3 PowerPoint Presentation on Walt Disney CRM Case Study

Introduction

The purpose of Customer Relationship Management (CRM) is to efficiently and effectively increase the acquisition, growth and retention of profitable customers by selectively initiating, building and maintaining good relationships with them. Examining two cases, Disney and Marriott, will provide an informational analysis of the approaches to CRM and some of the lessons learned by following this approach to improving customer experience and increasing profitability.

Case Study 1. Disney – Business Description & Problem

A weak domestic economy, competition in the amusement park realm, potential amusement park attendees lacking patience when it comes to inconveniences, fewer international travelers and mounting operations costs leave Walt Disney World in a precarious business situation. To stay competitive in this difficult landscape, Disney needs to find new ways to show each visitor value in its brand and commitment to his or her vacation experience, without breaking the bank. One way Disney hopes to accomplish this is by integrating technology into the overall customer experience.

Many people recognize the famous characters, voices and the hilarious children’s cartoons that began in late 1928 from The Walt Disney Company. Their iconic brand has made Walt Disney Co. an “international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media” (Walt Disney Company). Their goal is to provide families with wholesome entertainment and memories that will last a lifetime in which many make the pilgrimage to their top-of-the-industry theme parks and resorts. They also maintain multiple other businesses that include collectible toys and memorabilia, television networks and who could forget their films such as the recent “Saving Mr. Banks.” With theme parks and resorts in countries like Japan, Paris, and the United States of America, Disney has to ensure the customer satisfaction of millions on a daily basis and in 2003, CIO Roger Berry, was placed at the helm to “restore the luster of its aging brand, increase efficiencies and boost attendance” (CIOinsight, 2003).

Walt Disney World is losing sales. Disney’s theme parks are experiencing lower attendance figures and in turn, lower revenues. At the same time costs for insurance, healthcare and pension plans for employees is on the rise. The ticket prices have also risen 20% since 1998. These ticket prices are one of the main reasons, among others, for lower sales figures. In an effort to turn things around for Walt Disney World, Roger Berry wants to bring in fresh technology to the park. Disney wants to restore its aging brand by increasing efficiencies, boosting attendance, and increasing the bottom line revenue. By bringing in new technology, Berry hopes to create a more personalized environment and improve the overall customer experience.

The Analysis & Lessons Learned

Walt Disney is operating in a service industry where communication with the customer is very important and keeping customers happy is even more important. This is a kind of industry where “word of mouth” really improves popularity to the service provider. To provide better services to the customer, Disney took help of Customer Relationship Management (CRM).

To gain a strategic advantage and in an attempt to serve the customers in a better way information technology can support their ideal CRM. They will implement an array of new technology, for example, “Pal Mickey” that puts to use GPS, smart sensors, wireless technology and mobile devices. (Time to Invest, 2004).

The problem to be solved in Disney’s case goes beyond providing the means to justify current leisure spending in a weak, post-recession economy. Their use of a CRM model and subsequent expansion of the use of technology must get customers to increase their spending on leisure. The success will greatly depend on whether the customers see the benefits the way Disney thinks they will.

A key lesson for Disney is that they must focus on the customer part of CRM. A quick search on the Internet for news sources on keyword “Disney” provides a long list of articles, mostly complaining about their high prices. Some blog sites have began to take issue with Disney’s prices in innovative ways. For example, one popular fashion travel site lists French Castles that families can rent for less than a stay at Disney (Elle Decor, 2014). Another site praises Disney’s improvements, but still cautions that the increase in prices will continue to be a major challenge for Disney moving forward (Harry, 2014). In Disney’s current strategy, in order for the Disney to solve their sales problem, customers must agree to pay increased prices. Time will tell if this strategy of increasing value for increased prices will be successful.

Case Study 2. Marriott – Business Description & Problem

Marriott International Incorporated (MAR) has been in the hospitality industry since the late 1920s. With more than 85 years of history, 3,900 properties in 72 countries, and 195,000 hotel rooms currently in development—making Marriott one of the leading hospitality company in the world. It is mostly recognized by their values, spirit to serve, and a corporate commitment to creating better places to live and work (Marriott, 2014). Unfortunately, the decrease demand in the hospitality industry has made Marriott owners turn to a Customer Relationship Management (CRM) technology to increase sales and improve operations.

