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Pricing Strategies At Walt Disney

Numerous factors influence the five pricing strategies: premium, penetration, economy, psychological, and promotional.

Four critical criteria may influence the premium strategy’s selection. To begin, if the business wishes to imply superior quality. The resulting consumer perception might assist in elevating or maintaining the value of a premium brand. Second, if the corporation wishes to advertise to exclusive groups or images of high-net-worth individuals. Thirdly, if the corporation wishes to fast recoup its investment in the product demonstrated at marketing assignment help. Fourth, the corporation offers numerous variations on a single product. This fourth aspect contributes to the strategy’s classification as a product-line pricing strategy (Hughes & Kapoor, 2010, p. 466).

For new items, penetration pricing is used. As a result, the primary element affecting pricing is the new product status. Unlike premium pricing, which is heavily impacted by product line and involves charging a premium to imply high-quality/luxury, penetration pricing entails charging a cheap price to quickly gain market dominance.

The primary reason driving the decision to use economy pricing is the desire to sell at the lowest possible price that yet generates a profit for the business. Due to the product’s low price, the corporation can market it to the public. Due to the low prices, the technique is comparable to penetration pricing, however unlike penetration pricing, another component is taken into account, namely setting the price beyond the break-even price. Whereas premium pricing is utilized when a business wishes to sell to high-income groups, economy pricing is used to maximize profits.

Under psychological pricing, the primary criteria determining strategy selection are the company’s desire to elicit emotional responses from consumers rather than economically reasonable answers; and if the offers are consumer products (Hughes & Kapoor, 2010, p. 466). While premium pricing is ideal for both business and consumer items, psychological pricing strategies such as placing the price at $4.99 rather than $5 may not elicit the same emotional responses in business products as they do in consumer products.

While a luxury brand may place a premium on the product in its 4Ps marketing mix, an everyday brand that prides itself on low-cost products may place a premium on pricing. The latter company is more more likely to use a promotional pricing strategy in order to highlight its price competitiveness. Additionally, a corporation may utilize promotional pricing to debut a new product, combining penetration pricing, which involves setting a low price, with promotional pricing, which involves adopting unusual pricing and discounts.

Although Disney’s pricing strategy is complicated, the firm is primarily focused on premium pricing. According to Baisya (2013), Disney is a luxury brand that charges much more than competitors’ comparable products. Market attitudes indicate that the corporation is on the verge of pricing out the middle class and has lately implemented a dynamic pricing strategy to accommodate for seasonal variations (Cameron, 2019). In some instances, the corporation blends its premium marketing strategy with other techniques as deemed appropriate. For example, in order to balance demand throughout the year, Disney charges higher rates during peak demand months and lower promotional pricing during low demand periods. Another example of the company’s pricing strategy is the debut of Disney Plus, the company’s streaming service comparable to Netflix. For the launch, the corporation used a penetration pricing approach. Disney priced the service at $7 per month, compared to Netflix’s $13. Many were taken aback by the penetration pricing, with others questioning whether the price was “too low for the premium brand” (Hollis, 2019). The corporation also employs psychological pricing, indicating a monthly subscription charge of $6.99 for Disney Plus. Despite the complexity of the pricing structure, Disney’s approach is primarily one of premium pricing, given the company’s premium brand.

Disney has strategically positioned itself as a luxury brand, allowing it to demand premium rates for its products. Occasionally, the corporation will increase its prices. As said previously, there are worries about whether the corporation is pricing itself out of reach of the middle class. Despite these feelings, the company’s market share continues to expand and the brand continues to thrive. As a result, the premium pricing approach is effective because the company has developed a premium brand that is backed by high-quality products and a strong marketing strategy. As Santos (2012) notes, Disney exemplifies the concept of pricing power. Due to the company’s brand value, it is able to charge premium prices while still retaining customers. Disney is cognizant of brand value and its implications for price in this regard. By retaining a strong brand value, the corporation is able to pursue a premium pricing approach.

