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GROUP ASSIGNMENT

MKT5MMA

Abul Hasanath Mustafa Pahlwan 17827063

Karan Gujar 17799941
Luca Cantadori 18162401
Riccardo Stiglich 18162418

13-Apr-2015

TABLE OF CONTENTS
1.1 Question 1-Disney Case Study

1.2 Question 2-Disney Case Study

References Disney Case Study

2.1 Question 1-Microsoft Case Study

2.2 Question 2-Microsoft Case Study

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References Microsoft Case Study

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DISNEY CASE STUDY

1.1 What does Disney do best to connect with its core consumers?

Since the beginning Disney used the motto "The Happiest Place on Earth and this motto is still
present today. Disney runs a customer-oriented business and they are able to do so by developing
several ways to target the core consumers (Jones, n.d).

Disney focuses in creating magical moments by offering products with high quality but at the same
time unforgettable experiences. As stated by Bruce Jones, Disney goal is to be the most admired
company in the world. We believe we can achieve this goal by conducting our business and creating
our products in an ethical manner, and by promoting the happiness and well-being of kids and
families by inspiring them to join us in creating a brighter tomorrow. Disney is concentrating in
trying to diversify the experiences that are being offered to its consumers in order to make sure that
each single consumer will be able to find himself/herself in those experiences. Disney is putting a
lot of effort in trying to build, expand and at the same time improving the existing facilities; this is
the only way through which Disney can be certain that consumers will come back again and again
(Jones n.d).

Everyone agrees that loyal customers worth a lot for a company. It is in fact less expensive to keep
an already existing customer rather than finding a new one. Successful companies are the ones that
are able to reinforce the connection between their brand, the people working for them and as well
their customers and by doing so they will gain a huge profit. Walt Disney placed a big stress on this
topic by saying that brand loyalty starts through a genuine relationship with its customers. For this
reason, as stated by Jones, the company determined since the beginning that every single employee
has to treat people not just as a paying customer but as guests in our own home. Walt believed
that guests would have been loyal to Disney forever if they had understood and believed that the
main goal of the company was to care about them (Jones n.d).

Disney is for this reason focusing its business in providing an excellent customer service and for
this reason they created the Disney Institute which consists in a customer service training program
that has the goal to teach to its cast members the best way to assist customers. Employees
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working for Disney have to continually seek contact with guests. According to Jones, staff working
for Disney should always be able to know or predict in advance the what customers need; for
example they always have to offer assistance to a family that appears to be confused about the park
map or that cant find where its car is parked instead of waiting for them to ask for assistance. Staff
has to make sure that the customers' experience is somewhat magic by giving them the best quality
service but also offering them the newest products and packages. Employees have to provide guests
with all the information available about new attractions, fun facts but also upcoming events (Jones
n.d).
Brand loyalty is therefore considered as a reciprocal relationship that starts from the company itself.
Each cast member has to understand that being loyal to customers is a must in order to receive
loyalty in return from them. Spending some time with the customers gives Disney a great chance to
build relationships for example by making new friends, or becoming trusted advisors. Given this
knowledge, Disney cast members all over the world are allowed to voluntary create magical
moments for guests; these might include:
- Honorary titles, badges and certificates
- Special scavenger hunts
- Honorary starring roles in our shows
- Special games and activities just for children
- Signed cards from Disney characters

Jones believes that if customers appreciate the service that is being offered, they will speak
extremely well about their experience and consequently their children and grandchildren are likely
to become loyal customers, along with their friends (Gallo, 2009)

By undertaking constant market research the company can understand where, when, and to whom
they might reintroduce the brand and by continually reaching out to our customers in new and
innovative ways, Disney can increase the likelihood that the existing customers will introduce the
company to others who may not yet know the firm as well.
In order to do this, Disney has adopted some of the latest technologies. Podcasts are a good tool for
people to communicate. Disney is nowadays one of the first companies that started to use podcasts.
Moreover Disney website takes the customers into a tour of movie trailers and on-line theme park
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experiences and this can make customers journeys to Disney even more enjoyable. Disney is
putting a lot of effort in bringing previous cartoons such as Mickey Mouse to the internet and by
doing so the company might be able to make its cartoons popular again. Finally Disney has also
introduced TV channels such as Disney Channel, Touchstone Pictures and Touchstone television in
order to reach a broader range of consumers.

