Value Pricing & The Magic of Disney

By: Melissa Santos

The Disney Brand:

Throughout many generations, Disney has successfully provided individuals, families and children alike with many warm, happy memories. Disney is both a global and powerful brand that has been well established since the early nineteenth century. Disney not only connects with younger generations, it reaches and also speaks to adults of a wide variety of ages. The brand has touched and will continue to touch the hearts of individuals for many generations to come. Due to its prestige, Disney is a powerhouse that will continue to thrive far into the future.

The Disney brand is well known for its innovation and creativity that enables consumers’ “dreams to come alive.” The brand serves itself as a platform for all ages to reconnect with their inner child and imagination. Disney provides a magical, fantasy escape from ordinary life with their extraordinary tales of magic, love and adventure. The Disney organization will never cease to stop succeeding as its core values continue to touch the lives of many people world-wide.

Disney Theme Parks:

The magic of Disney comes to life within the walls of its globally renowned amusement parks. Across the world, more specifically in countries such as the United States, France, Japan and China, Disney has extended its imaginative world of laughter and fun to the consumer in the physical form of a theme park.

Disney attracts more than sixteen million guests per year to these amusement parks, and over the last sixty years, the park entry fees have increased steadily. According to the Wall Street Journal article, “Disney Parks Consider Off-Peak Prices” by Ben Fritz, the organization is contemplating a change to its current ticket pricing strategy by implementing a value based pricing system. Revenues for Disney are strong, and the company has maintained a continual, profitable increase over the span of the last few years. With revenues strong, the question remains: why change the pricing system?

As mentioned in the article, the primary reason for switching to a value based pricing system, aside from profitable growth, is to “help reduce congestion, and to raise attendance at slower times”. Meaning, Disney has had an issue with overcrowding during its busy season. These peak times include school vacations, the summer season, weekends and holidays. The proposed idea suggests that ticket prices will increase during peak times, while they will decrease during the slow season. The company hopes to attract a balanced number of guests all year round with this method. Simultaneously, Disney hopes to reduce the park’s current issues of overcrowding, long lines and extended wait periods for attractions, food and games. The company suggests that this change could potentially result in an overall increase in guest satisfaction.

The Consequences of a Value Based Price System:

In my opinion, an implementation of a value pricing system contains both positive and negative implications for Disney. Beginning with the positive, it could potentially decrease the number of guests during the busy season, allowing shorter wait times for rides, food, restrooms etc. It would also decongest the overwhelming atmosphere of such a heavily populated theme park. This would increase guest satisfaction, and keep the average park goer happy. For the company, it could potentially influence guests to consider visiting the park during the slower season in order to take advantage of reduced ticket prices. This would allow each park to be well balanced with guests all year round. Additionally, this enables the organization to profit and prosper throughout the year; however, this comes at a price.

The price surge during peak times could potentially anger loyal Disney guests and Disney communities. It could also deter many families because they may not be able to afford the park passes priced at new, higher admission rates. Issues of schedule conflicts could also negatively impact the success of this new system. Most families are confined to their children’s academic calendar in terms of when they can and cannot take family vacations. These schedules typically allow families to be able to visit theme parks during the peak season. If they are only able to visit the park during the peak season but cannot afford park admission, this may result in many families no longer vacationing at Disney. This could be a severe loss for Disney from a financial perspective, but more importantly, a loss from the customer loyalty perspective as well.

While weighing the positive and negative aspects of this system, marketers should be careful when implementing this new idea. There are many loyal Disney guests visiting, year after year, and with this new pricing system, they may not be able afford to vacation at Disney. Another major issue marketers are going to face is that families plan their vacations around their children’s educational schedule. This implies that school vacations, holidays and summer break are the only time in which they are able to take their vacations. Marketers must be weary when facing these dilemmas because these surging of prices may just deter guests (both potential and repeat) from vacationing at the Disney theme parks and resorts. Altogether, Disney marketers face a serious challenge. They must convince consumers that the brand and experience is worth the price increase, while simultaneously encouraging guests to pay less and visit the park during the off-peak season. They must promote both ends of the spectrum while maintaining the vibrant Disney brand.

Disney takes pride in their excellence, and they far exceed the expectations of all guests. I believe a value pricing system, if it is chosen to be implemented, will succeed. Disney theme parks provide an excellent experience for their guests that no competitor on the market can currently offer. The atmosphere, the amusements, and the Disney brand is what entices consumers to pay more for their tickets. Every potential and also every returning guest wants to experience, again and again, that magical, memorable experience only Disney can effectively and successfully provide.

References:

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17 thoughts on “Value Pricing & The Magic of Disney

  1. Melissa Miller November 9, 2015 / 6:37 pm

    Melissa, I think you did an excellent job presenting this article in class. In my personal opinion, valuebased price system would be a genius move for Disney. For the most part regardless if the prices goes up or not they will still have loyal customers coming to their theme parks. I think this would be a good way to get people to the park during their off-seasons. I do not think it will anger their loyal customers because for the most part I’m sure they already get rewards and special promos for being such a loyal customer. Disney Parks are seen as such an elite theme park compared to other parks that people will be willing to pay high ticket prices to get in.

