Harvard Case Study- Disney

Marketing nutrition to children

DISNEY CASE STUDYMade by- Rhythm TyagiDTU

History of the brandFounded by Walter Elias Disney and his brother Roy and later renamed as Walt Disney Company.In 1923, the famous Mickey Mouse is debuted which is the first cartoon with sound.

Disney film are known for their beautiful imagery and for emotional storytelling. Thus, the company won the Academy Awards for their cartoons. This followed the success of release of Snow White, highest grossing film at the time.

The brand debuted into amusement parks including a theme park boasting of hotels, golf courses, shopping centres.

After the death of roy,Eisner took over and the company focused more on its entertainment assets by acquiring the famous ABC channel.

here!

CaliforniaFlorida

Paris

Shanghai

Hong Kong

Tokyo

Disney parks globally

9.16 billion

Around the world, families spent an annual average of

hours immersed in Disney-branded experiences and products

WHY?

Media networks

STudio entertainment

Parks and resorts

DCP

Diversification of the brand into 4

categories-

Merchandise licensing and DCP× Merchandising at Disney dated back to 1929, when,

because of the popularity of the first Mickey× Mouse films, the company began to receive requests

to license the character.× Disney Consumer Products was responsible for

extending the Disney brand to merchandise ranging from apparel, toys, home décor and books to interactive games, food and beverages, electronics and animation art

1. Licensing Model- DIsney being a big brand was accustomed to settling terms with licensees for distribution. However, the scenario of market was changing and DIsney had to come up with two new models for distribution:

2. Sourcing- When licensees couldn’t provide with distribution strength and superior product differentiation, DIsney switched to its Sourcing model.

3. DTR- Direct to retail model involves partnering with retailers who are winners in their own marketplaces.

NEW

DCP had been a long-time licensor of packaged foods, the portfolio had consisted largely of candy and ice cream.

They did have a few cereals, Minute Maid juices, some frozen fish and chicken—but the portfolio was mostly sweets and treats.

It was largely an extension of the park experience. Their strategy then was-Disney is about fun and they should be in fun categories.

However, In 2004, health experts estimated that more than 30% of American children between the ages of 5 and 9 years were overweight and 14% were obese.The Advertising Standards Code of the Communications Act of 2003 ensured that broadcasters followed a tough set of rules regarding advertising food to childrenDramatic increases in childhood obesity caused the company to consider the nutritional value of its own food products. Disney conducted a corporate-level audit of the food and beverage offeringsDCP managers realized the company would need to establish credibility with the U.S government, parents and nutritionists.

This was a significant challenge given the company’s existing licensing deals with candy and treat manufacturers and its long-standing role as a toy supplier to McDonald’s, itself under constant attack as a significant contributor to the obesity epidemic.

THE

Disney found out that mothers transferred their perceptions of the Disney brand as high quality, trustworthy and familiar to a line of food and beverages.

Moms associate Disney strongly with magic—it is the key image that comes to mind—even when it comes to food.

Thus, they combines the likes of children with the idea of loyalty of their moms into their products.

RESEARCh

STrategy- product innovation DCP’s internal nomenclature for its evolving

healthier product line—products would be minimally processed, have controlled levels of added sugar, and contain no trans or hydrogenated fats.

Calories were limited by either adjusting a ood’s formulation or its portion size. In addition, the company minimized the use of additives.

They set limits within the problem areas of calories, fat, added sugar and sodium. We also look for ways to promote fiber and calcium and prefer to use whole foods that are intrinsically dense in nutrients.

STrategies for overcoming the problem3

312

InnovationThe third strategy was to offer products that already had broad appeal such as milk or peanut butter.

Creative PackagingInnovative packaging was used to inspire product sampling, such as making water bottles in the shape of characters.

RebrandingProducts that are already healthy and make them more fun. They partnered with source manufacturers and took something that is already working and make it more fun. For example, we could mold whole-wheat pasta into character shapes

Thats All planning!Where’s the

implementation?

Imagination Farms Kroger

Disney began licensing its characters to ImaginationFarms, a national fresh produce marketing company founded specifically to serve as a licensee to dCP, in March 2006.

