Global Perspective

Hong Kong — Disney rolls the dice again

With the opening of Disneyland in Anaheim in 1955 the notion of the modern theme park was born. The combination of the rides, various other attractions and the Disney characters has remained irresistible. Tokyo Disneyland has also proved to be a big success, making modest money for Disney through licensing and major money for its Japanese partners. Three quarters of the visitors at the Tokyo Park are repeated visitors the best kind.

Then came Euro Disney Dissatisfied with the ownership arrangements at the Tokyo Park, the Euro Disney deal was structured very differently. Disney negotiated a much greater ownership stake in the park and adjacent hotel and restaurant facilities. Along with the greater control and potential profits came a higher level of risk

Even before the park’s grand opening ceremony in 1992, protestors decried Disney’s assault on the French culture. The location was also a mistake – the Mediterranean climate of the alternative Barcelona site not chosen seemed much more attractive on chilly winter days in France. Managing both a multicultural workforce and clientele proved daunting. For example, what language was most appropriate for the Pirates of the Pirates of the Caribbean attraction – French or English? Neither attendance nor consumer purchase targets were achieved during the early years: Both were off by about 10 per cent. By the summer of 1994 Euro Disney had lost some $ 900 million. Real consideration was given to closing the park.

A Saudi prince provided crucial cash injection that allowed for a temporary restructuring and a general reorganization, including a new French CEO and a new name, Paris Disneyland. The Paris Park returned to profitability and attendance increased. However, the temporary holiday on royalty’s management fees and leases is now expired and profits are dipping again. Disney’s response was to expand with a second Disney Studios theme park and an adjacent retail and office complex at the Paris location. Again in 2005 the Saudi prince injected another $ 33 million into the park.

In 2006 Hong Kong Disneyland opened for business. The Hong Kong government provided the bulk of the investment for the project (almost 80 per cent of the $ 3 billion needed). As in Europe the clientele is culturally diverse, even though primarily Chinese. Performances are done in Cantonese (the local dialect), Mandarin (the national language) and English. Disney also linked a new joint venture agreement for online delivery of entertainment services to customers in China. Indeed it will be quite interesting to follow Mickey’s international adventures in the new millennium!

The opportunities and challenges for international marketers of consumer goods and services today have never been greater or more diverse. New consumers are springing up in emerging markets in Eastern Europe, the Commonwealth of Independent States, China and other Asian countries, India, Latin America – in short, globally. Although some of these emerging markets have little purchasing power today, they promise to be huge markets in the future. In the more mature markets of the industrialized world, opportunity and challenge also bound as consumers’ tastes become more sophisticated and complex and as increases in purchasing power provide them with the means of satisfying new demands.

As described in the global Perspective Disney is the archetypal American exporter for global consumer markets. The distinction between products and services for such companies means little. Their DVDs are products, whereas cinema performances of the same movies are services. Consumers at the theme parks (including foreign tourists at domestic sites) pay around $ 40 to get in the gate but they also spend about the same amount on hats, t-shirts, and meals while there. And the movies, of course help sell the park tickets and the associated toys and clothing. Indeed this lack of distinction between products and services has led to the invention of new terms encompassing both products and services such as market offerings and business to consumer marketing. However, the governmental agencies that keep track of international trade still maintain the questionable product service distinction. The reader should also note that when it comes to US exports targeting consumer the totals are about evenly split among the three major categories of durable goods (such as cars and computers) nondurable goods (mainly food, drugs, toys) and services (for example tourism and telecommunication).

Never has the question which products / services should we sell? Ben more critical that it is today For the company with a domestic market extension orientation like Ben & Jerry’s Ice Cream, the answer generally is Whatever we are selling at home .The company with a multi-domestic market orientation develops different products and services to fit the uniqueness of each country market; the global company ignores frontiers an seeks commonalities in needs among sets of country markets and responds with global market offerings.