GROUP 1International marketing

CONTENTSBACKGROUND

SWOT ANALYSIS

MANAGEMENT & NAME CHANGES

QUESTION & ANSWERCONCLUSION

VIDEO http://www.youtube.com/watch?

v=4bFzw5YJLmo

Background

Comprises two theme parks, a retail, dining and entertainment district, and seven Disney-owned hotels.

Operating since April 12, 1992, it was the second Disney resort to open outside the U.S (following Tokyo Disney Resort).

Disneyland Paris is owned and operated by French company Euro Disney S.C.A, 39.78 % of its stocks s is held by The Walt Disney Company, 10 % by the Saudi Prince and 50.22% by other shareholders.

A second theme park, Walt Disney Studios Park, opened to the public March 16, 2002.

DevelopmentCrisis looms...

Disney had projected that the new theme park would attract 11 million visitors and earn over $100 million during the first year of operation. In 1992, amount of visitors reached only 9.2 million and spent 12% less on purchases than the estimated $33 per head. Summer 1994, had lost more than $900 million since opening.

Rescue...October 1994 the park's name was officially changed

from EuroDisney to "Disneyland Paris", in order to more closely link the park with the romantic city of Paris, and to disassociate itself with the poor reputation that has become linked with the phrase "Euro Disney".

The tide turn… In 1996, Disneyland Paris became France’s most visited

tourist attraction with 11.7 million (increase 9% from the previous year).

With 15.3 million visitors in the fiscal year of 2008, it is one of Europe's leading tourist destinations.

spending per spending per guestguest

200

240

280

320

360

400

fren

ch fra

ncs

Spending per guest 258 248 224 248

1993 1994 1995 1996

Initial forecast

50%

100%

Occupancy 58% 60% 68% 72%

1993 1994 1995 1996

Initial forecast hotel occupancyhotel occupancy

Following price

cut

Actual

Spending per guest Spending per guest & Hotel & Hotel

occupancyoccupancy

Fina

ncia

l O

utco

me

Att

en

dan

ce

Forecast: Forecast: 11,000,00011,000,000

•STRENGTH

•Disney well-known already •Huge in capital and investment ( Saudi Arabia royal family )

•WEAKNESS

•Lack of knowing local culture•Adapting American culture in Euro Disney•Spending a lot of money in trams construction

•OPPORTUNITY

•Better Regional demographic•French has its own lovable cartoon characters ( Asterix, the helmeted, pint-sized Gallic warrior )•Different breakfast habits of European ( will gain profit )•One month family vacation ( European vacation ) – August shutdown

•THREATS

•Dismal winter weather of Northern France•( argued ) Paris not Europe’s most popular city destination among tourists of all nationalities.•Translantic airfare war ( 1992 )•Currency movement ( 1992 )•The French image toward Euro Disney ( American Imperialism )•European recession ( 1980 )•Gulf War ( 1991 )•High interest rates and the devaluation of several currencies against the franc•Competitor ( The World fair in Seville & 1992 Olympics in Barcelona )

STRATEGY Change in marketing Pay attention on differing tourist habits

around the continentSeperating marketing office open in

London, Frankfurt, Milan, Brussels, Amsterdam and Madrid. – Charge with tailoring advertising and packages to its own market.

Price cut 20% for park admission and 30% some hotel room rates.

Special promotion for winter months. Transformation in park’s name. To be Disneyland Paris ( October 1994 )

RESULT In 1996 Disneyland Paris became

Franc’s most visited tourist attraction.

Economical Aspect:

Regional affairs in Eastern Europe and economic recession in the western half of Europe and Scandinavia contributed much to the poor performance of Euro Disney.

Airfare wars during the period of time and disproportionate changes in exchange rate made spending for holidays in “Disneyland, Orlando…cheaper than a trip to Paris”.

The political: Of greater consequence was the Gulf War, which

reduced travel to and around Europe. The next major even inline was the birth of new democracies in Eastern Europe.

The 1992 Olympics in Spain marked another landmark event that shadowed fascination towards Euro Disney.

1.What factors contributed to EuroDisney’s poor performance during its first year of operation?

1.What factors contributed to Euro Disney’s poor performance during its first year of operation?( con’t)• It’s operation and marketing: Disney budgeted for real estate to account for

22% of revenues in 1992, 32% of revenues in 1993, 40% of revenues in 1994, and 45% in 1995. Unfortunately, due to the collapse of the real-estate market which caused the demise of the planned development around the theme park. Thus, Euro Disneyland did not receive revenue from property development as had been anticipated.

Advertising messages had been miscommunicated, “emphasizing glitz and size…not the rides or attractions”. Disney remained unsuccessful in attracting customers just by vigorous brand name promotion communicated through Mickey and his friends.

2. To what degree do you consider that these factors were (a) foreseeable and (b) controllable by either Euro Disney or the parent company ?Foreseeable factors:

Disney should have foreseen the changing economic scene in France with the forthcoming European recession.

The relationship with the local government should have been handled with greater care and delicacy, because of the size of the investment involved and ultimately, the number of jobs dependent on the success of the project.

