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When the Disneyland was approved to establish a theme park in Shanghai, this US-based entertainment company began to think of how to adapt itself to the Chinese local market.
The cute “Mickey Mouse” is already 80 years old and the pretty “Snow White” is not younger than 70 years. These classic cartoon characters have been watched and loved by generations. The Mickey Mouse and his companions do not only bring about 1 billion US dollars of franchise fees for Disney, but also create an entertainment empire covering media, films, Internet, publication, theme parks and consumption goods with the market capital of 130 billion US dollars.
How to make generations of youths become the fans of a cartoon character and maximize the character’s market value. The insiders of Disney attributed this to the strategy of “serial images and characters”, which is believed to be the biggest impetus to Disney’s development. Now Disney is introducing this strategy into China, hoping that this business pattern could blossom in China and create a new legend.
A Good Story as the Source
Huang Jingzhi, vice president of market department of Disney Greater China said that “a good story is the start of Disney’s success.” Huang Jingzhi now is responsible for introducing the “serial images and characters” into China.
Disney made out a rough definition for the “serial images and characters”, which can create value in multiple fields in different places for a long time and can carry a certain feature or brand information to attract audience and their favors.
In Disney’s opinion, the kids see a Disney story and like the characters. Then they will go to see more Disney movies to know more characters. Later they want more experiences from Disney, like going to Disneyland, watching on-site shows and buying merchandize. Disney provides different products and services based on these characters via TV series, films, DVD, Internet, theme park and so on. These products and services earn Disney the trust from parents and kids.
“I used to work for a product package company, whose success is based on the customers’ interests triggered by our advertisements,” said Huang Jingzhi. “But things are different in Disney. Its tales are the best advertisements.”
Huang Jingzhi gave out an example: there are many films about cars. But who can remember and get fascinated by the cars in the movies? But Disney’s movie “Cars” is quite humorous and interesting by giving life to and personalizing different cars, enabling the audience to love these cars.
Every good story from Disney must be moving and eternal. This can ensure that several generations of people can watch and like these stories. “When I saw Toy Story for the first time, I was just a young man. Now I am 40 years old and take my boy to watch Toy Story 3,” said Huang Jingzhi. “Therefore, good tales are the bases of good performance and they can bring about continuous development.”
How to turn good tales into good performance is another matter Disney must consider carefully. In Disney, the writing of a good story and the development of products are synchronal instead of the pattern of developing products after the popularization of the story. The story developers work together with the marketing department and retailing department to develop the products which the customers are fond of and will choose. There is a 5-year supporting plan for every tale and it’s related products which requires the cooperation between different departments to maximize the value.
As we see, when a new movie of Disney is released, the related products are simultaneously displayed on the shelves. “The success is not only shown at the box office, but also the turning of contents into commodities,” said Huang Jingzhi.
This makes the consumption goods department a significant part of Disney, which is the largest franchisor of movie-related products in the world. In its 2008 financial year Disney earned 30 billion US dollars from this field.
How to make a successful movie a classic is also a big test for Disney.
In January 1937, the first color cartoon in the world – “Snow White and the Seven Dwarfs” – came out and was quite popular among people. Today’s kids also like the character of pretty Snow White. Huang Jingzhi attributed this to the positive and moving contents. “Of course, Disney is always using the modern technology to reincarnate the charm of the old stories.”
In order to catch up with the trend, Disney’s entertainment department issued the blue ray edition of “Snow White and the Seven Dwarfs” on December 29, 2009. The new edition involves the latest video and audio technologies and many interactive games.
In addition, Disney keeps compiling new stories and spreading new characters while reserving the old ones. “High School Musical” is the typical sample.
Different from Mickey Mouse and Snow White, “High School Musical” is based on real people instead of cartoon characters. It originates from the TV series which was broadcasted on Disney Channel. After the success of the movie, a lot of visual and audio products were launched in the market. The actors starring High School Musical, like Zac Efron and Vanessa Hudgens, became the idols of the young people all around the world.
