WE WANT OUR ANNUAL PASS CODES NOW FOR APRIL AND MAY!!!

[CuteKatCar]

I believe people pay rack rates also.

Many people I know are amazed at the discounts I get. They don't even know about it. I just helped 2 friends get code discounts. Otherwise they were going to pay rack rates. Two other friends I know got packages - one thru TA and one thru Delta. They don't want to book the entire trip themselves. Another, on my advice, has asked me to let her know about discounts for November.

Not everyone is obsessed with Disney the way we are!!
I must be on these boards 10 times a day.

Anna

 

[PatriciaH]

My friend was going on her honeymoon last November to the Keys and WDW. I told her to check a certain site we all know for codes many times and she kept "forgetting." Finally it came time to book and it was over $4,000 for Grand Floridian concierge with tickets and meals for 4 nights. I GAVE her the code this time and told her to call back and they saved over $1,500. She could not believe that such codes existed. I TOLD you to check them I said

 

[Hayley]

Originally posted by csmommy
It looks like they are posting their discounts on their website today.
http://disneyworld.disney.go.com/waltdisneyworld/index

Click on vacation savings. It looks just like the savings from the CZF code, but its now AEF.

I'm still hoping for AP's.

THANKS! I just called and got another $200 knocked off my already discounted rates!

Ya gotta love these boards! You are queen for the day csmommy!

 

[RobMax]

Originally posted by Hayley
I don't know, I thought the airlines would cut fares to entice people to fly and yet all they did was cut flights and jobs to save money. From my city there is only one flight a day where there used to be 3 or 4 to some cities.

And got a huge kickback from the Federal Gov't for 9/11.

 

[RobMax]

Originally posted by CuteKatCar
I believe people pay rack rates also. - Anna

Hi Anna, my internal knowledge of visitation and rating is that the majority of WDW customers are return visits and pay off-price rates. Its not what I believe, its fact of their marketing strategy. One of the big mistakes we make in the US is considering that our experiences are normative. They typically are not. People and markets are just too complicated for an antedotal understanding of our friends and neighbors to be meaningful in the grand scale of things.

As I mentioned before, the discounting is part of their psycological pricing stratgey. Now, if someone is crazy enough to avoid doing any research on their trip -- which only means they need buy one of the many guides at less than $17 -- then Disney certianly will sell them the farm. See the person who spends that "rack rate" money really isn't making a "HIGHLY INVOLVED" decision and thus is signaling that the trip is a passing fancy and thus they probably are not the type of person(s) who will return frequently and thus they are not part of the Disney target market.

Then again, the customer can change their segment if they decide they love the place and look for a discount afterwards/or while on site (poof! - the DVC appears). This is the customer changing to match Disney.

Sorry, it is Spring Break Here ... I'm in Lecture Withdrawal!!!

I know a car dealer that will sell a Yugo for $100,000.00 if the customer is willing to pay. That car dealer really doesn't expect you to return, actually they really would rather you didn't! But If you will buy into a frequent buyer plan - well that's different, because they get the margin from the first deal and your signal of loyalty means you are not going to call them on the asymetric pricing issue and you are going to create a cash stream. Its like saying "You screwed me, but if you promise I can get the car cheaper next time, I promise I will buy again." Disney loves those people, but there aren't many.

The calculation of customer for disney is CLV - customer lifetime value - a stream of cash flows summed and adjusted for the life time of the relationship between disney and the individual customer. They know these calculations for Families of 4 who own annual passes and singles who don't and pay rack rate. Wanna bet which is higher?

I like to talk about customers like they are Bears.

A domesticated Bear will let you scratch its tummy. And it you do a really god job he may even let you share half of his ten fish. If you scratch so awesome that he falls asleep (satisfied or delighted customers are like sleeping bears ) you may take all the fish. But if you take them all you can't go back and try to get 5 or even one! The bear will kill you!!! So why not do a good to awesome job and take 5 once a year for 30 years! Do you follow?

Disney is a Relationship Marketing Firm. From tourism, to liscencing, to Film ... its all about long term relationships with customers and partner firms.

Here is a basic hint at disney's strategic pricing/promotional planning...

Disney's visitation sustain & growth strategy is two fold...

Base - 1. Retain loyal customers to an annual visit.
(This is the code & AP tactic)

Growth - 2. Convert semi-loyal and new customers to loyal.
(This is the DVC and niche marketing tactics)

Yes some people buy at rack, but people also go to Wal*Mart and look for high quality cavier and fish. These people aren't a target for Wal*Mart. They also are not a target (or major target) for Disney.