Controllable factors:Price: Expensive (should be cheaper to encourage

attendance)Product: Mickey and Co. (should be French cartoon

characters)Promotion: American Culture (should be European

culture)Channels of Distribution: Europe

3. What role does ethnocentrism play in the story of EuroDisney's launch?

“Top down" governance as having played a role in the misfortunes of EuroDisney. It could have been due to the lack of communication or formalization that is associated with the top down governance structure that led to the culture conflict.

Ethnocentrism, as did culture, played a conflicting role in the launch of EuroDisney. The Disney belief was that what it sells in the U.S. and Japan would sell just as well in Europe. A marketing mix was to be adopted similar to that of what was developed in other markets.

"Ethnocentrism complicates the process of cultural assimilation by producing feelings of superiority about one's own culture and, in varying degrees, generates attitudes that other cultures are

Japan unlike, France, succumbed to Disney's promotional firepower. Japan welcomed the taste of American culture; France on the other hand went nationalistic. Disney followed a domestic market extension concept, believing one universal product would be accepted in Europe with as much vigor as was seen in Japan.

3. What role does ethnocentrism play in the story of EuroDisney's launch? ( Con’t )

4.How do you assess the cross-cultural marketing skill of Disney?

The cross-cultural marketing skill as practiced by Disney in Europe fell short of expectations from the entertainment giant.

The cross-cultural marketing skill of Disney as lacking cultural knowledge.

Having misinterpreted the data and information retrieved during the environmental scanning of the elements of European culture.

Wrong measuring the degree of cultural sensitivity and tolerance inhibited but the French towards American culture.

The Europeans have to be "attuned to the nuances of culture so that a new culture can be viewed objectively, evaluated, and appreciated.

Marketers must understand how their own cultures influence their assumptions about another culture".

Toward the end being culturally sensitive, followed by open communication, increased cultural assimilation should assist in building an ever-lasting relationship with the Europeans.

 

5.a. Do you think success in Tokyo predisposed Disney management to be too optimistic of their expectations of

success in France? Discuss.The Japanese population is composed by a large

number of younger people. Japan's home culture as I see it is in transition, influenced a great deal by the influx of American culture bought in through increasing trade ever since the post war era. At the time, during the 80's, it seemed the right thing to do when Japan all over bought American culture in all forms. Japan created the ripe environment for Disney to enter.

Europe was part bad luck and part miscalculation. Management at Disney was of the opinion that success in Japan would be matched by success in Europe.

The targeted European market consists of an older nationalist population. This being on of the more general observations, though one to which little heed was paid, may be attributed among other factors to why EuroDisney performed so poorly in its earlier years.

Success in Japan proved so overwhelming that management treated both markets as equals. Disney was blinded of the implications for its actions.

5.b. Do you think the new theme park would have encountered the same problems if a location in Spain had been selected? Discuss.

The launch of EuroDisney in Spain would have been met with less criticism. Unlike the central and east Europeans, the southerners receive foreign culture with greater warmth. But once again Spain cannot change itself to what some may see as overbearing American pomposity.

International marketing is a function of culture, what you are able to do in marketing to a particular foreign product is shaped by the cultural variables of the country. Success for Disney to market its theme park internationally forces them never to over-emphasize the importance of understanding a foreign culture. A theme park in Spain as in any other part of Europe would face a varying proportion of, legal restraints, political risk, culture conflict, and economic disruption.

Professional analysis by the Disney marketing intelligence unit may reveal accurate data regarding macro and micro indicators of market size relevant to the launch of EuroDisney. Nonetheless, if a comparison is made with a Spanish city the odds will be against Paris.

Geographic conditions provide sunshine all year round, and milder winter temperatures. As a market Spain may attract potential customers from northern Africa and the Arab world. The local Spanish market is just as fruitful, in terms of, total population, density, and buying power as its French counterpart.

6. Now that Disney has succeeded in turning around Disneyland Paris and has begun work on the new Hong Kong and Shanghai locations, where and when should go next ? pick three locations and select the one that you think will be the best new location for Disneyland X.

COUNTRY

GDP TOTAL TRADE/GDP

POPULATION

SIDE

CHINA $4.9 Trillion 8.70% 1.3 billion

9.571.300 km²

DUBAI $ 37 Billion 17.90%

1.204 million 4.114 km²

BRAZIL $ 1.482 Trillion 18%

194.4 million

8.511.996 km2

We suggest Brazil the best new location for Disneyland X. Since China location is near to HongKong and Japan and Dubai might have problem in cultural acceptance. Brazil cultural background is influenced by the contributions of Italian, German and other European immigrants who arrived in large numbers in the South and Southeast of Brazil. So its easy to adapt Disneyland cartoon figures ( we can learn from France culture ).

7. Given your choice of local "X" for the newest Disneyland, what are the operational implications of the history of EuroDisney described above for the new park?

In-depth study based on exhaustive research into every applicable aspect of the economy, laws, culture, climate, interests, customs, life-style habits, geography, work habits ( adapt local culture)

Conclusion The lesson learned is that any meal providing

company contemplating expansion into any foreign market should be intensely indoctrinated on all aspects of the eating habits of people in and near that country. On the other hand, not all lessons learned are based on Disney's negative experiences

In order to determine the best way for a business to enter a new foreign market it should review the external and internal environment ( also adapt local culture) which being important factor to learn about before settled in that particular market.

Through adapt local culture and to know important external and internal factors that impacts the business when contemplating entering the market would have the ability to increase its chances of success as well as decrease its chances of failure.