1.2 What are the risks and benefits of expanding the Disney Brand in new ways?

After the death of two founding brothers, Disney stumbled for several years. The
Company is eager to absorb new blood to be on the right track. So it plans to expand the
brand into different areas.
. While Disney takes the expanding opportunities to target its
core customers and enrich its products, it has to deal with the challenges properly. As far as Im
concerned, expanding the Disney brand brings more benefit than risks.
Brand extension is seen by de Chaternatony and McDonald (1998, p315) as an economical
advantage, in fact as reported by the economics of establishing new brands are pushing companies
more towards stretching their existing name into new markets (Chaternatony and McDonald, p.
315).
Is possible to identify several benefits of brand extension:
Consumer knowledge: is possible to utilize the strong brand recognition and awareness to promote
and to enhance brand equity of the new product. In fact as analysed by Taylor (2004, p.1) the main
task is communicating the specific benefits of the new innovation
Consumer trust: Its easier for a consumer to recognize as a quality product the one generate via
the brand extension, in fact he/she is already aware of the features of the strong brand.
In this way is to create create a compelling value proposition in a new segment or
markets (Taylor 2004, p1).
Moreover as reported by a survey conducted by Brandgym 58% of UK consumers will be more
likely to try a new product from a brand they knew, versus only 3% for a new brand, Taylor (2004,
p1)
Furthermore Catherine Viot (2007, p42) analyses more in depth the relationship product-customer,
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indeed the customer is expecting to transfer his information from the brand to the extension. If the
general opinion about the brand is favourable, the behaviour regarding the extension should be the
positive as well.
Lower cost: through brand extension, as analysed before, is possible to utilize brand features in
order to increase awareness and recognition of the new product, accordingly it is cheaper than
creating a completely new brand, on which we should invest money to increase those factors.
Moreover as reported by Taylor (2004, p.2) Studies show that cost per unit of trial is 36 % lower
and that repurchase is also higher.
The hypothesis is confirmed by Smith and Park (1992, p.296) as well, in fact they support the same
idea, suggesting the budget for advertisement for a brand born by brand extension is lower than for
a new product.
Another benefit of brand extension is enhancing of brand visibility.

Aaker (2004, p194) gives some advantages more or less close to Taylor or C. Viot (2007) beliefs:
Enhancement of brand visibility: Aaker (2004, p.194) suggests in fact than when a brand appears
in another field it can be a more effective and efficient brand-building approach than spending
money on advertising.
Furthermore they add the relationship between brand and a loyal customer is strengthened, in fact
the same brand utilized in another context will move the loyal customer to buy the known bread
instead of a competitors product.
Provide a source of energy for a brand:
Is possible thru brand extension to re-vitalize an old and less active brand, by a re-enforcement of
its image.
As analysed by Viot (2007) is possible to increase the popularity of a brand by the fact that it gets
into different markets and is possible to increase so brand memorization by customers, that will see
the product more often.
Is possible to see brand extension not only as a reactive, but also as a proactive strategy.
Defensive strategy: as reported by Aaker (2004) in fact, the extension of a brand in another market/
sector might anticipate potential competitors by entering in the same market with a new product, in
fact usually brand extension is faster than creating an apposite new product for a market (Aaker,
2004).
When a company decides to implement a brand-extension strategy it has to take into consideration
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the possible risks that it can face.

