Marketing Communication Recommendations Presentation

TO: Tiffany Morrow, Vice President of Marketing

FROM: Moesha Moncrieffe, Marketing Analyst

DATE: January 2, 2024

SUBJECT: Market Segmentation Memo for Disney+ Streaming Service

1. Market Segment Analysis

Disney+ targets a diverse audience by offering captivating content on its website. The main target market comprises individuals of various age groups who possess the ability to utilize computer devices, smartphones, tablets, and the Internet. Effective market segmentation involves categorizing customers into groups based on their behavior, demographics, location, and psychology, among other factors. These groups are commonly referred to as segmentation bases. The current market segmentation of Disney+ and the characteristics of each segment are examined to enhance the user experience of the primary target audience. Further research from reputable sources and market insights have revealed potential new market segments for Disney+ to increase customer loyalty, attract new users, and maintain its competitive edge in the streaming industry.

Current Primary Segment: Families and Adventure Enthusiasts

Disney+ has established itself as a prominent participant within the streaming market by capitalizing on its robust brand, extensive content library, and original programming, catering to families and individuals who are drawn to a diverse array of family-oriented entertainment. This platform is widely regarded as an all-encompassing streaming service that takes into account different target audience segments, offering a blend of entertainment, nostalgia, and educational content.

Description of Primary Segment:

The primary demographic for Disney+ consists of individuals and households who savor and value superior quality family entertainment. Disney+ caters to a varied and inclusive audience, comprising children, adolescents, and adults, who are enthusiasts of Disney, Pixar, Marvel, Star Wars, and National Geographic content. By providing a vast selection of content, Disney+ aspires to be an all-encompassing destination for captivating and enjoyable entertainment, delivering happiness, exhilaration, and imagination to its viewers.

Characteristics of the Primary Segment:

· Behavioral: This segment consists of frequent users who regularly access the platform on a specific device and are loyal to the company due to the specialized content and customer service. The consistent usage patterns of Disney+ subscribers suggest a preference for a dependable and entertaining streaming experience.

· Demographic: The majority of the demographic segment consists of teenagers and individuals in their late 30s. Disney+ has data that enables market segmentation based on factors such as the package form acquired, registration details, account number, and devices used with a single account. Teenagers extensively use the Disney+ streaming services to watch a wide range of foreign films (Jia, 2022).

· Psychographic: This segment seeks to understand consumers' routines and habits outside of their interactions with the product, and how this influences their decision-making and usage of knowledge. Disney+ has the capability to utilize technology to categorize its members and determine their preferences regarding the shows they watch and the frequency at which specific genre-based shows are supported. This enables the personalization of the Disney+ experience for each user .

Appropriate Name for the Segment: Family Entertainment Enthusiasts

The label "Family Entertainment Enthusiasts" signifies the emphasis on delivering wholesome and family-oriented content that appeals to both parents and children. It encapsulates the primary target audience of Disney+ and underscores the streaming service's commitment to creating a delightful and inclusive entertainment experience for families.

VALS Type Classification

In terms of VALS Type Classification, millennials are distinguished by their characteristics as experiencers, who are known for their sociability, receptiveness to new habits, and impulsiveness (particularly in response to visual cues). They are also highly driven by the need for self-expression. Disney+ imbues high-definition entertainment with a sense of creativity and genuineness, which serves to encourage loyalty among experiencers and other psychographic segmentation groups. (Bhasin, 2020).

Disney+ has strategically positioned itself to capture the affection and attention of families and entertainment enthusiasts, carving out a unique niche for itself in the streaming industry by focusing on the values, attitudes, and lifestyles of its target demographic.

II. New Market Segments

The objective of addressing two potential market segments was to improve their capacity to cater to distinct demographic, behavioral, and psychographic characteristics. In order to expand its market segments and maximize revenue, Disney+ aims to embrace new growth opportunities, diversify its content, and gain a competitive advantage. Additionally, the company seeks to leverage cross-promotion among its various brands.

New Market Segments 1: Nostalgic Viewers

One of the segments identified is the Nostalgic Viewers, who are individuals who enjoy watching nostalgic and vintage TV shows and films, and who appreciate the emotional bond and sentimental significance of the medium. This segment is characterized by individuals over the age of forty, a lack of gender discrimination, and a range of economic levels relative to the geographic area. The corporation offers coverage across the entirety of the United States.