Marriott International is a top hospitality corporation that is headquartered in Bethesda, MD. Today the company owns, franchises, and operates more than “4,000 properties, and more than 690,000 rooms in 78 countries and territories. (FundingUniverse, 2014)” Currently there are approximately 330,000 employees working for Marriott international. Marriott started out as a root beer shop in 1927 opened by J. William Marriott. It's first hotel, the Twin Bridges, was opened in Arlington Virginia in 1957. Incorporation of its name took place thereafter in 1967. Marriott most recognized brands include Marriott, JW Marriott, Renaissance, and Ramada International, etc. There are eighteen brands in total. Convenience and Customer satisfaction have always been the two main focal points for the business. E-business strategies are being utilized to drive sales and increase revenues.

In early 2001, the hospitality industry anticipated approximately a 5.6% decline in hotel profits (Carr, 2002). As a result, Marriott wanted to get ahead of this potential decline. In an effort to fine tune business practices, it used technology products to enhance sales management and operate more economically.

Analysis & Lessons Learned

Through Marriot’s global market strategy and dedication to the consumer they were able to put into place a uniquely tailored Customer Relationship Management platform across their entire enterprise of over sixteen brands. This provided the customers what they wanted and the employees the tools and data that they needed to effectively and efficiently work with the customer. Moving into the change the focus on online sales, payments and booking was underestimated, however has proven to be a main contributor to the success of Marriott’s brand globally. Consolidation of resources and customized systems plagued the brands locations and ease of use for the consumer and has since been cut-down and has the potential to consolidate further as to cut cost as well as manage facilities more efficiently (Information Week, 2001).

With more and more individuals and corporations using the Internet and e-mail these days, Marriott needed to address the ‘spam’ notifications that clutter up e-mail boxes. Part of their CRM implementation, data was used more practically and in a targeted approach of the consumer. This created a much better acceptance to consumers as it brought targeted ads and promotions to them rather than generalized junk that inevitably was deleted. These valuable CRM endeavors were able to increase sales within months of going live, climbing the international Marriott brand further up the ladder of success and setting precedence for competitors to follow.

References Carr, G. (2002, June 3). Record Decline in 2001 Hotel Profits, Worst in Over 60 Years. http://www.hotel-online.com/News/PR2002_2nd/Jun02_ProfitFallOff.html . CIOinsight. (2003, December 01). Case Study: Walt Disney World Resorts and CRM Strategy. Retrieved June 18, 2014, from CIOinsight: http://www.cioinsight.com/c/a/Past-News/Case-Study-Walt-Disney-World-Resorts-and-CRM-Strategy/ Elle Decor. (2014). It's Cheaper to Rent A French Castle Than to Stay at Disney World. Retrieved July 3, 2014, from www.elledecor.com: http://www.elledecor.com/design-decorate/ideas/french-castle-chateau-cheap-rentals FundingUniverse. (2014). Marriott International, Inc. History. Retrieved June 29, 2014, from www.fundinguniverse.com: http://www.fundinguniverse.com/company-histories/marriott-international-inc-history/ Harry, J. (2014, June). Seeking Alpha. Retrieved July 4, 2014, from www.seekingalpha.com: http://seekingalpha.com/article/2280043-disney-excellent-growth-but-at-what-price Information Week. (2001, June 21). Marriott Uses CRM Application to Boost Sales. Retrieved June 18, 2014, from Information Week: http://www.informationweek.com/marriott-uses-crm-application-to-boost-sales/d/d-id/1010910? Marriott. (2014). Marriott Proprietary Information . Retrieved June 25, 2014, from http://www.marriott.com/marriott/aboutmarriott.mi Time to Invest. (2004, January 12). Retrieved from www.Eweek.com. Walt Disney Company. (n.d.). Our Businesses. Retrieved June 18, 2014, from The Walt Disney Company: http://thewaltdisneycompany.com/disney-companies