Dilution of the existing brand image:

Since brand extensions utilize to expand its most important asset, namely brand image, if its not
well implement it may lead to a brand dilution of the original brand
As reported by Park , McCarthy and Milberg (1997) brand extension can damage the brand , as
undesirable associations and a weakening of already existing association may occur.
This latter can be a consequence of new associations transferred from the extension.
Moreover according to
Aaker (2004, p211) the associations created by an
Extension can fuzz a sharp image that had been a key asset, and at the same time reduce the brands
credibility within its original setting.
He suggest further that brand extension has to be careful implemented by companies, especially by
top notch organization, in fact an excessive brand extension may lead to a brand exclusivity erosion.
(Aaker, 2004)
Cannibalization: if a brand is extended in a close market it can erode the original brand, creating
confusion in the customers (Aaker, 2004).
Accordingly is possible to affirm that the sales of the extended brand will increase, meanwhile the
ones for the parent brand will decrease.
As reported by Aaker (2004) the sales of the extended brand usually are not enough to compensate
the sales erosion of the parent brand, generating a loss for the company.
Moreover he adds that is important for the company not creating clone brands, but try to
differentiate the product generated by brand extension by the one already existing and that the sales
decreasing created by the extended brand is still better than the one caused by competitors.
An example of this is the case of Crest, that launched for years different toothpaste twist and that
has decreased the market share from the 50%, with one product only, to the 25% with the different
twists. As reported by Aaker (2004, p.212) indeed each introduction competed for the same usage
occasion and introduced novelty value but not enough added values to create incremental growth.
A disaster can occur: This is created by the increasing diffusion product discusses above, in fact if a
problem is found in a product, it will immediately spread even to the products created and
developed by brand extension.
. The more extensions the brand made, more important the damages would be.
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Audi, when in 5000 cars of the German brand was found a sudden-accelerating problem
experienced a similar case.
A negative publicity appeared in the 1978 and it was even mentioned in an episode of CBSs 60
minutes broadcasted in the 1986.
Nevertheless Audi didnt try to change the situation, doing no efforts to fix the problem.
Consequently Audis sales fell from 74000 in 1985 to 23000 in 1989.
Audi required 15 years to recover from that episode (Aaker, 2004).
To conclude Disney has already made the first steps to extend its brand .
Disneys products due to product life cycle sooner or later will get to the decling stage , but thanks
to brand extensions is possible to postpone those effects , therefore I suggest that Disney should
strongly implement a brand extension strategy , even analysing the greater impact of benefits
compared to risks .

References

Aaker, D. (2004). Brand portfolio strategy. New York: Free Press.

De Chernatony, L. and McDonald, M. (2003). Creating powerful brands in consumer, service and
industrial markets. Oxford: Elsevier/Butterworth-Heinemann.
Gallo, C. (2009). How Disney Works to Win Repeat Customers. [online] Businessweek.com.
Available at: http://www.businessweek.com/smallbiz/content/nov2009/sb20091130_866423.htm
[Accessed 10 Apr. 2015].
Jones, B. (n.d.). Brand Loyalty: Applying Disneys Formula for Long-Lasting Success. [online]
Available at: http://www.trainingindustry.com/media/3647005/disney%20brand%20loyalty.pdf
[Accessed 10 Apr. 2015].
Milberg, S., Whan Park, C. and McCarthy, M. (1997). Managing Negative Feedback Effects
Associated With Brand Extensions: The Impact of Alternative Branding Strategies. Journal of
Consumer Psychology, 6(2), pp.119-140.
Smith, M. (2003). Research methods in accounting. London: Sage Publications.
Taylor, D. (2004). Brand strecht. Hoboken, N.J. [etc.]: J. Wiley.
Viot, C. (2007). Le capital-marque: concept, mesure et valorisation.
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MICROSOFT CASE STUDY

2.1Evaluate Microsofts strategy in good and poor economic times.

