The Not-So-Wonderful-World Of Disney Essay, Research Paper
The Not-So-Wonderful-World of Disney
Until 1992, the Walt Disney Company had experienced nothing short of success in the theme park business. Having successfully opened parks in California, Florida and Tokyo, it only seemed logical to open one in Europe. When word of this go out, officials from many European countries offered Disney pleas and cash indictments to work the Disney magic in their hometown. In the end only one city was chosen and it was Paris, France. That was the first of many decisions that led to a very unsuccessful opening of EuroDisney. Many factors contributed to EuroDisney’s poor performance during its first few year of operation and many of these factors could have been alleviated if the proper factors would have been looked at previously.
The first problem with EuroDisney was that Paris was the town chosen to be this park’s home. It was chosen because of demographics and subsidies and because the French government made Disney an offer it could not refuse. “About 17 million people live less than a two hour drive from Paris and another 310 million can fly there I the same time or less. The French government offered the company more than $1 billion in various incentives, all in the expectations that the project would create 30,000 French jobs.” The land came at rock-bottom prices, cheap loans were made available, and a dedicated high-speed TGV and suburban railway link was also offered by the French. France gave Disney an offer they could not refuse. “Overlooking the over-valued franc, bad weather, French people not being known for their hospitality and occasional anti-American demonstrations by angry farmers because French agricultural subsidies had been cut, Paris was still chosen to be home of EuroDisney.”
Foreign uncontrollables in Paris in regards to economic forces, legal forces, competition, and culture can be held accountable for EuroDisney’s misfortunes. In opening in the summer of 1992, Europe was entering into a very bad recession and this caused income from catering, merchandise, including souvenirs and foods, and hotels to be way below what was expected. High interest rates also caused many currencies to devaluate against the franc leading to more financial difficulties for EuroDisney. In negotiations with France, lawyers were used excessively. This rigid legal approach was offensive to the French, who, like most Europeans consider depending on lawyers to reach a conclusion to be a last resort. The climate in Paris was also unsuitable and off-season attendance was way below expectations. Many landmark events were competition for EuroDisney’s opening year. “Spain held the World Fair in Seville and Barcelona was home to the 1992 Olympics which took tourists to areas other than Paris.” All in all, 1992 was not looking good for EuroDisney in terms of success.
Despite the foreign market uncontrollables hindering the park from the beginning, when EuroDisney opened in the summer of 1992 many marketing and operational errors factored into the parks unsuccessful opening. “EuroDisney’s advertising had emphasized Disney’s image as an alluring bit of Americana rather than an explaining to potential customers what they can actually do for the park.” EuroDisney’s image-marketing did not explain to Europeans what the theme park was or what attractions it had to offer the European consumer. Advertising was so focused on the size of the park and the glamour behind it, that this poor marketing strategy hurt overall business. No one in France cared that “EuroDisney had costs over $4 billion and that it’s 4,800 acres include five separate recreation areas, six hotels with room for 5,200 people in all, an entertainment center, a 27 hole golf course and a wooded campground.” The marketing strategies of the United States were used in France and it backfired when the French visitors stayed away from the park.
Operational errors that easily could have been avoided accounted for more troubles than were expected at EuroDisney. In regards to employees, alcohol, admission and hotel prices, hotel breakfasts, staffing problems, and regulations regarding pets, many problems were cause for EuroDisney’s misfortunate first year. The employee dress code enforced on employees prohibited facial hair and limited the use of makeup and jewelry. “The French didn’t think dress standards like these existed outside the West Point military academy.” Since this caused much discontent, Disney has relaxed on rules regarding personal grooming.
“The ban on alcohol caused astonishment in a country where a glass of wine for lunch is a given and it is almost as necessary as a fork.” How banning alcohol in this theme park could have ever been a consideration is unbelievable and since it was such a major issue this policy of not serving alcohol in the park as since been reversed.