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  2. James Wegman November 10, 2015 / 2:17 am

    It’s a shame I wasn’t part of this class to hear this in full presentation. It’s interesting to note about Disney that even though the prices are high, the lines are long, the food not the best, and it being too hot, people still pay to go to this place. Jack up the prices all they want, there will always be people who find something from Disney they relate to and enjoy (whether its one of their iconic locations, movies, TV shows, or characters). So going along with Melissa, there is some elbow room for a value-based system. The pros outweigh the cons for Disney’s case. Of course, in going with a quote from Jurassic Park “this park was not built only to cater to the super-rich.” Everyone deserves a chance to go to Disney and the price increase will definitely drive people away. Maybe there are some people who don’t enjoy Disney, but that doesn’t mean we have to take away the chance to live through the experience of Disney World and Disney Land. They should have the option, rich or not.

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  3. Kristen Elizabeth (@baniak_kristen) November 10, 2015 / 8:14 pm

    It was interesting to read this article because sometimes I do not realize how expensive it is to go to Disney World and its unfortunate to see the price increase every single year. But because Disney is such a popular tourist spot, it really does not make a huge difference to people who go every year. I think Disney could make a more reasonable price which included some food or picking two rides to go to the front of the line. Disney could reevaluate some different price packages to make it easier for people to continue to afford the park every year.

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  4. Owen Jarem November 10, 2015 / 8:55 pm

    I found this article to be very interesting, because the Disney brand is something that I directly relate to my childhood which in turn has given me much joy during my life. To me, this was a very relevant topic because when I had gone to Disney World as a child, my family decided to go during a down time during the season for the reason of congestion. I’m not sure about the pricing differences, but we decided to go at the very end of August which is apparently a rather slow time for the park. When we went, we were able to have relatively shorter lines which enhanced my families overall experience. I think this would be a great idea for Disney because I know families are willing to pay a premium price for the experience that the theme parks provide. Personally, I don’t think that pricing is the biggest issue but as you mentioned, congestion seems to be more of a concern.

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  5. Mark Lindquist November 11, 2015 / 3:57 am

    Melissa I enjoyed this article and your presentation very much. I have a major soft spot for Disney and the seasonal pricing would be a smart move for additional revenue, as long as they do it in moderation. For example, if they charge $20 extra per person, per day, during peak seasons such as the summer or Christmastime, I don’t believe an average family or young couple will be deterred. Also, visiting the park during non-busy times has its benefits. I went to Disney World 2 years ago, 10 days before Halloween and my experience had advantages such as comfortable temperatures, smaller crowds, and smaller lines. Disney can justify slightly higher prices due to new innovations such the Star Wars, Marvel, and Avatar expansions. Larger crowds during the busy seasons with higher prices will bring in more revenue. Speaking as a fan, I would pay higher prices to visit Disney during Christmastime because Disney is able to create those kinds of everlasting moments.

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  6. Maheshwari Zala November 11, 2015 / 4:47 pm

    I have a different opinion. The article was interesting and I could resonate with my real Disney World’s experience. I have recently visited Disney World and luckily twice in a single year. My very first experience was in first week of Jan 2015 and second visit was in end of September 2015. In Jan, there were long lines for food, rides and even for restrooms. Thought it was a joyful experience, I thought it may be better in non-season. But it was the same scenario in September. The only difference I noticed that during September, Disney was visited by international tourists more than Americans. I do not think so there is any non-season for Disney World. Everyone in the world would want to visit Disney someday.

    I would not comment on Disney’s current pricing, but I think the idea of value based pricing is not a good idea. Indians, Chinese or people from any other countries would not mind to visit Disney even in hot summer of Florida. Value based pricing might not affect international tourists but will definitely affect Americans and would also make it unaffordable for some families if they do not get holidays except vacation time. Many’s dream would never come true and ultimately will effect Disney’s revenue.

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  7. Gautham Vamshi Podila November 14, 2015 / 7:45 am

    Melissa, You have done a excellent analysis, In my opinion value pricing may reap the biggest rewards, but it’s extremely challenging for an organization to sustain, it can be harmful in some cases. Organization need to learn how to set up their pricing because they have a huge investments on creating theme park with all the luxurious amenities and they are hiring the staff to make a better neat and tidy place, moreover Disney is a Life time experience kind of place the hard work they do to keep the customers happy is priceless. In my opinion keeping some extra bucks for a life time experience wouldn’t be much hard.

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  8. Jameson Pinette November 16, 2015 / 2:55 am

    Great post and thorough analysis. Disney has done an excellent job aligning themselves with countless brands that have become household names. From a very young age, children learn to love Disney characters, thus cannot help but dream of going to Disney World. In some ways it is a right of passage. As a result, demand is extremely high. The value pricing model is not a new concept by any means, and is one that fits well with the theme park. Logistics play a major role in consumer satisfaction so why not kill two birds with one stone? Improve the flow and park admission, while increasing the profit margin during peak seasons. This will not anger dedicated customers, as Melissa mentioned, they are receiving promotions and other rewards for their continued loyalty. Those who can not afford to come during peak season, will find a way to come when it is off season. Any family or individual with excess money, who does not care about higher prices, will pay no matter the cost. As long as the pricing model is not too steep, there is really no downside with such robust demand.

