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Experiential Exercise 8A
Developing a Product-Positioning Map for Walt Disney

Product Positioning

Product positioning is closely related to market segment focus. Product positioning

involves creating a unique, consistent, and recognized customer perception about a firm's
offering and image. A product or service may be positioned on the basis of an attitude or
benefit, use or application, user, class, price, or level of quality. It targets a product for
specific market segments and product needs at specific prices. The same product can be
positioned in many different ways.

The illustration below shows an example taken from Philip Kotler's book, Marketing
Management published by Prentice Hall. This two-dimensional perception map shows
how Kotler analyses the positioning of an instant breakfast drink relative to variables of
the price of the product and speed of preparation.

Another common framework for product positioning is taken from a series of

questions. You can position a product using a positioning statement that answers these
important questions:

• For who is the product designed?

• What kind of product is it?
• What is the single most important benefit it offers?
• What is its most important competitor?
• How is your product different from that competitor?
• What is the significant customer benefit of that difference?
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For example, the following are positioning statements used by Palo Alto Software to
focus marketing for two new products introduced in late 1994:

• Business Plan Pro

For the businessperson who is starting a new company, launching new products
or seeking funding or partners, Business Plan Pro is software that produces professional
business plans quickly and easily. Unlike (deleted), Business Plan Pro is a stand-alone
product, and requires no other programs to buy or learn.

• Marketing Plan Pro

For business owners and managers who oversee their company's marketing
programs, Marketing Plan Pro is software that creates and helps manage
professional marketing plans. Unlike our most aggressive competitor, Marketing
Plan Pro provides a system for scheduling and tracking the entire marketing
process from plan to action.

And the following steps are required in product positioning are:

1. Select key criteria that effectively differentiate products or services in the industry.
2. Diagram a two-dimensional product-positioning map with specific criteria on each
axis.
3. Plot major competitors’ products or services in the resultant four-quadrant matrix.
4. Identify areas in the positioning map where the company product or services could be
most competitive in the given target market. Look for vacant areas (niches).
5. Develop a marketing plan to position the company’s products or services
appropriately.

Some positioning strategies will work better than others. The best positioning plays to
your company's strengths and the product's strengths, and away from weaknesses.
Position your product to reach the buyers whose profiles most closely match needs you
serve, in the channels you can reach, at the prices you set.
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For this exercise, we are developing a product-positioning map for 3 companies that
are for Walt Disney, Time Warner, and News Corporation. We will built four map that is
representative of 4 market segments; consumer products, studio entertainment, parks and
resorts, and media networks broadcasting.

A. PRODUCT-POSITIONING MAP FOR CONSUMER PRODUCTS

Popular Brand Name

High Variety of Product Low Variety of Product

and Services and Services

Unpopular Brand Name

From this positioning-map, we can see that product or services by Walt Disney was
being in good position than the other two competitors, which are Timer Warner and News
Corporation. Disney was competes in its character merchandising and other licensing,
publishing, interactive, and retail activities with other licensors, publishers, and retailers of
character, brand, and celebrity names. Disney is also the largest worldwide licensor of
character-based merchandise and producer/distributors of children’s film-related products
based on retail sales. And their consumers’ goods such as straight-to-video movies, books,
apparel, toys, video games, and other tangible goods account for 10% of revenue. It is also
because of their brand name. Walt Disney’s brand name alone is one of the most recognized
and prized in the world at 9th according to Interbrand. Like was saying by Roy Disney, that
was believes that the brand name of Disney is very important stating “It is often said that our
company's most valuable asset is the Disney name. You'll get no argument from me. I kind of
like the name myself. But, in recent times, there's been a tendency to
refer to it as the "Disney brand." To me, this degrades Disney into a
"thing" to be bureaucratically managed, rather than a "name" to be
creatively championed. But, Disney no need to be proud forever
with their positions now, they have to always come out with the new
strategy that can make them stay in now positions. Maybe they can
implement the market development strategy, by introducing their
consumer products or services into new geographic area. Example
like in India or Russian, maybe Walt Disney can come out with the
toy that wearing their traditional cloth likes Sarees’ for Indian.