Prices revolving around EuroDisney were also the cause of it not making a profit. “Consultants who have studied the park say that its high admission price-30% more than at Disney World in Orlando-makes visitors keen to take as many rides as possible, so they spend less time shopping for Mickey Mouse ears and such.” Prices at hotels were so high that staying overnight for many visitors was out of the question. Plus, with inexpensive charter transatlantic flights and the lower prices prevailing in the United States, they could travel there for the same amount as going to Paris and Florida’s sunshine was an added bonus. All of these price issues cause potential consumers to stay away from EuroDisney.
In regards to hotels, the restaurants were downsized because Disney executives were told that Europeans “don’t take breakfast,” and when the park opened everybody showed up for breakfast. “They were trying to serve 2,500 breakfasts in a 350-seat restaurant at some of the hotels and lines were horrendous. Lunch turned out to be another problem. Everyone wanted to eat lunch at 1:30 and cast members were used to calm down surly patrons and engage in some ‘behavior modification’ to teach them they could eat lunch at 11am or 2pm.”
There were staffing problems too. Disney had tried to use the same teamwork model it had with its staff in America and Japan but it did not work in France. “Within the first nine weeks of EuroDisney’s operation, roughly 1,000 employees, 10 percent of the total, left.” People were leaving because they felt that they were not being understood and they were not being treated in a manner that suited them. Disney also thought that Monday would be a light day and Friday would be a heavy day and staffed accordingly. In reality this was reversed and Mondays were very busy days at EuroDisney. This caused major rescheduling problems with the staff and with the staff’s supervisor’s making the schedules. It was also difficult to forecast how many visitors to expect and it was a struggle to staff the correct amount of people for different seasons of travel because in France workers rights are protected under the law.
EuroDisney also had to compromise and build accommodations for visitor’s pets. “The thought of leaving a pet home during vacation is considered irrational by many French people.” Disney had special kennels built to house visitor’s pets while they were enjoying the park out of respect for the French and their traveling needs in regards to their pets.
These errors all could have easily been eliminated before EuroDisney opened. If the French culture would have been studied and worker’s needs would have been evaluated they could have been remedied before the park’s opening day. Price, promotion, and the product itself all are controlled by Disney and it seems that the efforts in regards to the marketing mix concerning EuroDisney were very poor. In adding that to the mistakes involved in understanding the foreign restrictions involving the culture, the economy, political issues, the basis for competition and the overall cultural forces, all of this led to a miserable first year of EuroDisney. If anything positive can be noted about these errors, they caused an overdue realization by Disney that Europeans are different and they must be treated this way.
Disney misunderstood what is important to the French people, which caused them to stay away. “They had been expected to make up 50 percent of the attendance figures?.and the French saw EuroDisney as American imperialism.” The people in France have their own cartoon characters and they do not need American ones to be forced upon them as EuroDisney was doing. “Many French were hostile to the entire Disney idea from the beginning and a Paris theatre producer Ariane Mnouchkine described it as ‘A cultural Cherynobyl.’” To the men from Disney, all of this French hostility was seen as amusement and was not taken seriously. The executives at Disney had no idea how much trouble their ethnocentric values played in the nonsuccess of EuroDisney the first year.
Disney marketed EuroDisney like it markets in the United States. It did not keep in mind the cross-cultural issues that faced them by doing business in France. Ethnocentrism played a huge role in EuroDisney’s failure. The executives at Disney failed to study and evaluate the imperatives in France as well as the languages of time, space, things, friendships and agreements. They also failed to realize that the European culture is broad and different marketing strategies need to be taken to market to the different European cultures. EuroDisney could have been a success from the start; instead many changes had to be made in areas of marketing and day-to-day operations.
As Disney considers establishing new theme parks in other countries there are many things they should do before another disastrous opening like EuroDisney’s. The country they are thinking of locating should be heavily studied. Edward T. Hall’s silent languages in overseas business in regards to time, space, things, friendship and agreements should be understood for the country they are thinking of doing business in as well as the imperatives and exclusives that must be followed in that country. The foreign uncontrollable must be noted especially in regards to legal issues, the economy, the country’s geography and infrastructure, and the cultural forces dealing with that country. In thoroughly studying the country and knowing the needs of that country, adaptations to the marketing mix must be made to accommodate what is best for that country. Ethnocentrism, the assumption of similarity and our self-reference criterion are obstacles that must be avoided and overcome to successfully build a theme park in a foreign country. It is also important to respect that country’s culture and to not do anything that would turn you against the people that call that country home. Costs that deal with the theme park must be relevant to consumers there and marketing campaigns should focus on what is important for the consumers of that country and the surrounding countries to know. Possible problems should be noted and handled before opening day of the theme park and expectations should be realistic.
