Running Head: CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 1 Creating Offerings and Using Channels to create Value for Customers Student: Kadi AMAH Student’s Name: Kadi AMAH UMGC MRKT 350 Professor: Jane Burman-Holton Date: 04/27/21 CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 2 Part 1 Type of Consumer Offering Disney Plus is a product from The Walt Disney Company, which offers an on-demand, ad-free online streaming service. Subscribers watch series and movies on Smart TVs, laptops, gaming consoles, phones, and tablets. The product also includes unlimited downloads for the subscriber to be able to watch from wherever they want. Disney Product content emanates Walt Disney Television and Walt Disney Studio’s biggest names including 20th Century Fox, National Geographic, Star Wars, Marvel, Disney, and Pixar. The product costs $6.99/month or $69.99/year in the United States (Chen & Kevin, 2020). A user gets ad-free access to all Disney plus streaming titles spanning the numerous distinct genres and interests for this price. A consumer has another option to purchase a bundled package with ESPN+ and Hulu at $12.99/month for the three services (Chen & Kevin, 2020). The consumer saves $6 by choosing this option instead of signing up for each product individually. This is important for Disney+ considering that it is a service-dominant product where the consumer focuses on the product, as well as the services that accompany it. Disney+ supports 7 profiles upon subscription. This way, different members within a household can each create their unique profile with unique avatars & personalized settings. There is a kids' profile option that may be used for kids. The service allows simultaneous streaming as well. Disney+ falls under shopping offering where the consumer makes great effort in comparing and selecting, which brand to choose. There are important differences between product offerings to the consumer and they would wish to choose the best CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 3 product. Through the bundled package, consumers have an opportunity to buy three different products at a good price because they need all three because of their important differences. If a consumer likes another product more, but still likes Disney+ he may choose to purchase the bundled offer rather than let Disney go and this increases business for Disney+. Product Lifecycle Disney+ is a pretty new product in the market. It was launched in 2019 after its development stage. During its introduction, it immediately began a huge market share for itself. The introduction stage included a lot of activity including both online and offline channels to create a connection with consumers. This includes huge expenses but the return was awesome as a year after its launch, it trailed Amazon Trail video, the fourth contender in the streaming market, which had 8% of the market, by a minute margin. Disney+’ Q3 earnings report showed that the product had earned 60.5 million subscribers (Sengwe, 2020). The product is at its growth stage: customers have already accepted Disney+ and the company is working on increasing the product’s marked hare. Netflix has a commanding market share of 28% against Disney+’ 6%, however, last year, Netflix had a market share of 31% which shows much it has lost to Disney+ (Duprey, 2021). Its market share is expanding at a very high rate as the product’s Q1 2021 earnings report shows that it has 94.9 million subscribers and has beaten its 4-year goal in just 14 months (Pereira, 2021). Its revenue per subscriber has however dropped to $4.03/month because it has expanded its market to North America, Indonesia, and India where it charges less than what it charges in its original markets: US, Canada, Australia, and the Netherlands. Today’s demographics and orientation have changed making the entertainment industry to be at the growth stage. This makes it possible for new entrants. However, Disney+ has a very strong CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 4 foothold derived from its parent company, Disney’s brand value, and long history and roots in the culture of America. Part 2 Marketing Channels and Strategy Disney uses multiple marketing channels to reach consumers: direct and indirect channels. The product is sold directly to customers. This occurs through the Disney+ website where customers can directly subscribe to Disney|+. Disney+ is an online service hence most of its marketing occurs online too. Disney has relied heavily on social media to advertise its Disney+ product. Since November 2019 when the product was launched, Disney relied on Facebook, as well as Desktop Videos to promote the product. The two channels have accounted for 80% of the $525M used to market Disney plus in 2020 (Merchan, 2021). First, it invested in advertising via Facebook but there were growing concerns about how Facebook handles hate speech, as well as other objectionable content. Disney+' marketing budget was then shifted to desktop video ads. Facebook Ads