The rack rates are what we call a pricing flagship strategy. They are set to allow customers to trade down, just like vehicles and PCs that have every possible bell and whistle. Pleople do pay those top end prices and buy those top end products (not many - go to dell and customize any model to the max and see if it make sence to pay that price), but when the company's goal is loyalty/retention, the company must recognise that those who buy at full price will feel screwed eventually and not become the idea retainable customer. We let these people go or watch for changes in their habits!

I was thinking about something that we aren't factoring into the equation. The french own a large amount of Universal Studios. You can bet disney is hoping the international complexities will force some park swapping (rather than hopping)

 

[MelissathePooh]

Robmax - would you cite your information about the actual numbers of guests who pay rack rates vs discounted rooms? I could certainly be incorrect, but would like to see the actual data if possible please.

I appreciate that you are a marketing professor, as I have a degree in marketing and what I learned above all else is that numbers can be manipulated in a multitude of ways, it all goes back to supply and demand. If the public is willing to pay a certain price for something and there isn't an over supply of that thing the price will remain steady until the demand changes then the price will be adjusted accordingly.

So are you actually saying that Disney has an obligation to offer you a discount because you have an AP?

Melissa

 

[RobMax]

Originally posted by MelissathePooh
Robmax - would you cite your information about the actual numbers of guests who pay rack rates vs discounted rooms?

I'm telling you what I know from past experiences working on Disney Marketing Strategy. You know the actual data is conf. Even if I did have it (which I don't) I could not release it.

If the public is willing to pay a certain price for something and there isn't an over supply of that thing the price will remain steady until the demand changes then the price will be adjusted accordingly.

OK, good!

You say in math - If Supply = Demand (or the unrealistic state economists call equilibrium) then price remains the same. This is a correct (basic) statement, a law of economics I guess, but too simplistic to explain the true dynamics of Pricing strategy and the Role of Price (see early as Monroe 1979)

Remember!
*Price can also enact the market(demand)
*Supply can also enact the price
*Price x supply can enact the market(demand)
*Price x demand can enact supply
*Price can be mutually exclusive of supply and demand (think of top end luxuries)


Two major things...
1.You are assuming away or holding constant 100s of variables that impact supply, demand, and price. Economists typically use price as an outcome or an antecendent and not a mediating or moderating variable. The relationship is never this simple. Even when it comes to comodities. If it was this simple, marketing wouldn't exist.

You may want to think about these things...
a. Price signaling of quality
b. Price signaling of loyalty
c. Opportunity cost related to elevated prices
d. Customer lifetime value & Relationship Marketing
e. The impact of technology on customer price taking
f. Value based pricing vs. the old cost based approach
g. Elasticity/inelasticity of price vs. elasticity of promotions (promotions are not inelastic)
h. The role of marginal revenue, net contribution, and fixed costs, on Break even volume/sales.
i. Impact of the experience curve on loyal customers
j. Geographic markets and the targeting impact of war
k. Current promotions to channel partners that must be given in advance of consumer level discounts.
l. The three levels of product/service design - core, actual, and augmented and the role of value
m. The role of price in comp situations.
n. Promotional impacts on demand acceleration
o. The impact of expectations updating

The check list for disney!
i. Know your costs (especially fixed!)
ii. Know your needed BE demand
iii. Know your market above focus on your competition
iv. Know your corporate targets especailly when below capacity(reduced this week!)
v. Determine consistent objectives through adaptive pricing.
vi. Maintain pricing feedback and control of targeted customers.

2.The resort is UNDER capacity, meaning there is over supply. Additionally there is oversupply in the entire trave industry. So even using your logic, prices must change!

So are you actually saying that Disney has an obligation to offer you a discount because you have an AP?

No no no, I want the discount and if I don't get it I have reservations at the Swan and Dolphin. I just think Disney owes it to the stockholders to make all possible attempts to guarentee increasing CLV through loyalty programs and usage for the onsite resorts ... and I am a stockholder.

My comment is they are obligated to the MARKET not to me. I don't think the AP makes me a special class of person. I really just use it so I can make 2 trips a year at a reduced cost (my personal marginal cost minimization) and thats fine. But they must make changes, unless they want me (and others) to cut annual trips back and ultimately sell stock! This would be a bull-whip effect - less working capital + less top end money for growth.

Thanks for keeping me sharp. If I can be clearer, please let me know.

