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INDEX

1. 2. 3. 4. 5. 6. 7. 7.1. 7.2. 7.3. 7.4. 7.5. 8. 8.1. 8.2. 8.3. 8.4. 9. 10. SOURCES

INTRODUCTION 2 WHY PARIS? 2 3

MARKET SEGMENTATION THE 8O 4

PROBLEMS AND CONSEQUENCES

SOLUTIONS FOR THE PROBLEM (MARKET STRATEGIES) 6 MARKETING MIX PRODUCT PRICE 8 PROMOTION PLACE 10 PEOPLE 11 SWOT ANALYSIS STRENGTHS WEAKNESSES 12 13 14 12 9 7 7

OPPORTUNITIES THREATS CONCLUSION 15 14 15

1. INTRODUCTION This resort is located in Marne-la-Valle, a city in the east of Paris. It has two theme parks, one entertainment zone and seven official Disney hotels. It was opened on April 12 in 1992, it was the second Disney resort opened outside the United States (after Tokyo Disney Resort), but the first that

belonged and was exploited by Disney. In 2007 the resort had 14.5 million visitors, and it is considered as one of the most important touristic places of Europe. Disneyland resort Paris belongs and is exploited by the French company Euro Disney S.C.A, a company with 39.78% of its stocks in the hands of Walt Disney Company, 10% belongs to the Saudi prince Al Waleed Bin Talal and 50.22% owned by other stockholders. The park is in charge of the president and CEO Karl Holz. At the beginning there was a lot of controversy during the periods of negotiation and construction because some people expressed their opposition about the resort and also because the country was through a period of recession.

2. WHY PARIS? The Walt Disney Company chose Paris, France, as the site of Euro Disneyland for many reasons. On April 15, 1983, the Walt Disney Company opened in Tokyo, Japan, their first theme park outside the United States. This theme park, Tokyo Disneyland became an instant hit. In fact, since the Walt Disney Company executives believed they learned so much about operating a theme park in another country, and since Tokyo Disneyland was an instant success, they began immediately to search for a site for a fourth park.

To find a site for their fourth theme park, the Walt Disney Company looked to Europe where Disney films historically have done better than in the United States. Because of this film success, the Western European audience already was familiar with Disney entertainment and merchandise. From 1983 through 1987 the company searched for sites in the United Kingdom, France, Germany, Spain, and Italy. Finally the possibilities were narrowed down to Costa del Sol in Spain and Paris in France. Although Spain had the edge due to its climate, France had a larger population and a spectacular transportation network. The Walt Disney Company executives believed since Tokyo Disneyland located in a coldweather climate and virtually the same latitude as Paris was so successful, they would be able to operate in similar weather conditions in Paris. In fact, Disney executives admit that "...without the cold-climate (Tokyo) Disneyland success, they would never have picked Paris, which has the same or worse weather than Tokyo". Thus, Paris was selected to be the site of their fourth theme park.Disneyland Paris is considered as the market leader in theme parks and the most attractive touristic place in all Europe, even though it has a little rival The Asterix Park but this one do not have comparison with Disney Paris because it only is opened during certain seasons of the year while Disney is opened all the year. Another thing that differentiates both parks is the infrastructure: Disney Resort has is really huge but Asterix is not too big and if this park wants to have a similar infrastructure its owners should make a big investment. Disneyland Resort Paris Asterix Park

3. MARKET SEGMENTATION Disney Paris has adopted a database marketing program that uses a methodology for segmentation based on consumer behavior, a consumer household stage of life, such as single, married, parents or empty nest; and other socioeconomic factors. The household-based life-stage segmentation is constructed much like geo-demographic systems, but tied to a household, not a piece of geography. This means segmentation according to consumers' different stages of life: demographic and socioeconomic characteristics. This type of segmentation is used because the company is life-stage-oriented, for example some people visit Disney at different stages of their life, like when they become parents or grandparents.

4. THE 8O

5. PROBLEMS AND CONSEQUENCES After the success of Disneyland in Japan and in the United States, managers began to think about the possible places in Europe to set up the new theme park and the candidates were Spain and France because of their location, economic advantage, tourism and climate. Therefore, the country elected for the best offer was France, Paris for its climate and excellent sightseeing, but they did not expect failures. Before the opening in the 1992, of the Euro Disneyland and the Euro Disney Resort in France, some controversies and critics appeared mainly due to the fact that this park promoted overconsumption of Cultural Imperialism of the Americans. But also, French workers were not agreed with the rules and limitations imposed by Disney that later claimed that those norms were violating with their personal freedom, so many workers stopped working after one-month opening. The problems that suddenly appeared due to perceptions of the market produced: * Lack of market segmentation: All Europeans * Focus on transactions than relationships: Volumes

For selecting the wrong service design and standard this made:

For not delivering the service standards: * All language to be spoken: Expected by customers.

