Disney's Magic Kingdom – Part C
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DISNEY’S MAGIC KINGDOM – PART C Disney’s Magic Kingdom – Part C Alex Mottershead & AJ Russo Temple University Marketing in Tourism & Hospitality Management (STHM 3996-001) Dr. Ceridwyn King April 25, 2016 DISNEY’S MAGIC KINGDOM – PART C 2 Executive Summary Magic Kingdom opened in October 1971 in Orlando, FL as the first of five theme parks in Walt Disney World. The park servers millions of visitors each year with an emphasis on families with children under the age of 18. Despite age, ethnicity, gender, and so on, Magic Kingdom promises to be a destination where dreams come true. The park accomplishes this through its realistic and immersive theming, technological innovations, Cast Member loyalty, overall strong brand image, transportation accessibility to MK and Orlando, park infrastructure, and the increase in the United State’s tourism industry. However, the financial investment a Guests makes for the Magic Kingdom experience is high and is bogged down by overcrowding and depreciating areas and attractions. Additionally, there are various industry and external environment factors that could potentially affect the park’s prosperity such as the global currency crisis, LGBT movement, effects of the sharing economy, and the domestic effects of the Shanghai Disneyland addition are impending industry and global factors that could potentially affect the prosperity of the park. Furthermore, the threat of substitutes is high since there are many viable other entertainment options, such as with LEGOLAND and Universal theme parks also located in Central Florida. As a result of that research and analysis of the internal and external environments of Magic Kingdom that it was determined that the park has a positioning problem. It has been found that after recent changes made to our admissions pricing structure, parking, and new special events, along with the domestic budget cuts as a result of Shanghai, guests are expressing a perceived disconnect between the price of the experience and experience itself. The three strategies that will be used to resolve this issue are (1) market research, (2) pricing, and (3) communication and promotion. DISNEY’S MAGIC KINGDOM – PART C 3 Table of Contents Executive Summary ........................................................................................................... 2 Table of Contents ............................................................................................................... 3 1.0 Introduction .................................................................................................................. 5 2.0 Situational Analysis ..................................................................................................... 6 2.1 Internal Analysis .............................................................................................. 6 2.1.1 Overview of Organization................................................................. 6 2.1.2 SWOT Analysis ................................................................................ 8 2.1.2a Strengths Analysis ............................................................... 9 2.1.2b Weaknesses Analysis ........................................................ 12 2.1.2c Opportunities Analysis ...................................................... 15 2.1.2d Threats Analysis................................................................ 16 2.1.2 Consumer Profile ............................................................................ 18 2.2 External Analysis ........................................................................................... 19 2.2.1 Environmental Analysis (PESTE) .................................................. 19 2.2.1a Political Factors ................................................................. 20 2.2.1b Economic Factors.............................................................. 21 2.2.1c Socio-Cultural Factors ...................................................... 21 2.2.1d Technological Factors ....................................................... 22 2.2.1e Environmental Factors ...................................................... 23 2.2.2 Industry Analysis (Porter’s Five Forces) ........................................ 25 2.2.2a Bargaining Power of Suppliers ......................................... 25 2.2.2b Bargaining Power of Buyers ............................................. 26 2.2.2c Threat of Entry Competition ............................................. 26 2.2.2d Threat of Substitute Products ............................................ 27 2.2.3 Competitor Analysis ....................................................................... 27 2.2.3a Universal Florida Resort in Orlando, FL .......................... 27 2.2.3b LEGOLAND Florida Resort in Winter Haven, FL .......... 30 2.2.4 Target Market Analysis................................................................... 31 2.2.4a LGBTQ+ ........................................................................... 32 2.2.4b Parents/families with children under 18 years of age ....... 34 DISNEY’S MAGIC KINGDOM – PART C 4 2.3 Situational Analysis Summary ....................................................................... 35 3.0 Problem Identification ............................................................................................... 36 4.0 Proposed Marketing Strategies .................................................................................. 38 4.1 Strategy: Market Research ............................................................................. 38 4.2 Strategy: Pricing............................................................................................. 40 4.3 Strategy: Communication and Promotion ...................................................... 42 5.0 Conclusion ................................................................................................................. 44 References ........................................................................................................................ 45 Appendix .......................................................................................................................... 59 Appendix A .......................................................................................................... 59 Appendix B .......................................................................................................... 60 Appendix C .......................................................................................................... 62 Appendix D .......................................................................................................... 64 Appendix E .......................................................................................................... 66 Appendix F........................................................................................................... 67 Appendix G .......................................................................................................... 68 Appendix H .......................................................................................................... 69 Appendix I ........................................................................................................... 70 Appendix J ........................................................................................................... 72 Appendix K .......................................................................................................... 73 DISNEY’S MAGIC KINGDOM – PART C 5 1.0 Introduction In order for Walt Disney’s East Coast Disneyland dream to become a reality, he secretly bought thousands of acres of swamp land in Orlando, Florida in the middle of the 20th century (Foglesong, 1999). Magic Kingdom became the first entity (of five) to occupy any of that swamp land and opened in October of 1971. The availability of the land and the lack of surrounding urbanization enabled Walt to put a plan into place to develop a park that would one day become larger and ultimately more successful that California’s Disneyland. It was noted that “Disney hated the ticky-tack development of Anaheim, which surrounded Disneyland.” This pushed him to pursue a location that enabled him to acquire a lot of land in order to control the surrounding environment of his new Disney theme park (Foglesong, 1999). Magic Kingdom and Walt Disney World became the place where he could fix all the flaws from his CA park and expand upon his imaginative ideas. Walt dreamt of a park where he could make dreams come true. He implemented underground tunnels into his new design that allowed the characters and employees to travel between the different areas of the park without being seen by the guests. These tunnels, the Utilidors, would become very important to hold the authenticity of the theme of the different areas of the park. Originally, he had wanted the tunnels to be built for all the different parks but due to financial constraints Magic Kingdom, Future World in EPCOT and Pleasure Island in Downtown Disney (now known as Disney Springs) were the only ones to receive the tunnels (Walt Disney, 2016). Despite any deviations from Walt’s initial plan, Magic Kingdom has skyrocketed to become the number one theme park in the world. Unfortunately, Walt was unable to open the park and watch it rise to the top and succeed. However, his original passion and his original goal to create a place where people could dream together in a world DISNEY’S MAGIC KINGDOM – PART C 6 where minds could freely