The Not-So-Wonderful World of EuroDisney EuroDisney’s First Year Case Study
Disney’s management was quite surprised that EuroDisney’s first year was not successful and had performed poorly during its first year in operation. There were many factors that contributed to this. The hotels were overpriced so many families did not stay overnight as they do at the other Disney parks. The average expenditure per day for a family was an overprice $280.00 to enjoy the theme park and to order meals such as hamburgers and milkshakes. Overpricing does decrease the number of visitors and the amount of money that is spent. Coleman (1995) reports, “EuroDisney…has slashed prices both at the gate and within the theme park in an attempt to boost attendance and shed its image of being overpriced. The company said these efforts led to “a substantial increase” in attendance and hotel occupancy, and to a 17% rise in operating revenue…” (Cateora, P. and Graham, J., p. 614.) Another factor that contributed to the park’s unsuccessful year was that transatlantic airfare wars and currency movements led to visits to Orlando’s Disneyworld being less expensive than going to Paris. The weather in Florida was sunny and the beaches are nearby. The saw EuroDisney as another form of American imperialism, or an extension of the American Empire. “American Empire is a term relating to the political, economic, military and cultural influence of the United States,” explains Wikipedia (2008).
The factors that played into the unsuccessful first year could have been foreseen somewhat easily by EuroDisney and/or the parent company. The same goes for their being able to control them. Hostility among the French had risen even as the plans were being set as it was stated earlier, that they did not want American imperialism invading their country and culture. Cateora, P. and Graham, J., p. 614 reports, “Paris theater director Arianne Mnouchkin became famous for her description of EuroDisney as “a cultural Chernobyl.” In fall 1989, during a visit to Paris, French Columnist pelted Michael Eisner with eggs. The joke going around at the time was, “For EuroDisney to adapt properly to France, all seven of Snow White’s dwarfs should be named Grumpy…’” The French were upset during the early advertising because of the advertisement’s focus on the size and glitz instead of the different rides and attractions. (Cateora, P. and Graham, J., p.614.) As most of us know, advertising plays a very strong role in our world today. Nowadays it seems that the only way to avoid any form of advertising is to isolate oneself and live in a cave but not all advertising is negative and bad. It is found almost everywhere such as just by walking on the street, driving a car, or watching TV. Ference (2004) reports, “Every surface that could possibly have an ad slapped on it -- clothing, buses, taxis, myriad walls and billboards, even the snow you ski on -- now hawks something.” According to Wikipedia encyclopedia, “Advertising is the promotion of goods, services, companies and ideas, usually performed by an identified sponsor. Marketers see advertising as part of an overall promotional strategy. (“Advertising”, 2006). Companies are bombarding us with thousands of different ads with only one intention: to persuade us to buy their products. Every advertiser or company must do more than just make a product, give it an attractive price, and offer it to the consumer. They have to also communicate and promote it to their current and future
customers; they have to advertise it. Advertisers appeal to the lusts, desires, and wants of the target market or potential customer. Therefore, the ability to foresee that the advertising was getting a negative response was obvious and this could have been somewhat controlled by EuroDisney and/or the parent company Disney. Yes, advertising bombards us everywhere but it is not without control and regulation by the government, businesses, and citizens. This opens one of the major issues in advertising, “the question of law and ethics”. Advertising should be carefully controlled. Society needs to make sure that people are not taken in by misleading advertisements. There is a set of principles that all advertisers must follow (Roman & Mass, 2003, p.200-202): 1. Tell the truth, show the truth – The product should look exactly the same way as the consumers will purchase it. 2. Make the general impression truthful – “Advertising is judged not by what it says, but what the consumer thinks it says”. ( p.201) 3. Ban “weasels” and dangling comparisons – All sentences must be clear. 4. Substantiate product claims – Must provide evidence that the claim is true. 5. Back testimonials with research
Factors that could really not managers could not foresee included the approaching European recession, the Gulf War in 1991, and increased interest rates. External factors that affected business also included the devaluation of other currencies against the franc and competitions that drew the attention of European tourists. These competitions were the World’s
