2010_5_f49a525a

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GROUP 1INTERNATIONAL MARKETING

VU AI VAN

M987Z256

NADIA

M987Z250

TINA M987Z240

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CONTENTS

y B ACKGROUND

y

SWOT ANALYSIS

y MANAGEMENT & NAME CHANGES

y QUESTION & ANSWER y CONCLUSION

y VIDEO

y

http://www.youtube.com/watch?v=4bFzw5YJLmo

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ackground

y Comprises two theme parks, a retail, dining and

entertainment district, and seven Disney-owned hotels.y Operating since April 12, 1992, it was the second Disney

resort to open outside the U.S (following Tokyo Disney Resort).

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

y A second theme park, Walt Disney Studios Park, opened tothe public March 16, 2002.

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Development

y Crisis looms...y 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 millionand spent 12% less on purchases than the estimated $33 per head.

Summer 1994, had lost more than $900 million since opening.y Rescue...

y October 1994 the park's name was officially changed fromEuroDisney to "Disneyland Paris", in order to more closely linkthe park with the romantic city of Paris, and to disassociate itself with the poor reputation that has become linked with the phrase"Euro Disney".

y The tide turny In 1996, Disneyland Paris became Frances most visited tourist

attraction with 11.7 million (increase 9% from the previous year).y With 15.3 million visitors in the fiscal year of 2008, it is one of

Europe's leading tourist destinations.

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Prices initially too high:

spending per guestspending per guest

200

240

280

320

360

400

f r

e n c h

f r a n c s

Spending per guest 258 248 224 248

1993 1994 1995 1996

Initialforecast

50%

100%

Occupancy 58% 60% 68% 72%

1993 1994 1995 1996

Initialforecasthotel occupancyhotel occupancy

Followingprice cut

Actual

S pending per guestS pending per guest& H otel occupancy& H otel occupancy

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F

i n a n c i a l

O

u t c o m e

9,500,0008,800,000

10,700,00011,700,000

1993 1994 1995 1996 A

t t e n d a

n c e

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

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STRENGTH

Disney well-known already Huge in capital and investment

( Saudi Arabia royal family )

W E AKNESS

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

construction

OPPOR TUNITY

Better Regional demographic

French has its own lovable cartoon characters ( Asterix,the helmeted, pint-sizedGallic warrior )Diff erent breakfast habits of

European ( will gain profit )One month family vacation (European vacation ) Augustshutdown

THRE A TS

Dismal winter weather of NorthernFrance

( argued ) Paris not Europes mostpopular city destination among touristsof all nationalities.Translantic airfarewar ( 1992 )Currency mov ement ( 1992 )The French image toward Euro Disne y

( American Imperialism )European recession ( 1980 )Gulf W ar ( 1991 )High interest rates and thede valuationof se v eral currencies against the francCompetitor ( The W orld fair in Se ville &

1992 Olympics in Barcelona )

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STRATEGYy

Ch

ange in marketingPay attention on diff ering tourist habits around

the continent

Seperating marketing office open in London,

Frankfurt, Milan, Brussels, Amsterdam andMadrid. Charge with tailoring adv ertising andpackages to its own market.

Price cut 20% for park admission and 30% some

hotel room rates.Special promotion for winter months.Transformation in parks name. To be Disne yland Paris ( October 1994 )

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RESULT

y In 1996 Disne yland Paris became Francsmost visited tourist attraction.

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y E conomical Aspect:y Regional affairs in Eastern Europe and economic recession

in the western half of Europe and Scandinavia contributedmuch to the poor performance of Euro Disney.

y

Airfare wars during the period of time anddisproportionate changes in exchange rate made spendingfor holidays in Disneyland, Orlandocheaper than a tripto Paris.

y T he political:

y

Of greater consequence was the Gulf War, which reducedtravel to and around Europe. The next major even inline was the birth of new democracies in Eastern Europe.

y The 1992 Olympics in Spain marked another landmarkevent that shadowed fascination towards Euro Disney.

1.What factors contributed to EuroDisneys poor

performance during its first year of operation?

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1.What factors contributed to Euro Disneys poor

performance during its first year of operation?( cont)

I ts o peration and marketing:y 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, dueto the collapse of the real-estate market which caused

the demise of the planned development around thetheme park. Thus, Euro Disneyland did not receiverevenue from property development as had beenanticipated.

y Advertising messages had been miscommunicated,

emphasizing glitz and sizenot the rides orattractions. Disney remained unsuccessful inattracting customers just by vigorous brand namepromotion communicated through Mickey and hisfriends.

