Disney

6. Case Study - (Euro Disney) Disneyland Paris:

Importance of Researching the Customer

Disney assumed that its reputation and success would transfer to Europe.

The case highlights that the organisation did not take into account customer

differences or the marketing environment into which Disney was moving.

Amidst high expectations, Euro Disney opened just outside Paris in April

1992. Success seemed guaranteed. After all, the Disneyland Parks in Florida,

California, and most recently in Japan, were all spectacular successes. But

somehow all the rosy expectations became a delusion. The opening results

cast even the future survival of Euro Disney in doubt. How could what

seemed so right be so wrong? What mistakes were made? And what lessons

can be learned?

Optimism

Perhaps a few early omens should have raised some cautions. Between

1987 and 1991, three, 150 million dollar amusement parks had opened in

France with great fanfare. All had fallen flat, and by 1991, two were in

bankruptcy.

Visit London Module 2 - Researching Customer Insights

September 2005 16

By now, the Walt Disney Company was finalising its plans to open Europe's

first Disneyland early in 1992. Company executives initially predicted that 11

million Europeans would visit the attraction in the first year alone. After all,

Europeans accounted for 2.7 million visits to the U.S. Disney parks and spent

$1.6 billion on Disney merchandise. Surely a park closer to home would draw

many thousands more?

As Disney executives thought more about it, the forecast of 11 million seemed

most conservative. Adding fuel to the optimism was the fact that Europeans

typically have more vacation time than do U.S. workers. For example, fiveweek

vacations are commonplace for French and German employees,

compared with just two to three weeks for U.S. workers.

The failure of the three earlier French parks seemed to be irrelevant to

Disney. Robert Fitzpatrick, Euro Disneyland's chairman, stated, "We are

spending 22 billion French francs before we open the door, while the other

places spent 700 million. This means we can pay infinitely more attention to

detail - to costumes, hotels, shops, trash baskets, etc. - to create a fantastic

place."

Nonetheless, a few early indicators suggested that not everyone was happy

with the coming of Disney. Leftist demonstrators at Euro Disney's stock

offering greeted company executive with eggs, ketchup and 'Mickey Go

Home' signs. Disney had foreseen that it might encounter cultural problems.

Results

As the first 'year-end' was winding down, it became clear that revenue

projections were, unbelievably, not being met. But the opening turned out to

be in the middle of a severe recession in Europe. European visitors, perhaps

as a consequence, were far more frugal than their American counterparts.

Many packed their own lunches and shunned the Disney hotels.

Disney executives soon realised they had made major miscalculations.

Whereas visitors to Florida's Disney World often stayed more than 4 days,

Euro Disney - with one theme park compared to Florida's three - was proving

to be a 2-day experience at best.

Other operational errors and miscalculations, most of these cultural, hurt the

enterprise. A policy of serving no alcohol in the park caused consternation in

a country where wine is customary for lunch and dinner. (This policy has

since been reversed.)

Disney thought Monday would be a light day and Friday a heavy one and

allocated staff accordingly, but the reverse was true. It found significant peaks

and