Executive Summery
Over the past 50 years, the idea of a Disney vacation has evolved from a single park in Anaheim to the multifaceted resort destination of Walt Disney World Resort . . . to the ever-increasing variety of ways to vacation with Disney today. But as noting comes at a fairly cheap price, Walt Disney has also witnessed a series of major ups and downs in there operations during the 1990s. Revenues were declining, profit and loss account showing negative profits and many of the newer Disneyland opened in foreign countries were facing cultural conflicts.
In this assignment emphasis is given to the kind of steps that the various Disney Theme parks took to hedge them against the probable probable tourist turn-offs. turn-offs. The platform platform on which they decided to implement CRM is based on both the use of information technology and compli complimen mented ted with with qualit quality y line-s line-staf taffs. fs. Disney Disneylan land d used used advance advanced d commun communica icatio tion n technology like GPS, Infrared devices to communicate with the customers not only when they want but also when the customer wanted. They tried to build a kind of relationship with the customer by keeping their previous records and providing them with the kind of service they preferred without asking them. Presently the kind of Information technology Infras Infrastru trucct ccture ure Disney Disneywor world ld is using using can easily easily give give them them edge edge agains againstt their their rival rival competitors but at the same time it is important for Disneyland to that uses of IT in the CRM is just to facilitate their operations smoothly and a clear distinction should always be made between when to use IT and when to use human resource?
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Company Background Disneyland is more than a place. It is an experience that transcends global boundaries. Disneyland describes any Disney theme park because despite language, culture, design, and entertainment differences, guest feelings and experiences are the same at every Disney Disneylan land d Park Park around around the world. world. The Disne Disneyla yland nd brand brand lives lives in many many market markets, s, includ including ing the theme theme park, park, family family vacati vacation, on, restau restauran rant, t, and travel travel indust industri ries, es, and is consistently a leader in these categories. During the past 50 years, nearly 2 billion guests have passed through the gates of Disney theme parks around the world.
The first Disney theme park came into existence in the year 1955 and was located in the California. Since then Disney expanded its theme parks both in numbers as well as facility and the adventures they are offering. Presently there are 11 Disney theme parks across the world which is located in fine different countries across the world.
In 2002, Walt Disney became 100 years old. Once know exclusively for its revolutionary and fascinating animated moves, Walt Disney has rapidly expanded its operations and ventured into a number of fields. Its vast empire now includes Disney theme parks, several movie production companies, special-effects firms, professional sport franchises, cable and network network televisio television, n, publishing publishing companies, companies, retail retail stores, stores, a cruise cruise liner, liner, theater theater production and even estate holding. The company operates in North America, Europe, Asia Pacific and Latin America, with the US being the major market. The company is headqua headquarte rtered red in Burbank Burbank,, Calif Californ ornia. ia. The compan company y record recorded ed revenue revenuess of $31,944 $31,944 million during the fiscal year ended December 2005, an increase of 3.9% over 2004. The operating profit of the company was $4,654 million during fiscal year 2005, an increase of 3.7% over 2004. The net profit was $2,533 million in fiscal year 2005, an increase of 8% over 20041.
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Source: Datamonitor, Database: Datamonitor Company Profiles Authority, Link: http://search.ebscohost.com/login.aspx?direct http://search.ebscohost.com/login.aspx?direct=true&db=buh&authdb=dmhco&AN= =true&db=buh&authdb=dmhco&AN=1792&site=ehost-li 1792&site=ehost-live ve
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Disney Theme Parks”. The In this assignment we will be concentrating mainly on the “ Disney
first Disney Park was conceived and funded by Walt Disney himself. After mortgaging his house and selling part of his company to the ABC network. 182 acres land in Anaheim, California became the site of Disneyland, which opened in 1955. The next theme park “The Magic Kingdom” Walt Disney opened at Orlando, Florida in 1971 followed by Epcot in 1982, Disney-MGM Studios in 1989, Disney’s Animal Kingdom in 1998 and Disney’s California Adventure in 2001.
Disneyland and Disney World attracts tourists from around the world, especially Asians. So Disney entered into a licensing agreement with a Japanese company called Oriental Land and opened Tokyo Disneyland Disneyland in 1983. In exchange for a small small initial investment investment of $20 million, the 45 years license gives Disney licensing fee plus 10 percent of admissions and 5 percent of food and merchandise sales2. With the opening of the HongKong Disneyland resort in September-20053, guests can now experience Disney’s 11 theme parks across five different locations across the world including Tokyo and Paris.
