20500356 entry-6

How could euro-Disney overcame its crisis?

In last class, we talked about the failure of Euro-Disney by case-study. Euro-disney adjusted their success model excessively to Europe, but because it didn’t work, they failed. Their financial position is still not good; even Saudi-Arabic prince fancied himself to pay their debt. However, it is still being operated. This year they would open 15th anniversary festival. What have made Euro-disney survived? We can know it by looking their marketing-innovations.

First, they discounted their admin fee over 20 percent, and also did hotel fee as one-third. In the beginning, their admin-fee-policy was simply same to one of US, but the reason of recession of Europe, that was too expensive to Europeans. In that meaning, their discounting was not just bargain-sale, but it was one of localization.

They performed the localization policy indeed. They opened marketing institute all over Europe. The name of themselves was changed first- from euro-disney to Disney land paris. I think it was their attempt to remove their view to Europe market as just the one whole-market without any characteristic, and then renew it to maximize the figure of paris – it seems to be attempt to both localization and distinguish.

They also renewed the relationship between employees. The executer had breakfast with employees at 2 times per week. The excessive restriction to them made the public opinion opposite to euro-disney, and they recognized it.
As a result, euro-disney, no, the Disney land paris has shown the clear improvement of output. The number of visiter rose above 10 million again, and the hotel-guesting rate also rose, and the cost for each visitor was reduced. Even though their deep-seated financial problem still remains, but their success is meaningful because of the fact that they overcame their failure and changed to sustainable company.

My opinion

Disneyland succeeded in japan because their cultural brand was exotic enough and it met the need of market. Disney tended to adjust it to Europe as it is, but paris already had its original brand and it broke to disney’s brand. In contrast, they were squeezed by the brand power of paris and fail to perform their attempt. This failed strategy prevented Disney from success, and they are still not able to succeed.

However, they need to solve their problems in order ‘not to bankrupt’. Not strategic problem but their managing problem. They solved it successfully; now they can survive on the market.

The failure and its recovery have taught me about S and W in SWOT. Maximizing S determines their gross and minimizing W reduces their risk to failure. When I got into the executer of a company, I need to determine which side I focus on either strategy or operating, for growth or safe.

references

http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=110&oid=015&aid=0000103274

http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=110&oid=015&aid=0000101859

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.

20501005 - Entry 6

Party Times: Marketing Through Events
Are foreign marketers missing the boat in China with trendy parties? Culture watchers say traditional values are still important

original article

My opinion

Today, I would like to talk about 'Localization' which we discussed about in last class. We did a research about the reason why Disney failed in Paris, and we found out some reasons.
Basically, it was about the culture. Disney failed to preposition the value and understand their culture. Like Disney case, this article tells us the importance of knowing culture in order to succeed in localization. Moreover, this article is about marketing through events such as parties.
I have seen that many luxury companies such as Prada, Luis Vuitton and Gucci hosted launching parties. In that parties, many influential and rich people are invited. These events can be the ways of marketing. In addition, this article talks about another fact, 'knowing culture'.
According to this article, learning from the past and taking traditional values into consideration when marketing a product is the first lesson. For example, communal and family values are much stronger among teenagers in China than in the West.
Another factor is decorum and it applies to all cultures with a Confucian element. In this way, I think Chinese culture is similar to Korean culture. To sum up, what this article tries to tell us is the important of knowing culture. Before we do marketing, we should know and understand how they(targets) think, live and act. So that we might succeed in localization.

20820014 - Entry 6

Low Price- Short term success.
Consumers will always ask for lower prices, but they don't always want them. Price is an indicator of value.

/ summary of article/
Cutting prices might seem strategic way to boost company`s profit but it may causes short term success and decrease long term growth. Because price isn't merely a reflection of product quality, it's an indicator of it as well.
If there are two TVs sold in electronics store, both have similar features and design characteristics but completely different price. Many people would choose lower price option, but some would buy more expensive TV. So, what would happen one or two years later? Obviously, there is some certain differences in quality. It would have to justify price is an indicator of value. If something is more expensive, it's usually for good reason.
Furthermore, high prices may to lower sales volume in the short term, but they need to expand their distribution networks. Due to expensive goods and service, you might lose some price sensitive customers. It can be odd to feel good about losing customers because of price, but if you're not, you may be backing yourself into a low-margin corner. You should admit that you are not Wal-Mart, very few companies can sustain lower price positioning.
Therefore, search and find a way to test a higher price point. Sometimes consumers pay bit more for something it makes them to feel better about that brand.