EuroDisney was faced with many challenges after its doors opened in 1992 and if all the proper steps would have been taken before opening day, many of these challenges could have been eliminated beforehand. Cross-cultural literacy is required to do successfully do business in any country and making decisions based on assumptions should be avoided at all costs. “Disney assumed Europeans would vacation like the American and Japanese; that they would be happy to stay away for several days at a theme park. But middle-class Europeans try to get away from it all on their vacations by going to the beach or the mountains, and EuroDisney lacked that kind of appeal.” The challenges surrounding EuroDisney forced Disney to realize many things, most importantly it made Disney realize that it is imperative to understand all cultural differences that they will encounter when doing business in a foreign country and it is highly unlikely that Disney will see this kind of failure again anytime in the near future.
Walt Disney is the world leader in family entertainment and one of the most valuable brands in the world. Recently, Walt Disney has decided to open up a Disney Theme Park in Hong Kong China, which will be the first theme park in China. Since the opening of Euro Disney, the Walt Disney Company has learned to take into consideration important determinants so that their investment will not be a huge financial loss. Unfortunately, Since Disney did not research as much as they should of when deciding to open Euro Disney, this lead to one of the biggest failures for the Disney Company and is today used as an example of international marketing failures.
Disney had high expectations about opening up a Disney Theme Park in France. They projected 500,000 visitors to be in the park on opening day and the result was only 20,000 visitors. According to the textbook, international corporations should research and analyze their profitability level and the market size. Many international companies need to expense their research and development because it will only lead to big financial losses. Walt Disney Company should of used a transnational approach to achieve a consistent and controlled marketing strategy. Transnational approach has three types of variables such as demographic, psychographic and behavioral. A big problem that Disney overlooked was the lack of marketing to the French people, there were more visitors from outside of France then there was in France. After realizing their turnover they starting promoting special package prices for French residents.
Several fundamental points that affected the failure of Euro Disney's first 2 years were location, staffing, dining, prices and the opening of to many hotel rooms at.
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. for American companies to realize that "their way" isn't always going to work, especially in a different country with such a different culture. Their Hong Kong project seems like they are taking precaution to prevent any huge financial losses. In spite of their mistakes, Disney is still one of the most important brands in the world and is widely recognized as a successful corporation.
"Euro Disney: An American in Paris" http://www.business.bham.ac.uk/business/images/cme_resources/Users/Szmigin/euro%20isney.doc
Businessweek.com. " Building a Mouse House in Hong Kong". April 11, 2002 http://www.businessweek.com/bwdaily/dnflash/apr2002/nf20020411_4498.htm
Doole, Isobel and Lowe, Robin. "International Marketing Strategy". Third Edition, Copyright, 2001.
Recklies, Dagmar. " Managing Resources-Accounting Assignment". Themanager.org
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The confidence of Disney was partly based on the number of Europeans visiting US Disney parks. Europeans would be visiting the US parks because they were in America however, not visiting America specifically to go to the parks (These figure hence do not accurately reflect the popularity of Disney theme parks in Europe). The US Disney parks are seen as part of the American experience not as a complete holiday destination as they are more in America.
All attendance predictions are based on parks in the US and Japan, which is also quite americanised. All calculations treated Europe as a general mass of people rather than many individual countries.
The strategy was very greedy in buying all the surrounding land so no one else could benefit from the project. This is not going to promote any local support and isolates the project from and other business support. The scale of the investment also isolated them more in the case of a failure.
The idea was to market the Disney as a complete holiday encouraging people to stay in the hotels and eat all meals in the park.