Russian traditional
cloth
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Comparing to the Time Warner and News Corporation, Time Warner was being in
low variety of product and services and was in moderate based on their popular brand name
level. It is because, Time Warner also not just focusing or knowing in AOL, Cabel, Filmed
Entertainments, and Networks, but also involve in produce the consumer products that are
based on publishing thing. But, Time Warner’s publishing unit has not been faring well.
Downturn in print advertising and readership has made the company restructures its
operations in America in order to align new entertainment and lifestyle publications. The
company has also shifted focus from print advertising and readership to online content.
As a result, Warner should make a product development strategy by attempting to capitalize
on the increase in advertisers’ interest in interactive and digital media. And for News
Corporation, they actually are directly compete with the Walt Disney Company in the Media
Network segment, but are not rivals in the Consumer Products and Parks and Resort
segments. Their brand name also not really known by the public, just certain people who are
alert about the media industry, comparing to the Walt Disney name. Then, what should News
Corporation do to make their name being known by all the people? The answer is easy,
expanded their operation activities, not only focus on media thing, but make an unrelated
diversification strategy like trying to enter service sector like opening an educational
institution that provide a subject about media; like film learning, reporter learning, etc.
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B. PRODUCT-POSITIONING MAP FOR MEDIA NETWORK/ BROADCASTING

High Variety of Station

High Average of
Low Average of
Audience Audience

Low Variety of Station

For this positioning map, we can see that News Corp. being a leader in this industry
rather than Walt Disney and Time Warner. News Corp operates in eight industry segment:
Filmed Entertainment, Television, Cable Network Programming, Direct Broadcast Satellite
Television, Magazines and Inserts, Newspapers, Book Publishing, and other. For Walt
Disney, they have been operates in five industry segment there are Disney-ABC Television,
ESPN Inc., Walt Disney Internet Group, ABC Owned Television Stations and ABC Radio.
Time Warner’s media and entertainment have segments own AOL, Cable, Filmed
Entertainment, Networks, and Publishing. News Corp. and Walt Disney stay at a good
position in with the high variety of product and high average of audience but for the Time
Warner there have a high variety of station but low average of audience.

News Corp. has high revenue on their segment. The company has been moving
aggressively toward digital technologies such as broadband, mobility, storage and wireless. In
2005, News Corp. acquired MySpace.com, the Internet’s most popular social networking site,
and IGN.com (gaming and entertainment site). The company has reported an increase in
traffic at most of their pre-existing sites such as newspaper, cable networks and local TV
stations. In June 2007, Fox TV, owned by News Corp. had the most popular shows on
television with and average audience of 6.7 million every night, followed by CBS with 7.6
million viewers during each prime time, Walt Disney Company’s ABC with 5.4 million
viewers per night, and finally NBC with 4.8 million viewers during each prime time period.

Walt Disney increase their revenue in this segment that was primarily due to growth
form cable and satellite operators, which is generally derived from fees charged on a per-
subscriber basis, contractual rate increases, and higher advertising rate at ESPN. In 2006,
Disney and Citadel Broadcasting Corporation announced an agreement to merge the ABC
Radio business, which consists of 22 of Disney’s company-owned radio stations and the ABC
Radio Network, with Citadel. While advertising in the network is a source of additional
revenue for the broadcasters, it requires selectivity for charging for each episode. Video on
demand is a major industry and growing rapidly, expected to be a 3.9 billion dollar industry
in 2010.
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Time Warner’s media and entertainment has been improving their revenue because of
their company have high variety of stations but low average of audience. Time Warner just
acquired Adelphia for $8.9 billion in cash to improve this segment of their business. Its Films
Entertainment segment produces and distributes theatrical motions pictures and television
shows. The Network segment consists of HBO and Cinemax pay television programming
services. The Publishing segment publishes magazines and Web sites in a variety of areas and
has a strategic alliance with Google.
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C. PRODUCT-POSITIONING MAP FOR PARKS AND RESORT

HIGH
CONVENIENCE

FIRM 1

BAD
GOOD
CUSTOME
CUSTOMER
R
SERVICES
SERVICES

FIRM 2

FIRM 3

LOW
CONVENIENCE

NEWS
WALT DISNEY TIME WARNER
CORPORATION
(FIRM 1) (FIRM 2)
(FIRM 3)

Good customer services

GOOD CUSTOMER
and high convenience
SERVICES AND
because Walt Disney have - -
HIGH
many park and resort on
CONVENIENCE
the world.

News corporation just

Time Warner
compete with Walt
BAD CUSTOMER doesn’t have a park
Disney in media
SERVICES AND LOW - and resort because
network. Their company
CONVENIENCE their company just
doesn’t have park and
focuses on cable.
resort.
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WALT DISNEY

Disney World is a phenomenon that has made an indelible mark on travel and tourism and
changed the very notion of what it means to take a vacation and be entertained. It can be a
wonderful source of pleasure and a great way to gather with friends and family for treasured,
shared moments. Disney World is much too big now for vacationers to do it all.

Improvement: Add more park and resort in the country that far away from Walt Disney. This
is can make customer always with them.

Strategy: Customers are the important issues in the business. Walt Disney should make their
happy with make the discounts card for them. The Walt Disney Company's
customer service strategies involve no magic, but they do follow a success formula
for staff training, standards, and implementation that can be adapted to any work
environment. During Friday's breakfast, customer will hear from a Walt Disney
Company professional and learn how to take these proven strategies back to their
staff and their organization to enhance the service provide.

