Service Marketing Case Study: Euro Disney

EURO DISNEY

BACKGROUND • Company Name: Walt Disney • Business Line: Amusement/Theme Parks • Opening: In 1955, 80-acre theme park in California, US • Theme Parks: US (California & Florida), Tokyo and France. • Famous Cartoon Figures: Mickey Mouse, goofy etc. • Focus : Euro Disney (Disney’s Largest project in 90’s) • Problem Area: Euro Disney “Service

Tangibility Salt Soft Drinks

Spectrum

Detergents Automobile Cosmetics Fast Food Intangible Dominant Tangible Dominant Advertising Entertainme Airline nt – Theme s Management Park

Consulting Insurance

Theme Parks in Europe

Euro Disney Project • • • • •

Investments: 21 billion Francs. Site Size: 1/5th of the city of Paris. Projected : 12000 Employees. Forecast: 11 million visitors in first year. Hotels: Complete ownership of total of 6 hotels. • Occupancy: 70% annually for hotels. • Other Features: 18 hole championship Golf Course. • Design: Same as other Disney parks but

Financial Arrangement

Real Risks Taken…... • Real Estate Development: Own and Operate hotels and resorts nearby • Phase II Development: shopping malls , apartments etc nearby • Sell Phase II: When real Estate prices high • Expectation: Soaring Profits!!!! • Negligence: Investment made when European economy was in recession

Criticism of Euro Disney

Catering Multinational Audience

Operations: Reality Vs Forecast

Management & Training

Continued……………. • Disney Trademark: Smile a lot • Interpretation of Smile in French Culture • Total customer satisfaction: Disney Vs Employees thinking

Marketing Concerns

Marketing Counter measures

Euro Disney’s Problems

Euro Disney’s Problems Cont’d

Services Marketing Triangle

The Services Marketing Triangle Company (Management) Internal Marketing

External Marketing

“enabling the promise”

“setting the promise”

Employees

Customers Interactive Marketing “delivering the promise” 18

Internal Marketing Company (Management)

Employees

External Marketing Company (Management)

Customers

Interactive Marketing Employees

Customers

GAP MODEL

PROVIDER GAP 1: Not knowing what customers expect

• Lack of market segmentation: All Europeans • Focus on transactions than relationships: Volumes

PROVIDER GAP 2: Not selecting the right service designs & standards

PROVIDER GAP 3: Not delivering the Service Standards

Customer not fulfilling roles

•All language to be spoken: Expected by customers. •Barcelona resident Expectations

PROVIDER GAP 4: Not matching performance to promises

Ineffective mgmt. of customer expectations

• Lack of Adequate Education to customers • E.g. : Toilet signboards were low

SWOT Analysis Euro Disney

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Strengths & Weaknesses • Strengths – Strong reputation and brand name – Ability to realize mistakes and to change – Financially sound – Phillippe Bourguignon

• Weaknesses – Cultural imperialism

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Opportunities & Threats • Opportunities

• Threats

– Learn more about – local culture & – customs – Integrate local – culture into theme park – Customize employee standards to the reflect local culture

High prices Increasing value of the Franc Employee dissatisfaction

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Euro Disney Update( 1993-97)

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Outlook

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What’s New At Euro Disney • New Entertainment programs and special festivals. • Opening of the Newport Bay Club. • Commercial real estate development of land around Euro-Disney. • A new suburban rail station.

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Five Year Financial Review 1995

1994

1993

$838

$772

$735

 Net Income (loss) 38 (292) (869) (in millions)

40

40



1997

1996

 Sales (in millions) $709 $954

 Avg # of employees 10,941 12,177

10,229 10,307 9,356

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Euro Disney Financial Update

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Financial Update Continued

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Thank You

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