Some of the psychographic traits of Nostalgic Viewers include a preference for classic Disney+ shows and movies, a desire for comfort and familiarity in entertainment choices, and an appreciation for authenticity and history in narrative presentation (Week, 2021).

New Market Segments 2: Diversified Consumer

The viewing audience comprises of Indie Content Lovers, who exhibit certain behavioral characteristics, such as a preference for unique and independent television programs and films. This demographic, which encompasses both low and high-income brackets, includes teenagers and millennials (aged 18-34) who enjoy diverse content without any gender bias. The audience is passionate about independent and alternative cinema, admires originality and creativity, seeks thought-provoking content, and desires to belong to a community of like-minded individuals.

Upon evaluating the potential of both target segments, the Indie Content Lovers market segment presents the most significant commercial potential. The rise of content creators and innovators has fueled the growing interest in unconventional and unique content.

III. Recommendation

Given the market analysis, Disney+ should concentrate on catering to the Indie Content Lovers segment, as they possess substantial market potential. By fulfilling the specific needs and interests of this younger audience, Disney+ can enhance its reputation as a provider of diverse content, including independent films and television series.

Customer Persona
Segment Name	Indie Content Lover
Demographic	Young adults and millennials
Background	Tech-savvy, digitally connected
Needs	Unique and unconventional content
Goals	Discovering hidden gems, supporting independent creators.
Challenges	Limited availability of indie content on mainstream platforms.
Perceptions	Appreciates creativity, originality, and artistic value
Motivations	Seeking a sense of belonging to a community of like-minded individuals
VALS Type	Innovators

Products/Service Upgrades

To effectively cater to the Indie Content Lover target group, Disney+ may consider implementing the following recommendations to transform or modify its products and services:

· Adding a dedicated section or category to its platform that features independent TV shows and films, making it easier for customers in this group to access and locate content relevant to their interests.

· Collaborating with production companies, independent producers, and filmmakers to create high-quality content for Disney+, thereby attracting the attention of the target market and encouraging registration.

· Developing community engagement tools and interactive features that enable the segment to communicate with other fans of independent content through forums, recommendations, and discussion threads, enhancing their overall experience and fostering a strong sense of community.

Disney+ is attracted to the profitable Indie Content Lover market for several reasons. The growing number of young adults and millennials in this category, who are adept at locating unique and unusual information, is one factor. Additionally, the segment's psychographic characteristics align with the VALS "Innovators" classification, indicating a preference for original experiences and innovative solutions. Furthermore, by focusing on this market, Disney+ can enter the larger independent content market, which presents a significant opportunity for growth and profitability.

Undertaking a longer-term marketing campaign for Disney+ will appeal to enthusiasts of independent programming, as this demographic is deemed highly desirable. This campaign will emphasize the platform's commitment to independent content creation, its partnerships with independent producers, and the interactive features that foster a sense of community, all of which will serve to entice the target audience and drive subscription growth (McCarthy, 2022).

References

Barnes, B., & Koblin, J. (2019, April 11). Disney plus streaming service is unveiled to Hollywood fanfare. The New York Times. https://www.nytimes.com/2019/04/11/business/media/disney-plus-streaming.html#:~:text=Disney%20Plus%20Streaming%20Service%20Is%20Unveiled%20to%20Hollywood%20Fanfare

Bhasin, H. (2020, January 30). Vals - Values Attitude Lifestyle. Marketing91. https://www.marketing91.com/vals-values-attitude-lifestyle/

Jia, Y. (2022). The streaming service under pandemic with the example of performance of Disney+. Advances in Social Science, Education and Humanities Research. https://doi.org/10.2991/assehr.k.220105.149

McArthur, A. (2022, April 23). How Disney+ maximized their user’s overall experience to build their customer base. Taplytics. https://taplytics.com/blog/how-disney-maximized-their-users-overall-experience-to-build-their-customer-base/

McCarthy, J. (2022, April 19). Covid-19’s impact on the competitiveness of streaming services: Comparative analysis of Netflix, Disney+, and Peacock. Home. https://repository.tcu.edu/handle/116099117/54187

Week, A. (2021, February 3). Advertising week. Advertising Week. https://advertisingweek.com/nostalgic-viewing-becomes-the-new-normal-for-tv-viewers/