Euro Disney (Paris) (Marketing Plan for an Existing Business)

1. Euro Disney (Paris)(Marketing Plan for an Existing Business) To accompany Fasttrack Management and Organizational Behavior (Chapter 6)

2. Disney Parks Worldwide • Disney is the world’s largest amusement/ theme park operator • ’10 revenues: $10.8 billion* • ‘09 revenues: $10.7 billion* *parks only; down from $11.5 B in ‘08 • Global operations began in 1983 with Tokyo park • Very successful • A clone of CA & FL operations • Japanese adore Disney, certain elements of U.S. culture • International parks • Paris (1992) • Hong Kong (2006) • Shanghai (planned to open in 2016)

3. Original Mistakes I • For economic reasons, Disney located European park near Paris (rather than in warmer climate such as Spain) • 49% ownership originally; later 39% when new investors needed • French generally anti-Disney; company failed to consider cultural issues • Farmers angered when property expropriated • Pricing at park discouraged visitors • Weather too cold/rainy for year round attendance • Perception of Disney as a plastic rather than a real culture

4. Original Mistakes II • Arrogance of U.S. management alienated government, banks, many French citizens, unions • Labeled a “cultural Chernobyl” & “the tragic kingdom” • 1st general mgr. was an American • Competition from other events • Seville World’s Fair • Barcelona Olympics • Lack of marketing research • Inadequate breakfast seating • Shorter visits than U.S. • Insufficient focus on entertainment value • No alcohol allowed

5. 2000 – 2005 Period • Some recovery by 2000 • Diminished anti-Americanism • Reduced prices • Policy changes • New rides/attractions • Return of problems • Post 911 tourism slump • Iraqi war in March 2003 • Heat wave in Summer 2003 • High cost/inconvenience of travel • New Disney initiatives • $500 million infusion from government • Lobbying to allow cheaper flights • New European characters in park

6. Disney SWOT I • Strengths • Unique characters/animation • Extensive theme park experience • Willing to change as required • Major employer (15-20,000 jobs) • Economic impact (12 MM visitors) • Joint venture partners to reduce risk • Weaknesses • No global/regional market • Decisions previously largely U.S. based • Management arrogance

7. Disney SWOT II • Opportunities • Recession reduces travel & long vacation trips; park now attractive for many in EU • Lessened hostility toward U.S. by ‘09 • A larger market for all company products: theme park visitors, films & cable, Disney merchandise & licensing royalties • Threats • Future of €? Future of EU? • High unemployment (8½%, ‘10) • Low GDP (2% growth, ‘10) • Competing visitor attractions (i.e., beach, museums, about 35 other theme parks) • Bad weather

8. Recent Positive Results • Changes in policies • Increased guest spending & attendance due to rational pricing • Park more reflective of French culture • Moratorium on royalty payments • Dropping of pan-European marketing • Separate country promotions • Changes in environment • Favorable foreign exchange • Operations at about break-even levels (although Hong Kong included in reported results)

9. Issues I • What motivated Disney to set up parks abroad? • Disney was motivated to expand internationally in order to increase sales & profits • Initially, Tokyo Disneyland was established in response to a proposal from Japan’s Oriental Land Co., i.e., Disney was pulled into the international arena

10. Issues II • What factors in the external environment have contributed to Disney’s success, failure & adjustment in foreign theme parks? • Market demand for theme park entertainment is substantial, as evidenced by foreign visitors to Disney’s U.S. parks & by visitors to its foreign operations • Both the level of demand & Disney’s profitability are sensitive to upturns & downturns in the economic environment & foreign exchange rates • Why is cheaper for Western Europeans to visit Disneyworld (FL) than Euro Disney (Paris)?

11. Issues III • How has Disney managed its risk in its global theme park operations? • Limit of its financial exposure through licensing & joint venture operations • Re-pricing in response to local conditions • Adding features that are desirable to host country visitors • Adjusting its policies to be culturally compatible with host country traditions

12. Issues IV • What are the other 2012 issues? • Differentiation of the Paris operation from other European theme parks • Development of a marketing strategy in the face of a dynamic competitive environment • Improvement in the utilization of capital resources including the hotels & off-season park attendance

13. Disney Marketing Plan I - Develop relationship with air/rail carriers & governments for park travel packages • Negotiation with Air France, other carriers • Other - Emphasize quality of park vs. other parks through advertising & promotions • Develop promotions based on recognized Disney characters • Other

14. Disney Marketing Plan II - Organize focus groups to determine consumer perceptions of Disney • Hire marketing research firm to contact previous visitors • Other - Pursue convention & business conference business including family packages, particularly in off season • Contact business associations regarding plans for future meetings • Other