The location of the park first defied this. Since the travel time to Paris was 35 minutes and the gate hotel in Euro Disney cost as much as the best hotel in Paris, many people may prefer to stay overnight in the capital city.
The proximity to Paris also puts it in competition regarding the tourist industry. People passing through the area may decide to take the more traditional option and visit the romantic Paris instead. Paris may also lose out from the detraction of local tourist focus causing some businesses in Paris to oppose the project.
Secondly the attention to the wrong details. How many Europeans are going to notice leather wallpaper when they cant get their usual breakfast or wine with meals. This seems to show that Disney were acting on an American view of Europe rather than a native view, which could identify the important cultural differences.
Also the paranoia about offending 'sophisticated' European tastes meant that Disney forgot that their parks would always be seen as part of American culture. Most people enjoy the parks for this reason and would prefer a hamburger to a large lengthy meal, which would be normal everyday at home.
The executive saying, "We were told Europeans don�??t take breakfast. " seems to show that the analysis of the European market was very general and the managers were too confident in their success to research the small details about European cultures.
In planning Euro Disney there do not seem to have been many contingency plans established. The attitude towards customer habits was very complacent, assuming that there would be so many customers every day, each staying an average number of nights spending an average amount of money. In America this may be more the case since there is a well-established theme park culture. Many people will avoid visiting during peak holiday times, spreading out attendance figures over a year for example. The European market proved to be a lot more volatile however, with great peaks and valleys in attendance. One would expect large crowds at weekends and holidays. In planning, Disney were more interested in the moneymaking ventures than the fundamental details such as providing enough restrooms for coach drivers.
Most Europeans are not accustomed to stating overnight in a theme park so the heavy investment in hotels seems a big risk.
Disney was introducing theme parks to people only previously interested in fun fairs. People would hence not be used to completely living in the amusement environment. The scale of Euro Disney would also be associated with high prices and a commercial atmosphere.
In marketing the park Europe was treated as one country when it has a larger range of language and culture than the US or Japan. While the attempt was to give the park a European flavour, the advertising campaign was typically American.
Most advertising was aimed at children while the adults make the final decision on whether to go or not. In America this may work because Disney theme parks are long established and adults associate the whole experience with childhood memories. In Europe however theme parks are un-established so more marketing effort is required to convince people that Euro Disney will surpass everyone�??s expectations.
On opening the park, Disney continue to display over-confidence. The prices reflected their expectation for demand. The Media also appear to have been treated as if the scale of the investment would sell the park. By not giving access to the Disney executives it seems as if they have better things to do and the success of Euro Disney is guaranteed.
The Management seem to be overpowered by their reputation for success with no scepticism about the European market.
The opposition to Euro Disney was disregarded despite the fact that mainstream newspapers seemed support the protest. Disney ignored the description of Euro Disney as a cultural abomination, which could have highlighted the need for further cultural integration. The attitude of Disney management is confidently dismissive making them appear out of touch with the cultural differences.
The early change in managing director shows Disney�??s expectations for success. Robert Fitzpatrick was said to know Europe well, which sounds like a general knowledge rather than that acquired from being native to the country and living there. Choosing Fitzpatrick may have been an initial bad choice but to replace him after only a year shows Disney as being impatient and throwing away the experience Fitzpatrick has gained.
Philippe Bourguignon tells that some of the best ideas on park improvement came from staff members. This suggests that more could have been done to survey visitor�??s opinions of the Park after opening. There is a need for management to treat the Europe as something knew about which they are constantly learning, rather than as a market they can dominate at will.
There were reasons for failure due to marketing and administration decisions made before and after the launch of the park. The whole concept of trying to sell an American product to Europe, while trying to adapt some features of the park to suit a wide variety of cultural tastes, doomed the project. Overconfidence in the formerly foolproof Disney formula meant that in planning the park not much attention was paid to many important details. In this sense the administrative errors in the project planning were the main reasons for failure. The inappropriate marketing of Euro Disney contributed greatly to the poor attendance but ultimately the park itself was not going to make the groundbreaking impression needed to create a new market.