Need For Customer Relationship Management: “To accomplish more, sometimes you need to see less4”. This quote perhaps holds true in all the service that are being marketed across the globe. Services sector across the world has now become more customers oriented like ever before and customers are given the utmost importance. So there is always a need to become more and more customer oriented and emphasis is always given to align all the services and operations keeping customer first in the mind. In doing so the role of the company’s employee also becomes very important because they are basically dealing with the customers at the front end. According to a survey at companies such as Walt Disney Employees share such a strong 2
Source: Robert Neff, “In Japan, They’re Goofy about Disney” Business Week , March 12, 1990,p-64; “Will Tokyo Embrace another mouse?” Business Week , September 10, 2001; “Cowboys and Samurai: the Japanizing of Universal,” Wall Street Journal . March 22,2001, P.B1 3 http://www.americasgreatestbrands.com/brand-case-studies.php? and-case-studies.php? Source http://www.americasgreatestbrands.com/br key=disneyland&label=Disneyland&ur key=disneyland&label=Disneyland&url=www.disneydestinations.com l=www.disneydestinations.com 4 Source: Ad-line of one of a series of Tiger Woods ads that are part of the Accenture rebranding campaign 2004
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vision vision that they know in their hearts that what is correct for the company5. So when we are talking about Disney Theme parks Customer relationship management becomes very important. Customer relationship management is a corporate level strategy which focuses on creating and maintaining lasting relationships with its customers. In the early 90s Disney Theme Parks witnessed a major drop in the attendance of customers and henceforth a major decrease in the revenue as well. There were many reasons for the fall in attendance. Long queues, fidgety crowds and high tickets prices were some of the reasons of customer’s turnoffs. It became important for Disney to understand that expanding the Disneyland to various part of the world needs to taken care in a more sophisticated manner. The visitors across the world are different and their likings and preferences are completely different. Walt Disney was operating in a service industry were communication with the customer is very important and it is always important to keep your customers happy every time you serve and always should try to improve your performance. This is a kind of industry were “word of mouth” give a lot of popularity (or discredit) to the service provider. Walt Disney, to provide better services to the customer, took help of Customer relationship management.
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Source: Brain Dumaine, “Why Great Companies last,” Business Week , January 16, 1995, p.129.
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Customer Relationship Management Models:
In the recent past it’s been observed that almost all the companies across the world have understood the need of CRM. But at the same point though customer management grow growth th is cont contin inui uing ng,, its its impl implem ement entat atio ion n is stil stilll a ques questi tion on mark mark to most most of the the companies and it is not working properly. As per the recent research from Ogilvy One and QCI, the top 10% of companies in Europe and the US could save costs or generate revenue in excess of £20 billion through more effective Customer Management systems6.
1. The QCI Customer Management Model One of the models that are widely used in the organization is CMAT. CMAT is a diagnostic and benchmarking tool which provides companies an assessment approach for comparison of its own performance with the global. It also allows them to dram a platform from where they can judge the needs of the customer in a better way and allow them them to serv servee effi effici cien entl tly. y. It comes comes from from QCI, QCI, a lead leadin ing g Cust Custom omer er Mana Manage geme ment nt consultancy with a partnership with Ogilvy One and the WPP group. The QCI customer manage managemen mentt assess assessmen mentt tool tool consis consists ts of 260 best best practi practice ce questi questions ons that that provid providee companies and management a much better and clearer opinion about CRM abilities that can be achieved throughout answering the boxes on questionnaires. They cover all the elements of QCI management model. Thee CMAT Th CMAT asse assess ssme ment nt resu result ltss to iden identi tify fy clear clear plan plans, s, real real deliv deliver er and and sati satisf sfie ied d customers. It also provides a better co-relation between the customer satisfaction level and CRM.
QCI Model 6
Source: “Is customer relationship management working for you,” A discussion paper from Ogilvy One and QCI.
