 310 stores across the world. Having physical stores for the Disney shop benefits them in a huge way as their customers buy into the experience of Disney that they sell. Not everyone can visit one of the Disney Parks, so the Disney store brings a little part of the parks to the store. For a customer to visit the store they can see the actual product they want to purchase, some stores such as the Belfast store has a Princess Castle for the children to go through and movies played on a projector to keep them occupied while their parents are queuing to pay or are browsing the products. Although having a physical store can be beneficial there are disadvantages as the store are quite popular which results in them being busy this may put customers off as they may not be able to get to the products they want, they may not be able to see the full range of products that the Disney Store offer or they must queue for a long period of time. It also has its drawbacks for the company themselves as it can get expensive for rent and staff, especially depending where they are located too. This must be taken into consideration for two reasons, certain areas may be more expensive for their overheads and for how popular the area would be, if it’s a popular area there will be more footfall resulting in more potential customers.
In 1996 the Disney online store was launched this allows customers to view all their products online and order products straight to their door, this also means that they are staying current as ‘E-commerce accounted for a 19 percent share of total business turnover in the United Kingdom in 2015. As of 2015, roughly 80 percent of UK internet users did online shopping, the highest online shopping penetration rate in Europe.’ (Facts, 2019)
(Ons.gov.uk, 2019)
Although this has allowed the company to earn more profits as they can sell online 24/7, selling online loses their unique selling point of the experience of being in the store. When purchasing products in the store or just popping in to see what they have on offer the customers are not treated as customers but more as guests. This is the Disney Stores unique selling point as they pride themselves on the experience they give their customers and not just their customer service. Having an online presence helps the company as there are more places to advertise to promote the company and any offers that they may have available, it will also save the business money as their will be less overheads to pay. One of the most beneficial aspects of the Disney store being online for customers is that they would be able to customise some of their products, another advantage would be all their items that they order will be delivered straight to their door.
The third P in the Marketing mix is Price, ‘Price is part of a business’s marketing mix and one of the 4 Ps. Price is the amount the business charges the customer for the product or service. The business can work out the price for which it will sell its product to a customer by looking at various factors. These include the costs of producing the product, its brand image, the target market and the target customers. This will help the business form a pricing strategy. Unique selling point An attribute that makes a product stand out from other products in the market.’ (Hage M, 2017)
There are several different types of pricing strategy.
‘Cost-plus pricing is where the business adds together the costs of the raw materials, labour and overheads for a product. This gives the cost per unit, also known as unit cost. The business then adds a mark-up percentage (to create a profit margin) in order to arrive at the price of the product.
Price skimming means the business sets a high price before competitors come into the market or when the new product is believed to be superior to others on the market… Price skimming allows for greater profit from customers prepared to pay the premium price for the new product, often called ‘early adopters’. However, sometimes the strategy breaks down as other competitors enter the market.
Penetration pricing involves the business setting a relatively low initial price to attract new customers. This is to encourage customers to switch to the new product to achieve a high market share. However, profit levels are likely to be low and starting at a low price may make it difficult for the product to establish a quality reputation.
Predatory pricing is where prices are deliberately set very low by a dominant business in the market in order to drive competitors out of the market or out of business. It is illegal under competition law, but it is very hard to prove that low prices are intended to damage others. Competitive pricing means the business must accept the going market price as determined by the forces of demand and supply and other similar products in the market. Such a business is known as a ‘price taker’ as it has to charge what others in the market do for their products. Psychological pricing means the price is set to make the customer believe the product is cheaper than it really is. Pricing in this way is intended to attract customers who are looking for ‘value’. Instead of charging £10.25, a business may charge £9.99, to avoid going through the £10 psychological price barrier. It may seem trivial but it can be important. No one wants to pay £1 for a chocolate bar, so 99p becomes the psychological price ceiling. Factors that determine the most appropriate pricing strategy.