Additionally, the strategy of premium pricing benefits from the focus on an exclusive market niche. The company is unmatched in terms of its ability to impact its market segment. This factor provides Disney with considerable leverage in order to charge premium pricing. For example, Disney theme parks not only give a world of imagination and entertainment to a specific market, but also persuade visitors to return. Disney’s cultivated strong relationship with consumers provides it with greater leverage to charge premium pricing. Get any case study help here.

Disney’s pricing approach is largely consistent with the language in promotions. In its “huge marketing push” to introduce the new streaming service, Disney Plus, the firm emphasized the low pricing (Sutton, 2019). This penetration pricing model has enabled the business to rapidly grow in terms of subscriptions. In keeping with the premium price strategy, the corporation promotes the brand’s value and product excellence in promotional material. Consider the messaging of company-sponsored theme park promotions. One advertisement stated, “That is the power of magic – you can fly.” Another illustration is seen in Disney’s phrases, which are regularly featured in marketing campaigns. “The happiest place on earth” is one such tagline. This tagline speaks to the value that consumers receive from the Disney brand.

A prominent aspect of Disney’s messaging in its marketing is the company’s proclivity for insinuating the Disney brand’s high brand value. This may be a precautionary action taken by the corporation to nurture and protect its brand value even as it pursues low-price pricing techniques. Despite stressing the low price, which was determined by a penetration pricing strategy, the highly promoted Disney Plus also underlined the product’s worth. The image below is an example of a marketing promoting Disney Plus during its initial debut, with the tagline “Plus up your day.” This label promotes the product’s worth to consumers.

Sutton, 2019: Figure 1.

In keeping with the promotional price strategy, Disney uses messaging in promos such as “family discounts” and “limited-time offer.” These examples demonstrate the connection between Disney’s price policy and promotional messaging.

Sample Solution

actual behaviour matches both the required behaviour and preferred behaviour of the situation the consequence is maximum group performance and satisfaction. However, if the group are not performing and achieving goals or are not satisfied or both, then the leader is able to amend their actual behaviour to improve this. Leaders able to monitor performance and satisfaction, and understand what is required to amend the situation will achieve optimum group performance in Chelladurai’s model. The one limitation of Chealldurai’s model is that it assumes the leader is in a position of complete positional power over the group, and can implement any leadership style of their choosing without constraints. Positional power is the authority and influence a leader has over a group, if the leader has positional power, they will be able to implement the leadership style they best see fit for the situation. Positional power cannot be measured or quantified, making it highly ambiguous and hard for a leader to understand whether they have it or how then can gain it. It becomes the responsibility of the organisation to have policies in place to provide leaders with some positional power, usually by establishing a clear hierarchal structure. By establishing a hierarchy, the leader is perceived by the group to be able to make demands and expect compliance from them giving the leader legitimate power (French and Raven, 1959). Secondly, by providing the leader with the ability to reward compliance and punish non compliance from the group, the leader has reward and coercive power (French and Raven, 1959). To obtain complete power over the group the leader must gain the trust and belief of the group that they are capable of success, by ensuring the group are both satisfied and meeting performance goals. The importance of establishing a hierarchy became evident during the planning stage of the outdoor management course for the red team, the coordinators within the team assumed leadership roles but were unable to gain positional power due to the team being a peer group (Pettinger, 2007). The leaders selected had little authority and influence over the group as everyone was perceived to have the same rank, status and occupation, hence the leaders had none of French and Ravens five bases of power (Pettinger, 2007). The result was leaders with no positional power over the group, so could not direct the group with the method of leadership required for the situation. The task had significant constraints, particularly a short time frame and a large group size, for this situation Chelladurai recommends an autocratic leadership style would be most favourable (Chelladurai and Madella, 2006). The leaders attempted an autocratic leadership style, setting individual tasks for the g
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