Glenn

 

[MelissathePooh]

And to think I spent all that money on a degree when I could have gotten everything I need to know about marketing right here at the DIS

I guess I'm still curious about where your data came from - was your Disney Marketing Strategy something that you did for the Disney Co. or something you published - in which case sources should be cited???

Again I'm certainly not saying that I am right, I would just like to have more information - more than take your word for it - no offense, but mama always taught me never to trust the Crimson Tide!

War Eagle,

Melissa

p.s. you might find some of the rumors and news board discussions interesting.

 

[cindyfan]

Even if they don't give us those AP rates for the time I go.....
One thing is for sure....
I am getting an education on the boards lately

I don't know anything about %s or # of guests paying discounts or not......I just know what kinds of prices friends and co-workers pay. and this is just what I have seen......certainly NOT representing any number of people......
Most of the people I know have choosen to stay off site because the rates are traditionally lower. Even if I mention there are ways to get better rates....they still feel it's cheaper off-site.
Now.....there are those that have stayed on site......but under these circumstances:........VALUE SEASON!!!! Again...they look to the past to see what is typical of Disney. No they don't want to pay those higher prices, but really want the convinience of on-site, and this is the only afforable time to go.......
Or they were able to get a "Package DEAL"....as they put it! (if they only really knew ). Or as one co-worker put it....."we've never gone before, so we are going all out!!"....they are staying at the Grand Floridian, and even though money is really not an issue with him....I wish I could convince him, he could do it cheaper. But he is the type that doesn't want to think about anything...wants something "all inclusive"...just send the check and be done with it.

Anyway.....IMHO....those of us on this board are the MINORITY. When Disney runs these ads in the papers listing the "packages" well, those may save the typical WDW visiter a few $$. But that isn't what we are looking for. We are the Disney freaks here! We aren't looking to save $....we want to save lots of $$$$$$$$$

In all of your marketing expertise.....here is a situation......how does it translate to what is typical????
Some one sees a very popular item they want to buy. It costs $100. They decide to wait til it goes on sale. One store is supposed to have it on sale the following week for $85. But they have very little in stock. Then they hear it might go on sale at another store next week for $80, but that store has even less in stock. So do they buy it today at $100, wait til next week to TRY to get it for $85. Or really take their chances and wait to get it for $80 even though the chances are slim that they will get it?????
Then on the flip side.....let's say all stores have LOTS AND LOTS of them!!! In which case you would obviously say "wait" to buy it.....but now you realize you won't be able to get to that store that week!!!!

All of this just tells me there are too many variables!!!

But, also, WDW right now....the attendance is low! Meaning the supply of rooms is far outweighing the demand......that's why the recent codes, etc.....BUT ...and this is where my trip during Easter comes in to play.....even though they have admitted the attendance is down...they have cut hours & attractions!!.....they have not yet released any codes for that time.

I'm sorry, I am really getting carried away here. But I think I am just getting frustrated waiting for better prices !!

 

[CarolA]

OK. I have a marketing degree and an accounting degree. Here are my thoughts.

Marketing would probably sell the rooms for free if they could get away with it. If you let marketing run a company you are doomed (most of us marketing types count dollars, bodies, whatever they grade us on not normally profits)

However, there is the concept of fixed and variable costs here. Disney has to cover all of it's the varialbe costs associated with your visit and to stay in business better cover it's fixed costs. Now if they aren't as full as they would like they have a few options. The option they may have chosen at Easter is to decrease some of thier variable costs. (ie. shorten the hours, they pay less employees).

Now I think we ALL agree that if today Disney said FREE ROOMS, they would be FULL. Could they afford to have housekeeping clean those rooms, power to the rooms, etc?

So if I am Disney's accountant, I am going to sit down and look at a number of things. such as;
1. Success of past promotions during times of crisis, Gulf War, 9/11, the last code Orange.
2. Current bookings
3. Fixed vs. Variable costs.
4. The results of the 10,000 surveys Marketing will have bought to my office to tell me that if I give x away they can get y bodies in the door.

So... I think that a 30% discount will lead to a 10% increase over current volume but providing service to those people will increase my variable costs by 10% . Or I could think that if I close some resorts and shorten hours I could save 20% in variable costs. Now if I give the discount some of my current bookings at full rate will go down causing me more lost revenue and we have marketing costs associated with the discount. When you add that to the current atmosphere.... the accountant in me says go with option two , shut resorts, shorten hours. The marketing person (who gets paid for people showing up!) is still screaming for the discount.

Who wins normally depends on lots of things and this time it may be accounting (especially if Marketing's last great idea was a bust!)

