CASE STUDY REPORT GROUP 9 CASE 2 1 the not so wonderful world of euro disney

MINISTRY OF EDUCATION AND TRAINING UEH UNIVERSITY UEH BUSINESS SCHOOL INTERNATIONAL BUSINESS MARKETING DEPARTMENT CASE STUDY REPORT GROUP 9 CASE 2 1 The Not So Wonderful World of Euro Disney Course nu[.]

MINISTRY OF EDUCATION AND TRAINING

UEH UNIVERSITYUEH BUSINESS SCHOOL

INTERNATIONAL BUSINESS -MARKETING DEPARTMENT

CASE STUDY REPORT - GROUP 9 CASE 2-1: The Not-So-Wonderful World of 

Euro Disney

  Course number: 22C1MAR50309605

Course name: Internaonal Markeng - EN

Members of group 09 – Pink Organizaon

Tran Ngoc Thien Kim - 31201020435

  Le Thi Thao Trang - 31201024368

Ngo Thi My Hanh - 31201025745

Le Ngoc Yen Nhi - 31201024647

TABLE OF CONTENTS

1 Case study Summary 2

1.1 The problems that caused Disneyland to fail in Paris 2

1.2.The problems that caused Disneyland to fail in Hong Kong 3

1.3 Disneyland's workaround and the result after 3

2 Case study analysis according to individual opinions of our group 5

2.1.Problems that EuroDisney faced 5

2.2 Cultural differences between the United States and France 8

2.3 Evaluating the cross-cultural marketing skills of Disney 10

2.4 Why did success in Tokyo predispose Disney management to be too optimistic in their expectations of success in France? In China? 12

2.5 Lessons learned from the faults of Disneyland 13

2.6 Recommended measures for Disneyland in Paris and Hong Kong 14

3 Case study analysis based on class answers 15

3.1.Discussion question 1 15

3.2.Discussion question 2 16

3.3.Discussion question 3 20

3.4.Discussion question 4 21

4 CONCLUSION 23

5 APPENDIX 23

1 Case study Summary1.1 The problems that caused Disneyland to fail in Paris:

Disney failed in both aspects: In culture and in international marketing

 Foreseeable factors: staffing problems, advert problems, and cultural differences

● Disney ought to have anticipated how the recession in Europe would alter theeconomic climate in France

● Given the amount of the investment and the number of jobs eventually reliant onthe project's success, the relationship with the local government should have beenhandled with more care and delicateness

● Foreseeable events: 1992 Barcelona Olympics & World's Fair in Seville, Spain in1992

Unforeseeable events: Gulf War in 1991, currency & airfare wars

Unforeseen issues: The outbreak of the European recession, the 1991 Golf War, andrising interest rates were among the factors that management really couldn't see Thedownturn of the Franc currency on the global market was another external that had animpact on company and caused rivals to use other websites to attract customers Thesecompetitors represented the entire world at the Barcelona Olympics in 1992 and Seville

in 1999

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

Uncontrollable elements

Aspects of trade co have no control or influence over

● European recession in early 1990s & summer heat wave in 2003, competition,weather, government controls, etc

● Out of more than 200 other possible locations, Paris was selected for its morecentral location

● Dismal winter weather 

● The different legal systems

● Foreign uncontrollable and Exchange rate

1.2 The problems that caused Disneyland to fail in Hong Kong:

- Disneyland Resort Paris was on the verge of bankruptcy (2005).

