Euro Disney Services Marketing - Case Study Example

Euro Disney Case – Services Marketing Inserts His/Her Inserts Grade Inserts (30, March, Contents Contents 2 Introduction to Euro Disney 3 Choosing the location 3 Financing the project 4 Incorporating European Culture in Disney theme 5 Competition 6 Challenges faced by Euro Disney 7 Climatic conditions 7 Cultural imperialism 7 Human Resource Management issues 8 Fewer visitors attracted 8 Unmet visitor expectations 9 French eating habits ignored 9 Poor customer relations 10 Service Marketing at Euro Disney 10 Euro Disney’s SWOT analysis 12 Recommendations to adjust the marketing mix 14 Introduction to Euro Disney The theme park idea was initiated by Walt Disney in order to give the people a unique experience of entertainment by combining adventure with fantasy; and at the same time enriching the spectators with learning and history. This theme park was created not just in California and Florida in United States but also in Japan. And then, Disney entered Europe and established Euro Disney. In each Disney Park there are few identical sites that are common: the Fantasy land, the Main Street, the Adventure land and the Frontier land. Each of these areas has a particular theme and atmosphere, different from each other. In the theme the differentiation exists in terms of rides and attractions being offered, the façade and architecture; and the employees and food being served. Thus, this uniqueness and control of environment makes Disney an enthralling experience. (Project 2006) Choosing the location Hence, when Disney decided to expand its business, it came up with two options for opening the theme park: Barcelona and Paris. However, due to the benefits in form of subsidies and tax incentives being offered by the French government; Paris was the final choice. Another major reason for opting for Paris was the market potential that the city offered. Within a 160 km radius of the proposed site for Euro Disney a population of sixteen million lived. Not just this, the presence of an efficient transportation network made Paris an ideal location. Even if Euro Disney would have had a lower penetration in the market as compared to its sister parks in California and Florida; the market size was huge giving a higher utilization of the capacity. Another attractive feature for opening a theme park in Europe was that the Europeans had a different pattern of spending their vacations. Not only is the time period of the holidays which Europeans enjoy longer than the American citizens. But the Europeans also take frequent smaller breaks throughout the year. Disney also kept in few the family size and the disposable incomes which the target audience was composing of. And thus, kept keeping these trends in mind Disney started its new venture. Financing the project Another smart thing which Disney did when starting this venture was that it financed this project in a way that the risk was minimized. Disney floated a new company in the market called the Euro Disney SCA. Through this company the financial arrangements were made in a manner that the Walt Disney group had a 49% holding where as the rest of the share was generated by raising capital from the public. Further more, Disney was leasing this venture for initial twenty years and the ownership was to be given to them at the end of that period. Till then, Disney was to enjoy royalties’ brand name and incentives. However, the only negligence on Disney’s part here was that they made all this investment in a period of recession. (Case Study of Euro Disney n.d.) Incorporating European Culture in Disney theme The Euro Disney theme park was to offer the tourists not only entertainment in an American way but also incorporating in it the French and European culture. Disney gave the characters and the architecture presented a European touch. The Euro Disney’s Cinderella lived not in a mansion but in a French Inn. The Snow White in Euro Diseny theme park resided in a Bavarian village. The Discoveryland feature of the Disney park was having touches of Leornado da Vinci and Jules Verne. The 360 degree angled theater was an emblem of the French culture. Not just these, many other American themed sights at the Disney were transformed by adapting to the market research done. For instance, consumer insight revealed that the European customers were attracted to the wild Western American life. So Disney on basis of this research came up with a Wild West theme for the visitors. Which was not only having a architectural design of a small Western town but also had hotel and lodges names the Santa Fe and the Sequoia Lodge. Disney in order to give a superior service to the European crowds was paying a lot of attention to many other minor details. Particular care was given to the issue that Europeans are not attracted by the idea of waiting in long ques. So Disney, in order to minimize the frustration which the visitors faced when standing in queues; came up with entertainment ideas such as video scenes screening. Euro Disney was carefully planning this entire project and took specific care in hiring the employees as it had to carefully handle multiple languages prevalent in the European territory. The people hired were coming majorly from France; where as one-fourth of the employees were coming seventy five diverse nationalities. However, the knowledge and sufficient command over French language was made a compulsion. To further make the visitors comfortable, the customer relations were not only available in French but also in other four languages. The customers were also supported by signs of attractions and rides in English, French and Dutch. Competition But Euro Disney was not the only firm that was offering people this theme part environment. The competition came from Parc Asterix, Big Bang Schtroumpfs and Futuroscope. The advantage which all three parks had over Disney was the lower prices which they offered. At Parc Asterix, the park gave the visitors another advantage of bringing in their own food to the park and could easily access it by car or bus. However, Parc Asterix was not operating like Disney in every season of the year. Parc Asterix was open only during the months April and October. The Big Bang Schtroumpfs were not a major threat though but still attracted a major chunk of population that was coming to Disney. Whereas, Futuroscope was able to enjoy not only favorable audience rating s but also huge profits as it was build on basis of innovative technology through which it offered the visitors a unique theatrical