“Toy Story 3 will be on in this summer. We know that this is not a single film but contains a series of characters and behind them hide a lot of business opportunities,” said Huang Jingzhi. “This is a successful movie series. That’s why we chose the project of Toy Story as the first expansion project in our Hong Kong Disneyland. This is a kind of embodiment of the cooperation of different departments as required by the ‘serial images and characters’ strategy.”
Core Strategy in China
Somebody once asked about Disney’s board chairman Michael Eisner Disney’s biggest dream and his answer is to get into the Chinese market. That’s due to a group of statistical data: China has 260 million children below 15, nearly same to the US population.
The great market space made Disney move its “serial images and characters” to China with the hope of building characters with Chinese features to win the hearts of Chinese people.
According to Huang Jingzhi, Mickey Mouse and Winnie the Pooh are the two largest serial products in China. Disney Princess is a series of products newly introduced in China and enjoys the fastest growth rate in this country. “Next we will launch the products of Cars, High School Musical and Toy Story.”
“Localization is very important for us. We think and do business in Chinese ways as Disney China is a company based in and originated from China,” said Huang Jingzhi.
Mickey Mouse and Winnie the Pooh have already won the hearts of Chinese children. Before launching the Disney Princess products in China, Disney made numerous careful researches and communicated with many mothers. They found out that every Chinese girl dreamt of being a little princess. Huang Jingzhi said: “Though some of our competitors also have products targeted at little girls, we combined the classic princesses like Snow White and Cinderella to create Disney Princess. Right this series of products is enjoying the double-digit growth in China.”
Disney not only launched the Disney Princess products, but also set August 8 as the birthday of Disney Princess in China. Every year Disney will invite 88 girls to attend the carnival in Hong Kong Disneyland, increasing Disney’s fame among Chinese people. In addition, Disney especially created the living theatres of its classic legends – “Snow White”, “Cinderella”, “Beauty and Beast” for Chinese audience.
Apart from introducing the successful movies, cartoons and products into China, Disney is also looking for a partner in China, aiming at enabling entertainment contents to trigger audiences’ interests.
In China Disney once co-produced a film named “The Secret of the Magic Gourd” and the film won a success at the box office. In May 2009, Disney cooperated with another two Chinese local film producers in the film of “Touch of the Panda”.
However, Huang Jingzhi said: “Actually, we would most like to film a Chinese edition of High School Musical, which in my opinion could be very successful.”
In 2009, the living theatre of “High School Musical” started its Asia tour show with the debut in the Shanghai Grand Theatre. The Chinese audience watched the living show of Disney. It was known that 260 thousand tickets of the show were sold in Shanghai and the total sales amount reached 1.7 million yuan (USD 249.06 thousand).
Moreover, Disney plans to produce a new High School Musical in China. The Chinese version willchoose Chinese actors and directors. “We will not use the original music in the American High School Musical. Actually, we will compile new songs in Chinese for the new film, making it a complete made-in-China High School Musical,” said Huang Jingzhi.
High School Musical will be the trial of localizing successful characters of Disney. If it is successful, Disney will create more and more China-related images and characters.
Easy to Share but Hard to Copy
Disney is nearly one hundred years old since it was founded by Walt Disney. Its business pattern was studied and borrowed worldwide.
“We attach great importance to the characters we created because they reflect our company’s core value and brand awareness. These things are hard to be borrowed by the other companies, I think.”
Yet the Chinese local entertainment companies have begun to create good tales and film good movies. “Pleasant Sheep and Big Big Wolf” is the most successful Chinese cartoon in the recent years. The related toys are sold in the shops and two movies saw great success both in reviews and at the box office. Even Huang Jingzhi thought highly of this cartoon, which is popular among children and their parents.
However, a boss of a Chinese cartoon-making company said: “Many local entertainment companies have been engaged in the development of products related with the cartoons, but it is quite hard to form a complete industrial chain like Disney covering theme parks, living theatres and TV channel.”
