Interdependent World Economies: Converging Cultures and Tastes

Globalization is a factor all business must take into account to be able to survive, it is defined as the “integration and interdependence of the world’s economies, resulting in cultures and tastes converging at an accelerating pace”. Nowadays the world is becoming more interconnected through cross-border trade and operations than ever, and because of these more opportunities as well as threats have been introduced to all businesses. As the expert Peter Drucker claimed, ‘because the objective of a company is to obtain clients, there are only two functions that generate income: innovation, and marketing, all the rest are expenses’ .

One of the key features when referring to marketing is the price. Price is defined as “the amount paid by a customer to purchase a good or service”.  During this paper, I will take up pricing strategies Disneyland has adopted to respond to issues of globalization, and subsequently, be able to achieve their long-term goals of increasing profits.

Globalization is nowadays the key component in order for a businesses to function effectively.

In the case of Disneyland, globalization mainly focuses in involving the international flow of people, services, and tourism. Disney opened its first theme park on July 17, 1995 in Anaheim California. Since then, it has become universally popular as it is known as wonderful place where people can transport themselves to a world of fantasy. Disney decided to expand their theme parks to carefully chosen countries, with large populations, tourism and stable economies, as people must be willing to spend their money on entertainment.

Get quality help now

WriterBelle

Verified

Proficient in: Disneyland

4.7 (657)

“ Really polite, and a great writer! Task done as described and better, responded to all my questions promptly too! ”

+84 relevant experts are online

Hire writer

Therefore, over the years, Disney opened theme parks in Florida, Tokyo, Paris, and Hong Kong. These theme parks are doing sublime, collecting billions of dollars every year.

One of Disney’s globalization strategies is the fact that they imply the Western culture into the cultures of other countries in the world. One of the theme parks Disneyland has mostly globalized is in Hong Kong Disneyland, with a mix of ‘east’ and west’ culture, Disney knew they needed to add local attractions to attract local consumers. For example Mickey Mouse mascot wears a bright red Mao suit, Mickey being a common figure in the United States but at the same time wearing a typical Chinese outfit. Furthermore, all employees are required to speak different languages, for example in Hong Kong’s theme park employees are required to speak both English and local dialects like Standard Mandarin. As well as the fact brochures and maps are printed in those languages too with additional Japanese language.

Another aspect globalization deals with is the fact of technology advancements. For example, now customers are given the chance of getting their tickets from ticket machines, and therefore it is no longer needed ticket booths that require workers to sell entrance tickets. New technology, can also have a direct effect in the roller coasters, as roller coasters can be much more innovative giving people unique experiences for which they will be willing to spend their money as a new kind of entertainment. Consequently, Disney is able to gain more revenues as a result of its new technology. With the use of technology, guests can also book the park tickets online, which makes it much more convenient, being one of the key features in the e-commerce world. Furthermore, Disney has also taken advantage of social media and mobile apps, in order to increase promotion and therefore gain interaction with the public.

Being this an effective way for Disney to announce new attractions or activities in their theme parks. Nevertheless, Globalization has also brought negative aspects, Disneyland has to now compete against more competitors as it is globally expanded. Such theme parks as Universal Studios, Six Flags or even Sea World, which also attract millions of people, are also very popular within individuals, and Disney must be able to differentiate in order to attract more customers. Therefore, for Disney to remain on the top competitors of theme parks, it must remain innovative and multiply local attractions, for the purpose of increasing quantity of local consumers and constructing new ones to attract new and more customers.

Disneyland’s globalization has generally affected in several ways the pricing strategies of the business. The fact that as a result of the incredible globalization Disney has followed they have been able to become one, if not the leading competitor of all theme parks around the world, has directly affected the strategies this business follows when assigning prices. Pricing decisions, are one of the most important parts within the marketing mix, they can directly affect the corporate image of a business and the number of customers it may have, having a straight impact in sales revenues.

For example, China’s population of 1.26 billion people, makes a high demand for entertainment in Hong Kong’s Disney theme park, so Disney has decided to follow the price leadership strategy. Price leadership strategy, is a strategy used for “the best-selling products or brands in a particular market” (Hoang pp. 411). This means that as Disneyland is the leader of this sector and therefore competitors prices don’t influence their decisions when assigning prices. Disneyland bases their price in seasonal pricing, prices will be set in advance according to the demand vía the internet, and the booking site will give guests the option of searching the cheapest time to visit. Tickets will be priced differently based on the exact date visitors want to use them. The range of prices for single-day tickets now is $102-$129 depending on the park and time of year, however, Disneyland has decided to increase the range to $109-$129. (Wsj).

So, the highest price for a single-day ticket won’t increase, but the lowest price will increase. The high popularity of the parks, can cause crowding during peak days, therefore introducing this pricing strategy will allow a better distribution throughout the year. Bad weathers like rain decreases entrance tickets sales of Disney theme parks as consumers will be taking the consideration under bad weather, therefore during this dates prices will decrease. Disney is conscious that sales may decrease, but that they can generate the same profit as people will still purchase their tickets for higher prices, and therefore those who do so will enjoy the theme park as much as possible without bumping with overcrowding.

To cope with globalization, another pricing strategy which Disney follows is price discrimination. This occurs when “the same product usually, a service is sold at different prices to different customers”. Being one of the main goals of Disney to attract as much families to the park, Disney aims to convince parents to take their children. Therefore, the theme park follows the strategy of decreasing the price of children while the price of adults remain higher. For example, in Disneyland Hong Kong, children below the age of 3 receive a free park admission, however, child ages 3 to 11 have to pay HK$458, and finally the general admission which involves ages from 12 to 64 will have to pay HK$619 (hongkongdisneyland).

Finally, globalization is one of the most important factors when a business is aiming to increase profits. Disney’s theme parks are nowadays creating immense revenues and further establishing itself as a global brand. Through the process of globalization Disney brand is known by people globally, especially when investing into various countries of its theme parks. It is obvious that despite the fact that the price of Disney is somewhat higher than its competitors, their uniqueness makes them stand over the rest and attract millions of individuals all around the world. Concluding, Disney manages to survive and develop over time, with a sustainable image, credibility and profitability but above all, being innovative and attracting all customers around the world. Employees: The fact that Disney expands all around the world has caused decrease in unemployment rates, for example in France by 10%.

Nevertheless, the fact that new technology is emerging can cause people to lose their jobs as they can be replaced by technology that can be something more profitable in the long term by the theme park. Customers: Disneyland customers can be directly affected when focusing in the pricing strategy, mainly due to the fact that it is the leader in indicating prices and therefore prices are very high and not everyone can afford it. Competitors: This sector will be directly affected, Disney being one of the most potential theme parks in the world, all competitors must try to follow their steps and therefore they must try to model their prices in order to give a good image of their theme park. Consequently, many competitive businesses may lose their customers as they might seem more interested Disney’s services for certain prices rather than theirs.