Posted: September 13th, 2017

The Not-So-Wonderi‘ul World of

The Not-So-Wonderi‘ul World of

EuroDisney -Thmgs Are Better Now at
Disneyland Resort Paris
R, and Disney had projected that the new
th k ld tt tll ’11’ “t d t
In April 1992, EuroDisney SCA opened its doors to European visi- eme par. “iou a Iiac im Ion ‘.1181 Ors an

genera 6 Over
t L . . . . $100 million in operating earnings during the first year of opera-
ors. ocated by the river Marne some 20 miles east of Paris, it was

tion. By summer 1994, EuroDisney had lost more than $900 mil-
deslgned to be the blggest and most lavlsh theme park that Walt lion since 0 enin Attendance reached

onl 9 2 million in 1992
Disney Compaily (Disriey) had bililt to datefibigger than Disrieih and visitorspspentg12 percent less on

purchaislesithan the estimated
land in Anaheim, California; Disneyworld in Orlando, Florida; $33 per head
and Tokyo Dlsrieyland In Japan’ , . . If tourists were not flocking to taste the thrills of the new Euro-

Much to Disney managements surprise, Europeans failed to D.

isney, where were they going for their summer vacations in 1992?
go goofy over Mickey, unlike their Japanese counterparts. Be- Ironicall h f b. . f
y enoug , an un oreseen com ination o transatlantic air
tween 1990 and early 1992, some 14 million people had visited f d 1 d. . D. Id
T D. 1 dj .th thr _ rt b . t . .t A f _ are wars an currency movements resu te in a trip to isneywor
Okyo lsney a,n W1 , 66 qua ers emg repea V181 Or,S’ am in Orlando being cheaper than a trip to Paris

with guaranteed good
ily of four staying overnight at a nearby hotel would easily spend Weather and beautiful Florida beaches

Within easy reach.
$600 on a visit to the park. In contrast, at EuroDisney, families were E D. k . f . d. b
uro isney management too steps to recti y imme iate pro
reluctant to spend the $280 a day needed to enjoy the attractions lems in 1992 b Cuttin rates at two

hotels u to 25 ercent intm_
of the park, including les hamburgers and les milkshakes. Staying d . y g p p
ucing some cheaper meals at restaurants, and launching a Paris
overnight was out of the question for many because hotel rooms
ad blitz that proclaimed California 1S only 20 miles from Paris.
were so high priced. For example, prices ranged from $110 to $380
a night at the Newport Bay Club, the largest of EuroDisney s SIX An Am eri can Icon one Ofthe most

Worrying aspects of
new hotels and one of the biggest in Europe. In comparison, a room E
uroDisney s first year was that French visitors stayed away, they
in a top hotel in Paris cost between $340 and $380 a night.

had been expected to make up 50 percent of the attendance fig-

Financial losses became so massive at EuroDisney that the

ures. A park services consulting firm framed the problem in these
president had to structure a rescue package to put EuroDisney Words: “The French See EuroDisney as

American imperia1iSm_
back on firm financial ground. Many French bankers questioned

plastics at 1tS worst. The well-known, sentimental Japanese attach-
the lmtlal financmg’ but the Dlsney response was that that Vlews ment to Disne characters contrasted

starkl with the unexpected
reflected the cautious, Old World thinking of Europeans who did . y . y

and widespread French scorn for American fairy-tale characters.
not linderstarid US’.-Style free market financmg After. some ac“- French culture has its own lovable

cartoon characters such as Aste-
monious dealings with French banks, a two-year financial plan was

rix, the helmeted, pint-sized Gallic warrior, who has a theme park
negotiated. Disney management rapidly revised its marketing plan located near EuroDisney.
and introduced strategic and tactical changes in the hope of “doing Hostility among the French people

to the Wh 01 6 “Disney idea”
It fight thls tune’ had surfaced early in the planning of the new project. Paris theater
director Ariane Mnouchkine became famous for her description of
A Real Estate Dream Come True T116 Paris lo- EuroDisney as “a cultural Chernobyl.” In fall 1989, during a

visit
cation was chosen over 200 other potential SitCS stretching from to Paris, French Communists pelted

Michael Eisner with eggs, The
Portugal through Spain, Fl‘ 31106, Italy, and lf1to GI’€€C€. Spain joke going around at the time was, “For

EuroDisney to adapt prop-
thought it had the strongest bid based on its yearlong, temperate, erly to France, all seven of Snow

White’s dwarfs should be named
and sunny Mediterranean climate, but insufficient acreage of land Grumpy (Grincheux)?
was available for development around Barcelona. Early advertising by EuroDisney seemed to aggravate

local

In the end the French governments generous incentives, French sentiment by emphasizing glitz and size

rather than
together with impressive data on regional demographics, swayed the variety of rides and attractions.