My background includes a lot of healthcare. Several years ago hospitals would sign any managed care contract that showed up on their door. The assumption was that the volume of patients would keep the bills paid. One day we woke up and went WAIT! We have 10,000 patients here and this insurance company is not paying us enough to cover the nursing costs, much less buy the fancy new million dollar piece of equipment we need to treat them well. Now lots of hospitals are saying we would rather have less patients and more money per patient. Maybe Disney is thinking if I have fewer guests, but more per guest I am in good shape.

 

[RobMax]

Originally posted by cindyfan
Most of the people I know have choosen to stay off site because the rates are traditionally lower.

Boy, the powers that be at WDW don't want to hear that even though in the economic downturn we would all probably expect this. The promos are supposed to stop some of this - especially for returning customers. The Paris and The Pacific Rim parks did a great job of bying more property and managing(or governing) the rates of the offsite resorts. They ofcourse first learned their lesson at DL, were they lose tons of revenues to offsite resorts.

Here's a question I can't even guess on ...If Disney advertised the enhanced saftey staffing they have at their on-property resorts, would they steal customers for offsite resorts and/or whould the damage overall demand or increase it?

VALUE SEASON!!!!

Think about this one - if undercapacity continues will value season be eliminated? How would that impact loyalty.

"Package DEAL"....as they put it! (if they only really knew ).

Ha Ha Ha LOL, ROF. Where's the deal? Man - talk about smoke and mirrors marketing - Yikes!

In all of your marketing expertise.....here is a situation......how does it translate to what is typical???? Some one sees a very popular item they want to buy. It costs $100. They decide to wait til it goes on sale. One store is supposed to have it on sale the following week for $85.

-this is basic postponement, unfortunately anytime you offer regular promotions you train customer to buy on deal. This has become a big problem for grocery stores. I think my grandmother has made a living on double coupons and drive many a store out of business. Now she has started work on the Biloxi Casinos!!!

But they have very little in stock. Then they hear it might go on sale at another store next week for $80, but that store has even less in stock. So do they buy it today at $100, wait til next week to TRY to get it for $85. Or really take their chances and wait to get it for $80 even though the chances are slim that they will get it?????

-Now you are talking about temporal pricing maint or life cycle planning. The process you describe works for perishable comodities like hamburger. Its the opposite approach that most services use - Buy 2 months out and your airline ticket is $159, buy the day of and the price will be $1259. WDW will most commonly use an s-curve approach, where prices are high a year our, lovering for several time periods, and then high again a few weeks out. These strategies are all related to product characteristics and service value of time.

Then on the flip side.....let's say all stores have LOTS AND LOTS of them!!! In which case you would obviously say "wait" to buy it.....but now you realize you won't be able to get to that store that week!!!!

-This sounds like what's going on here and my issue with WDW taking so long to open the flood gates for AP holders. I think you call this DISTRACTION! Now that the WDW goals have been adjusted, I bet the offerings will soon follow. I really love this. What a wonderful job I have.

I'm sorry, I am really getting carried away here. But I think I am just getting frustrated waiting for better prices !!

Hang in there ... you will here something soon I bet and I bet the hours increase, but not as a formal announcement. You'll have to have faith (oh Boy, here comes the tag fairy again) and then pick up your happy little schedule form at the desk and rejoice. And even if it doesn't happen - the place should be so thin that you should have the trip of you life!!!

If you follow my way of thinking (scarry) your proof is here!!!

It really makes me feel ill - an makes me poorer than I was 2 years ago!

 

[lizzie64]

Oh my GOD - STOP

I have a headache. LOL

 

[RobMax]

Originally posted by CarolA
OK. I have a marketing degree and an accounting degree. Here are my thoughts. Marketing would probably sell the rooms for free if they could get away with it. If you let marketing run a company you are doomed (most of us marketing types count dollars, bodies, whatever they grade us on not normally profits)

Carol - these an old joke that sales people can always sell a product for less than it is made.

But I have to fire back...

Accounting degrees are down nationally and have been since the 80s and late 90s when firms realized that an internal accounting focus wouldn't advance the firm.

On most campuses today, Marketing and IB Marketing are the top Business degree. As place owned by MIS until the past year.

Lets face it - accountants add cost to the firm. They are a necessary evil and staff. Marketing/marketers add value. Whens the last time you heard someone say - I'm going to continue to do business with them - their accounting people are so personable. Or ... thanks to accounting we have become tops in the market ... Or without our accountants, we could have never negoiated those deals that moved us into those culturally diverse markets.