and cinema experience. Challenges faced by Euro Disney Climatic conditions However, Euro Disney has major problems other than its competitors. For one, there was the climate of France was a major issue. The Disney rides were designed as per the climatic conditions of the sunny Californian and Floridian weather. And the long wet winters of France made the operations of the rides challenging for the Disney management. Then, to combat this weather, Disney did not provide its customers with adequate facilities and even the rain coats been given to the tourists visiting were not that effective against the water. Cultural imperialism Another mistake problem which Disney faced here was that as Disney had been successful in Japan even keeping its core American ideas enact. So Disney used the same ideology in France too and expected that the French would also accept the Disney ideology without any major changes to the original concept. However, the French were not so welcoming to the idea of American culture based Disney. The French presumed the Disney as an encroachment in to their values. The general sentiments were that the French language was facing a major threat at the hands of the English language. And the Euro Disney faced a lot of negative publicity and criticism from the French media for bringing this Americanized culture to their nation. (Beckwith 2000) Human Resource Management issues Another challenge which the Euro Disney faced was that of personnel management. The most important thing in Disney’s customer relations is the way with which the Disney staff i.e. the Cast members interact with the visitors. Disney however, had meticulous when it came to handling employees. The Disney’s employees had to strictly follow the employee handbook and had particular reference to some issues like the dress code and the appearance of the employees. Disney did not allowed its employees to wear any heavy make up or even wear any bright colored accessories or clothing items besides the uniform. The female staff was allowed to wear only clear colored nail polish and men were restricted to maintain neat short hair. This was accompanied by constantly maintaining a big smile on the faces when dealing with customer. All this was able to create slight unrest among the French employees who were both fond of their trendy appearances. Even the visitors didn’t like the Disney staff much because of the lack of association with them. Fewer visitors attracted Another very important issue was that the Disney administration had failed to realize was that the Disney was unable to attract sufficient number of customers. The visitor estimates was over done by the team and the assumption that the Europeans saw Disney as several day trip was proven wrong. As most of the Europeans were considering it as a one or two day short trip. This issue was aggravated by the higher prices that were charged by Disney at admission and also for the food and the accommodation. And even through the marketing strategies which Disney adopted; visitors were not coming. It was figured out that this was happening because the Disney ads were not focusing on what services Disney has to offer and failed to give the potential customers an insight to the features that were offered to them at Euro Disney. Unmet visitor expectations Further problems at the Euro Disney were that the European visitors were expecting some sort of price differentiation for off season or off peak hours visits. But any such packages were not available at Disney. Disney ignored the influence of tour operators and group visitors in generating business. And this contributed to further mishaps for Disney management. Another thing was that Euro Disney was not easily accessible by the visitors. Not only were the parking spaces too far away but also there was minimal facilities being provided to reach the theme park from the mass-transit systems. (Service Marketing Characterstics n.d.) French eating habits ignored Within the theme park, Disney didn’t allow the visitors to consume any wine or alcoholic beverages. This was a major clash with the French norms, as the French meals are never complete unless some wine is available. Similarly, another factor that Disney overlooked in France was that the French would not be interested in spending so much time on breakfast. However, the French unlike the Americans spend considerable time on breakfast and that facility was not available at Euro Disney restaurants. Disney had been planned for American behavior of having food while wandering around. The Europeans on the other hand would prefer to dine-in and eat. This resulted in a lot of long queues and chaos at meal times in Euro Disney. Poor customer relations Further, the service quality of staff and management at Euro Disney was not of same standard as that of the American parks. The visitors were frequently comparing the Euro Disney facilities with that of the American and Japanese ones. And found the Euro Disney of poorer quality at a higher price. Further, the staff at Euro Disney came from diverse background and they were unable to converse with the guests at ties because they were unsure of which language to speak to the visitors in. All these factors merged together made the Euro Disney operations a major challenge for the Disney entertainment group. Service Marketing at Euro Disney The services’ marketing involves three different kinds of promises. (Manfred Bruhn 2006) First, between the firm and the customers; where the promise is set. Here the promise made by Disney is to offer the customer an enthralling experience of adventure. The nest promise is between the employees and the management. The management has to do internal market to enable the employees to fulfill the promise. And the last promise is between the employees and the customers; by which the employees are able to deliver the promise set initially to the customers. Here by being supportive in nature and helping the visitors and handling their queries and complaints. At Euro Disney, the internal marketing was improved by giving the employees training and development. Euro Disney had a Disney University, which offered the employees a well structured training facility. Such as employees were told to smile at all times; which however was not working in sync with the French culture values. This had eventually led to many employees quit the workforce in initial months of the operations. On the external marketing front, i.e. where the management was attracting the visitors. The outlook of the advertising campaign