Committed to maintaining
Disney management to choose the Paris location. It was calculated Disney’s reputation for quality in

everything, more detail was
that some 310 million people in Europe live within two hours’ air built into EuroDisney. For example, the

centerpiece castle in the
travel ofEuroDisney, and 17 million could reach the park within two Magic Kingdom had to be bigger and

fancier than in the other
hours by car-better demographics than at any other Disney site. parks. Expensive trams were built

along a lake to take guests from
Pessimistic talk about the dismal winter weather of northern France the hotels to the park, but Visitors

preferred walking, Total park
was countered with references to the success of Tokyo Disneyland construction costs were estimated

at FFr 14 billion ($2.37 billion)
Whcrc rcsolutc Visitors bravc cold winds and snow to enjoy their in 1989 but rose by $340 million to FFr

16 billion as a result of all
piece of Americana. Furthermore, it was argued, Paris is Europe’s these add-ons. Hotel construction

costs alone rose from an esti-
most-popular city destination among tourists of all nationalities. mated FFr 3,4 billion to FFr 57 billion,

The Official name has been changed from “EuroDisney” to “Disneyland Resort Paris.”

CASE 2?1 The Not-So-Wonderful World of
BONJOUR, MICKEY!
In April 1992, EuroDisney SCA opened its doors to European visitors. Located by the river Marne some 20

miles east of Paris, it was designed to be the biggest and most lavish theme park that Walt Disney

Company (Disney) had built to date—bigger than Disneyland in Anaheim, California; Disneyworld in

Orlando, Florida; and Tokyo Disneyland in Japan. Much to Disney management’s surprise, Europeans

failed to “go goofy” over Mickey, unlike their Japanese counterparts. Between 1990 and early 1992,

some 14 million people had visited Tokyo Disneyland, with three-quarters being repeat visitors. A family

of four staying overnight at a nearby hotel would easily spend $600 on a visit to the park. In contrast,

at EuroDisney, families were reluctant to spend the $280 a day needed to enjoy the attractions of the

park, including les hamburgers and les milkshakes. Staying overnight was out of the question for many

because hotel rooms were so high priced. For example, prices ranged from $110 to $380 a night at the

Newport Bay Club, the largest of EuroDisney’s six new hotels and one of the biggest in Europe. In

comparison, a room in a top hotel in Paris cost between $340 and $380 a night. Financial losses became

so massive at EuroDisney that the president had to structure a rescue package to put EuroDisney back

on ?rm ?nancial ground. Many French bankers questioned the initial ?nancing, but the Disney response

was that their views re?ected the cautious, Old World thinking of Europeans who did not understand

U.S.-style free market ?nancing. After some acrimonious dealings with French banks, a two-year ?nancial

plan was negotiated. Disney management rapidly revised its marketing plan and introduced strategic

and tactical changes in the hope of “doing it right” this time.

EuroDisney*—Things Are Better Now at Disneyland Resort Paris
Spills and Thrills
Disney had projected that the new theme park would attract 11 million visitors and generate over $100

million in operating earnings during the ?rst year of operation. By summer 1994, EuroDisney had lost

more than $900 million since opening. Attendance reached only 9.2 million in 1992, and visitors spent 12

percent less on purchases than the estimated $33 per head. If tourists were not ?ocking to taste the

thrills of the new EuroDisney, where were they going for their summer vacations in 1992? Ironically

enough, an unforeseen combination of transatlantic airfare wars and currency movements resulted in a

trip to Disneyworld in Orlando being cheaper than a trip to Paris, with guaranteed good weather and

beautiful Florida beaches within easy reach. EuroDisney management took steps to rectify immediate

problems in 1992 by cutting rates at two hotels up to 25 percent, introducing some cheaper meals at

restaurants, and launching a Paris ad blitz that proclaimed “California is only 20 miles from Paris.”

