Deemed University 2010 M.B.A University: Lingayas University Term: IV Title of the : Service keting - Question Paper
Roll No. ..
Lingayas University, Faridabad
MBA 2nd Year (Term-IV)
Examination Nov, 2010)
Service Marketing (BA-224)
[Time: 3 Hours] [Max. Marks: 100]
Before answering the question, candidate should ensure that they have been supplied the correct and complete question paper. No complaint in this regard, will be entertained after examination.
Note: Attempt five questions in all; picking up any two from Section A, any two from Section B and the last Section C question 8 which is compulsory.
SECTION A
Q-1. What kind of actions customers can take in response to service failure? Why is it important for a service firm to have a strong service recovery strategy? Illustrate your answer with suitable examples. (20)
Q-2. How does the design of physical environment enhance service experiences positively? How can service firms reduce the impact of waiting lines on the customers? Give examples. (20)
Q-3. What is the difference between desired service and adequate service? Why would a services marketer need to understand both types of service expectations? (20)
SECTION B
Q-4. Briefly explain the services triangle giving suitable examples. Why are service employees critical to the success of any service organization? (20)
Q-5. What is managing people for service advantage? What is service leadership and culture? (20)
Q-6. Write short notes on any two of the following: (20)
(a) gaps model
(b) technology in services
(c) delivering service through intermediaries
Q-7. How to plan and brand service products? What is effective pricing? (20)
SECTION C
Q-8. Read the enclosed case titled The Walt Disney Company and answer the questions given at the end of the case. (20)
The Walt Disney Company : Riding its Theme Parks into Tomorrowland
When Michael Eisner became chairman and chief executive officer of The Walt Disney Company in 1984, the much-beloved firm was best known for its revolutionary animated movies, U.S. amusement parks, and childrens television programming. During the next two decades, Eisner expanded the companys holdings by building more theme parks; adding a cruise line and a chain of retail stores; and acquiring movie production companies, special-effects firms, cable and network television stations, and sports teams.
Eventually, the House of Mouse became overextended, and in 2003 sold several of its high-profile enterprises. In addition, a power struggle ensued between Eisner and Walk Disneys nephew, Roy Disney. Ultimately, in January 2005, Eisner announced that he would step down from his executive posts in September of that year.
Despite these problems, the year 2005 looked promising for the venerable corporation. Disneys net income was on the rise, up 85% in 2004 compared to 2003. Also, the company was preparing to celebrate the 50th anniversary of its first theme park, Disneyland, in 2005. A new theme park was scheduled to open in Hong Kong late in the year. And the ABC television network was being revitalized by a bunch of Desperate Housewives and a group of travelers who became Lost.
Opening the First House of Mouse
The first Disney Park was conceived and funded by the companys namesake. Walt Disney purchased 182 acres of land in Anaheim, California, and transformed the site into Disneyland, which opened in 1955. Later, the company bought 28,000 acres in Orlando, Florida. The Magic Kingdom at Walt Disney World opened in 1971, followed by Epcot in 1982, and Disney-MGM Studios in 1989. Disney acquired another 55 acres of land in Anaheim, and Disneys California Adventure debuted in 2001.
Walt Disney World has also been seeking more visitors. It continues to add attractions: most recently Disneys Animal Kingdom in 1998, followed by the spectacular Animal Kingdom Lodge. However, it is also trying another approach. Many people perceived that we were just for families, explained a marketing executive for the company. Were reinventing the branch by making it relevant to various life stages. Four markets are being targeted: younger couples, older couples with grown children, families with young children, and families with teens. By emphasizing its golf courses, Pleasure Island (a nightclub-type setting located in Downtown Disney), and fine dining options, Disney World is trying to attract everyone from honeymooners to retirees, with the latter group hopefully bringing their grandchildren.
Spreading the Magic Overseas
The Walt Disney Company entered into a licensing agreement with Japanese company called Oriental Land and opened Tokyo Disneyland in 1983. The park was a huge success, drawing 13.2 million guests in 2004.
Tokyo DisneySea opened in 2001. Much like its California Adventure counterpart, this complementary attraction was intended to boost attendance at Tokyo Disneyland-perhaps from 17 million to 25 million a year. DisneySea is targeting a slightly order crowd with wilder rides, a full-service spa, and alcoholic beverages. Disneys operations in Tokyo face stiff competition from Universal Studio, which opened its own theme park in Osaka in 2001.
The second park that Disney built outside the U.S. was Euro Disney, which opened for business in 1992. Located outside Paris, the park initially had to deal with criticism from some people and apathy from many others. In stark contrast to Japanese enthusiasm about Disney parks, some French intellectuals characterized Euro Disney as a cultural wasteland. The park lost hundreds of millions of dollars in its first several years of operation.