Fair in Seville and the 1992 Olympics, which was held in Barcelona. (Cateora, P. and Graham, J., p. 615.) It was apparent that the managers of EuroDisney and Disney separated themselves from their counterparts with many levels and departments. These include the government, ad agencies, banks, and other parties that were involved. Some Disney managers admitted that they were arrogant and that their attitudes were forceful and controlling. It was as if all would agree to do it the way they suggested, then everything would be just fine and everyone would be happy. (Cateora, P. and Graham, J., p. 614.) Ethnocentrism is the “belief in the superiority of one's own ethnic group,” as defined by The American Heritage Dictionary of the English Language. In this case, the managers of Disney and EuroDisney used their way of doing business, their cultural beliefs and ethics, and what they know and are used to in order to try and get another country to do the same. Cateora, P. and Graham, J. describes in more detail, “A barnstorming, kick-the-door-down attitude seemed to reign amongst the U.S. decision makers.” The authors referred to one former manager’s comment, “We were arrogant—it was like, ‘We’re building the Taj Mahal and people will come —on our terms.” Ethnocentrism is usually referred to as “tunnel vision”. This view says that one certain ethnic group’s beliefs and morals is the right one and is better than any other group. The French saw the American managers as bullies, arrogant, and workaholics. A search for the topic, “Business Culture vs. French” (n.d.) refers to Laura Hampton, the French Ministry of Education as she explains the views that the French have about American business and culture:
“The French have a love/hate relationship with the U.S. We are deeply admired for many things (entertainment industry, our political system, our optimism as a people) but they are also very critical of the role the U.S. has played in globalization which they see threatening their own identity, culture, and language…(Regarding management practices) the French are less direct about their expectations and you have to pay closer attention to the subtle cues given to you.” Ed, a representative for Internships International who connects Americans with French jobs, states: “French as a whole is attracted to culture (music, entertainment, etc) but the perception of American society is not attractive. Generally they think our society is governed by economic relationships as opposed to social ideas. In their eyes we are driven by profit, not family and enjoyment. However, they do admire our individualism.” Disregarding the French culture of being the worlds’ biggest wine consumers, Disney management still hung on to their “we know best” conviction. Male employees had to keep well groomed as the American managers wanted it this way. Their insensitivity to the French culture led to a very bad start even though they did relent in some areas such as allowing the female employees to wear brightly colored nail polish and allowing kennels for the guests’ pets. The French would never dream of leaving their pets when going on vacation. (Cateora,P. and Graham, J., p. 615.)
The role of ethnocentrism played the biggest part in the planning, launching, and start of EuroDisney. This was a very negative role and led to the failures that the park saw in the first year. Due to technology, globalization is the way companies are conducting business. Globalization is “to make global or worldwide in scope or application”, as defined by The American Heritage® Dictionary of the English Language (2000). It is a contentious, or controversial, process. A popular view of globalization is the integration of markets, nations/states, and markets in order to reach the globe faster and more efficiently. (Globalization Debates, 2000-2001). It is crucial that cross-cultural communication, cooperative decisionmaking, and collaborative problem-solving be implemented in multinational corporation management. Globalization leads to cultural homogeneity. Interaction and integration, global norms, and ideas or practices all become united. It is important that the management of a multinational corporation work together to overcome boundaries and differences and to be able to communicate, cooperate, and collaborate in order to effectively work together, communicate, make decisions, and solve problems as a single entity as globalization does simply that….brings the world together. As management, it is important to have knowledge of domestic activities and policies and to understand the various cultures and operations of the sales force outside of the United States. This can only be accomplished by using human resource (staff) from around the world as they are familiar with the countries, company, and cultures in which they live and are operating from. Proper training, understanding of a various cultures, how business is handled in different parts of the world, varying company policies and operations (although the company is one entity, policies and routines vary slightly, if not extremely, in order to accommodate the
differences), language and cultural differences, various sales methods, training, customer service, account management, follow-up procedures, key accounts management, etc. can only be handled by working with the various sales teams and using their expertise. Management
