Disney’s Magic Your Way Pricing Strategy

Disney's magic your way pricing strategy

Disney’s Magic Your Way Pricing Strategy

To maintain and grow market share in an increasingly competitive theme park market, the company was challenged with making a week-long vacation at Walt Disney World more affordable.  In response to the challenge, the principals of Integrated Insight designed, developed, and implemented Magic Your Way, the most sweeping change in pricing strategy in company history.  The strategy and implementation of Magic Your Way required eighteen months of intense collaboration among all facets of the organization.  Extensive research (both qualitative and quantitative) was required to fully understand both the consumer and business value proposition and test hypotheses.  In addition, breaking down organizational barriers, aligning the company around the transformation, and having the courage to take calculated risk were critical factors for the overall success of Magic Your Way.

The holistic strategy pulled guests into optimal behavior with the ability to customize their vacation, enabled by unbundling water parks and park hopping from theme park tickets; pricing to achieve significant, diminishing marginal day ticket prices to encourage longer length of stay; introduction of low cost meal plans for resort guests to overcome barriers to staying onsite; implementation of Extra Magic Hours (evening and morning) for resort guests only; and development and implementation of Disney’s Magical Express (free round trip transportation from the airport and to the room luggage delivery for resort guests).  With the launch of the new strategy, the cost of an all-inclusive seven night, eight day vacation with meals and transportation was reduced by over 35%, enabling many young families to take the vacation they had only dreamed of previously.   Dubbed “Disney’s Brilliant Price Hike” by analysts, overwhelming consumer response drove a 20% increase in annual operating income in year one with year after year revenue gains in high single digits.

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Category

Baseline and Tracking Research, Concept Testing, Conjoint and Discrete Choice Research, Customer Assessment, Customer Experience & Employee Engagement, Marketing, Sales, and Distribution Strategies, Operational Efficiency and Process Improvement, Pricing Strategy, Revenue and Profit Optimization

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Attractions, Resorts