Huang Jingzhi said that he saw many good cartoons which are hard to be transplanted into another platform. Some cute cartoon characters died because of lack of enough contents and tales. So it is hard to copy Disney’s success. Actually, it is even hard for Disney to create a classic character.
Opening All the Possible
Channels in China
In China, Disney has to deal with another challenge – the pirate. How to make the Chinese customers access to Disney products without being bothered by the pirate?
Disney gave up its high-profile status in order get accustomed to the Chinese market. A consumer can see a wholesale shop of genuine Disney products in a small street in Shanghai. Disney also acts more swiftly and smartly during the construction of distribution channels in China.
“Being pirated means the approval for your goods. That tells you that your things are popular in the market and the consumers would like to acquire your products in any place with reasonable prices,” said Huang Jingzhi. “Therefore, Disney needs to put more products with lower prices into larger areas accessible for the customers.”
Now, Disney’s programs were broadcast in CCTV 6 and CCTV 14, enabling the audience to watch Disney’s programs without being charged. Disney will further provide more contents through Internet. Its DVD products are priced at different levels based on the consumption power. So are the other kinds of products.
The consumption goods department of Disney set up more than 5,000 exclusive stores in shopping malls in 25 cities of China.
In the next few years, Disney will step into the second- and third-tier cities in China. Then the number of Disney’s franchise stores in China will double. Meanwhile, Disney will choose the channel of traditional wholesale market in the second- and third-tier cities where the consumption power is not so strong.
Besides the physical stores, Disney also plans on developing the online sales channels. On January 2010, Disney opened a flagship store at Taobao, providing 5,000 kinds of genuine Disney products varying from clothes, toys, decorations to books and videos.
The experts believed that Disney’s multi-channel strategy is the reflection of Disney’s self-adaptation to the Chinese market and their confidence in good performance in China.
“If I can buy a genius Disney product at the same price of the pirate, why do I choose the latter?” said a consumer.
The cute “Mickey Mouse” is already 80 years old and the pretty “Snow White” is not younger than 70 years. These classic cartoon characters have been watched and loved by generations. The Mickey Mouse and his companions do not only bring about 1 billion US dollars of franchise fees for Disney, but also create an entertainment empire covering media, films, Internet, publication, theme parks and consumption goods with the market capital of 130 billion US dollars.
How to make generations of youths become the fans of a cartoon character and maximize the character’s market value. The insiders of Disney attributed this to the strategy of “serial images and characters”, which is believed to be the biggest impetus to Disney’s development. Now Disney is introducing this strategy into China, hoping that this business pattern could blossom in China and create a new legend.
A Good Story as the Source
Huang Jingzhi, vice president of market department of Disney Greater China said that “a good story is the start of Disney’s success.” Huang Jingzhi now is responsible for introducing the “serial images and characters” into China.
Disney made out a rough definition for the “serial images and characters”, which can create value in multiple fields in different places for a long time and can carry a certain feature or brand information to attract audience and their favors.
In Disney’s opinion, the kids see a Disney story and like the characters. Then they will go to see more Disney movies to know more characters. Later they want more experiences from Disney, like going to Disneyland, watching on-site shows and buying merchandize. Disney provides different products and services based on these characters via TV series, films, DVD, Internet, theme park and so on. These products and services earn Disney the trust from parents and kids.
“I used to work for a product package company, whose success is based on the customers’ interests triggered by our advertisements,” said Huang Jingzhi. “But things are different in Disney. Its tales are the best advertisements.”
Huang Jingzhi gave out an example: there are many films about cars. But who can remember and get fascinated by the cars in the movies? But Disney’s movie “Cars” is quite humorous and interesting by giving life to and personalizing different cars, enabling the audience to love these cars.