* Barcelona resident Expectations

Customer not fulfilling roles

Absence of strong internal marketing program: Promoting and creating passion for Disney Brand

* Lack of Adequate Education to customers * E.g. : Toilet signboards were low

Ineffective mgmt. of customer expectations

Euro Disneys financial results of the years 1992 and 1993 by far missed the plans given in the Offer of shares. These plans were mainly based on Disneys experiences with its existing and successfully performing theme parks. Although the planning process seems to have been carefully conducted and backed by analysis of external experts some significant failures occurred. From the financial results of the first two years of operation and from analysts comments on the actual development one can see that the problems resulted amongst other factors from the following general reasons: * Wrong assessment of the market situation, * overall economical development, * development of property market, * guest awareness of high prices, * cultural problems. Even though not all developments could have been predicted correctly at the time the plans were established, the above factors were not taken care for in the necessary extent in the planning concept. In this sense Disney decided for a too optimistic scenario.

6. SOLUTIONS FOR THE PROBLEM (MARKET STRATEGIES)

As we can see Disney is the market leader in the world of entertainment in theme parks and the creator of thousands of cartoon series and movies, therefore its target market are families with small children and teenagers. Some of the clues that help this theme park and hotel in Paris were the following solutions: * Due to the financial crisis in the 90s, the project Disney-MGM Studios Europe was delayed until another decision that was later opened in the 2002.

* As European people do not spend so much as the Americans, they decided to reduce the hotel prices.

* To increase the assistance of the people, they began to serve after a year, alcohol drinks because people over there are used to drink wine.

* Highlight seasonal events and focus on affordability of a visit.

* The name of Euro Disney Resort was changed into Disneyland Paris in 1995 because for the Americans it represented something exciting and charming while for the European it was a business term, so after half a year; the company began to have profits.

7. MARKETING MIX

Those four Ps are the skeletal aspects for a product industry, however, it is clear that The Walt Disney Company does not solely provide products but also, in the case of their theme parks, they are providing a service.

8.1. PRODUCT Disney Company is very good at the product aspects, resulting from over years experience in the business. It is continuously offered us many products and services to purchase, this has given them an advantage of instinct and familiarity when it comes to selling their products. The variety of products that Disney offers is almost limitless. Their merchandise includes infant, child, and adult size clothes, toys, games, movies, and collectors items.

The attribute base is employed within Disney by the customer benefit: a family-friendly, safe, fun environment that is open for business all year. But the most important positioning base utilized by the Walt Disney Company is the one that distinctly sets them apart from any of their competitors: Emotion. Emotion is, how the product makes customers feel,

Disneyland Resort is Booths in the parks have representatives selling. Disney vacation packages for future visits. Also we can find stores with gifts and restaurants inside. For Disney, quality of their products and services should overcome the expectations of the consumer. The most important is to focus in the small details, because they will make the great difference. "In Disney there is always something new to discover although it is the tenth visit, the consumer always notices the details that before he had not seen"

8.2. PRICE Here we have to take into account that Disneyland is a Market leader, so we can say that Disney Park is a monopoly. Disney as a market leader is a price setter. It can decide what price to set without consideration to how to other seller would react. Since Disney is a family oriented company they want to be able to attract families of median incomes. Therefore, the pricing, relative to the theme parks and true to the pricing strategy is the quickest element to change . The prices for admission are subject to the seasons.

If you look at Disneyland resort prices, each time of the year has a different rate. During summer time and Holiday weeks, when students are out of school, the price of a room is significantly higher than in September. When times are slow, as they are in September and October, Disney offers free meals with your lower priced room. They also target their advertising to people who do not have children in school, such as empty nesters and parents with toddler children.

Disney entices school age children during the year by offering school bands, cheerleading squads and other student groups opportunities to come to the parks and perform. These packages work to boost attendance as well as improve Disneys reputation. Disney offers specials for families, such as discounts on flights, car rentals and hotel rooms many are seasonal to attract more people to their parks, and this tactic is considered as a good strategy in the price and quality base indicating a value bargain to their potential customers.

