20501034 Entry 6

Why did Euro Disney fail?
(Further analysis on what we dealed with in the class)

1) The reason why Disney pick the Europe

Tokyo Disneyland that opened the business in 1983 was the first big oversea project for Disney. Tokyo Disneyland became huge success and then naturally Disney pointed Europe for the next target. When Disney planned to launch Disney, it is regarded as jack pot as Tokyo Disney. The reason why people thought that Europe Disney would be so successful was that the brand, Disney was well known in whole European countries and European was spending quiet big percentage of their income for leisure. In addition to this, Europe didn’t have any amusement park that is as big as what Euro Disney would be.

2) Euro Disney’s Pre-marketing plan

Before they opened the Disney, they wanted to fulfill those purpose
-Inform that there will be new theme park in Europe
-Position Euro Disney as attractive company to work for
-Attract as many people as possible

To achieve those aim, Disney set several strategies that is mentioned above.

-To start the pre-marketing a year in advance to open the park
-To emphasize of Disney’s opening ceremony as a huge issue in Europe
-To broadcast the program that is called “Disney Club” for 30 minutes in 13 TV channels
-To cooperate with sponsors(Kodak, Nestle, CocaCola, Phillips, Esso, France Telecome, IBM, Renault, etc) and keep the good relationship with mass media.
-To do the “Target Market Castle Tour” that is 40 Disney staffs with 6 tents take a trip in 16 cities in German, Austria, Switzerland, Belgium, UK and Italy and set the Disney miniature castles and promote it

3) The result

For the first year, 11 million people visited Disney which is way too many over the expectation. Even though lots of people came, they lost $ 320 million in 1994 and the number of visitors decreased 10% in comparison with 1993.

4) The mistakes Disney made

As professor said, the biggest mistakes Disney made was the fact that they tried to not only own and manage Euro Disneyland but also develop the huge land that is near Euro Disneyland. The reason why Disney is so obsessed with Euro Disneyland was that Disney barely made the money out of Tokyo because majority of Tokyo Disney was owned by Japanese investors. Therefore, Disney wanted to have substantial part of money that is generated by Euro Disney.

Another reason was recession in Europe. Europeans who used to spend big money for leisure are becoming stingy. Furthermore, Gulf war influenced on Tourism and Real estate in Europe.

The third reason is Disney set the marketing plan based on the idea that whole Europe is homogeneous. As a matter of fact, every European countries has their own culture code and Disney obviously ignored it.

The fourth reason is Asterix park in Paris. Asterix is French traditional character and the especially the French love it. I have no idea it is made to be against American capitalism. Anyway, Euro Disney got hurt a lot by Asterix park.

The last reason was miscalculation. Disney’s optimal price for entrance fee was proved way too expensive concerning European purchasing power. Disney miscalculated the money European would spend per visit and the number of day European would spend in Disneyland.

5) My Suggestion

Micro marketing: As Mark Pinn who is former Hilary’s campaign strategist and successful author of Micro Trend said the market could be divided as many demographics that have different tastes. Of course, Europe could be divided as many big and small consumer group. Disney should approach the European market concerning they have lots of different aspects and characteristics.

In addition to this, Disney needs to carefully calculate the estimation of optimal price and the number of visitors according to the season. Disney also should take a consideration about the risk and share the risk investing with others. It is good to have majority of profit by themselves but they have to consider the many external environment which sabotage their business.