Advertising Approaches
In its early days Microsoft was a strong market leader and the companys advertising efforts were
focused on communicating their companys range of products from DOS to the launch of Excel and
Windows- all under a unified Microsoft look(Kotler et al., 2014). It was selling 90 percent of the
worlds operating systemsoftware, and generally left the advertising to Dell, H.P. and other
hardware makers who licensed Windows(Eisenach et al., 2000). The only time Microsoft hawked
its most recognizable brand on television was when the latest version of the software hit the
shelves(Gawer and Cusumano, 2002). Then the company flooded the airwaves with commercials
full of loud music and swirling imagery saying that the new version of Windows is out.
Apple is the classic smaller insurgent. Its share for desktops and laptops in the United States is just
over 8 percent. Every time Apple grabs another point of market share from Microsofts partners, its
stock price climbs. And one way that Apple has tried to gain share is by running clever ads that
ridicule everything Microsoft stands for(Gawer and Cusumano, 2002). Theres no better example
than Get a Mac, unveiled three years ago by Apples ad agency(LEONARD, 2009).
No technology company would choose Mr. Hodgmans character, PC, to personify its brand. He
reeks of the past. He boasts of using his desktop to make spreadsheets and ridicules his more
youthful friend, Mac, played by the actor Justin Long, for using his desktop for juvenile pursuits
like blogging and movie making even through its clear that PC would like to be in on the fun.
He just cant get his Windows computer to do his bidding. Like a classic sitcom character think
Ralph Kramden of The Honeymooners PC is always dreaming up ill-advised schemes
intended to show his superiority. Hes thwarted by viruses, system crashes and other problems more
associated with Windows-based computers than Apples products and, recently, he has become a
hapless apologist for Vista. Mr. Longs character smugly watches his friends pratfalls, glancing at
the audience with raised eyebrows as if to say, If only this poor guy would buy a Mac. . . .(Baye,
2012) PC will never learn. Not as long as he keeps driving sales for Apple. Since 2006, the year that
he first appeared in all his pasty-faced glory, Apples share of the computer desktop market in the
United States has more than doubled, according to IDC, the technology industry research firm. Its
stock price, meanwhile, has risen 142 percent since May 2006, while Microsofts has barely
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budged. Yes, the astonishing success of newer Apple products like the iPod and the iPhone has
helped. But the PC character should also take a bow. Apples ads put Microsoft in a bind. One of
Madison Avenues rules is that a market leader never acknowledges a smaller competitor in its
advertising(LEONARD, 2009). And it was clear in the case of Microsoft & Apple advertising war,
where Microsoft failed to learn a valuable lesson.

2.2 Discuss the pros and cons of Microsofts most recent Im a PC campaign. Is Microsoft
doing a good thing by acknowledging Apples campaign in its own marketing message? Why
or why not?

Microsofts strategy Evaluation

Microsofts marketing strategy did not/does not change to reflect consumers changing buying
priorities. For example, in 2008 in the midst of a recession, Microsoft was still plugging away with
selling products at premium prices without delivering premium value for the money (VISTA)
hence the success of Apples campaignpremium products, but they deliver performance. In good
times, peoples willingness to buy products based on prestige, popularity, and peer pressures is
greater than in less robust economic times when priorities are evaluated more closely. Microsoft has
to learn to adjust its marketing message to meet the demands of their consumers(Kotler and
Armstrong, 2010).
Customer Relationship Management does much more than just track customer interactions. It also
helps organizations optimize their operations by automating routine tasks and standardizing best
practices. Ultimately, CRM allows organizations to better acquire, manage, serve, and extract value
from their customers while improving operational efficiencysomething that is critical in todays
economy. Microsoft has clearly adopted this technology through its products(Chen and Popovich,
2003). For example, Microsoft Dynamics CRM business software is very powerful in terms of
understanding the customers and dealing with them differently & personally. Over the years, if we
analyze Microsoft, we would be to able to see clear growth in short spanning of time, after constant
change in leadership.

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References
BAYE, M. R. 2012. Strategies Used by Microsoft to Leverage its
Monopoly Position in Operating Systems to Internet
Browser Markets. 1.
CHEN, I. J. & POPOVICH, K. 2003. Understanding customer relationship management (CRM)
People, process and technology. Business process management journal, 9, 672-688.
EISENACH, J. A., LENARD, T. M. & POINT, P. O. 2000. The Microsoft monopoly: The facts, the
law and the remedy.
GAWER, A. & CUSUMANO, M. A. 2002. Platform leadership: How Intel, Microsoft, and Cisco
drive industry innovation, Harvard Business School Press Boston.
KOTLER, P. & ARMSTRONG, G. 2010. Principles of marketing, Pearson Education.
KOTLER, P., KELLER, K. L., ANCARANI, F. & COSTABILE, M. 2014. Marketing management
14/e, Pearson.
LEONARD, D. 2009. Hey, PC, Who Taught You to Fight Back?

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