8.3. PROMOTION Promotion is intertwined throughout The Disney Company, surfacing in theatrical productions, books, consumer products and theme park. Every aspect of Disney promotes not only itself but every other aspect as well in a circular rotation. One promotion that the Disney Store uses is having a sale, where merchandise can be purchased at a discounted price. Another way that Disney promotes itself is by making toy figurines for its newest animated film available at fast food restaurants. This promotion is an excellent way of reaching children by making the toy a free gift with the purchase of a kids meal. Another way promotion that Disney uses is television advertisements. Each time Disney creates a new animated film, a new childrens fad is born. (A fad is any product that generates a lot of sales for a short period of time.)

Any merchandise featuring the new films characters becomes a very hot item. Therefore, by advertising the movies on television, they are promoting all the items in their store that relate to that movie. Inside the Park we can see different ways of promotion for example: During travel on trams, monorails, trains, boats, etc. there are always marketing announcements. These recordings inform you of ways to upgrade your ticket, to stay longer, to visit other parks, to dine at restaurants, to stay at resorts or to go to other attractions. Disney ads on television are often seen offering packages for round trip airfare for cheap, kids fly free, and hotel packages all to attract consumers to their parks and resorts.

For Disney the surprise and the creativity are fundamental elements. Its principal objective in promotion is to impact in the consumer and positioning in the mind of the consumer, for this raison Disney adopted the publicity BTL (Below The Line). Disney has been one of the pioneer companies installing a campaign in which invited the adults to feel as children. For that, it placed big armchairs not only in the park but in different cinemas, so people feel tiny again. Disney also use Internet like a new channel of distribution of its message.

8.4. PLACE Disney offers a place where costumers can wish upon a star and have their dreams come true And also a place where adults can briefly return to childhood. As new theatrical productions are released, it allows for new product lines based off the features characters to be made and sold in strategically placed stores throughout in France. The stores are located in malls and super centers, in urban locations in order to be visible for consumer, and they are nationally located within their theme parks where they will be heavily sought after by eager vacationing families. However, Disney merchandise can also be purchased at Disney Theme Parks. The stores located within the theme parks are normally in a strip-like

format. There are usually concession stands, games, and other attractions in between them. One common characteristic of all Disney Stores is that they are located in high traffic areas, where they are available to a very large trade area.

8.5. PEOPLE

Disney has an organizational culture within its structure. "Organizational culture is the set of values, traditions, and customs in a firm that guide employee behavior . " This amusement park self-proclaim themselves as the "Happiest place on the Earth." There is an emphasis put upon the employees to act cheerful and smile and to focus on the customer's satisfaction. This happy go lucky atmosphere is reflected through the company's organizational structure. The theme park's structure consists of the general managers for specific areas of the park, ride operators, sweepers, concession attendants which are referred to as hosts or hostesses.

This terminology of calling employees down lower in the firm's structure as hosts or hostesses is to instill an attitude of job satisfaction amongst the employees. It is supposed to make the employees feel important about their job, which will hopefully lead to the best possible outcome of performing their job. The Disney store is the last entity. The Disney Store's main objective is to apply that same happy go lucky attitude in their stores as it is done in their amusement parks. The employees are always smiling and happy and will do anything to make sure the customer is satisfied.

The store is a childrens delight representing a small little magical wonderland filled with Disney toys and apparel. This atmosphere couldn't be created without the employees themselves and the structure they are involved in. The Disney Store's organizational structure consists of the General manager or store manager, then the assistant store manager of operations, and assistant store manger for human resources, following with assistant store manager for selling and merchandise, next group sales manger, sales mangers and last salespeople.

8. SWOT ANALYSIS

STRENGTHS

| WEAKNESSES | | Poor market research Operational |

Brand nameAbility to recognize mistakes errorsMiscalculation of per-capita spending OPPORTUNITIES | THREATS |

Location (proximity to Paris)Transport infrastructure

| CultureRecessionControversies

9.6. STRENGTHS Brand name Disney is a well recognized brand for its amusement parks and for its cartoon series and movies. The competitive advantage is that Disney is in the top of mind of the consumers. Differentiation: they provide a good service.

Ability to recognize mistakes After the wavering beginnings of Euro Disney, management quickly learned many valuable lessons about international expansion and acted on these lessons to develop a culturally accepted and profitable theme park.