A Real Estate Dream Come True

The Paris location was chosen over 200 other potential sites stretching from Portugal through Spain,

France, Italy, and into Greece. Spain thought it had the strongest bid based on its yearlong, temperate,

and sunny Mediterranean climate, but insuf?cient acreage of land was available for development around

Barcelona. In the end, the French government’s generous incentives, together with impressive data on

regional demographics, swayed Disney management to choose the Paris location. It was calculated that

some 310 million people in Europe live within two hours’ air travel of EuroDisney, and 17 million could

reach the park within two hours by car—better demographics than at any other Disney site. Pessimistic

talk about the dismal winter weather of northern France was countered with references to the success

of Tokyo Disneyland, where resolute visitors brave cold winds and snow to enjoy their piece of

Americana. Furthermore, it was argued, Paris is Europe’s most-popular city destination among tourists of

all nationalities.

An American Icon One of the most worrying aspects of EuroDisney’s ?rst year was that French visitors

stayed away; they had been expected to make up 50 percent of the attendance ?gures. A park services

consulting ?rm framed the problem in these words: “The French see EuroDisney as American

imperialism— plastics at its worst.” The well-known, sentimental Japanese attachment to Disney

characters contrasted starkly with the unexpected and widespread French scorn for American fairy-tale

characters. French culture has its own lovable cartoon characters such as Astérix, the helmeted, pint-

sized Gallic warrior, who has a theme park located near EuroDisney. Hostility among the French people

to the whole “Disney idea” had surfaced early in the planning of the new project. Paris theater director

Ariane Mnouchkine became famous for her description of EuroDisney as “a cultural Chernobyl.” In fall

1989, during a visit to Paris, French Communists 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 (Grincheux).” Early advertising by EuroDisney seemed to aggravate local French

sentiment by emphasizing glitz and size rather than the variety of rides and attractions. Committed to

maintaining Disney’s reputation for quality in everything, more detail was built into EuroDisney. For

example, the centerpiece castle in the Magic Kingdom had to be bigger and fancier than in the other

parks. Expensive trams were built along a lake to take guests from the hotels to the park, but visitors

preferred walking. Total park construction costs were estimated at FFr 14 billion ($2.37 billion) in 1989

but rose by $340 million to FFr 16 billion as a result of all these add-ons. Hotel construction costs alone

rose from an estimated FFr 3.4 billion to FFr 5.7 billion.

*The Of?cial name has been changed from “EuroDisney” to “Disneyland Resort Paris.”

Cases 2

The Cultural Environment of Global Marketing in a 350-seat restaurant [at some of the hotels]. The lines

were horrendous. And they didn’t just want croissants and coffee, they wanted bacon and eggs.” In

contrast to Disney’s American parks, where visitors typically stay at least three days, EuroDisney is at

most a two-day visit. Energetic visitors need even less time. One analyst claimed to have “done” every

EuroDisney ride in just ?ve hours. Typically many guests arrive early in the morning, rush to the park,

come back to their hotel late at night, and then check out the next morning before heading back to the

park. Vacation customs of Europeans were not taken into consideration. Disney executives had

optimistically expected that the arrival of their new theme park would cause French parents to take

their children out of school in mid-session for a short break. It did not happen unless a public holiday

occurred over a weekend. Similarly, Disney expected that the American-style short but more frequent

family trips would displace the European tradition of a one-month family vacation, usually taken in

August. However, French of?ce and factory schedules remained the same, with their emphasis on an

August shutdown. In promoting the new park to visitors, Disney did not stress the entertainment value

of a visit to the new theme park; the emphasis was on the size of the park, which “ruined the magic.” To

counter this, ads were changed to feature Zorro, a French favorite, Mary Poppins, and Aladdin, star of

the huge moneymaking movie success. A print ad campaign at that 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, including the Temple of Peril, Storybook Land, and the

Nautilus attraction. Donald Duck’s birthday was celebrated on June 9—all in hopes of positioning

EuroDisney as the number 1 European destination of short duration, one to three days. Faced with

falling share prices and crisis talk among shareholders, Disney was forced to step forward in late 1993 to

rescue the new park. Disney announced that it would fund EuroDisney until a ?nancial restructuring

could be worked out with lenders. However, it was made clear by the parent company, Disney, that it

“was not writing a blank check.” In June 1994, EuroDisney received a new lifeline when a member of the

Saudi royal family agreed to invest up to $500 million for a 24 percent stake in the park. The prince has

an established reputation in world markets as a “bottom-?sher,” buying into potentially viable

operations during crises when share prices are low. The prince’s plans included a $100 million convention

center at EuroDisney. One of the few pieces of good news about EuroDisney is that its convention

business exceeded expectations from the beginning.

