Disneyland Paris | Feature: Marketing and Sales Strategy meeting - 27th January 2014

On 27th January 2014 form 6pm to 7:30pm, Disneyland Paris held a meeting for shareholders where it discussed its ongoing plans in regards to sales and marketing. The event took place at the Newport Bay Club conference centre.

The presentation was led by:

  • Julien Kauffmann, Vice President of Revenue Management and Analysis, who is responsible for all the pricing policies (Such as ticket prices, merchandise, dining) and supervises the optimisation strategy and the work to increase revenue.
  • Jean-Christophe Gandon, Vice President of Marketing, who has been in the role since July 2013 after spending 15 years at Procter and Gamble, followed by LVMH. He is responsible for all marketing and communication, including notably promotional offers.

After a brief 7 minute long video showcasing the resort's highlights for 2013, the presentation began with a look at Disneyland Paris' position in the market - it is the theme park market leader in France, in the top 2 or 3 in Spain, Italy, the UK, Belgium and Holland, and is NOT in the top 3 in Germany and Scandinavia. Since Disneyland Paris' arrival in 1992 its competitors have increased their investments and promotional offers and some have put in place a very strong promotional strategy, such as Port Aventura. This is all something Disneyland Paris is paying attention to.

Currently, in the time of a recession, it is important to know consumers and the market well and the following statistics come from many different studies and surveys:

  • With the lowering of purchasing power, 57% of Europeans think that the financial situation will continue to worsen (this figure is 75% in France and 61% in the Netherlands.
  • 81% of consumers wait for promotions before booking or buying items or services.
  • In 2013: 32% of people in France did not wish to travel, 75% of people in France want to spend less on their holidays (this number is 87% in Spain).
  • Children are still seen as a priority in homes.
  • Disneyland Paris remains seen as a special destination.
  • Anniversary celebrations are the most important celebrations.
  • Themed seasons (such as Halloween and christmas) also have a strong impact.
  • Disneyland Paris' TV advertising is memorable.
  • Disneyland Paris' brand image is continually measured and has increased for 8.0/10 in 2010 to 8.3/10 in 2013 across Europe.
  • The perception of Disneyland Paris's value for money has also increased in the same timeframe from 6.7 to 6.9.
  • The intention to visit the resort has increased in the last year, from 42% in 2012 to 48% in 2013. The conversation rate from intention to actually making a booking, however, is still much lower.
  • There were 14.9 million visitors in 2013, more than the visitors to the Louvre and the Eiffel Tower. To compare Blackpool Pleasure Beach in the UK saw 5.9million visitors in 2012 and Europe Park in Germany had 4.6million in the same year.

Important events to come:

  • Opening of Ratatouille
  • Continuing development of the themed seasons such as Halloween and Christmas
  • Continuing renovation of the Disney hotels

From all this research Disneyland Paris has developed six ways to improve its overall strategy.

The 6 strategic points:

  1. Continue to reduce the barriers to visits
  2. Create an urgency to visit
  3. Adapt straggles based on media consumption
  4. Improve the on-line experience
  5. Optimise investments depending on the market, and redefine distribution strategies
  6. Improve the visitor experience and slowly reduce the number of offers to increase turnover and improve brand image,

 

Some of these points were these expanded on in more detail.

Points 1) and 2): As the conversation rate for visitors is low, marketing will be focused on:

  • A unique experience that only Disney can offer
  • Create emotion and engage the consumer
  • Add an expiry date to offers to create a sense of urgency and encourage to book now
  • The resort will no longer do annual themes [such as Mickey's Magical Party], instead showcasing its base product with special celebrations (in order to create a consistent image every day of the year), the Halloween, Christmas and anniversary seasons will be strengthened as these are the most effective. 

