Value Destruction at Marvel, and How to Manage Customer Alienation Risk

Abstract

On June 2, 2023, the stock of Disney—owner of Marvel Entertainment (Marvel)—closed at $90.77, which was approximately 54 percent less than the stock’s March 12, 2021 close of $197.16 sixteen months earlier. One explanation for the decline has been “super hero fatigue,” or customers losing interest in super hero movies given the quantity of such movies released since 2008 by Marvel and other studios. While this may seem plausible, there are more likely explanations. This paper proposes that customer alienation risk is a key reason for the decline. To understand why, consider that a super hero paradigm is effectively a brand. The stronger the bond between customers and a brand, the more customers will maintain or extend their buying patterns over time. And the more customers personally identify with a brand, the greater the likelihood a customer alienation will occur if a firm disrespects that bond. Our research proposes that customers have been, to some degree, alienated by the gap between Marvel’s current slate of movies and the comic book source material upon which those movies are based. As a result, customers have not patronized those movies to the extent they patronized Marvel’s earlier and more successful movies. The paper concludes with four practical suggestions to mitigate customer alienation risk that are applicable across industries. This draft includes a new Appendix, which addresses comments received since the paper was published, most especially from former Marvel executive, Alan Fine.

Keywords: Brand Management, Customer Alienation, Value Destruction

JEL Classification: G32, G34, M19