KidZania:

Group 16

ADITYA TANEJA – EPGP-11-006

HARSHDEEP SINGH DUA –EPGP-11-044
NITISH MEHTA – EPGP-11-070
PANKIL KUMAR PATEL –EPGP-11-073
YOGRNDRA SINGH RATHORE-EPGP-11-129
KEVIN JOHN-EPGP-11-246
1. How is KidZania able to differentiate in the competitive entertainment market?
What is unique about KidZania’s offer?

The concept of Edu-entertainment was a new concept in children’s entertainment. Edu

entertainment refers to a modality that proposed the strategic use of media in an
entertaining fashion, easy to understand and capable of constructively influencing the
audience’s behaviour. When KidZania started in 1997, the entertainment opportunities
for children in Mexico were vastly deficient as compared to the existing demand. Most
of the alternatives did not offer cognitive or creative development. The project had
multiple entertainment and learning spaces where children could grow their creative
potential and their capacity to imagine and play. The basic idea which they tried to cash
on is the concept of roleplaying among children. Based on the idea of “Playing grown-
ups”, a universal playing activity most common among children, the founders decided
to represent the adult world on a child’s scale. All activities were based on 5 educational
themes: Traffic rules, citizenship, environment, health and community. KidZania also
made sure their activities changed and adapted to the changing needs of children over
the years. They tried to study the key aspects of children’s lives, their preferences,
purchasing patterns, hobbies and social life. It hence helped understand what would
make KidZania different. The loyalty programme, the currency system and the idea of
citizenship promoted by KidZania was another unique feature introduced by them.
Children were allowed to work and earn Kidzos or the local currency for their work.
They were allowed to hold public offices, be invited for events, be given VIP access
and purchase goods at discount for citizens. There is lots of activity is playing based on
real training and which is related to real training in manufacturing industry like Coca-
Cola and with this child can play the role with banking system which help them to
create the real service activity that helps the children. KidZania market is different from
others based on different kind of activity they are introducing. A fundamental and
unique element was kid onia city’s own economy. After the game each activity, the
children were awarded for their work and the park’s own currency where children could
save the money in bank account also they will use this money for shopping and other
activity so they will purchase in KidZania market can feel real market on that way they
will feel basic of economy and value of work.

2. Who are KidZania’s stakeholders? What do they contribute to the experience

and what do they receive in return?

The major stake holders as given in exhibit 3 are Coca Cola, Nestle, Unilever,
PepsiCo, Honda, Sony, P&G, Hyundai, DHL, McDonalds, Dominos, Yakult, Air Asia,
Danone and Cadbury. All activities carried out are sponsored by these leading
businesses in their sector. These industry partners provided the concept with realism,
bringing in their logos and products, designing their activity conjointly with educators,
and training their staff in their industry specific topics. For instance, at a scaled down
assembly line kids learned the process of making and bottling Coca Cola. Industry
partners were essential for economic viability of business. They contributed 40-50
percent of initial investment and pay a yearly maintenance fee which represents about
30 percent of parks annual revenue. Children were allowed to store their money in a
 bank account sponsored by BBVA Bancomer and they were allowed to products such
as renting a Mercedes-Benz or Renault at go kart track or a slice of pizza at Domino’s
sponsored pizza making activity. The industry partners actually found a new
communication channel to aim at the next generation of consumers. They could bring
their products and services to children and their families in an interactive, non-intrusive
way. They saw KidZania as a unique marketing opportunity with an experiential factor
to it. Industry partners were allowed to make activities specific to their industry and
hence help them market their products. Hence, this way the industry partners receive
brand recognition by an efficient means of reaching their brand to the masses.
3. Is KidZania’s current strategy sustainable in the long term given the competitive
landscape?