Every good story from Disney must be moving and eternal. This can ensure that several generations of people can watch and like these stories. “When I saw Toy Story for the first time, I was just a young man. Now I am 40 years old and take my boy to watch Toy Story 3,” said Huang Jingzhi. “Therefore, good tales are the bases of good performance and they can bring about continuous development.”
How to turn good tales into good performance is another matter Disney must consider carefully. In Disney, the writing of a good story and the development of products are synchronal instead of the pattern of developing products after the popularization of the story. The story developers work together with the marketing department and retailing department to develop the products which the customers are fond of and will choose. There is a 5-year supporting plan for every tale and it’s related products which requires the cooperation between different departments to maximize the value.
As we see, when a new movie of Disney is released, the related products are simultaneously displayed on the shelves. “The success is not only shown at the box office, but also the turning of contents into commodities,” said Huang Jingzhi.
This makes the consumption goods department a significant part of Disney, which is the largest franchisor of movie-related products in the world. In its 2008 financial year Disney earned 30 billion US dollars from this field.
How to make a successful movie a classic is also a big test for Disney.
In January 1937, the first color cartoon in the world – “Snow White and the Seven Dwarfs” – came out and was quite popular among people. Today’s kids also like the character of pretty Snow White. Huang Jingzhi attributed this to the positive and moving contents. “Of course, Disney is always using the modern technology to reincarnate the charm of the old stories.”
In order to catch up with the trend, Disney’s entertainment department issued the blue ray edition of “Snow White and the Seven Dwarfs” on December 29, 2009. The new edition involves the latest video and audio technologies and many interactive games.
In addition, Disney keeps compiling new stories and spreading new characters while reserving the old ones. “High School Musical” is the typical sample.
Different from Mickey Mouse and Snow White, “High School Musical” is based on real people instead of cartoon characters. It originates from the TV series which was broadcasted on Disney Channel. After the success of the movie, a lot of visual and audio products were launched in the market. The actors starring High School Musical, like Zac Efron and Vanessa Hudgens, became the idols of the young people all around the world.
“Toy Story 3 will be on in this summer. We know that this is not a single film but contains a series of characters and behind them hide a lot of business opportunities,” said Huang Jingzhi. “This is a successful movie series. That’s why we chose the project of Toy Story as the first expansion project in our Hong Kong Disneyland. This is a kind of embodiment of the cooperation of different departments as required by the ‘serial images and characters’ strategy.”
Core Strategy in China
Somebody once asked about Disney’s board chairman Michael Eisner Disney’s biggest dream and his answer is to get into the Chinese market. That’s due to a group of statistical data: China has 260 million children below 15, nearly same to the US population.
The great market space made Disney move its “serial images and characters” to China with the hope of building characters with Chinese features to win the hearts of Chinese people.
According to Huang Jingzhi, Mickey Mouse and Winnie the Pooh are the two largest serial products in China. Disney Princess is a series of products newly introduced in China and enjoys the fastest growth rate in this country. “Next we will launch the products of Cars, High School Musical and Toy Story.”
“Localization is very important for us. We think and do business in Chinese ways as Disney China is a company based in and originated from China,” said Huang Jingzhi.
Mickey Mouse and Winnie the Pooh have already won the hearts of Chinese children. Before launching the Disney Princess products in China, Disney made numerous careful researches and communicated with many mothers. They found out that every Chinese girl dreamt of being a little princess. Huang Jingzhi said: “Though some of our competitors also have products targeted at little girls, we combined the classic princesses like Snow White and Cinderella to create Disney Princess. Right this series of products is enjoying the double-digit growth in China.”
Disney not only launched the Disney Princess products, but also set August 8 as the birthday of Disney Princess in China. Every year Disney will invite 88 girls to attend the carnival in Hong Kong Disneyland, increasing Disney’s fame among Chinese people. In addition, Disney especially created the living theatres of its classic legends – “Snow White”, “Cinderella”, “Beauty and Beast” for Chinese audience.