EuroDisney and Disney managers unhappily succeeded in alienating many of their counterparts in the

government, the banks, the ad agencies, and other concerned organizations. A barnstorming, kick-the-

door-down attitude seemed to reign among the U.S. decision makers: “They had a formidable image and

convinced everyone that if we let them do it their way, we would all have a marvelous adventure.” One

former Disney executive voiced the opinion, “We were arrogant—it was like ‘We’re building the Taj Mahal

and people will come—on our terms.’ ”

STORM CLOUDS AHEAD
Disney and its advisors failed to see signs at the end of the 1980s of the approaching European

recession. Other dramatic events included the Gulf War in 1991, which put a heavy brake on vacation

travel for the rest of that year. Other external factors that Disney executives have cited were high

interest rates and the devaluation of several currencies against the franc. EuroDisney also encountered

dif?culties with regard to competition—the World’s Fair in Seville and the 1992 Olympics in Barcelona

were huge attractions for European tourists. Disney management’s conviction that it knew best was

demonstrated by its much-trumpeted ban on alcohol in the park. This rule proved insensitive to the local

culture, because the French are the world’s biggest consumers of wine. To them a meal without un verre

de rouge is unthinkable. Disney relented. It also had to relax its rules on personal grooming of the

projected 12,000 cast members, the park employees. Women were allowed to wear redder nail polish

than in the United States, but the taboo on men’s facial hair was maintained. “We want the clean-shaven,

neat and tidy look,” commented the director of Disney University’s Paris branch, which trains

prospective employees in Disney values and culture. EuroDisney’s management did, however,

compromise on the question of pets. Special kennels were built to house visitors’ animals. The thought

of leaving a pet at home during vacation is considered irrational by many French people. Plans for

further development of EuroDisney after 1992 were ambitious. The initial number of hotel rooms was

planned to be 5,200, more than in the entire city of Cannes on the Côte d’Azur. Also planned were

shopping malls, apartments, golf courses, and vacation homes. EuroDisney would design and build

everything itself, with a view to selling at a pro?t. As a Disney executive commented, “Disney at various

points could have had partners to share the risk, or buy the hotels outright. But it didn’t want to give

up the upside.” “From the time they came on, Disney’s Chairman Eisner and President Wells had never

made a single misstep, never a mistake, never a failure,” said a former Disney executive. “There was a

tendency to believe that everything they touched would be perfect.” The incredible growth record

fostered this belief. In the seven years before EuroDisney opened, they took the parent company from

being a company with $1 billion in revenues to one with $8.5 billion, mainly through internal growth.

MANAGEMENT AND NAME CHANGES
Frenchman Philippe Bourguignon took over at EuroDisney as CEO in 1993 and was able to navigate the

theme park back to profitability. He was instrumental in the negotiations with the ?rm’s bankers,

cutting a deal that he credits largely for bringing the park back into the black. Perhaps more important

to the long-run success of the venture were his changes in marketing. The pan-European approach to

marketing was dumped, and national markets were targeted separately. This new localization took into

account the differing

Telling and Selling Fairy Tales

Mistaken assumptions by the Disney management team affected construction design, marketing and

pricing policies, and park management, as well as initial ?nancing. Disney executives had been

erroneously informed that Europeans don’t eat breakfast. Restaurant breakfast service was downsized

accordingly, and guess what? “Everybody showed up for breakfast. We were trying to serve 2,500

breakfasts

Part 6

Supplementary Material The root of Disney’s problems in EuroDisney may be found in the tremendous

success of Japan’s Disneyland. The Tokyo Park was a success from the ?rst day, and it has been visited

by millions of Japanese who wanted to capture what they perceived as the ultimate U.S entertainment

experience. Disney took the entire U.S. theme park and transplanted it in Japan. It worked because of

the Japanese attachment to Disney characters. Schools have ?eld trips to meet Mickey and his friends

to the point that the Disney experience has become ingrained in Japanese life. In the book Disneyland as

Holy Land, University of Tokyo professor Masako Notoji wrote: “The opening of Tokyo Disneyland was, in

retrospect, the greatest cultural event in Japan during the ‘80s.” With such success, is there any wonder

that Disney thought they had the right model when they ?rst went to France? The Tokyo Disney

constitutes a very rare case in that the number of visitors has not decreased since the opening.

