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This is for a discussion board. Summary of Case
The Walt Disney Company is “reimagining” its pricing strategy. Responding to the ever-increasing demand for theme park tickets, especially at peak times, Disney has implemented “demand-based pricing.” Demand-based pricing has been in use by Disney competitor, Universal Studios, and other theme parks. The idea is to redistribute customer demand by lowering prices during times with less demand to encourage customers to switch some of their visits to lower-priced times. Under demand-based pricing, there are three prices. “Value” tickets for Mondays through Thursdays are $95, a reduction of $4.00. “Regular” tickets for most week-ends and summer months are $105. “Peak” tickets for visitors during December, spring break weeks, and July weekends are $119. The new demand-based pricing is only for single day passes. The unknown is how consumers will respond to this new pricing strategy long term. Will they see it as a more equitable system in which you pay more at the “best” times to travel and pay less at “off” times. Of course, consumers may perceive the new strategy as a pricing gimmick. Although, Disney stresses that it is using the new demand-based pricing to more efficiently manage its customer experience, this policy can also lead to greater profits. How will consumers think of Disney and its theme parks long term?
You Make the Call:
10-36 What is the decision facing Disney?
10-37 What factors are important in understanding this decision situation?
10-38 What are the alternatives?
10-39 What decision do you recommend?
Support your answers.
No sources required.