- Visitors felt that the entrance price was still too high

- Complaints about too much focus on American rather than European film making

- Ecological disaster 

- In Hong Kong, a lack of knowledge about the culture led to advertisement failure

- Hong’s’s guests lack knowledge of the American Disney characters

- Cultural differences and the inputs of ethnocentrism

- Disneyland Hong Kong also had some cultural missteps:

A Disney ad in 2006 featured a family consisting of two kids and two parents.China's government, however, limits most couples to just one child

1.3 Disneyland's workaround and the result after

 EuroDisney

● Change in Marketing:

- Pay attention on differing tourist habits around the continent

- Separating marketing office open in London, Frankfurt, Milan, Brussels, Amsterdam,and Madrid -> Change with tailoring advertising and packages to its own market

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

- Special promotion for winter months Transformation in park’s name to be DisneylandParis (October, 1994) Now it is called “Disneyland Resort Paris”

● Financial help

The new Euro Disneyland brought nothing but debt in its first few years On March

14, 1994, The Walt Disney Company proposed a rescue plan to reduce debt At theheart of the project is the issue of rights to 6 billion Francs ($1.25 billion), of which51% will be guaranteed by 61 banks and the rest taken over by Walt Disney, whichhas a 49% stake in Euro Disneyland (Burgoyne, 2007) A rights issue is an offeringthat gives existing shareholders the right to buy shares, usually below market price, at

a rate equivalent to their current ownership percentage

● Promotion

They also offer a lower-priced "After 5" evening entrance ticket Responding tocomplaints regarding high entrance fees and hotel prices, Disneyland introducedcut-rate entry and room rates for the off-season (Greenhouse, 1991)

● Expanding market

Disneyland Paris tried to expand their market to countries near Europe, such asAfrican countries Disneyland Paris also marketed it as one of many stops on amonth-long European itinerary rather than a vacation destination for a period of time

=> Result: In 1996, Disneyland Paris became France’s most visited tourist attraction.Disneyland Paris has been dedicated to change, employee empowerment, and culturalrespect:

+ Disneyland Paris was able to make its first annual profit of $20 million (1995)+ Disney changed the names of rides, decreased language barriers alongside itsmultilingual employees

+ They have also had a great emphasis on intercultural relations as well+ The park now employs people from 92 different countries

+ The park has become widely accepted in France

=>  These strategic changes provided Paris Disneyland with more competitive forces in the industry.

=> Disney's true success lies in adapting to the surrounding culture of the French and   Europe as a whole, being marketing oriented in finding success in customer satisfaction.

 Disneyland HongKong 

● Language:

The majority of staff are locals They are not only outstanding performers, but alsofluent in Chinese, Cantonese, and English They are capable of guiding guests fromall around the world, particularly those from China who are unfamiliar withDisneyland

● Culture: 

The change of strategy at Hong Kong Disneyland is revolutionary Hong Kong'senvironment is completely different from the US To adapt to the Hong Kongenvironment, it is necessary to change the culture:

+ Following feng shui principles,

+ Hong Kong Disneyland tries to combine Chinese culture into the Americantheme park, such as the Chinese Gazebo and Mickey‟s Chinese gown.+ "Journey in the Forest" and "Festival of the Lion King" are two unique programs in Hong Kong Disneyland that are not merely duplications of other Disneylands.

+ There are supplies of various types of food from Asian nations such asChina, Thailand, the Philippines, India, and Singapore to avoid the food and beverage difficulties in Paris The menus are different on festivals

● Promotion:

+ Hong Kong Disneyland planners keep on consolidating operations Having

a clear marketing strategy since the beginning

+ Disneyland not only offers many types of services in the park, but alsovaried advertising campaigns in various regions, in order to attract their target guests

a Culture: Euro Disney-An American Icon

One of the most worrying aspects of EuroDisney's first year was that French visitorsstayed away; they had been expected to make up 50 percent of the attendance figures A park services consulting firm framed the problem in these words: “The French seeEuroDisney as American imperialism—plastics at its worst.”

● The French don't like Disney characters

○ The well-known, sentimental Japanese attachment to Disney characterscontrasted starkly with the unexpected and widespread French scorn for American fairy tale characters French culture has its own adorable cartooncharacters like Astérix, the Gallic warrior…

○ Hostility among the French people to the whole “Disney idea” had surfacedearly in the planning of the new project Paris theater director ArianeMnouchkine became famous for her description of EuroDisney as “acultural Chernobyl.” In the fall of 1989, during a visit to Paris, FrenchCommunists pelted Michael Eisner with eggs The joke going around at thetime was, “For EuroDisney to adapt properly to France, all seven of SnowWhite's dwarfs should be named Grumpy (Grincheux).”