created 32 billion impressions (Merchan, 2021). Desktop display and desktop videos created 9 billion impressions each. All these ads directed the consumer to the Disney+ website where they can subscribe. Dual distribution proved to be an important channel for Disney+. Disney also partnered with Verizon to enable eligible data subscribers in Verizon to access the Disney+ service free of charge for one year. This way, Disney+ has reached millions of customers, who could be interested in the service. The direct-tocustomer channel strategy should change to adopt non-digital channels. Events offer important human connections and experiences that can never be replicated online. In-person marketing is much memorable compared to any other experience conveyed online. During events, participants CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 5 will sign up for the Disney+ streaming service on the spot. The company will use tour vehicles covered with ads to push the service. Disney+ stores will help customers scan a code using their smartphones to subscribe to the service. If done correctly, events will one excellent marketing channel for the service. Pricing Strategy Disney+ uses a competitive pricing strategy. Since it was launched, it set a competitive price that gives competitive advantage: its prices are higher than those of certain competitors (Apple TV Plus), lower than those of some competitors (Netflix), and equal to those of other competitors (Hulu & Amazon prime video) (Chen & Kevin, 2020). Disney+ has also partnered with Hulu and ESPN+ to offer consumers a bundled package, which is cost-friendly such that the consumer saves by subscribing to the bundled package rather than subscribing to each product individually. Disney+ also uses penetrating pricing where it sets low prices to gain market share faster. The product is introduced into other new markets at a lower price, which has lowered Disney+’ revenue per subscriber per month to $4.3 rather than $6.99. Going forward, the company will need to base its pricing on demographic segmentation. Through income segmentation, the product will consider consumers’ monthly or yearly income. They can also segment on the basis of household income or personal income. Disney plus can then offer a specific package at a higher price and another at a lower price. With an expensive and inexpensive product, even people who would never have subscribed due to high prices will have an opportunity to subscribe. CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 6 References BBC. (2021). Market segmentation. Retrieved 4 25, 2021, from https://www.bbc.co.uk/bitesize/guides/z7scbdm/revision/1 CHEN, C., & KEVIN, S. C. (2020). Disney Plus: All your questions answered about Disney's ad-free streaming service. Retrieved 4 24, 2021, from https://africa.businessinsider.com/entertainment/disney-plus-all-your-questionsanswered-about-disneys-ad-free-streamingservice/lgp029l#:~:text=Disney%20Plus%20is%20an%20on,tablets%2C%20and%20ga ming%20consoles). Duprey, R. (2021). Netflix Still Dominates Streaming, but Disney Steals Market Share. Retrieved 4 24, 2021, from https://www.fool.com/investing/2021/01/13/netflix-still-dominatesstreaming-but-disney-steal/ Merchan, W. (2021). Disney+ Marketing in 2020: Behind Disney Plus’ $525M Digital Advertising Strategy. Retrieved 4 25, 2021, from https://www.pathmatics.com/blog/disney-marketing-in-2020-behind-disney-plus-525mdigital-advertisingstrategy#:~:text=Disney%20Plus'%20advertising%20strategy%20for,video%20to%20pro mote%20Disney%20Plus.&text=Most%20of%20Disney%20Plus'%20ads,appeared%20o n%2 CREATING OFFERINGS AND USING CHANNELS TO CREATE VALUE FOR CUSTOMERS 7 Pereira, M. (2021). How Disney+ Is Giving Netflix Goosebumps: The Marketing Strategy Decoded. Retrieved 4 24, 2021, from https://www.martechadvisor.com/articles/customerexperience-2/disneyplus-marketing-strategy/ Sengwe, S. (2020). Disney Plus Grabs Significant Share in the Streaming Market Less Than a Year After Launch. Retrieved 4 24, 2021, from https://thestreamable.com/news/disneyplus-grabs-significant-share-in-the-streaming-market-less-than-a-year-after-launch 7 B in (40 do G do AP Do Re û Tie | Se Wo î Intl cy Ap SO M Be LE Se Tal CN Jur Рас Cy! Dig UX + f → C A learn.umgc.edu/d2l/Ims/dropbox/user/folder_submit_files.d2l?db=1056229&grpid=0&isprv=0&bp=0&pu=563484 h J Update: 1 Integrated Marketing Communications and the Changing Media Landscape Learning Outcomes 1. Integrated Marketing Communications. Student understands how integrated marketing communications can add value for customers. 2. Marketing communications objectives. Student can develop marketing communications objectives using the AIDA framework. 3. Promotion mix. Student can select the appropriate promotion tool to be used for different marketing communications objectives. 