must make use of their number one asset which is human resource in order to apply the best approaches and methods and focus on both the macro and micro economics of the global business. The management from the headquarters branch (in this case, management from the United States) cannot do this alone but will achieve success if he learns from those in the various parts of the world and learns from those who are experts in the various locations and cultures in which they live and work. They will know the best approaches to communication, sales, customer service, find solutions, developing innovative tactics, etc. The best way in managing a diverse sales team is to incorporate the sales management from each area and empowering them and learning from them. The problem was that in the beginning, cross-cultural marketing skills were not employed. For instance, Disney executives were told that the French did not eat breakfast so that meal was downsized but, surprisingly, the French do eat breakfast. 2,500 breakfasts were served in a restaurant that only held 350 people. They also discovered that the French at more than croissants and coffee. (Cateora,P. and Graham, J., p. 615.) Cross-cultural marketing would have let the managers know that the Europeans were more energetic and covered more of the EuroDisney theme park and rides than those in the western hemisphere. Therefore, instead of the typical three day visits at the Disney American theme park, the stays were usually only two days. The European vacation customs were not
examined so the theme park did not see profits and success as hoped. Americans take short breaks but they take them more often. However, Europeans take one month for holiday. The American managers thought that the Europeans would change their one-month tradition and adopt the Americans’ shorter yet more frequent time off but that did not happen. The French scheduled remain the same and they would close the office and factory during the entire month of August. These factors should have been considered. Cross-cultural marketing would have been extremely useful but the parent company’s executives were being quite ethnocentric and it cost a great price. (Cateora,P. and Graham, J., p. 615.) Needless to say, their cross-cultural skills were unsatisfactory, in fact, nonexistent. Had they had any skills of this sort, the beginning would have been a success and not such a failed start. After many advertisements about how large the park was (which proved to be quite unsuccessful (as the Europeans were not impressed by the size but the various attractions), managers changed their tactic. The authors explained how they counteracted their own mistake: “…ads were changed to add Zorro, a French favorite, Mary Poppins, and Aladdin, star of the huge money-making movie success. A print ad campaign at the time featured Aladdin, Cinderella’s castle, and a little girl being invited to enjoy a ‘magic vacation’ at the kingdom where all dreams come true. Six new attractions were added in 1994…All in hopes of positioning EuroDisney as the No. 1 European destination of short duration, one to three days.”
The park in Tokyo had an extremely different beginning as it was a successful from the moment that its doors were open. The reason for the success was due to the Japanese love for the Disney characters. The Disney experience was already ingrained in the minds of the Japanese and the park is believed to be the greatest cultural experience for that country. The authors Cateora and Graham quote Masako Notoji, a professor of the University of Tokyo, as he wrote, “The opening of Tokyo Disneyland was, in retrospect, the greatest cultural event in Japan during the 80’s.” Notoji also reminds us of another factor that led to the huge success which is the fact that schools take children on field trips to the park and so the Disney experience is ingrained into the lives at a very early start. Therefore, there was no need to make cultural changes and focus on the differences in the two countries (the United States and Japan) as those differences were what made the park so successful in Japan. If Disney places a theme park in Spain, it is believed that the cultural differences will play a huge role in its success. Disney would have to learn the customs and culture of Spain and incorporate them into the development, implementation, and operation of a new theme park. The diehard work habits of the Americans is opposite of Spain’s focus on life and the family first. In the United States, people focus more on themselves and individuality is the focus, not the group. Tom Strong in the Spanish Cultural Commentator gives his views of the differences between Spain and the U.S.A.:
“At the risk of patronizing, to me Spain harkens back to a more wholesome time, like, say, the Eisenhower era in the USA... That means the mother still knows how to clean and cook... It also means the father does not know how to clean and cook... From all the ‘times have changed’ comments I got, it was
clear that times hadn’t changed that much....The family is more important here than the individual. In the USA, a newborn baby gets a social security number. In Spain, the newborn gets added to the Libro de Familia. Countless TV programs feature children singing flamenco or in game shows (with numerous pans to the proud parents). Either because of the importance of the family, or because of higher unemployment...it’s not at all uncommon for the children to stay at home until (and beyond) age 30. More importantly, it’s not at all frowned upon. In the USA, of course, you’d be tagged with the word “loser”. Children in Spain are not thinking “I can’t take my parents another minute. I gotta get outta here”. Parent/child friction isn’t there...Americans are obsessed and stressed about work—individual achievement there is the measure of selfworth. During their free time, they take self-improvement courses: try to learn a language, psychoanalyze themselves, learn how to cook. The Spanish take it easy. When the mother of the house has finally finished cleaning, she goes with her friends to take a walk to the other end of town and back; it’s not for exercise, it’s for no real reason!”