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2. T o what degree do you consider that these factors were (a)

oreseeable and (b) controllable by either Euro Disney or the parent

company ?

yForeseeable factors:y Disney should have foreseen the changing economic scene

in France with the forthcoming European recession.

y The relationship with the local government should havebeen handled with greater care and delicacy, because of the

size of the investment involved and ultimately, the numberof jobs dependent on the success of the project.

y Controllable factors:

y Price: Expensive (should be cheaper to encourage

attendance)y Product: M ickey and Co. (should be French cartoon

characters)

y Promotion: American Culture (should be European culture)

y Channels of Distribution: Europe

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3. What role does ethnocentrism play in the story of

EuroDisney's launch?

³Top 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 thatwhat it sells in the U.S. and Japan would sell just as well

in Europe. A marketing mix was to be adopted similar tothat of what was developed in other markets.

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"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 extensionconcept, believing one universal product would be acceptedin Europe with as much vigor as was seen in Japan.

3. What role does ethnocentrism play in the story of

EuroDisney's launch? ( Cont )

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

of Disney?

y

The cross-cultural marketing skill as practiced by Disney inEurope fell short of expectations from the entertainment giant.y The cross-cultural marketing skill of Disney as lacking

cultural knowledge.y Having misinterpreted the data and information retrieved

during the environmental scanning of the elements of

European culture.y Wrong measuring the degree of cultural sensitivity and

tolerance inhibited but the French towards American culture.y The Europeans have to be "attuned to the nuances of culture

so that a new culture can be viewed objectively, evaluated, andappreciated.

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

y Toward the end being culturally sensitive, followed by opencommunication, increased cultural assimilation should assistin building an ever-lasting relationship with the Europeans.

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5.a. Do you think success in Tokyo predisposed Disney

management to be too optimistic of their expectations of

success in France? Discuss.

y

The Japanese population is composed by a large number of younger people. Japan's home culture as I see it is intransition, influenced a great deal by the influx of Americanculture bought in through increasing trade ever since the post

war era. At the time, during the 80's, it seemed the right thingto do when Japan all over bought American culture in allforms. Japan created the ripe environment for Disney to enter.

y 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.y 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 attributedamong other factors to why EuroDisney performed so poorly in its earlier years.

y Success in Japan proved so overwhelming that managementtreated both markets as equals. Disney was blinded of theimplications for its actions.

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5.b. Do you think the new theme park would have encountered the

same problems if a location in Spain had been selected? Discuss.

y The launch of EuroDisney in Spain would have been met with lesscriticism. Unlike the central and east Europeans, the southernersreceive foreign culture with greater warmth. But once again Spaincannot change itself to what some may see as overbearing Americanpomposity.

y International marketing is a function of culture, what you are able todo in marketing to a particular foreign product is shaped by thecultural variables of the country. Success for Disney to market itstheme park internationally forces them never to over-emphasize theimportance of understanding a foreign culture. A theme park in

Spain as in any other part of Europe would face a varying proportionof, legal restraints, political risk, culture conflict, and economicdisruption.

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y Professional analysis by the Disney marketing intelligenceunit may reveal accurate data regarding macro and microindicators of market size relevant to the launch of EuroDisney.Nonetheless, if a comparison is made with a Spanish city theodds will be against Paris.

y Geographic conditions provide sunshine all year round, andmilder winter temperatures. As a market Spain may attractpotential customers from northern Africa and the Arab world.The local Spanish market is just as fruitful, in terms of, totalpopulation, density, and buying power as its French

counterpart.

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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.

The Cultureof China is one of the world's oldest and mostcomplex cultures[1][2]. The area in which the culture isdominant covers a large geographical region in eastern Asia with customs and traditions varying greatly between towns,cities and provinces.

The Dubai culture is a cosmopolitan one. With the influx of great number of foreign population which includes, Persians,Indians, Baluchis etc ,the culture in Dubai has become aglobal one. With Islam as its official religion , Culture inDubai is essentially a Muslim one but the presence of Hindus,

Christians , Sikhs etc cannot be ignored and their presencehas left an undeniable mark on the Culture in Dubai

Brazil is a European social nature clearerbecause there are many immigrants from

Portugal, Italy, Germany and Spain.

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COUNTR Y GDP TOT ALTR ADE/G

DP

POPULA TION

SIDE

CHINA $4.9 Trillion 8.70% 1.3 billion

9.571.300km²

DUB AI$ 37 Billion 17.90% 1.204 million 4.114 km²

BRAZIL $ 1.482Trillion 18% 194.4 million

8.511.996km2

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 cartoonfigures ( we can learn from France culture ).

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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)

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Conclusion

y The lesson learned is that any meal providing company contemplating expansion into any foreign market shouldbe intensely indoctrinated on all aspects of the eatinghabits of people in and near that country. On the otherhand, not all lessons learned are based on Disney'snegative experiences

y

In order to determine the best way for a business to entera new foreign market it should review the external andinternal environment ( also adapt local culture) whichbeing important factor to learn about before settled inthat particular market.

y Through adapt local culture and to know importantexternal and internal factors that impacts the business when contemplating entering the market would have theability to increase its chances of success as well asdecrease its chances of failure.

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2010_5_f49a525a

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