tourists’ habits around the continent. Separate marketing of?ces were opened in London, Frankfurt,

Milan, Brussels, Amsterdam, and Madrid, and each was charged with tailoring advertising and packages

to its own market. Prices were cut by 20 percent for park admission and 30 percent for some hotel room

rates. Special promotions were also run for the winter months. The central theme of the new marketing

and operations approach is that people visit the park for an “authentic” Disney day out. They may not

be completely sure what that means, except that it entails something American. This approach is re?

ected in the transformation of the park’s name. The “Euro” in EuroDisney was ?rst shrunk in the logo, and

the word “land” added. Then in October 1994 the “Euro” was eliminated completely; the park was next

called Disneyland Paris; and now Disneyland Resort Paris. In 1996, Disneyland Paris became France’s most

visited tourist attraction, ahead of both the Louvre Art Museum and the Eiffel Tower. In that year, 11.7

million visitors (a 9 percent increase from the previous year) allowed the park to report another pro?t.

2005—Bankruptcy Pending
In early 2005, Disneyland Paris was on the verge of bankruptcy. The newest park attraction at

Disneyland Paris, Walt Disney Studies, featured Hollywood-themed attractions such as a ride called

“Armageddon—Special Effects” based on a movie starring Bruce Willis, ?opped. Guests said it lacked

attractions to justify the entrance price, and others complained it focused too much on American,

rather than European, ?lmmaking. Disney blames other factors: the post-9/11 tourism slump, strikes in

France, and a summer heat wave in 2003. The French government came to the aid of Disneyland Paris with

a state-owned bank contribution of around $500 million to save the company from bankruptcy. A new

Disneyland Paris CEO, a former Burger King executive, introduced several changes in hopes of bringing

the Paris park back from the edge of bankruptcy. To make Disneyland Paris a cheaper vacation

destination, the CEO lobbied the government to open up Charles de Gaulle airport to more low-cost

airlines. Under his direction, Disneyland Paris created its ?rst original character tailored for a European

audience: the Halloween-themed “L ’Homme Citrouille,” or “Pumpkin Man.” He has also introduced a one-

day pass giving visitors access to both parks in place of two separate tickets. He is planning new rides,

including the Tower of Terror, and other new attractions. If these changes fail to bring in millions of new

visitors, Disney and the French government might once again be forced to consider dramatic measures.

Even though French President Jacques Chirac called the spread of American culture an “ecological

disaster” and the French government imposes quotas on non-French movies to offset the in?uence of

Hollywood and of?cially discourages the use of English words such as “e-mail,” Disneyland Paris was

important to the French economy. In light of France’s 10 percent unemployment at the time, Disneyland

Paris is seen as a job-creation success. The company accounted for an estimated 43,000 jobs and its

parks attracted over 12 million visitors a year, more than the Louvre Museum and the Eiffel Tower

combined. By 2008 Disneyland Paris was experiencing increases in park attendance, and the turnaround

appeared to be working.

THEME PARK EXPANSION IN THE TWENTY-FIRST CENTURY
With the recovery of Disneyland Paris, Disney embarked on an ambitious growth plan. In 2001 the

California Adventure Park was added to the Anaheim complex at a cost of $1.4 billion, and Walt Disney

Studios Theme Park was added to Disneyland Paris. Through agreements with foreign partners, Disney

opened Disney-Sea in Tokyo and Disneyland Hong Kong in 2006, and plans are underway for a theme park

in Shanghai scheduled for 2014. A decade after being slammed for its alleged ignorance of European

ways with EuroDisney, Disney is trying to prove its gotten things right the second time around. The new

movie-themed park, Walt Disney Studios adjacent to Disneyland Paris, is designed to be tribute to

moviemaking—but not just the Hollywood kind. The Walt Disney Studios blends Disney entertainment

and attractions with the history and culture of European ?lm since French camera-makers helped invent

the motion picture. The park’s general layout is modeled after an old Hollywood studio complex, and

some of the rides and shows are near replicas of Disney’s ?rst ?lm park, Disney-MGM Studios. Rather than

celebrating the history of U.S. Disney characters, the characters in the new theme park speak six

different languages. A big stunt show features cars and motorcycles that race through a village modeled

after the French resort town of St. Tropez. Small details re?ect the cultural lessons learned. “We made

sure that all our food venues have covered seating,” recalling that, when EuroDisney ?rst opened, the

open-air restaurants offered no protection from the rainy weather that assails the park for long

stretches of the year. On the food front, EuroDisney offered only a French sausage, drawing complaints

from the English, Germans, Italians, and everyone else about why their local sausages weren’t available.