Changes in management led to the long term success of EuroDisney. Separate marketing offices were opened in various cities including London, Milan, Brussels, Amsterdam, and Madrid. The habits of tourists for each area were examined and implemented. Admission tickets and hotel rates were decreased so that they could be more affordable. Due to the slower traffic during the winter season, special promotions were offered to increase visitors. Marketing changes also included advertising the park as an “authentic” Disney day out. This gives the impression that
they will experience a bit of something “America”. Even the logo was changed as the word “Euro” was shrunken” in the name EuroDisney and the word “land” was added. Then later, the word “Euro” was completed removed and the name changed to Disneyland Paris. (Cateora,P. and Graham, J., p. 616.)
In light of the near-bankruptcy in 2005, proposed plans to strengthen Disney's appeal to the French Market are in the works. The new CEO is working with the government to allow the Charles de Gaulle airport to let lower-cost airlines in. The new theme park Walt Disney Studios, which was added near Disneyland Paris now has more visitors as a one-day pass allows guests to enjoy both parks on one ticket. This is similar to the offers in the U.S. New rides and attractions are going to be added. The government provided $500 million to help the company from having to file bankruptcy. (Cateora,P. and Graham, J., p. 616.)
Disney, I believe, should think about adding a theme park in these areas: the midwestern part of the United States, Mexico, and/or Canada. I believe out of these three locations, Mexico should be the top priority. Many people go to Mexico because it is cheap, has history and culture, and beautiful beaches. Mexico is a country with much diversity as it has mountains, jungles, and beaches. The old meets new exists in Mexico as new resorts crop up next to farmers and families still on scooters and bicycles. Many Canadians, Americans, and Europeans travel to this country as it is very inexpensive. Many airlines, tour companies, and businesses offer trips to Mexico. It is one of the most popular destinations in the world. Mexico divides its tourism seasons as they call certain months by the names of the countries who usually vacation. The Europeans are most
likely to head there during August, the people from United States usually head down during spring break, and many companies offer trips to Mexico as incentives, bonuses, and meetings/conferences. Visitors from Central and South America come to Mexico also.
There is an influx of expatriates moving to Mexico as many want to go there to escape the rat race of the North American life. Many Mexicans move to the United States as well because they want to pursue “The American Dream”. There would not have to be much change in the Disney marketing and operation as almost everything American (of the United States, in particular) is grasped and accepted. The United States is viewed to be the land of opportunity as the country’s wealth and job opportunities give hope to many Mexicans who come to seek out their fortune and future. English and Spanish are the top two languages in the world and many Mexicans know enough English and many are even fluent. Many Americans speak Spanish. Finally, the dollar is highly accepted and is often more accepted than the peso in that country.
Having stated all of this, it is still very important to that the tunnel vision of ethnocentrism be avoided. Although there are advantages and reasons supporting why Disney can do with well with its current American operation style, Mexico’s culture, beliefs, and morals still vary. Like other countries, Mexico is not considered to be a country of “workaholics” as the United States is stereotyped to be. The family, or group, is still top priority versus the American’s view of individual accomplishment being the top goal. The country has much available natural resources, untouched lands and jungles, and does not have the kind of money that the United States has. Their focus on rituals,
customs, religion, etc. still set them apart from the U.S. and the country is still behind American ways. It is still like “going back in time” and things have not changed and advanced especially when compared to the United States.
It is important to learn from the mistakes that were made when EuroDisney was started. Having offices and managers from the country will be detrimental. Incorporating Mexico’s culture and the examining the tourists’ activities, practices, and trends will be crucial to the making or breaking of a Disney in Mexico.
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