3) Media Strategy:

Consumers' media habits have changed drastically over the past few years with less TV viewing and more use of internet connected devices. The Resort will:

  • Reduce its spending on TV advertising
  • Increase its spending on digital advertising
  • Work on its partnership with The Walt Disney Company.
  • Continue to work in partnership with European TV (such as The Voice, Dance avec les Stars, Sky, etc.)
  • Increase visibility in search engines (SEO and advertising)
  • Reduce spending on press campaigns

5) Optimise investments depending on the market:

Almost half of all visitors stay in a Disney hotel:

  • 44% on an on-site hotel
  • 23% are local residents without an annual passport who sleep at home
  • 21% stay off-site, usually near DLP
  • 12% are annual pass holders who sleep at home

6) Pricing Policy:

Invest in the Product and adaptation of the pricing policy:

  • At the hotels:
    • The creation of the Empire State Club at Hotel New York, replacement of the bungalows at Davy Crockett Ranch, and renovation of the Sequoia Lodge, Santa Fe and the Newport Bay Club hotels.
    • There is a lot of interest in concierge level experiences, e.g. Empire State Club, Golden Forest Club.
    • The aim therefore is to look at pricing throughout the renovation period and continue to create new higher classes of rooms and clubs, and to recommend higher level hotels to consumers.
  • In the parks:
    • Continue investment for the birthday celebrations (E.g. Disney Dreams for 20th anniversary), the seasons (Halloween and Christmas), new developments (Ratatouille) and refurbishments.
    • Strengthening the seasons which are of high demand allows the raising of prices for these periods.
    • Walt Disney Studios will be developed into a full-day park which will later allow the increase of ticket prices.
  • Merchandise:
    • Several efforts have already been made: Opening of the World of Disney store, differentiation of boutique, exclusive rangers (20th anniversary, Paris themed), innovations such as Disney Light'Ears.
    • Confirmation that the Light'Ears are selling well and that sales are ahead of their predictions, and that they allowed there to be several articles in the press showing the innovation that Disney can make therefore essentially providing free advertising.
    • A Strategy of "Good/Better/Best/Premium" allows products to be available in four different price ranges, allowing for different budgets. Examples include: Princess dresses, mugs and T-shirts.
  • Dining:
    • Increase the use of higher quality dining product at quick-service food locations (such as Angus Beef), an improvement of the buffets and table service restaurants, and a new menu at the Lucky Nugget.
  • Reduce offers:
    • Eliminate the free annual passport offers - they were used to help increase awareness of annual passes but renewals were not sufficient.
    • Continue the slow and "reasonable" increase in prices
    • Review pricing for locals, e.g. The Francillien ticket which was launched at the price of 29 euros for the 15th Anniversary; it is now 45 euros.
    • Review the range of annual passports, communication and yield packages.
    • Review packages: after the launch of half-board meals, then a full-board option, an all-inclusive option is now being pursued.


Some numbers:

  • Average spending per guest:  46,2€ (2011) - 46,4€ (2012) - 48,1€ (2013)
  • Average spending per room: 219,7€ (2011) - 231,3€ (2012) - 235€ (2013)

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After the main presentation, the floor was opening up to questions and several remarks were made by shareholders:

  • Marketing for Ratatouille should already have been in place around the resort for the Halloween season, as the Halloween and Christmas seasons attraction many visitors who would be exposed to these adverts.
  • The declining quality of many Disney Village restaurants since Disneyland Paris began running them again.
  • The monthly payment option for annual passports is extremely useful and should be kept.
  • The lack of figures during this presentation, including conversation rates, does not allow shareholders to truly understand what marketing strategies are working.

During these question and answer session Disneyland Paris also revealed that:

  • It continues to investigate the range of annual passports, and especially the "Premium Annual Passport" for which there is a demand but that it is too early to launch such a product until Walt Disney Studios starts to become a full-day park.
  • Research is being done into having kiosks installed at counter service locations as well as smartphone apps where guests can order food more quickly, but this of course relies on the resort's kitchens improving speed-wise too. This is not something that will appear immediately but it is rather a long-term project.
  • The huge decline in hotel occupancy rates from 87% in 2011 to 79% in 2013 is not only due to lower visitor numbers, but also because about 500 rooms are being renovated per year (not simultaneously) which guests cannot stay in. These 500 rooms have not been removed from the 5800 rooms usually available, leading to a lower occupancy rate.
  • Disneyland Paris is conscious of having made errors and admit to them, include their free annual passport promotion, the 2011 Halloween season and the official website experience.

 

Source: Mouetto (DisneyCentralPlaza). Original text in French.