● Spending habits of Europeans

○ For the tourists at Tokyo Disney at that time, a trip to the park for a family

of four staying the night at a nearby motel might cost nearly $600 Thesame family doesn't want to spend $280 per day at Euro Disney just toenjoy the park's activities, which include hamburgers and smoothies Due tocostly hotel room charges (from $340 to $380 per night in EuroDisney’shotel), many people frequently wonder whether to stay the night

● American free markets vs European caution and conservatism about financial  ideas.

○ Early advertising by EuroDisney seemed to aggravate local Frenchsentiment by emphasizing glitz and size rather than the variety of rides andattractions Committed to maintaining Disney's reputation for quality ineverything, more detail was built into EuroDisney For example, thecenterpiece castle in the Magic Kingdom had to be bigger and fancier than

in the other parks Expensive trams were built along a lake to take guests

from the hotels to the park, but visitors preferred walking Total park construction costs rose by $340 million to FFr 16 billion as a result of allthese add-ons Hotel construction costs alone rose to FFr 5.7 billion.

○ EuroDisney and Disney managers unhappily succeeded in alienating many

of their counterparts in the government, the banks, the ad agencies, andother concerned organizations A barnstorming, kick-the-door-downattitude seemed to reign among the US decision-makers: “They had aformidable image and convinced everyone that if we let them do it their way, we would have all had a marvelous adventure.”

○ Many French bankers financing questions understood the initial financing, but Disney's response was that their views reflected the cautious, OldWorld thinking of Europeans who did not US-style free market After someacrimonious dealing with French banks, a two-year financial plan wasnegotiated Disney management rapidly revised its marketing plan andintroduced strategic and tactical changes in the hope of “doing it right” thistime

b Economy: Stormcloud ahead

Disney and its advisors failed to see signs of the European recession's end in the 1980s.Other dramatic events included the Gulf War in 1991, which put a heavy brake onvacation travel for the rest of that year

Price competition for plane tickets to Paris and currency devaluation suddenly madetraveling to Disney World in Orlando, (USA) less expensive than traveling toEuroDisney in Paris (France) They made their effort to "compensate" their customers bydiscounting up to 25% for hotel costs

c The political:

Other external factors that Disney executives have cited were high-interest rates and thedevaluation of several currencies against the franc EuroDisney also encountereddifficulties regarding competition—the World's Fair in Seville and the 1992 Olympics inBarcelona were huge attractions for European tourists.

d  Ethnocentrism

Disney and Euro Disney executives applied their American corporate procedures,

marketing plans, and ethnic beliefs with the expectation that a foreign nation would adoptand accept them

This presented difficulties for Euro Disney's management because of ethnic differencesand a lack of understanding of French culture Alcohol, entry and accommodation rates,hotel breakfast, staff, policies regarding house animals, and staffing challenges weresome of the earliest concerns raised

The Walt Disney Company had a commercial strategy that was similar to what they did

in America and Japan, but this kind of global marketing was highly unacceptable inFrance Japanese culture would have been entirely distinct from other cultures

2.2 Cultural differences between the United States and France

According to Hofstede’s Cultural Dimension Theory:

● Long-term orientationUnited State:Short-term Most Americans are not pragmatic because of their culture,although this should not be confused with the fact that Americans are exceedingly

 practical, as evidenced by the aforementioned "can do" attitude

France: Long-term In societies with a pragmatic orientation, people believe that truthdepends very much on the situation, context, and time They show an ability to adapt

traditions easily to changed conditions, a strong propensity to save and invest, thriftiness,and perseverance in achieving results.