The factors that help a business decide the most appropriate pricing strategy include:
- USP – a product with a unique selling point is differentiated from the rest of the market and has a clear competitive advantage
- price elasticity of demand
- level of competition – if there are many similar products then a business will need to use competitive pricing’ (Hage M, 2017)
The final P is Promotion, ‘Promotion is the communication aspect of the marketing mix. It is creating a channel for conversation with the targeted consumer base. Through promotion, the company aims to attract the customer’s attention and give them enough information about the product to foster enough interest to motivate them to purchase.
Information provided to the customer at this stage helps them in making purchase decisions regarding the product. Often, there is substantial cost associated with promotional activities. But since the result is often an increase in sales or customer loyalty, there is thought to be long term return on this investment. There are many ends that a company may try to reach through a promotion including but not limited to an increase in sales, acceptance of new products, brand equity creation and brand positioning, addressing competitor actions and rebranding.’ (Cleverism, 2019)
For the Disney Store their promotion is important although with having movies being released every year helps with promoting new products, such as the new Dumbo movie, there will be products released just before the movie is released when the movie is released it is its own form of promotion. The ads for the movie will be tv, online and in the cinema, this will make children want the products if they’ve seen the movie. ‘Disney’s “content marketing” strategy goes in reverse compared to most brands. Meaning, where most brands start with a physical product and then build a story around it in the form of “content marketing,” companies like Disney do the exact opposite. They create a brand story – a movie – and then build products around that story.’ (Forbes.com, 2019). Although the Disney store will promote their products online through sponsored ads on the internet or through social. They also have sales and offers that will also promote their products and show potential customers what they have to offer and at affordable prices.
The Disney store mainly targets children with the kid’s movies and toys etc. although they have started to remake the original movies to keep it current for the younger generation, this brings adults into their target market as they will be reliving their childhood. This helps promote the Disney store and their products as not only do the adults if they have children want to by products for them but also themselves.
There are two different types of promotion controllable and incontrollable, controllable promotion is where the company themselves promote their products and release certain information about the brand or products that they want potential customers to know to help entice them to buy their products. Incontrollable promotion is for example word of mouth, online reviews or people posting about the company through social media. Incontrollable promotion can be damaging to a brand or product as customers are more likely to believe someone else who has already had the experience with the company or the products than limited information that the company is releasing themselves.
In addition to the 4Ps there is an extra 3 parts to the marketing mix, these are,
- ‘People – All companies are reliant on the people who run them from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products/services you are offering.
- Processes –The delivery of your service is usually done with the customer present so how the service is delivered is once again part of what the consumer is paying for.
- Physical Evidence – Almost all services include some physical elements even if the bulk of what the consumer is paying for is intangible. For example a hair salon would provide their client with a completed hairdo and an insurance company would give their customers some form of printed material. Even if the material is not physically printed (in the case of PDFs) they are still receiving a “physical product” by this definition.’ (Academy, 2019)
For the Disney store it is important who they hire as they put on mini shows in store on special events, they would have to be polite and confident to give the customers the experience that they come into the store to have.
The Ansoff Matrix was developed by H. Igor Ansoff and first published in the Harvard Business Review in 1957, in an article titled “Strategies for Diversification.” It has given generations of marketers and business leaders a quick and simple way to think about the risks of growth.
‘Sometimes called the Product/Market Expansion Grid, the Matrix (see figure 1, below) shows four strategies you can use to grow. It also helps you analyze the risks associated with each one. The idea is that each time you move into a new quadrant (horizontally or vertically), risk increases.
Figure 1: The Ansoff Matrix
(Mindtools.com, 2019)
In conclusion I believe out of all of the elements of the marketing mix the product and the promotion is the main aspects for the Disney store as the products are the main selling point following on with movies or special times of the year e.g. Disney Christmas ornaments or toys etc. The movies themselves are a huge part of the promotion of the Disney products as without a movie there would be no products for that specific brand.
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