4. Media strategy. Student can design a simple message and media plan for a product or service offering. Directions • This assignment assesses your ability to relate integrated marketing communications concepts to your product or service offering and the target market you selected. Here you will let your creative side shine as you think through how you would design the marketing communications for your product or service to effectively and efficiently communicate a clear, consistent and compelling message to your target market over the next year. o You may want to refer to some additional references for more information on message design. A good one is • Promotion: Integrated marketing communication (IMC). (n.d.). Lumen https://courses.lumenlearning.com/wmopen- introbusiness/chapter/promotion-integrated-marketing- communication-imc/ Part 1 Submit Cancel ng Communications. Considering your new target market and any modifications new product line extensions or new products Vou may 7 B do G do AP Do Re Se Ap M Be Tal CN Jur Рас Cy! Dig UX + + h J Update: 1 in (40 û Tie | Wo î Inti | cy SO LE Se → C learn.umgc.edu/d2l/Ims/dropbox/user/folder_submit_files.d2l?db=1056229&grpid=0&isprv=0&bp=0&pu=563484 1. Integrated Marketing Communications. Considering your new target market and any modifications, new product line extensions or new products you may have developed to serve the new target market needs, create your 'Big Idea" to be the basis of the message strategy for all your marketing communications. 2. Marketing communications objectives. In your Week 7 reading you learned about Message Strategies and the Organization's promotion objectives (See, Section 11.5). Write at least three marketing communications objectives using the AIDA framework discussed in the reading. Each of your marketing communications objectives must be specific, measurable, realistic, and have a time limitation (i.e., be a SMART goal). Part 2 1. Promotion mix. For each of the three marketing communications objectives written in number 2, discuss which of the promotion tools would be the best choice to reach each of the three marketing communications objective. One tool must be advertising (traditional or online) You may have more than one promotion mix tool for any given marketing communications objective. Consider and discuss whether you will be using digital marketing in general (email, mobile, social media, etc) or not to reach these goals. Why is this appropriate for this customer or not? 2. Media strategy. Discuss at least two of your media choices that you believe will best reach your target market with your advertising. Be specific with your choices, e.g. HGTV, Rehab Addict, because the product or service is targeting a do-it-yourself target market, or Home Depot website banner ads for the same target market. Or Morning TV National News, Good Morning America and The Today Show, 1st hour because your target market is educated urban workers. If using social media, discuss which social media and how they will be used to accomplish which obiective. 1 Submit Cancel rements - See Writing Assignment Instructions 7 E in (4 do do AP DO D Re ö Tie Se wc i Int i Cy Ар SO M Be LE SE Tal Ci Ju t Pa o Di | NWU X + + h J Update: 1 → C learn.umgc.edu/d21/le/content/563484/Home?itemldentifier=D2L.LE.Content.ContentObject. ModuleCo-20539422 Begins March 17 each of the questions. See Supporting Conclusions with Your Ideas and Reasoning. FORMAT & WRITING 2 Week 2 Customer Satisfaction (3/24-30) Begins March 24 Each writing assignment will require you to respond to four questions total (two in Part 1 and two in Part 2). You must respond to all four questions, or the assignment will be unsatisfactory. 4 Week 3 Consumer Behavior (3/31-4/6) Begins March 31 Each assignment should be approximately four to five pages of double-spaced text in length. A page is approximately 250 words. You may attach exhibits if you wish. More pages are acceptable, however, fewer than three pages is not satisfactory. Week 4|Market 5 Note that a percentage of your grade will be based on your grammar, composition, adherence to the submission requirements, and use of an appropriate college-level style guide for writing and referencing (APA format). Segmentation (4/7-13) Begins April 7 Prepare each assignment in Microsoft Word. Here are the technical requirements: Week 5|Creating Offerings (4/14-20) Begins April 14 • Use a simple 12-point font such as Times New Roman and black ink primarily. Use color where it enhances your ability to communicate your thoughts • A cover page is required. A references page is required. The cover page and references page are not included in the written analysis or the page count. • Be sure your name, writing assignment number, the date, and the name of your product or service are on the cover page of your writing assignment. • Use headings to separate topics (e.g., Part 1, 1. Creating Value for Customers) Week 6|Marketing 3 Channels and Price (4/21-27) Begins April 21 Use a minimum of six (6) references, four (4) of them dated 2016 to the present. Week 7|Integrated 2 1 Marketing • Includes references that explain the assignment concepts and references to the actual nroduct
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