My opinion
In my thinking we should consider “is the benefit of my product to provide customers equal to its price? Or are customers willing to pay for my product?” Obviously, if usual cup of tea costs 6$, nobody wants to buy it. But if it is sold in premium restaurant with luxurious environment and excellent service as well as with fancy cup and spoon, probably some people willing to buy it.
Moreover, what about if i already sold my product in low price? Or i am in a competitive situation? What should i do? In this situation i will try to built or strengthen my competitive advantage.
Finally, i understood many beneficial things from this article, Pricing is always complicated. If i sell my product too low price, it might give expression like chinese fake poor quality product.
Reference:
http://www.businessweek.com/

20820007 Entry - 6

‘Today’s challenge is not to let our people go but let our people know’

This article was very challenging and the title very attractive for me because I thought that how can we let our people know. It is about new ‘Ga-ga T-shirt’ and web site where you can see many familiar and not familiar faces to you. Celebrity interviewer Aliza Davidivit who interviewed Canadian Prime minister Pierre Trudeau, Prime minister Benjamin Netanyahu, Prime minister Mayor Michael Bloomberg and other well know people is launching new website that gives opportunities to buy special T–shirts with Israel historic faces and for visitors to know about notorious heroes in Israel history as nation approach 60th birthday. Have you ever heard about these two people like Ben Gurion and Golda? For me I haven’t so I searched about these people to find out who they are. Ben Gurion is first prime minister of Israel who leaded Israel to victory in Arab Israel war and helped to build state instructions. So Davidovit purpose for creating this T-shirt and web blogs is to help young generations to get know and excite with the past. Therefore these T-Shirts are an honorable tribute to great leaders who contended to build the Jewish state. Some famous people like comedian Jackie Mason, CNN journalist Larry King and Bon Jovi keyboardist David Bryan are joining effort. Additionally one another goal for this project is to raise funds to help shattered families by terror. The site also offers blogs to honor Moshe Dayan, Ariel Sharon, Shimon Peres and Yitzhak Rabin and others and scheduled to launch today.

My opinion
Every young generation of every nation is the future of their country. Based on this specific point the main target for this business are teenagers and students in order to give Israel teens chance to know about their country, its leaders and make sure what they did to build Israel state. I think advertisement is very attractive because Davidivit using famous people to model and promote the product and offering clear message by encoding (“Who are Ga-ga for?’) to reach the target. As chapter 17 says that as consumers becoming more skeptical about commercial we should use right media and should offer clear messages about the product. You can visit this website from today http://www.israelturns60.org/ if you interested how it is looks like and if you want to buy it. It costs about $18.

Reference:
http://www.worldnetdaily.com/

20400442-Entry 6

Brown Starbucks!

Angel-in-Us, Tom N Toms, Coffee Beans, Java Express...These are all well known coffee shops which are successfully estalished as a culture in modern people's daliy lives. Best of all these coffee makers, without any doubts, is Starbucks. However, Starbucks has been criticised for their high price. Finally, they made a brave decision to give further satisfaction to their customers by changing the color of their brand logo.

Starbucts, as we learned, is selling not only coffees and muffins, but also planting American culture into Korea. As many other competitors came into the market giving other alternatives to Starbucks' customers, higher price became more stressful and burdensome.

Opinion

I am sure this one brave action of changing the color of Starbucks logo will bring consequences other than just ease the criticism. Starbucks currently is almost a fashion now in Korea. Anyone can easily assume that fashionable Korean will find a way to make themselves look more cool with new Starbucks logo.

It was a surprise for me to see a company with so strong brand power, such as a Starbucks to change their previous existing brand logo. The article says that Starbucks will provide a new blend of coffee in the cup with brown Starbucks logo. This newer blend will have smoother taste hoping to ease customers' criticism on high price.

Once again, it is always not enough to put more emphasize on brand power that eventually will lead the company to more profit.

Reference