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Com eti etitors tors
The Custom Customer er E Ex x erienc eriencee
Customer Management Activity
Enquiry Management Targeting
Analysis and Planning
The Proposition
Welcoming
Win Back
Managing Problems
Measuring the effect
Getting to know Customer Customer development
Process
People and Organization
Information and Technology
Fig-17
2. Payne’s Model 7
Source :QCI, 2000
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The purpose of CRM is to efficiently and effectively increase the acquisition, growth and retention retention of profitable profitable customers by selectively selectively initiating, initiating, building building and maintainin maintaining g approp appropria riate te relati relationsh onships ips with them. them. The second second Model Model is based based on the method of interactio interaction n between between different different target group in order to test concepts, concepts, results results and ideas. It also draws on approaches used in the work on ‘contemporary marketing practices.
Payne’s Model Consist of five cross-functional processes and four key implementation CRM elements. The Strategy development process defines the ultimate goal that is needed to be achieved with the help of CRM. The process starts with selection of the most most prop proper er chann channel el in a part partic icul ular ar segm segmen entt and and then then creat creatin ing g opti optima mall cust custom omer er experience within and across all the channels. Information management is all about gather gathering ing inform informati ation on form form all the possib possible le points points where where commun communica icatio tion n with with the customer takes place. It also includes gaining customer insights so that service delivery can be improved. improved. Lastly Performance Performance assessment, assessment, as can be understood understood from the name, check that the quality of the service level with the sets standards.
CRM Strategy and Implementation Model
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CRM Readiness Assessment
Process 1: Strategy development
Enabling Process Process 2
Process 3
Process 4
Value Creation
Multi Cannel Integration
Information Management
Employee Engagement
Performance Assessment
CRM Project Management
CRM Change Management
Fig-2
Comparison between the Two Models
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Both of the models have similar goal; i.e. to access the quality of the CRM services and also also to improv improvee it. Both the model also also tries tries to improv improvee the relation relationshi ship p with with the customers. Both the models also provide a subjective and qualitative framework to judge the existing service level of the organization and the points where they need to improve. To continue further, both the model gives significant importance to the inputs from the customers to improve the service level. Customer’s attitude, attitude, behavior, wants, needs, is to name a few whose importance is taken care in both Models. Also both the model is conceptualizes IT in there basic framework.
One of the major differences that comes across when we study these two model is that QCI is mainly implemented by the external consultants wherein Payne’s have an internal implementation across the cross-functional processes in order to achieve greater service level.
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CRM Implementation at Disney Theme Park:
Euro Disneyland, Disney’s second theme park was opened overseas, in 1992 located outside Paris. The park initially had to deal with criticism from some people and apathy from many others. Some French intellectuals characterized it as a cultural wasteland. The park lost close to $2 billion in its first several year of ope ration. It becomes important to mention here that the impact of culture does affect the global marketing strategies. It is important to understand for a company like Walt Disney that globalization doesn’t mean “Americanization”. This was one of the main reasons for the initial failure of Paris Disneyland. It is always important to understand the local culture of the country of operation and accordingly frame your operations. Disneyland Paris failed flopped at first because it failed to take local culture values and behaviors into account. In the words of Disney Chief “When we first launched, there was belief that it was not enough to be Disney. Now we realize that our guests’ needs to be welcomed on the basis of there won culture and travel hobbits.” The realization, and the changes it spawned, has made Disneyland Paris the number one tourist attraction in Europe-even more popular than Eiffel tower. The park now attracts more than 12 million tour touris ists ts per per year year.. And And Disn Disney ey rece recent ntly ly intr introdu oduce ced d a new new movi movie-t e-the heme med d park park to accompany the revitalized Paris attraction. The new park blends Disney entertainment and attraction with the history and culture of European film. A show celebrating the history of animations features Disney characters speaking six different languages. Rides are narrated by foreign –born starts, including Jeremy Irons, Isabella Rossellini, and Nastassja Kinski, speaking in their native language8.
In the early 1990s there there were were high high hopes hopes for the new Californ California ia Adventu Adventure re Park, Park, especially because attendance at Disneyland decreased 8%. Disney world’s attendance also fell by 4% and the theme park as a whole saw a subsequent 30% decline in the earning. With all new roller costars, popular attractions from other Disney parks, and an 8
Source: Paulo Prada and Bruce Orwall. “ A Certain ‘Je Ne Sais Quoi’ at Disney’s New York-movie – Themed site Near Near Paris Is Multilingual, Multilingual, Sevres Sevres wine –and better better sausage variety,” Wall Street Journal, Journal, March 12, 2002.p.B1
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