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  9. 季宇垚 November 29, 2015 / 1:19 am

    I like Disney Park very much when I was a child, this article make me know more things about the Disney. What they are doing good now or what they are doing bad. Consequences of a Value Based Price System have a good aspect and bad aspect at the same time.

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  10. Emily Koba November 29, 2015 / 4:24 pm

    I think it’s great that Disney is giving consideration towards controlling levels of congestion in their parks. By changing their pricing model to encourage more visits during the down times, Disney is showing that they care deeply about providing a memorable and enjoyable experience to visitors, rather than just about charging visitors as much money as they possibly can. People who plan vacations to Disney are usually more concerned about their experience rather than its price. However, this pricing model will provide them the opportunity to still experience a magical vacation without paying insane ticket prices and having to maneuver through a congested park.

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  11. Courtney Aznavoorian (@CourtneyGraceAz) November 30, 2015 / 8:31 pm

    I think that a value based pricing system would be beneficial to Disney. There are definitely families who would rather go during the off season if the ticket prices are lower. It can potentially solve the problem of overcrowding during school holiday times. However, it may turn the off season into a much busier time if more and more people wait to take advantage of the lower prices. Disney will always be busy no matter what, they just have to make sure it stays under control.

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  12. Adam Chadbourne December 1, 2015 / 1:16 am

    Like others who have commented, I feel that Disney’s implementation of value-based pricing could be positive, overall. When I was 10 years old, my parents pulled me and my older sister out of school for a week in early October so we could go to Disney World. It wasn’t my only trip to Disney World, but it was my only one not during a peak travel time and the waits were nearly non-existent. Many park-goers will see the reduced prices as a new opportunity that they didn’t have before. They will find that they can afford to take the vacation during late September rather than saving until that Christmas Break, and with the expected shorter lines, it adds even more value to the deal. Melissa, you do make a good point about how some people schedule their vacations around their kids academic breaks, so they will probably not have any days that are not during peak times and the rising prices will probably make guests not want to go to a Disney Park and will go to a competitor instead. I do feel that the pros of the value-based pricing do outweigh the cons.

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  13. Tyler Berube December 9, 2015 / 7:12 pm

    I am really curious to see how this new venture pans out. The new value-based costing will certainly give family a more affordable option, but many family are unable to take the time off during off-season. School vacation time is really the only option for family’s who don’t want to take their kids out of school. I can remember when I was younger, it wasn’t even an option for my parents to take a vacation that didn’t coincide with a school vacation. The price reduction certainly will help spread out the numbers a bit, but when it comes to the die-hard Disney fans, high prices won’t stop them from visiting.

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  14. Brad Daly December 10, 2015 / 2:02 am

    I agree with Tyler on this. I think that it would be very interesting to see how this works for them and if it harms the brand image at all. In addition to a brand, Disney is an experience. This is an experience that, in my opinion, every kid should be able to experience. I realize that this is certainly not feasible for everyone, but for those fortunate enough, it is something that will create memories that last a lifetime. School vacation is a time when families can do these things without having to take them out of school and miss too many days of work. Trying the pricing options could hurt the image of the brand but they will never know until they try it and see the response of the patrons. However, I do think that it will certainly even out visitors and busy and slow times for the parks, but it will still make parent’s decisions difficult as to when they decide to take their kids. Great article and great presentation!

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  15. Joe Pantalone December 10, 2015 / 3:59 am

    I agree with Melissa. The value pricing system would be an idea that Disney should incorporate. The park is a destination park for families and they will make sure that they take their children there. The price will not be so much a factor to the loyal customers and I do not believe it will anger them. The pricing system may also increase their off season attendance.

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  16. Alyssa Crowley December 10, 2015 / 7:38 pm

    I like the value pricing idea for Disney. It helps to spread out the crowds throughout the year so that the peak season is not as packed and the off season will attract a bigger crowd. In regards to the reactions to the price, if anyone knows Disney they know it is not a cheap trip. Even with a change in the ticket price I believe those who have visited in the past will continue to come. Disney has such a strong positive reputation that families will always try to visit at least one in their lifetime no matter the price. The one issue I see with this new pricing approach is that kids are in school during off season so this will make it difficult for those families wishing to pay the cheaper amount to find an available day to visit. I can see weekends during the off season being just as busy as the peak season.

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  17. Alicia March 10, 2016 / 5:28 pm

    I thought that this article was really well written. I agree with everything that was stated in tae article as well, form the magic of disney to the negative effects of changing ticket prices. Disney is a place families love to go to spend time with their children and enjoy time away from home. That being said, parents do typically plan vacation time around their children academic schedules, therefore that would be one of the biggest issues in a pricing change. At the same time, Disney is extremely established and has a very loral customer base, so there are many consumers who would probably be fine with the change and work around it because of how much they value the time they spend at Disney.

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