According to the index, in the US, Walt Disney is aware that the external environmentmay evolve quickly; hence they should be agile enough to deal with the changes toachieve a competitive advantage. In the US, traditions are respected and that old-age isseen as an unhappy time Moreover, leisure time is important and there is a tendency tospend money

● Indulgence vs the RestraintUnited States: The United States is known to be an indulgent society, as displayed by itsscores for this dimension The nation is known for its “work hard and play hard”

approach Individuals living in this society believe in going after their goals in an

aggressive manner but also spend time relaxing and indulging in leisure activities

France: France scores somewhat in the middle (48) when it concerns Indulgence versusRestraint This, in combination with a high score on Uncertainty Avoidance, implies thatthe French are less relaxed and enjoy life less often than is commonly assumed Indeed,France scores not all that high on the happiness indices

Therefore, in the US, people might tend to go to the amusement park more than theFrench Disneyland enhances this feeling; “My business is making people, especiallychildren, happy”

● Masculinity Vs FeminineUnited States: Masculinity A 2017 Pew Research Center survey found that about half ofAmericans (53%) say most people in our society these days look up to men who aremanly or masculine, with women more likely than men (62% vs 43%) About two-thirds

of men who say society looks up to masculine men (68%) say this is a good thing; anarrower majority of women (56%) say the same

France: Feminine This may be implied by its well-known social security system (securitésociale), 35-hour workweek, five weeks of annual vacation, and emphasis on quality oflife However, French culture as a model has another distinctive quality The working-class scores are masculine, whereas the upper-class scores are feminine.

According to the index, in the US, employees are highly competitive; each of them ismotivated to outperform their counterparts These individuals are driven by success andare not afraid to show off their success

Behavioral Insights of French

French demonstrate a capacity to easily adjust traditions to new circumstances, a high predisposition to save and invest, thriftiness, and persistence in getting things done.Contrary to popular belief, French people are less relaxed and less likely to enjoy life.French behavior pays greater attention to the bigger picture, especially when it comes torelationships with coworkers They also place high importance on life's quality and purpose

2.3 Evaluating the cross-cultural marketing skills of Disney?

2.3.1 Overview

After seeing the strategies that Disney employed in various parts of the world, it is clearthat they need to do more research into their market and the potential risks of entry Theytried to show these folks how to have a good time, but they didn't realize that differentcultures have different ideas about what is enjoyable and practical As they were alreadyfamiliar with the iconic Disney characters, Japan appreciated the "U.S experience," yet it

is obvious that each culture responds to things differently The ideas of high and context societies are strongly related to this When it comes to expressing their ideas, theJapanese are renowned for being more reserved

low-Additionally, it wasn't acknowledged that the French and Americans have differentcultures, therefore changes had to be made Later, restaurant seating was increased andmeals were offered with alcohol.

The French are very unionized and quite socialized in a political sense, so the belief thatthe society operated similarly to that of America was just incorrect The French have astronger cultural affinity for liberty and independence than the Americans They thinkthey created the ideas, and the Americans stole them to use in their constitution

2.3.2 Frenchman Philippe Bourguignon’s strategies

In 1993, Frenchman Philippe Bourguignon took over as CEO of EuroDisney and

successfully led the company back to profitability He changed the name to DisneylandParis, reduced the cost of park admission and lodging rates, and overhauled the marketingstrategies With the addition of new thrilling parks like the Walt Disney Studios, whichcombines Disney entertainment with the history and culture of European filmmaking,Disneyland Paris has continued to grow its theme park in the twenty-first century

2.3.4 Marketing Strategy in Hong Kong Disneyland

The competing forces perspective is used to develop language and cultural strategies.Disneyland had to adapt to the local context when it decided to enter the Hong Kongmarket First and foremost, Disneyland needs to speak the same language as HongKongers Hong Kong residents would not be able to fully appreciate Disneyland if theydid not speak the language there Additionally, the culture made Hong Kong Disneylandmore familiar to the locals, which allowed for the development of stronger competitive pressures

The development of the other strategies—cooperation, government assistance,

 promotion, and advertising—is based on the strategic conflict perspective Since HongKong's entertainment sector is so well-known, there are many different techniques usedthere Hong Kong Disneyland needs strategies to conflict with other entertainment groups