Disney executives threatened to close Euro Disney unless costs were slashed and revenues increased. Financing was rearranged, ticket prices were cut, and attractions were added. The park also changed its name to Disneyland Paris. Attendance jumped 21% from 1994 to 1995, up to 10.7 million visitors; hotel occupancy increased as well. Perhaps more important, the park turned a profit of $23 million in 1995.
Disneyland Paris is now the number one tourist attraction in France-drawing more visitors than the Louvre and the Eiffel Tower combined-and is a major tourist destination for all of Europe. In 2002, it attracted 13.1 million visitors. Optimistic Disney executives approved the construction of a second park to attract even more guests. Walt Disney Studios Paris replicates many of the most successful attractions at its sister park, MGM Studios in Orlando, but it also features a variety of rides and shows that have a distinct European flavor. It too faces competition, this time from Warner Brothers, which has its own parks in Germany and Spain.
It was hoped that Walt Disney Studios Paris would draw eight million visitors its first year, and help increase attendance at Disneyland Paris to 16 million visitors by 2004. That didnt occur; the two parks combined attendance was 12.2 million visitors in 2004. Euro Disney reported a loss of $190 million for the 2004 fiscal year. Analysts agreed that the war in Iraq, uncharacteristically hot weather, and a weak economy all dampened demand. Nevertheless, the French government rallied to support the enterprise by securing more financing from local institutions and working out a deal with Disney (which owns 41% of the Paris complex) to defer debts and forgive loans.
On the other side of the globe, Disney hosted a groundbreaking ceremony for a new theme park in Hong Kong. Eisner referred to this Chinese site as a beach-head for the Disney brand in the most populous nation on earth. Disney reportedly provided $314 million toward the parks construction, giving it a 43% stake, with the Chinese government spending an additional $416 million. Hong Kong Disneyland, slated to open in September 2005, is being modeled after Disneyland in Anaheim, with two hotels, a number of retail stores, and several restaurants.
In mid-2002, the Hong Kong Economic Times reported that Disney intended to open a second park in China, this one in Shanghai. According to some observers, the two parks would compete for the same customers. Not surprisingly, Disney had a different view, namely that Chinas population (over 1.3 billion) was more than large enough to support two parks. Still, Disney postponed the opening of the new park until 2010, partly to give the Hong Kong park sufficient time to grow and flourish. Disneys decision was welcomes news to Universal, which planned to open a theme park in Shanghai in 2006.
Consolidating and Strengthening Mickeys Holdings
Disneys theme parks are interrelated with the rest of the firms holdings. In the parks, for example, you will find a wealth of Disney merchandise as well as shows that promote its network and cable programs, such as popular Disney Channel cartoons. Radio Disney hubs and Internet kiosks that feature Disney websites are also highly visible. And the ESPN Zone restaurant, located within several parks, is especially popular on game days.
The man responsible for The Walt Disney Companys broad holdings is Eisner. He judged that long term success required diversification as well as expansion into fast-growing international markets. Thus Disney started a chain of retail stores in the 1990s, but sagging sales caused the company to rethink its retail strategy. In October 2004, Disney announced the sales of its stores to Childrens Place Retail Stores Inc., a chain that specializes in fashions for babies and kids.
Two of Disneys higher-profile enterprises were Major League Baseballs Anaheim Angels and the National Hockey Leagues Mighty Ducks of Anaheim. The two-fold rationale for purchasing the teams was to allow cross-promotion of Disneys other properties in the area and to keep tourists in Anaheim for a longer period of time. However, the results didnt justify the expense, so Disney sold the Angels in 2003 and the Ducks in 2005.
In contrast, Disneys 1995 purchase of ESPN, the successful TV channel, has produced huge returns. As of 2004, largely because it commanded the industrys highest subscriber fees, ESPN was generating more than $1 billion worth of profits each year. ESPNs success was a key factor in Comcasts decision to try to purchase the Walt Disney Co. in 2004. To Comcast, one benefit of the acquisition would be avoiding the $2-per-subscriber fee it was paying each month in order to have the right to include the ESPN channel among its cable offerings.
Trying to Keep the Kingdom Magical
Comcasts takeover bid eventually failed, but shareholders of The Walt Disney Company were upset by the attempt. Eisner also received criticism for allegedly alienating several people who did business with the company.
Questions
i) Explain the meaning of the term service in the context of the Walt Disney Company.
ii) How does Disney address the unique challenges and opportunities posed by the four distinguishing characteristics of a service?
iii) Do you agree with Disneys decision to split its retail locations into adult- and kid-focused stores? Why or why not?
iv) How Disneys theme park contributed to the success of its other interrelated businesses? Elaborate.
| Earning: Approval pending. |