This time around, the park caters to the multiple indigenous cultures throughout Europe—which includes

a wider selection of sausages. Unlike Disney’s attitude with their ?rst park in France, “Now we realize

that our guests need to be welcomed on the basis of their own culture and travel habits,” says

Disneyland Paris Chief Executive. Disneyland Paris today is Europe’s biggest tourist attraction—even

more popular than the Eiffel Tower—a turnaround that showed the park operators’ ability to learn from

their mistakes.

DISNEY’S GREAT LEAP INTO CHINA
Disney’s record with overseas theme parks has been mixed. Tokyo Disneyland is a smash hit with 25

million visitors a year, and Disneyland Paris, opened in 1992, was a ?nancial sinkhole that just now is

showing promise of a turnaround. Disney was determined

Cases 2

The Cultural Environment of Global Marketing To compensate for the lack of awareness of Disney

characters and create the mystique of a Disney experience, Disney launched numerous marketing

initiatives designed to familiarize guests with Disneyland. One of the ?rst buildings upon entering the

park exhibits artwork and ?lm footage of Disney history, from the creation of Mickey Mouse through the

construction of Hong Kong Disneyland. Tour groups are greeted by a Disney host who introduces them

to Walt Disney, the park’s attractions, characters, and other background information. For example, the

character Buzz Lightyear explains Toy Story and the Buzz Lightyear Astro Blaster attraction. Even

though there were complaints about the park size and the unfamiliarity of Disney characters, there were

unique features built with the Asian guest in mind that have proved to be very popular. Fantasy Gardens,

one of the park’s original features, was designed to appeal to guests from Hong Kong and mainland

China who love to take pictures. At ?ve gazebos, photo-happy tourists can always ?nd Mickey, Minnie,

and other popular characters who will sign autographs and pose for photos and videos. Mulan has her

own pavilion in the garden, designed like a Chinese temple. Mickey even has a new red-and-gold Chinese

suit to wear. Restaurants boast local fare, such as Indian curries, Japanese sushi, and Chinese mango

pudding, served in containers shaped like Mickey Mouse heads. All in all, Hong Kong Disney is Chinese

throughout. It’s not so much an American theme park as Mickey Mouse coming to China. The atmosphere

is uncomplicated and truly family oriented. It is possible to have a genuine family park experience where

six-yearolds take precedence. However, early advertising that featured the family missed its mark

somewhat by featuring a family consisting of two kids and two parents, which did not have the impact it

was supposed to have, because China’s government limits most couples to just one child. The error was

quickly corrected in a new TV commercial, which the company says was designed to “forge a stronger

emotional connection with Mickey.” The revised ad featured one child, two parents, and two

grandparents together sharing branded Disney activities, such as watching a movie and giving a plush

version of the mouse as gifts. “Let’s visit Mickey together!” says the father in the commercial, before

scenes at the park set to traditional Chinese music. Many other aspects of the park have been modi?ed

to better suit its Chinese visitors. The cast members are extremely diverse, understand various cultures,

and, in many cases, speak three languages. Signs, audio-recorded messages, and attractions are also in

several languages. For example, riders can choose from English, Mandarin, or Cantonese on the Jungle

River Cruise. Disney runs promotions throughout the year. For example, the “Stay and Play for Two

Days” promotion was created mainly to give mainland tourists a chance to experience the park for a

longer period of time. Because many Chinese tourists cross into Hong Kong by bus, they arrive at

Disneyland mid-day. With this promotion, if a guest stays at a Disneyland hotel and purchases a one-day

ticket, the guest is given a second day at the park for free. Special Chinese holidays feature attractions

and decorations unique to the holiday. For the February 7, 2008, New Year holiday (the Year of the Rat),

Disney suited up its own house rodents, Mickey and Minnie, in special red Chinese New Year out?ts for

its self-proclaimed Year of the Mouse. The Disneyland Chinese New Year campaign, which lasts until

February 24, features a logo with the kind of visual pun that only the Chinese might appreciate: the

Chinese character for “luck” ?ipped upside-down (a New Year

not to make the same cultural and management mistakes in China that had plagued Disneyland Paris.

