ARCHIVED - Brief Case Studies of Exemplary Practices

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Walt Disney Company (Canada) Ltd. - Division Of Consumer Products

Objective and Scope of Business Line
Disney Canada Products (DCP) is a division the Walt Disney Company. DCP is responsible for the licensing of all Disney products in Canada as well as the marketing, promotion and merchandising of those products. The sated objective of DCP is to be the vendor of choice in all of its competitive categories.

Type of Service Provided
DCP licenses and promotes thousands of different products. These products are divided into three groups: apparel and accessories, toys and sporting goods, everything else (food products, domestic products, gifts, stationery, etc..).

DCP licenses product manufacturing to a wide variety of companies, such as Hasbro, Mattell, etc.. DCP then manages the marketing and merchandising of these products through key account vendors and its own chain of stores.

In addition to licensing and promoting Disney products, DCP also promotes Disney movies in Canada. This is generally aimed at enhancing the cross-promotional value of the movies and the corresponding products associated with those movies.

Sales of Disney products in Canada in the last year totaled just over $1 billion. Disney revenues are generated through the licensing fees and royalties that are generated by those sales.

Delivery Processes
Disney products in Canada are primarily sold through the 16 Disney stores in Canada as well as through their six key vendors. These vendors are WalMart, Zellers, The Bay, Sears, Toys R Us and Loblaws/Costco. DCP views these 6 vendors as being its most important customers.

DCP has approximately 68 employees who work in licensing, marketing, merchandising and administration. They have another 100 employees (a mix of full-time and part-time) who work as staff in the 16 Disney stores.

Service Standards in Use

Service Pledge
DCP offers its vendors the opportunity to maximize value "by leveraging the strength of its brand, character and entertainment franchises through a commitment to creative excellence and customer service coupled with strict financial discipline".

DCP is able to follow through on this pledge by providing each of its key vendors with:

• Its own key account team
• The development and implementation of an annual business plan
• Establishment of benchmarks and performance measurement tools
• The development and implementation of an account communication plan
• The establishment of partnership marketing relationships

Within the Disney stores, the staff are referred to as "Cast Members" and customers are referred to and considered as "Guests". This nomenclature lies at the core of the Disney customer service philosophy. Cast members are taught that success depends on servicing customer needs. DCP views the keys to staff training as motivation and empowerment. Cast members are motivated to provide guests with a positive Disney experience and they are empowered to ensure that they can accomplish this objective.

Service Standards
Because the bulk of DCP sales come through the key vendors, most of the service strategy is based on satisfying the needs of the vendors. Rather than imposing DCP standards on each vendor, DCP takes the position that these are large successful retailing enterprises that already have core customer service standards. DCP therefore provides individualized service to each of the vendors by adapting the vendors own service standards.

For example, one of the core philosophies of WalMart is the "Sundown Principle". This principle states that all queries and complaints must be dealt with before the sun goes down. This does not necessarily mean that the complaint will be resolved or that the query will be answered. It does mean that the customer will be contacted and the query or complaint will be acknowledged and the customer will be given an expectation of how long it will take to meet their needs.

Service Standard Monitoring

• DCP believes that they key measure for monitoring successful service is sales. They view growth and strength of sales as the key indicator of good service. Although they monitor other service variables, dollars are considered first and foremost.
• Key account teams are supposed to develop short term (annual) and long term (3 year) plans for their vendors. These plans are reviewed and monitored by the management teams of both DCP and the vendors. The account review process includes weekly account updates focusing on established benchmarks and using a variety of measurable performance criteria.
• Complaint resolution is considered vital. Calls that cannot be answered immediately are returned as soon as possible. Those who are unavailable delegate somebody to act in their absence. DCP uses the individual account communication plans as the core of this variable. Ongoing dialogue with the customers is used to ensure that this process is working effectively.

Exemplary Practices

Management Training

• All DCP management personnel receive intensive and ongoing training. Their training includes an initial in-house training program at Disney University. Included in the training is "Performance Management", which focuses on teaching managers how to train their staff to meet customer needs.
• Disney managers receive ongoing training and are expected to participate in two developmental workshops per year.
• In addition to using Disney Institute training programs, DCP will also use outside training organizations, such as Management Ventures Inc.

Drawing on Expertise of Customers

• DCP takes the attitude that its key vendors are the industry leaders when it comes to retailing. They therefore implement the vendors' own standards in developing individualized account plans.
• They avoid the conceit that they are better and that they know more. By adopting this philosophical approach, they are immediately in synch with their customers and have no need to modify their own planning structure to meet that of their customers.
• When introducing a merchandising or promotional program into a vendor's stores, they make sure that any campaign activities or displays meet the vendor's standards.

Empowered Staff

• Account service personnel are empowered to resolve outstanding issues on their own. If there is any kind of issue with a vendor (e.g. merchandise return, promotional materials, dating terms), then account service personnel are able to resolve the issue on the spot, on their own, without the requirement to consult head office.
• Account personnel staff are provided with training and guidelines that allow them to do this. In speaking to DCP management, they could not recall an instance in recent memory when an account representative encountered a situation which they were unable to resolve on their own.

Lessons Learned

Dealing with Demands that Cannot be Met

1. During a store promotional program for a new educational software line, DCP had a "Winnie the Pooh" team travel across Canada, doing personal appearances at stores that would be carrying the new products. The appearances were heavily advertised across the country. The character team was put on a tight schedule in order to meet commitments across the country.
2. At one store, the demand to meet the Disney characters was so high, that the team remained at the store well beyond the scheduled time (they stayed an extra three hours).
3. In spite of staying well beyond the allotted time, the character team eventually had to leave in order to catch its flight and meet its next scheduled commitment. The store's management received a very vitriolic complaint from one of its customers, which it passed on to Disney. The customer was upset because his child had been promised that he would meet Winnie the Pooh and that did not happen.
4. Disney immediately called back to find out the name of the child. They then had a set of photos of Winnie the Pooh autographed directly to the child and had them express couriered for same day delivery. In the end, this over and above attitude resulted in a customer whose complaint expectations were exceeded and a very happy child.
5. What DCP learned from this experience was to allow for greater flexibility in scheduling (i.e. not having appearances scheduled too close together), allowing for longer personal appearances, and having more than one character team operating across the country.
6. This future planning was the result of an incidence report that arose from the initial customer complaint to the store.
7. DCP understands that its greatest asset is its brand recognition. Consumers have very positive regard towards the Disney brand and the Disney characters. They are easily recognized, well known and well liked. Maintaining customer satisfaction depends on retaining the good will that is associated with the brand.

Contact

Bruce Morrison
Managing Director, Licensing, Retail and Marketing
The Walth Disney Company (Canada) Ltd.
Simcoe Place, 200 Front Street West
29^th Floor
Toronto, Ontario
M5V 3L4
Tel:  416-596-3339
bruce.morrison@disney.com

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