Apart from introducing the successful movies, cartoons and products into China, Disney is also looking for a partner in China, aiming at enabling entertainment contents to trigger audiences’ interests.
In China Disney once co-produced a film named “The Secret of the Magic Gourd” and the film won a success at the box office. In May 2009, Disney cooperated with another two Chinese local film producers in the film of “Touch of the Panda”.
However, Huang Jingzhi said: “Actually, we would most like to film a Chinese edition of High School Musical, which in my opinion could be very successful.”
In 2009, the living theatre of “High School Musical” started its Asia tour show with the debut in the Shanghai Grand Theatre. The Chinese audience watched the living show of Disney. It was known that 260 thousand tickets of the show were sold in Shanghai and the total sales amount reached 1.7 million yuan (USD 249.06 thousand).
Moreover, Disney plans to produce a new High School Musical in China. The Chinese version willchoose Chinese actors and directors. “We will not use the original music in the American High School Musical. Actually, we will compile new songs in Chinese for the new film, making it a complete made-in-China High School Musical,” said Huang Jingzhi.
High School Musical will be the trial of localizing successful characters of Disney. If it is successful, Disney will create more and more China-related images and characters.
Easy to Share but Hard to Copy
Disney is nearly one hundred years old since it was founded by Walt Disney. Its business pattern was studied and borrowed worldwide.
“We attach great importance to the characters we created because they reflect our company’s core value and brand awareness. These things are hard to be borrowed by the other companies, I think.”
Yet the Chinese local entertainment companies have begun to create good tales and film good movies. “Pleasant Sheep and Big Big Wolf” is the most successful Chinese cartoon in the recent years. The related toys are sold in the shops and two movies saw great success both in reviews and at the box office. Even Huang Jingzhi thought highly of this cartoon, which is popular among children and their parents.
However, a boss of a Chinese cartoon-making company said: “Many local entertainment companies have been engaged in the development of products related with the cartoons, but it is quite hard to form a complete industrial chain like Disney covering theme parks, living theatres and TV channel.”
Huang Jingzhi said that he saw many good cartoons which are hard to be transplanted into another platform. Some cute cartoon characters died because of lack of enough contents and tales. So it is hard to copy Disney’s success. Actually, it is even hard for Disney to create a classic character.
Opening All the Possible
Channels in China
In China, Disney has to deal with another challenge – the pirate. How to make the Chinese customers access to Disney products without being bothered by the pirate?
Disney gave up its high-profile status in order get accustomed to the Chinese market. A consumer can see a wholesale shop of genuine Disney products in a small street in Shanghai. Disney also acts more swiftly and smartly during the construction of distribution channels in China.
“Being pirated means the approval for your goods. That tells you that your things are popular in the market and the consumers would like to acquire your products in any place with reasonable prices,” said Huang Jingzhi. “Therefore, Disney needs to put more products with lower prices into larger areas accessible for the customers.”
Now, Disney’s programs were broadcast in CCTV 6 and CCTV 14, enabling the audience to watch Disney’s programs without being charged. Disney will further provide more contents through Internet. Its DVD products are priced at different levels based on the consumption power. So are the other kinds of products.
The consumption goods department of Disney set up more than 5,000 exclusive stores in shopping malls in 25 cities of China.
In the next few years, Disney will step into the second- and third-tier cities in China. Then the number of Disney’s franchise stores in China will double. Meanwhile, Disney will choose the channel of traditional wholesale market in the second- and third-tier cities where the consumption power is not so strong.
Besides the physical stores, Disney also plans on developing the online sales channels. On January 2010, Disney opened a flagship store at Taobao, providing 5,000 kinds of genuine Disney products varying from clothes, toys, decorations to books and videos.
The experts believed that Disney’s multi-channel strategy is the reflection of Disney’s self-adaptation to the Chinese market and their confidence in good performance in China.
“If I can buy a genius Disney product at the same price of the pirate, why do I choose the latter?” said a consumer.