TIME WARNER

Time Warner’s media and entertainment segment in filmed entertainment, network and
publishing. They don’t have any segment in the park and resort.
Improvement: Time Warner’s should make investment in park and resort so that their can
compete with the Walt Disney in this segment.
Strategy: When Time Warner’s was investing in this segment they can advertise their park
and resort use their own media and entertainment segment. This is more effective
way because they don’t have use another media network to advertise their park and
resort.

NEWS CORPORATION

News Corporation directly competes with Walt Disney in media network segment. News
Corporation is a diversified international media and entertainment company in eight
segments.
Improvement: News Corporation can make a huge improvement in their company such as
make a park and resort of their own company. This is because they already
have an eight industry segment. This is an advantage to the News Corporation
because they have big customer in the world.
Strategy: News Corporation can attract customer with their eight media segment to go to their
park and resort. This is more saving cost for their company because they already
have advantage in the advertising.
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D. PRODUCT-POSITIONING MAP FOR MEDIA NETWORK/ BROADCASTING

High growth

• Walt Disney

 News Corporation

• Time Warner

High customer Low customer

Low Growth

The Walt Disney Company is a leading media and entertainment conglomerate. The
company is divided into five major business segments: Media Networks (including the ABC
network), Parks and Resorts, Studio Entertainment (including Pixar), Consumer Products and
Interactive Media. Under the leadership of its new CEO, Bob Iger, Disney has renewed its
emphasis on its core strategy of creating and distributing attractive content for children and
syndicating this content through its various entertainment channels. For example, when
Disney produces a new movie, it continues to capitalize on the characters in the movie long
after it has left the box office. Before the movie leaves theatres, the company will have
already released a line of complementary toys and action figures. This is followed by the
release of the movie on DVD and depending on its popularity a presence in Disney's theme
parks or its own television show.
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Studio Entertainment: Often regarded as Disney's most visible business, Studio

Entertainment is actually subject to a great deal of variability in terms of both revenue and
profit generation, as its performance is driven largely by Disney's ability to produce hit
movies to be released in theatres, on television, and on home video. A flop, like the 2002
movie Treasure Planet, can be quite detrimental to the company's profits. On the other hand,
a blockbuster hit, like the Pirates of the Caribbean series, can boost sales and profits
substantially. In September 2009, Disney Studios Chairman Dick Cook was forced to resign
at the request of CEO Robert Iger, who had been unhappy with the studio's direction and
performance. In July 2010, the company announced it would be selling its independent film
Miramax unit for $650 million to a group of investors including Ron Tutor, Colony Capital,
James Robinson, and an unidentified Middle Eastern investor group. Disney reported $38
billion of revenue in fiscal 2010, up 5.3% from a year prior. Net income rose 19.8% to $3.96
billion. For the first quarter of fiscal 2011, Disney reported a 40% increase in profits to $2.2
billion from $1.57 billion a year earlier. Revenue rose 10% to $10.7 billion, up from $9.7
billion in the previous year. Cable and broadcast networks, which by far account for the
largest slice of revenue, reported an 11% gain in revenue to $1.65 billion. Operating income
surpassed analyst estimates in all segments. On a per share basis, net income was 68 cents per
share, easily beating the 56-cent average analyst estimate. Studio Entertainment revenue
came in at $1,932 million down from $1,935 million posted in the year-ago quarter, but
operating income grew substantially by 54% to $375 million. The growth reflects rise in
worldwide home entertainment and lower film cost write-downs.

Time Warner Cable Inc. is the second-largest cable operator in the U.S. and an
industry leader in developing and launching innovative video, data and voice services. We
deliver our services to customers over technologically-advanced, well-clustered cable
systems that pass approximately 26 million homes. Leveraging our leadership in innovation,
Time Warner Cable is at the forefront of delivering advanced products and services such as
video-on-demand, high-definition television, digital video recorders, Enhanced TV features,
high-speed data and Digital Phone.

Company Highlights

• Time Warner Cable service passes more than 26 million U.S. homes, and serves 13.3
million basic video customers.
• Time Warner Cable serves customers in the following 33 states: Alabama, Arizona,
California, Colorado, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky,
Massachusetts, Maine, Michigan, Missouri, Mississippi, Montana, North Carolina,
Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma,
Pennsylvania, South Carolina Texas, Virginia, Washington, Wisconsin, West Virginia
and Wyoming.
• Time Warner Cable has more than 7.9 million digital video customers, reflecting high
customer satisfaction with this popular service.
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Time Warner Inc. is a leading media and entertainment company, whose businesses
include interactive services, filmed entertainment, television networks and publishing.
Whether measured by quality, popularity or financial results, our divisions are at the top of
their categories. Time Inc., Home Box Office, Turner Broadcasting System and Warner Bros.
Entertainment maintain unrivalled reputations for creativity and excellence as they keep
people informed, entertained and connected. Their enterprise is more than a collection of
great brands that are owned under one roof. Time Warner’s businesses strive to gain
competitive advantage from opportunities for constructive collaboration.

