Monday, August 20, 2007
How an Underdog Trumps Disney
Aerial view of Ocean Park - courtesy of sabershadezero
At a recent marketing conference, I had the pleasure of learning all about how Ocean Park in Hong Kong managed to stand its ground against the upcoming Hong Kong Disneyland. Told by the energetic and charming Paul Pei (Executive Director of Sales and Marketing at Ocean Park), the lessons learnt are useful for anybody in the leisure attractions business. It is a classic David versus Goliath story.
When the news first came in 1999 that Disneyland was coming to Hong Kong, the spectre of doom hung heavily over the staff of Ocean Park. Many felt that the coming of the entertainment behemoth would spell the death knell for tourist attractions on the island. What's more, Ocean Park was already 29 years of age, with many of its facilities worst for the wear. Surely, they were no match for Disney's sheer might. Studies have in fact shown that whenever a Disneyland park opens anywhere, incumbent players could lose up to 20% of their businesses.
Happily Ocean Park rode the wave rather than sink into oblivion. It employed a 7-pronged strategy as follows:
Rather than fight head on with Disney, Ocean Park chose to differentiate itself and to complement rather than compete against the newcomer. It created a new vision statement: "The world's BEST marine themed attraction - the PRIDE of Hong Kong and a LANDMARK destination for tourists." It also focused on its strengths which are real animals, nature, its Hong Kong origin, the cable car, and edutainment. This differed from Disney's emphasis on cartoons, movies, the castle, America and fantasy and fun.
An ambitious HK$5.5 billion master redevelopment plan was undertaken by Ocean Park to revive its product. This will be done over 8 different phases and will be completed by 2012. Key to the success of this goal was the mustering of support from different stakeholder groups - government, employees, media, business partners, the public and environmental interest groups.
The idea behind this was to win back the hearts of its various stakeholders. Ocean Park did it by focusing on their competitive strengths:
a) Being home grown
b) Having many marine and land animals
c) Providing interactive edutainment
New products which provided interaction with animals like a sea jelly aquarium, dolphin encounters and panda keeping were rolled out. Dining with the animals programmes (similar to our Breakfast with Ah Meng at the Zoo) were initiated together with summer school activities for kids and unique wedding packages. Interactive quizzes and promotions linked to its heritage were conducted to help Ocean Park reconnect with the public.
As I shared earlier, events are the lifeblood of the attractions business. Ocean Park recognised this early and continued its 5 big annual events - Chinese New Year, Easter, Summer, Halloween and Christmas. Its award winning "Halloween Bash" in particular is highly sought after as a must-do event in October.
5) Reinforce as Must-Visit
This is where advertising comes in as a marketing tool to remind and refresh. The park embarked on aggressive tourist advertising to position it as a must visit attraction and came up with advertorials and TV trailers to re-engage its audiences. It also worked closely with tour operators - an important partner in tourism marketing - to enlist their help in channel marketing.
6) Expand Distribution Network
New partnerships were formed with channels like land, sea and rail transport operators as well as hotels. Value-added ticket combos and packages were developed to attract their guests to the park.
7) Compassionate Pricing
3 key principles were applied here:
a) Principle of Value - Offering visitors more value for money with bundled combo tickets to multiple attractions.
b) Principle of Loyalty - Awarding loyal visitors with better pricing. I was stunned to hear that they have 100,000 guests on their annual membership programme.
c) Principle of Compassion - Free admission or special offers to underprivileged groups, plus free admission to seniors and discounts for students.
The outcomes of the above? Very impressive. From an average of about 2.8 million visitors a year (1999), Ocean Park rose to hit close to 5 million visitors in FY 2006/2007. Earnings have also swung from the red (-HK$80.5 million in 2000/01) to very positively in the black (HK$156.5 million). Today, Ocean Park has something like close to HK$1 billion in the bank!
From my chat with Paul, the key lessons for any marketer are:
1) Focus on your strengths. Don't fight tooth for tooth with bigger boys.
2) Give the customers what they want.
3) Go back to the fundamentals. Yep, we are talking about the 4 Ps (or 7 Ps).