DCP and Imagination Farms used a three-pronged product development strategy:

1.Differentiate commodity produce through promotion

2.create value-added products through product preparationor packaging

3.develop exclusive produce varieties that would yield more child-friendly foods.

Disney+Imagination farms= taste, nutrition, magic

In addition to licensing produce through Imagination Farms, DCP developed a broad range ofproducts with Cincinnati-based Kroger Supermarkets,

60600000000

This is the annual sale of Kroger. It is the largest grocery retailer in the US

To be profitable with food,

you need to be in 80% of the nation’s outlets.

Kroger and Disney together launched the ‘Disney Magic Selection’ brand differentiated by a “better for you” health call-out which pictured a gloved, thumbs-up Mickey hand next to a “check it out” balloon that described the product’s health benefits.

Kroger used a variety of mickey centric characters like chef mickey, farmer mickey, mickey burgers, peanut butter etc.

The competitionSesame

WorkshopNickelodeon Warner Bros

Nickelodeon Spinach, baby carrots and clementines bearing SpongeBob Squarepants and Dora the explorer character images, licensed by children’s cable television channel Nickelodeon, began to appear on supermarket shelves.

Nickelodeon executives began contacting food manufacturers to explore new licensing partnerships for fruits and vegetables.The branding effort turned out to be an instant hit.

Sesame workshopDel Monte Foods signed a licensing deal with Sesame Workshop. They sold peas, corn and green beans featuring Elmo, Grover andCookie Monster characters on its labels.

A study conducted by Sesame Workshop found that preschoolers’ consumption of broccoli increased by 28% when the vegetable was branded with a Sesame Street character.

Warner Bros.Ready Pac, signed a licensing agreement with Warner Bros.And planned to feature Warner’s Bugs Bunny, Tweety and Tasmanian Devil characters on its Cool Cuts Ready Snax single-serving packages of fruit.

The company also marketed carrots and celery served with ranchdip or peanut butter, which it described as a “healthier snack alternative” and “the original kidpleasin’,Mom-lovin’ Dippity Delicious snack!”

Dcp’s food and beverage categoriesHealth Categories Staples Treats

Water/Juice

Pasta/Soups

Confections

MilkFruits Carbs/Breads Ice Creams

Vegetables

Yogurt/meat Cookies

You think all is well?

You need to reconsider

14,000New foods debut in US market each year

6%Successful

94% FAIL

Developing healthier food and beverage products or serving smaller portion sizes may beviewed by some private sector businesses as risks rather than as opportunities.

Making changes in the absence of broad-based consumer demand, whatever the market, conceivably can be seen as a risk to the private sector.

The food and beverage industries’ decisions are guided by key factors—including taste, palatability, cost, convenience, value, variety,availability, ethnic preferences, and safety—that drive consumer demand.

CHallenges

Pricing & Value LegacyDifferentiatio

n & competition

Growth & Distribution

Pricingproducts were priced similarly to private brands and Imagination Farms’ products were priced competitively within the produce department, the market expected premium pricing from Disney and this is a marketing challenge for them, to go out with lower pricing

Differentiation & CompetitionThere is competition and channel friction, but Disney can beat the competition because even if they develop and match our nutritional standards, they cannot access Disney magic,

LegacySome DCP managers wondered if the public—and particularly the media—would embrace the new food products..

Growth & DistributionThough DCP signed an exclusive DTR relationship with Kroger for the Disney Magic Selections line, Disney wanted to license or develop additional lines. DCP managers believed that the company could differentiate additional lines using characters, brand and price.

DCP was excited about their entry into the food market and planned to capitalizing on the vast resources of the Walt Disney Company to gain market share and acceptance for its new undertaking. Managers envisioned publishing cookbooks, televising cooking shows for children, and linking its nutritional efforts with exercise programs. Extending its offerings from retail supermarket products to food service (school lunch programs) and out-of-home consumption in restaurants was also under consideration. Disney—and by extension, DCP—was highly influential with children.

Credits× Google Images× www.fLickr.com× www.disney.in× www.disneyinternational.com× disneyworld.disney.com

Disclaimer

This presentation is made by Rhythm Tyagi, Delhi Technological University (Formerly Delhi College of Engineering) under prof. Sameer Mathur, IIM-L in the marketing management internship.