9.7. WEAKNESSES Poor market research The executives of Disney did not see the differences between the consumers of America and Europe. Executives did not perform and an accurate market research because they thought that it would be the same as Japan. When they entered into the Japanese market, the Japanese said Do not Japanese us, we came here for Disney, for America. We already know Japan. Operational errors There were various errors made in the operations of Euro Disneyland which affected the French culture. An example: Walt Disney Company's policy of serving no alcohol in its parks in California, Florida, and Tokyo was extended to France. This fact caused astonishment because French people used to drink a

glass of wine for lunch. Another example is: executives understood that European did not eat sit-down for breakfast. For that reason, they downsized restaurants.

A final error is the Europeans approach to vacation time. The Europeans are reluctant to take their children from school for a vacation in mid-session whereas Americans do it frequently. Also, the Europeans prefer a few longer holidays rather than several short breaks. The Walt Disney Company was convinced that it would be able to "Americanize" the European habits. Unfortunately for the Walt Disney Company, this was not the case.

Miscalculation of per-capita spending Executives assumed that guests visiting Euro Disneyland would spend large amounts of money as American and Japanese do. Disney calculated that each consumer would spend $33 worth of food and souvenirs per day. In fact, the spending was about 12% less than predicted. Europeans per-capita income is lower than the Japanese. European guest had to pay high entry fees ($43 for adults and $30 for children), but they spent less on food and souvenirs than Americans. This may be due in part to the fact that guests spent as much time on the rides as possible because of the high admission price (30% more than Disney in Florida). This caused lower expected revenue by Euro Disneyland.

9.8. OPPORTUNITIES Location (proximity to Paris) The theme park is located in the rural town of Mane-la-Valle because of its proximity to Paris and its central location in Western Europe. In addition, executives believed since Tokyo Disney Land located in a cold-weather climate and virtually the same latitude as Paris will be successful. Transport infrastructure Transport infrastructure is a good factor; there is a railway station in Marne-la Valle-Chessy which connects to the suburban RER network and the TGV high-speed rail network. They are connected between the theme parks and Disney Village.

9.9. THREATS Culture French people are proud of their culture, heritage and way of life. They expect that visitors to their country have a general knowledge of the French way. The country seeks to maintain its identity by

resisting the growing popularity of cheap fast food, foreign sitcoms, and American music. They are kind of ethnocentricism. Recession When Disney opened its park in Paris, Europe was in the middle of an economic slump. Executives thought that they could overcome this issue; however, Europeans had little spending power at this time. Controversies Disney Park in France was subject of debate and controversy because French people considered that Disney could encourage an American type of consumerism, adoption of American style in general terms. A journalist in the French newspaper Le Figaro wrote, I wish with all my heart that the rebels would set fire to Euro Disneyland.

9. CONCLUSION This type of case is a good source of learning and training because we can apply to any situation. When you want to enter into an International Market, you should perform an accurate study in order to know better the market. Due to the poor analysis, the executives took decisions based on the wrong information and assumptions such as: ban on alcohol (wine), the size of the restaurants, the purchasing power of the Europeans, etc. Furthermore, they did not take into account culture, which is an important factor. French people are really proud of their culture. The good point of this experience is: the executives recognized their mistakes in order to optimize its business. Thanks to the adoption of the marketing mix, they could adjust the process and achieve the organizations objectives.

10. SOURCES * http://en.wikipedia.org/wiki/Disneyland_Resort_Paris

* http://74.125.47.132/search?q=cache:7OVyRGLMzkAJ:faculty.ccri.edu/panaccione/Fall07StudentPresen tations/J.E.CharpentierCulture.ppt+French+people+proud+of+culture+vs+american+culture&hl=es&ct=clnk&cd=1&gl=ec

* file:///E:/Case%20Study%20-%20Euro%20Disney%20Its%20Limited%20Success.htm

* http://www.angelfire.com/alt/dansnyder/InternationalMarketing.PDF

* http://www.dmnews.com/Disney-Gains-Insight-With-Household-Based-Life-StageSegmentation/article/86094/

http://es.wikipedia.org/wiki/Disneyland_Resort_Pariscument&Highlight=0

* http://fateh.sikhnet.com/Sikhnet/discussion.nsf/3d8d6eacce83bad8872564280070c2b3/d6402 b26cf4fb3b4872569e000521b98!OpenDo