Disney On Ice – a look inside their Pricing Strategy

The Disney On Ice Pricing Strategy

This weekend I had the privilege of taking my children to the Disney On Ice show at the Denver Coliseum. What a lesson in marketing that was! Disney is known for their excellent marketing.  Just take a look at the pricing strategies employed.

Minimum Quantity Pricing

This whole charade started when I got an email through a mommy’s network saying that there was a special deal on tickets; buy 4 for $44 with extra tickets at $11 per person. Having a family of 5, this seemed very affordable. So, I got the coupon code, and went online to buy tickets.

Limited Quantities

The discounted seats weren’t available at all the dates and times of the show. It took an hour to find the day and time that they were still available. It is common to use the low price to drive demand and the scarcity of the opportunity plays into the psychological effect of persuasion. It is the fear of missing out that makes us want it even more. This brings us to….

Tiered Pricing

I think they were hoping I’d give up shopping and buy more expensive seats.  Do I really want to sit in the nosebleed section? Wouldn’t those ringside seats be much more enjoyable for my kids?

It is common to lure a customer in with a low price offer and then make that available in limited quantities so that when it sells out, or is inconvenient for the buyer, they will spend on the more expensive item. Just look at the car dealer ads in your local paper. They always show one car at an unbeatable price with a limited quantity (by law they have to have one) and it peaks your curiosity so you stop by to see what it like and end up looking at the more expensive models.

Creating Buzz

The special deal created a buzz that spread through the community. The psychological triggers that were used to create the buzz included scarcity (limited quantity) and inclusion (you needed to get that special code for the discount). Because you needed the special code, not everyone was privy to it so it spread virally as moms shared the offer with each other.

Handling Fees

What should have been $55 worth of tickets turned out to be over $90 when you add in facility charges and processing fees! They basically led with a low product price then recovered their costs with handling fees.

The Add-on Sale

Being a mom, and this being an evening event, I did the usual and packed snacks and drinks for the kids so as to prevent any meltdowns. However, the Coliseum wouldn’t allow us to bring water or food into the building. They had us poor the water out of our water bottle and into the trash can. It was like going through airport security. And what is to prevent us from filling the bottle up with water from a fountain or sink once in the facility? I knew this was a ploy to require us to purchase food and beverage once inside.

The Up-sell

But the Disney on Ice production hadn’t even gotten started. I knew we were in trouble when half the people had light-up wands and sticks while waiting in line outside the coliseum. What I wasn’t expecting was that every box of popcorn and every beverage container included an upsell for a Disney plastic toy or hat or cup. The cheapest box of popcorn was $10 and it was in a cardboard Disney princess box. It was an extra $3 for the plastic souvenir tub (which probably cost less than 50 cents to produce). The popcorn vendors that walked around had popcorn with a plastic Disney hat, your choice of Lightening McQueen or a fairy hat for the mere price of $15.

The snow cone came in a plastic Tinkerbell cup that cost $12 for the cup alone. I think it was $15 for the cup with the snow cone inside. Everywhere you turned; there was Disney paraphernalia for sale.

The Premium Price

Being that this was a Disney production, every item carried a premium price. This is the power of The Disney Brand. Even the plain box products weren’t completely plain, they still carried the Disney brand on them and they still carried a premium price.

High Markups

The cost of producing each souvenir item was pennies. The retail price had nothing to do with the cost of production. It was about the value of The Disney Brand and what the captive audience was willing to pay.

The Loss-Leader

From the revenue perspective, this event really wasn’t about the skating or the show, it was about all the stuff they could sell to us while we were there. It was a portable Disney store with paraphernalia at every point.

Room for Growth

As a true marketer, I have to evaluate each opportunity from the perspective of how we can expand and grow revenue in the future. So, the bathrooms were devoid of Disney stuff, but hey, there’s the opportunity for expansion in the future. Do I hear the call for Tinkerbell toilet paper?

About Debra Zimmer

After 25 years of growing entrepreneurial businesses at companies such as Microsoft, where she attracted 700,000 members into an online community in 18 months and then grew a second one to 250,000 members in 10 months, Debra Zimmer then struck out on her own to grow an online retail store to 6-figures of income and put it on AUTOPILOT for 3 years. With an engineering degree and an MBA from Columbia Business School, Debra is the undisputed expert in helping experts, entrepreneurs and executives to focus their brilliance and magnify their impact using social media and internet marketing tactics.

Comments

  1. Swirly Chametsky says:

    The problem with your article is that the price of shipping and handeling and merch and food is not a disney issue. Im guessing you bought the tickets through a vendor such as ticketmaster and they are the ones taht charge these fees not disney. the merch is sold off to a “merch” company that sets the price points and the food is through the venues food vendor. Normally disney does not even see these prices.

    This is more a matter of poor ticket sales and them needing to fill the venue so taht they could recoup their production costs.

    Swirly

    1. Debra Zimmer says:

      You are right. It is not really a Disney issue. Actually none of it is. Even the Disney on Ice performance is put on by a third party, not by Disney itself. Everything with the Disney name on it is probably handled through the licensing arm. But the whole experience is still a good lesson in pricing strategy.

      Actually, I should add a section about Licensing and Royalties. Because it is likely that the event producer paid Disney a licensing fee to use their name and characters in the performance. And I wouldn’t be surprised if Disney wasn’t getting a royalty on ticket sales. Similarly, the manufacturers of all the souvenirs paid Disney a licensing fee to produce Disney branded merchandise and they also probably pay a royalty on every item sold. Isn’t it amazing the number of ways there are to collect revenue?

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