News Corporation often abbreviated to News Corp., is the world's third-largest

media conglomerate (behind The Walt Disney Company and Time Warner) as of 2008, and
the world's third largest in entertainment as of 2009. The company's Chairman & Chief
Executive Officer is Rupert Murdoch.

• News Corporation is a publicly traded company listed on the NASDAQ, with

secondary listings on the Australian Securities Exchange. Formerly incorporated in
South Australia, the company was re-incorporated under Delaware General
Corporation Law after a majority of shareholders approved the move on November
12, 2004. At present, News Corporation is headquartered at 1211 Avenue of the
Americas (Sixth Ave.), in New York City, in the newer 1960s-1970s corridor of the
Rockefeller Centre complex.
• News Corporation’s motion picture and television programming operations bring the
best in comedy and drama to audiences around the globe.
• Fox Filmed Entertainment is a global leader in movie production and distribution.
Twentieth Century Fox Film is responsible for some of the top grossing movies of all
time, including history’s most successful movies, Avatar and Titanic.
• In television production, Twentieth Century Fox Television, together with the
Company’s other TV studios, produce and distribute some of the world’s most
popular television programming. The Company’s TV studios are leaders in animated
series and supply many of the most popular series to each of the major U.S. networks.

Strategy Walt Disney

Corporate strategies for Studio Entertainment segment -The Studio Entertainment

segment have had volatile revenues through out the last many years. They are dependent on
success of at least a few productions each year, and especially the Walt Disney Pictures
productions will partly secure the next couple of years earnings before the effect of the
product will wear of. According to Walt Disney Company (2006) the Studio Entertainment
segment has a high focus improving their returns at the moment. They seek to decrease the
volatility around their hit-driven productions. To do that, they want to control the overall
spending on each movie, lowering productions per year, and have a larger focus on quality
instead of quantity. They have a larger focus on analysing their past earnings to see where
they did wrong and where they have the highest earnings. This has resulted in a larger focus
on creating and maintaining Disney branded titles, which historically have given a higher
ROI than live-action films have.
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The Disney branded titles have not only higher earnings, but the franchise potential
gives large incentives towards this strategy. As an example can the Disney branded title of
Hunchback of Notre Dame, which so far has earned $200 million in video sales, but also
$160 million in merchandise earnings. The Studio Entertainment segment has furthermore
begun to use external investors for their live-action film productions. They have begun so
finance up to 40% of the production and marketing costs, and is mainly focused on financing
the more volatile productions. Sequels to already produced products, as for instance The
Chronicles of Narnia, will not be financed through this strategy, since they represent a less
volatile investment.

This form of strategies makes it possible to integrate outside partners, which could be
useful in production and distribution of the products, and furthermore is makes them able to
considerably lower their risks, but it also makes a cut in possible rewards. When looking
through Disney’s track records, then a thing about their way of expanding business and
knowledge becomes apparent. They do it mainly through acquisition of other companies.
Most up to date and significant is the acquisition of Pixar back in 2006. They needed the
knowledge about 3D animation, since their core competencies only revolved around 2D
animation. Another major company acquired for the Studio Entertainment is Miramax in
1996. Furthermore other segments of The Walt Disney Company have invested in computer,
mobile, and TV game development companies, and other distribution and media channels
around the world.

Furthermore there is a large focus on strategic alliances, and how they should keep the
company flexible instead of tie them up for longer periods of time. An example could be the
end of the 10 year agreement with McDonalds where they realised that the strategic alliance
had kept them from exploiting their major brand franchise (Stanley 2005). They still form
alliances with different companies, but not for longer periods of time, and normally no
exclusivity agreements.

Strategy Time Warner

Design Store for Sales - Take advantage of cross-merchandising strategies and

impulse sale opportunities. Use lighting techniques and creative displays to attract customers.
Play videos for product education, customer entertainment and any other up sell or
promotional tie-in.
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Strategy New Corporation

Advertise More - Just when think it's time to cut back the marketing dollars, should
probably be advertising more. It is wise to increase marketing efforts during slower sales
periods because there is more competition and fewer consumer dollars. Consider newspaper
ads, magazines, specialty publications and other forms of marketing.

Examine Your Pricing Strategy - When purchasing and pricing products, be sure
considered the cost of goods and that your retail shop is able to make a profit at that price
point. Your product price should be competitive, but still profitable. Ultimately, the right
price is the price the customer is willing to pay for the product.

Connect With the Customer - Excellent customer service is the key to increasing
sales. Listen to our customer to understand their needs and wants. Then educate him/her
about the products. Finally, let the customer know we appreciate their business. Offer value-
added services and products. Create a mailing list by asking for contact information from
each customer.