was focusing on highlighting the theme park but did not show that what the visitors could be able to do at the park. The need here was that the management should focus more on changing its advertising and marketing campaign to be being more descriptive. And also, there is a need to bend some other rules such as that of alcohol at the Disney premises in order to attract more visitors. Furthermore, a negative about the external marketing of Euro Disney was that the promise of making visitors interact with Disney characters at the theme park was not fulfilled and the visitors assumed this to be a false promise on the management’s part. And lastly, some of the promotional deals shown on various marketing campaigns turned out to be false and deceiving; thus, further damaging Euro Disney’s image among the French. However, the aspect of services marketing that was most efficient was that between the customers and the visitors. (Manfred Bruhn 2006) The visitors all approved of the fact that the cleanliness standards in the park were far beyond their expectations. But there were certain set backs here as well, especially, when the staff would try to deceive that they had command over certain language. But on customer’s questioning failed to give a response in that particular language. And hence, the idea of the multi lingual team was not being so effective. And what more, the French drivers were not happy here because the bus drivers were not able to get sufficient parking area. Euro Disney’s SWOT analysis But all in all the Euro Disney was still having some strong points about its self. If we do a SWOT analysis of the Euro Disney, then we identify that it has the following strengths. The first being strong brands name that Disney carries. This has enabled Disney not only to pursue the venture in France but has also helped it raise capital from the general public and gain subsides from the government. Another strength of Euro Disney was that they management conducted not only a prior research to identify what the consumers in Europe would like to enjoy and see in a theme park. But also was able to later on make changes to the mistakes they initially made. Like as initially the employees were not allowed to wear loud make up but later on they were allowed to wear it. Also, initially, the restaurants in Euro Disney did not serve wine but this was allowed later on as it was realized that wine was a part of the authentic French cuisine. These changes however came as Euro Disney had strong leadership under the head of Phillippe Bourguinon. The biggest strength however for Euro Disney was that it had a sound financial support and that it why even though it incurred losses in initial years; it didn’t close down or get bankrupt. However the weaknesses which Euro Disney had on its part were that the business was catering to a lot of culturally different market than that of America and to tackle them and fulfill their needs was becoming a challenge. The Euro Disney’s employee work standards were not meeting the needs of the visitors who were interacting with them. Hence, this made the service at Euro Disney of an inferior quality than its other counterparts. Another weak point here was an improper analysis of the market demand of the theme parka and its restaurants and Euro Disney gave the customers an oversupply of entertainment stuff at an expensive price. However, there were still a lot of opportunities here which could be tapped. Euro Disney here by doing market research on the needs and trends of the European consumers was able to understand and develop a new learning system for them. They through the learning process enabled themselves to customize the rigid employee practices they had set. And by that they were able to retain their employees later on. Most importantly, they gave the theme park a local touch. This was able to counter against all the fingers raised at them for introducing the American pop culture in to the French culture. The media which was thriving on bringing a doom to the Euro Disney venture was unable to permanently distort the perceptions of the customers. However, the threats which Euro Disney had to encounter were many. The first came from the high prices they were charging and with the increasing value of Franc there was a constant risk that the prices at the theme park, hotels and the restaurants might have to be increased in the future which could have been a downside for the sales being generated. And furthermore, the threat came here from the frustration and dissatisfaction which the employees were facing. The threats also came from the smaller theme parks which were opening up in competition. These smaller theme parks were able to give the visitors not only cheaper rates. But unlike the Euro Disney they were more accessible from the mass transit system and were meeting the lifestyle requirements of the local French people. Also, an often heard complain at Euro Disney was that due to the longer distance between the rides, the tourists got exhausted really soon. This identified the need for a medium of transport within the theme park, in order to attract the visitors in larger numbers. Recommendations to adjust the marketing mix What Euro Disney should be doing was that they must begin to market themselves as being a more economical entertainment package especially for families and groups. The Euro Disney management must change its marketing style by inviting the tourists for more frequent visits by highlighting on the local French and European events and seasonal holidays. What Euro Disney has to focus on is that it has to make the visitors realize that they will be enjoying and experiencing a unique holiday; if they choose to come to Euro Disney rather than any other theme based Adventure Park. Bibliography Beckwith, Harry. The invisible touch: the four keys to modern marketing. 2000. Case Study of Euro Disney. http://stu.cofc.edu/~wecapps/disney.htm. "Digital Orbits." http://www.digital-orbits.com/portfolio/html/writing/business/Mktg357Presentationfull.htm. "Euro Disney." http://www.eurodisney.com/data/327.pdf. Gallouj, Faïz. Innovation in the service economy: the new wealth of nations. 2002. Hans Kasper, Piet van Helsdingen, Wouter de Vries. Services marketing management: an international perspective. 1999. Magna Pub. Co. Managers as mentors: building partnerships for learning. 2002. Manfred Bruhn, Dominck Georgi. Services marketing: managing the service value chain. 2006. Packman, Hollie Muir, and Fred L. Casmir. 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