Disney took special steps to make Hong Kong Disneyland culturally acceptable. “Disney has learned

that they can’t impose the American will—or Disney’s version of it—on another continent.” “They’ve

bent over backward to make Hong Kong Disneyland blend in with the surroundings.” “We’ve come at it

with an American sensibility, but we still appeal to local tastes,” says one of Hong Kong Disneyland’s

landscape architects. Desiring to bring Disneyland Hong Kong into harmony with local customs from the

beginning, it was decided to observe feng shui in planning and construction. Feng shui is the practice of

arranging objects (such as the internal placement of furniture) to achieve harmony with one’s

environment. It is also used for choosing a place to live. Proponents claim that feng shui has effects on

health, wealth, and personal relationships. The park’s designers brought in a feng shui master who

rotated the front gate, repositioned cash registers, and ordered boulders set in key locations to ensure

the park’s prosperity. He even chose the park’s “auspicious” opening date. New construction was often

begun with a traditional good-luck ceremony featuring a carved suckling pig. Other feng shui in?uences

include the park’s orientation to face water with mountains behind. Feng shui experts also designated

“no ?re zones” in the kitchens to try to keep the ?ve elements of metal, water, wood, ?re, and earth in

balance. Along with following feng shui principles, the park’s hotels have no ?oors that are designated as

fourth ?oors, because 4 is considered an unlucky number in Chinese culture. Furthermore, the opening

date was set for September 12, 2006, because it was listed as an auspicious date for opening a business

in the Chinese almanac. But the park’s success wasn’t a sure thing. The park received more than 5 million

visitors in its ?rst year but short of its targeted 5.6 million, and the second year was equally

disappointing with attendance dropping nearly 30 percent below forecasts. Many of those who came

complained that it was too small and had little to excite those unfamiliar with Disney’s cast of

characters. Disneyland is supposed to be “The Happiest Place on Earth,” but Liang Ning isn’t too happy.

The engineer brought his family to Disney’s new theme park in Hong Kong from the southern Chinese city

of Guangzhou one Saturday in April with high hopes, but by day’s end, he was less than spellbound. “I

wanted to forget the world and feel like I was in a fairytale,” he says. Instead, he complains, “it’s just not

big enough” and “not very different from the amusement parks we have” in China. Hong Kong Disneyland

has only 16 attractions and only one a classic Disney thrill ride, Space Mountain, compared with 52 rides

at Disneyland Paris. After the ?rst year’s lackluster beginning, Disney management introduced ?ve new

attractions and added “It’s a Small World,” the ride made famous at the ?agship Disneyland in Anaheim,

California. A variety of other new entertainment offerings were due in 2008. Guests’ lack of knowledge of

Disney characters created a special hurdle in China. Until a few years ago, hardly anyone in mainland

China knew Mickey Mouse and Donald Duck even existed. Disney characters were banned for nearly 40

years, so knowledge of Disney lore is limited. China was the ?rst market where Disney opened a park in

which there had been no long-term relationship with attendees. It was the Chinese consumer who was

expected to understand Disney, or so it seemed. Chinese tourists unfamiliar with Disney’s traditional

stories were sometimes left bewildered by the Hong Kong park’s attractions.

Part 6

Supplementary Material 7. Now that Hong Kong Disney is up and running, will the Shanghai development

bene?t from the Hong Kong experience? 8. Now that Disney has opened Hong Kong Disney and begun

work on the Shanghai location, where and when should it go next? Assume you are a consultant hired to

give Disney advice on the issue of where and when to go next. Pick three locations and select the one

you think will be the best new location for “Disneyland X.” Discuss. 9. Given your choice of locale X for

the newest Disneyland, what are the operational implications of the history of EuroDisney and Disney

Hong Kong for the new park?

tradition), with mouse ears added on top. Inside the park, vendors hawk deep-fried dumplings and turnip

cakes. The parade down Main Street, U.S.A., is joined by the “Rhythm of Life Procession,” featuring a

dragon dance and puppets of birds, ?owers, and ?sh, set to traditional Chinese music. And of course

there’s the god of wealth, a relative newcomer to the regular Hong Kong Disneyland gang, joined by the

gods of longevity and happiness, all major ?gures in Chinese New Year celebrations. The Hong Kong park

lost more than $170 billion in each of the last two years. However, plans to increase the capacity of the

park 23 percent are going forward, with the new attractions to open in 2014. There are broader

implications for Disney from the performance of the Hong Kong theme park than just its ?nancial health.