Many of the industry leading theme parks such as Disney world, six flags or Sea world
were associated with an outdoor experience far away from the city, weather dependant
and highly seasonal. Therefore, theme and amusement park operators considered indoor
parks as a great opportunity to attract visitors throughout the year. The concept of
accommodation, recreation and entertainment seemed to be undergoing a merger.
KidZania competed directly with the local parks. Direct competition was growing
quickly in all corners of the world. LEGOLAND
Discovery Centre’s (LDC), an indoor Edu-entertainment chain aimed at children ages
3–12, inaugurated two parks per year on average in the past few years. The LDC parks
had certain similarities with KidZania, particularly the size and some activities;
however, they were not a direct copy and they did not have their own economy or
industry partners. In Beijing, China, on the other hand, Bayou World and EE City were
very similar to KidZania. Within these replicas – at the scale of a real city, with traffic
lights, banks, and theatres – children could play grown-ups while developing dozens of
trades. Work was paid with a pretend currency that could be used in the park’s store.
As in KidZania, activities were sponsored by businesses. Baby Boss City in Taipei,
Taiwan, established in 2008, was a park similar to KidZania, where children played
being fire-fighters, astronauts, magicians, archaeologists or bankers, followed by a
wage that could be used to purchase presents. The Lebanese company, KidzMondo,
began operations at the beginning of 2010 in Beirut, with the support of renowned
industry partners like Ford, Pepsi and Colgate. Diversity, the Latin American copy of
KidZania, opened its doors in Bogotá, Colombia in 2006. In 2010, they inaugurated
two more parks in Colombia (Medellin and Barranquilla), and in 2011 they began their
international expansion through a franchise model.
According to the company’s estimates it was very difficult to think about co-existence
of two parks in the same city. With the current estimates of growth in the number of
amusement parks and its competition, it is difficult for KidZania to sustain in the long
term. Since KidZania directly compared with the local parks and rely on local residents,
which estimates to attract 250-1 million visitors on an average per year (Exhibit-8),
competitive parks in the same region can drastically split and down size the number of
visitors. As per Exhibit 9, an average 14-year-old used to spend 3.3 hours of screen
time in 1995 while now they spent 8.6 hours of screen time. This shows a whopping
260% increase in their screen time and this could also imply their outdoor activities
 could be cut by at least half their earlier time. Attracting the youngsters to physically
being at the park is the biggest challenge faced by KidZania. Also, as per Exhibit 5, the
competitor Parks admission per day is in par or lowers than that of KidZania. Hence
the competitive advantage is also at risk at present for KidZania. Hence the current
competitive landscape does not support the present strategies of KidZania in the long
run and it calls for a revamp in strategy in accordance with the likes of present
generation children.
4. If you were Xavier Lopez Alcona, which one out of the four alternatives namely
opening more parks, developing a different type of indoor park, expanding into the
digital world, and developing media content based on KidZania characters would you
recommend to the board of directors to position, consolidate and differentiate the
brand? Discuss the pros and cos of each of these four options to help you arrive at a
decision. (Hint: Use Ansoff Matrix to assess and discuss the four growth options).

The four alternatives proposed are as follows:

1. Growth in number of parks. The opportunity of North American market.
2. Developing a different type indoor park.
3. Interactive digital platform.
4. Developing content to extend brand to other media.

Alternative 1: Growth in number of parks. The opportunity of north American market.

Pros:
1.North America has bigger cities and hence a larger population around 800,000 to Million
children
2. 15 American cities spend around billion hours and nearly $2.8 billion in several forms of
entertainment. -
3. KidZania has managerial and operational capability to develop 6 to 8 parks a year.
4. Efforts to open a large park is marginally higher than those needed to open a small park.
Cons:
1. Difficult to coexist two parks in same city
2. For those who do not know KidZania, the first contact with any other park would seem
similar to KidZania.
3. Competitors provide services at cheaper price but compromise on the educational
content, which is a factor that tends to be overseen.
4. Current trend is digital and they have to find ways to keep children out of devices.

Alternative 2: New Formats

Pros:
1. Government would be a stake holder and partner. This ensures good support from
government for all activities.
2. Guaranteed visits by school and support of government agencies which would oversee
KidZania’s best activities: University, hospital, police and fireman.
3. Opening more parks in Mexico where brand is well known is a safer strategy

Cons:
1. Given the smaller size, it was unclear if a small park would attain enough repeat visits
to be successful.
2. In large markets such as China, where quality of experience offered by the competitors
is low, convincing families to pay for and industry partners to invest in a better park
becomes more difficult.

Alternative 3: Interactive digital platform

Pros:
1. Online platform could strengthen the relationship with children after their physical
experience at the park.
2. Children spend more time in the online platform and hence it enables to have
edutainment offered by KidZania online.
3. It enables the children to link virtual currency through online platform and its not
something others have.
4. It helps to increase the reach of KidZania brand through children with devices in areas
without a park.

Cons:
1. Large investment required.
2. It is illegal in most markets to digitally advertise directly to children
3. Parents don’t want children to spend more time online
 Ansoff Matrix:-

Existing NEW
Existing

DEVELOPING DIFFERENT OPENING MORE

TYPE OF INDOOR PARK PARK

EXPENDING INTO DEVELOPING MEDIA

NEW

DIGITAL PARK CONTENT PARK