Here are a few marketing led firms, were marketing dictates growth...
-Disney - branding and liscencing
-P & G - promotional strategy and technological
-Wal*Mart - logistics/distribution, technology and negotiation.
-Nordstram - quality and pricing

oh heck this could go on forever

Here is one Accounting driven firm where accounting dictated growth

ENRON

When you look around today its supply chain managers, marketing strategists, management strategists that are driving the best firms - not the bean counters. And believe me I have more accounting background than I want from my career in supply chain operations and negotiation. That wasn't the norm in the 80's but the "internal" became a time to forget for many. That's not to say that a solid Financial manager (not acct) can't grow a company, but he must understand marketing strategy. Otherwise he focuses on economics without factoring in psycology (why we buy) and sociology (why we come here)!

Your other logic is good and I'm sure there is some 80/20 rule at play here and you certianly can't GIVE away rooms.

I am a transaction cost management person, so I always think operating efficeincy & effectiveness, revenues, and stock price as most strategists do. The real reason that they can't just drop utilization is that they have HUGE fixed costs. Much more than traditional service businesses. They have a number of people they must be in to get over the MR=MC BE. The variable costs per unit sold IS ofcourse constant. So, what they should be doing is cutting hours and running additional promotions the closer we get to the date.

This really goes back to my airplane example. No more rehashing.

You are right in this - the accounting side cannot be overlooked ...but an accounting focus can be the downfall of companies like disney as they lose market orientation (efficient resource deployment, understanding or the competition, understanding of the customer). You simply can't be effective managing a business from a cubicle or a spreadsheet. Eisner knows that - I hope whatever his decision - he gets things fixed or gets OUT!

OK - now I'm irritating myself - happy thoughts, happy thoughts - Sorry CarolA. Needed to be said, but we have many of the same beliefs here - just didn't like your early generalization - And by the way - my wife was in healthcare for 10 years (both sides - good and evil) before I let here retire to be a mommy. She has never been happier!!!

No more business discussion.

 

[cindyfan]

Okay.....I think I have an Honorary Marketing degree now. LOL!!!!!!!!

That AND a headache!!! LOL

And if they are giving rooms for free.....I'll be first in line!!!!
But til then....still waiting on AP rates.....
I'm wondering if it is REALLY close....did you see the hours CUT AGAIN for EASTER WEEK!!!!!!!!!
They have MK closing at 8pm on Easter!!!!!!!
That has to be a mistake!!!!

 

[DancingBear]

Okay, I understand that marketing is important, and I understand that higher occupancy (at some marginal rate) is better given fixed costs--but I'm not sure you've made the case that the AP discounts are the key.

For all I know:

--If I scratch AP Bear's tummy (or give him unlimited admission for one year), he will give me five fish 2 times a year for three years in a row...

--And if I also scratch AP Bear's head (or give him room discounts), he will visit one extra time in those three years and give me five additional fish. Grand total for three years, 35 fish.

BUT

--If instead of scratching AP Bear's head, I offer to scratch any Bear's head, I get three Bears to come visit over those three years (two of whom I remember having visited before, but who weren't AP bears), and I get four fish from each of the other three bears. Grand total for three years, 42 fish.

 

[jctwizzer]

anybody else find it amusing, and ironic, that some some appointed expert, purporting to be a college professor of some kind, is throwing a temper tantram because Disney doesn't feel compelled to bow to his want and desires. Pretty much confirms my opinion of the group......grading on the curve, he still comes out with a F;

 

[cindala]

Originally posted by jctwizzer
.... Pretty much confirms my opinion of the group......grading on the curve, he still comes out with a F;

Uh, what group???

 

[MelissathePooh]

He is an assistant professor, abd - I looked up his vita.

 

[RobMax]

Originally posted by jctwizzer
anybody else find it amusing, and ironic, that some some appointed expert, purporting to be a college professor of some kind, is throwing a temper tantram because Disney doesn't feel compelled to bow to his want and desires. Pretty much confirms my opinion of the group......grading on the curve, he still comes out with a F;

You get a PM sweet heart!

 

[RobMax]

Originally posted by MelissathePooh
He is an assistant professor, abd - I looked up his vita.

That's me - not hiding anything from anyone. Gonna take me 5-6 years to make tenure like everyone else. Adb issue is over now, I've completed it - I guess I have an update to do.

I like your website BTW, last time I did drinking around Epcot I forgot Canada was a country.