Will the vertical product differentiation strategy work?
"Does 'paradise' have a price? A new Orlando theme park is betting that it's $179 per day.
The park is called Discovery Cove, planned to open next summer by Anheuser-Busch Inc.'s Busch Entertainment unit. It promises a kind of interactive tropical adventure, where visitors will swim with dolphins, play with tame stingrays, snorkel among 10,000 tropical fish and lounge on the beach, all in relative solitude.
Busch plans to pitch Discovery Cove as an exclusive alternative to the giant competitors operated by Walt Disney Co.'s Disney World and Seagram Co.'s Universal Studios Inc. Attendance will be limited to just 1,000 people a day, which the company promises will eliminate long lines and make the park feel uncrowded.
But the cost will be eye-popping, especially compared with the $44 that Disney, Universal and Busch's own Orlando SeaWorld charge for their parks. For visitors who don't want to cavort with dolphins or are under the age of six, the price drops to $89 a day.
Busch's plan at Discovery Cove is built on the notion that vacationers want a respite from the long lines, body-to-body crowds and general frenzy of theme parks. To make sure the park would indeed feel uncrowded with 1,000 people in it, Busch constructed a scale model of Discovery Cove and then scattered 1,000 tiny humans around it...
Busch is so eager to distinguish the park from its bigger rivals that it refuses to even describe Discovery Cove as a theme park. 'We're not quite sure what to tell you it is,' Mr Abbey says. 'It's paradise.' He says the experience should be compared not to a day at Disney World but to more unusual and luxurious offerings such as a round of golf at Pebble Beach."
Source: Bruce Orwall, "Would You Spend $179 to Cavort With Dolphins?," the Wall Street Journal, November 18, 1999.
Discovery Cove opened to the public on July 1st, 2000. Early reports show a relatively high level of demand.