From the outset, executives at the business’s Burbank headquarters viewed Hong Kong Disneyland as a

springboard to promote awareness of the Disney name among the mainland Chinese population and

cement ties with Beijing. The next theme park is set for Shanghai, and the last thing they want is a

“turkey” in Hong Kong that would undermine their whole China strategy. The new $3.6 billion park in

Shanghai is scheduled for completion, also in 2014. Disney will hold a 43 percent stake there.

This case was prepared by Lyn S. Amine, Ph.D., Professor of Marketing and International Business,

Distinguished Fellow of the Academy of Marketing Science, and President, Women of the Academy of

International Business, Saint Louis University, and graduate student Carolyn A. Tochtrop, Saint Louis

University, as a basis for class discussion rather than to illustrate either effective or ineffective handling

of a situation. The original case appearing in prior editions has been edited and updated to re?ect

recent developments. Source: “An American in Paris,” BusinessWeek, March 12, 1990, pp. 60–61, 64; Asahi

Shimbun, “ Tokyo Disney Prospers In Its Own Way,” Asahi Evening News, April 22, 2003; Chester Dawson,

“Will Tokyo Embrace Another Mouse?” BusinessWeek, September 10, 2001; “Euro Disney Gets Its Rights

Issue Thanks to Underwriting Banks but Success in Balance,” Euroweek, February 11, 2005; “EuroDisney’s

Prince Charming?” BusinessWeek, June 13, 1994, p. 42; “Saudi to Buy as Much as 24% of EuroDisney,” The

Wall Street Journal, June 2, 1994, p. A4; Bernard J. Wolfson, “The Mouse That Roared Back,” Orange County

Register, April 9, 2000, p. 1; “Disney Applies Feng Shui to Hong Kong Park,” AP Online, June 27, 2005;

Michael Schuman, “Disney’s Great Leap into China,” Time, July 11, 2005; Michael Schuman, “Disney’s Hong

Kong Headache,” Time, May 8, 2006; “A Bumpy Ride for Disneyland in Hong Kong; Despite Fixes, Some

Observers Say Troubles Could Follow company to Shanghai,” The Washington Post, November 20, 2006;

Dikky Sinn, “Hong Kong Government Unhappy with Disneyland’s Performance,” AP Worldstream,

December 4, 2007; Elaine Kurtenbach, “Reports: Shanghai Disneyland May be Built on Yangtze Island;

City Of?cials Mum on Talks,” AP Worldstream, December 4, 2007; Lauren Booth, “The Wonderful World of

Mandarin Mickey . . .” The Independent on Sunday, July 22, 2007; Mark Kleinman, “Magic Kingdom Fails to

Cast Its Spell in the Middle Kingdom . . .” The Sunday Telegraph (London), February 25, 2007; Paula M.

Miller, “Disneyland in Hong Kong,” China Business Review, January 1, 2007; Jeffrey Ng, “Hong Kong

Disneyland Seeks New Magic,” The Wall Street Journal, December 19, 2007; Geoffrey A. Fowler, “Main

Street, K.K.; Disney Localizes Mickey to Boost Its Hong Kong Theme Park,” The Wall Street Journal,

January 23, 2008; “A Chinese Makeover for Mickey and Minnie,” The New York Times, January 22, 2008;

“Mickey in Shanghai,” BusinessWeek, November 16, 2009, p. 6; Chester Yung, “Hong Kong Says Loss at

Theme Park Shrank,” The Wall Street Journal, January 20, 2010, p. B4.

QUESTIONS
1. What factors contributed to EuroDisney’s poor performance during its ?rst year of operation? What

factors contributed to Hong Kong Disney’s poor performance during its ?rst year? 2. To what degree do

you consider that these factors were (a) foreseeable and (b) controllable by EuroDisney, Hong Kong

Disney, or the parent company, Disney? 3. What role does ethnocentrism play in the story of

EuroDisney’s launch? 4. How do you assess the cross-cultural marketing skills of Disney? 5. Why did

success in Tokyo predispose Disney management to be too optimistic in their expectations of success

in France? In China? Discuss. 6. Why do you think the experience in France didn’t help Disney avoid some

of the problems in Hong Kong?

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT 🙂