Global Marketing Management
Professor: Prof. Nicholas
Case study: The Not-So-Wonderful World of EuroDisney
Euro Disney SCA formally launched its theme park to Europeans in April 1992 near river Marne, 20 miles East of Paris. It was the biggest and most lavish theme park that Walt Disney had built bigger than any of its Disney parks around the world. The location was chosen over 200 potential sites in Europe from Portugal through Spain, France, Italy and Greece. Disney Management expected Europeans to receive the theme park in the same behavior that their Japanese counterparts for Disneyland-Tokyo did for Mickey Mouse and other famous Disney characters but, in 1992, amount of visitors reached only 9.2 million and spent 12% less on purchases than the estimated $33 per head, and the projected attracting 11 million visitors and operating of S100 million during the first year of operation became a loss of $900 million by summer of 1994 since opening. Development Crisis looms and rescue was put on October 1994. The park's name was officially changed from Euro Disney to "Disneyland Paris", in order to more closely link the park with the romantic city of Paris, and to disassociate itself with the poor reputation that has become linked with the phrase "Euro Disney". The tide turnaround in 1996, Disneyland Paris became the most visited tourist attraction in France with 11.7 million (increase 9% from the previous year), being one of Europe's leading tourist destinations. Later entering Hong Kong, although, Disney was determined not to make the same cultural and management mistakes in China that had plagued Disneyland Paris, they don’t predict the coming hurdle in China that is limited knowledge of Disney characters and lore. However, plans to increase the capacity in China will help to promote awareness of the Disney name among the mainland Chinese population and cement ties with Beijing.
The problem Euro Disney faced was that they overestimated the magic that was to be on performance when expanding its parks into other countries outside of American like Japan. During 1992-1994, Euro Disney had lost more than $900 million since opening.
On my understanding as a marketing student, every company must analyze the marketing mix (4Ps including Product, Price, Promotion and Place) and SWOT while planning their market entry strategy in new regions.
Since the American management was successful while launching the brand previously, in the USA and Japan, they thought it best to use the same formula in Europe. They were met with surprise during the scheme of things. The French market was not welcoming to their American ways. The reasons are most likely to be its lack in understanding of its customers in different regions. Walt Disney did not bother to investigate in detail the peculiarities of the European entertainment market and invest time or money in truly understanding its customer base. The management failed to study the European culture and behavior, to know the vacation patterns, such as long August vacations and reluctance to come for longer visits, relative cost of staying in a Paris hotel as opposed to their pricing, and European meal habits for example, wine drinking among French with meals, preference for redder than red nail polish among women), and also to foresee external threats such assigns of European recession, effect of the Gulf War on vacation behavior, high interest rates and the devaluation of other currencies against the franc. Additionally, they were too confident of their success and thus did not protect themselves against financial loss since they invested most of the money on their own. A great drawback was the arrogant approach by American managers who were determined to have things their way without weighing the circumstances. Ethnocentrism caused them to think that a little push will force European...