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A Case Study of Disney Consumer Products: Marketing Nutrition to Children
The Mouse VS. The Fat
IndexHi
stor
y Of Disney
Prob
lem
Definition
SWO
T Analysis
Prob
lem
Solution
Case Conclusion
History
1932-1980 1923
The Walt Disney company with the debut of Mickey Mouse. 1932
Disney won the Academy Award for Best cartoon.
1954 Disney debuted its first television
program, “the Wonderful World of Disney”. 1971
Walt Disney World was completed.
1980-2003 1984
Disney began focusing more on films for television.
1996 Disney purchased media company
Capital Cities /ABC for $19 billion. 2003
Disney became the first studio to surpass $3 billion in global box office
receipts.
Disney Consumer Products
Soft Lines
Buena Vista
GamesHard Lines
Home and
InfantToys Publishin
g
DCP’s 3 Licensin
g Models
Traditional
SourcingDirect to
Retail(DTR)
DCP: Wanted to focus on product innovation, creativity and quality, and building relationships with key retailers.
Obesity• In 2004, more than 30% of US children between
the ages of 5 and 9 years were overweight and 14% were obese.
• Experts characterized childhood obesity in the United States as epidemic
• social trends such as increased portion sizes, eating out more often, increased consumption of sugar-sweetened foods and lack of exercise held responsible
Disney faced criticism for contributing to obesity epidemic.
IOM recommendations:• Actively promote healthful diets for children. • Create or reformulate children’s products to
reduce calories, fat, salt and added sugar • Develop an “empirically validated industry-
wide rating system”.• Enforce strict marketing standards and
adhere to self-regulatory guidelines• Avoid linking “nutritionally questionable”
products to popular figures.
Disney Reacted Fast
• Reconsidered nutritional value of its entire range of products.
• Sought to lead the rest of the food industry in fighting obesity by using its brand image.
• Recognized need to establish credibility among parents, children, nutritionists and authorities.
• Did a corporate level audit of its entire line of food and beverages and differentiated products based on their relevance to their new goals.
But can the company use its magic to get children to switch from sugary,
processedfoods to nutritious diets?
Product Development
Alternatives with DisneyPros Cons
Keep Traditional LineKeeping broad consumers base.Preferable by common children.
Negative public opinionNot supporting by government regulation.
Healthy Program Line
Establish good imageStrong Brand Strong distribution ChannelPreferable by common parents.
Possible to loss broad consumers base.
SWOT
ANALYSIS
Strength• Good brand image
and revenue• Extensive exposure
media• Cooperates with big
retailers (Kroger and Wal-Mart)• Consumers spend
high amount of time on Disney products.
• Licenses the top earning fictional characters.
Strong revenue and therefore strong capital available for risky venture.
Total 9160 million consumer hours spend exposed to Disney entertainment activities.
WEAKNESS• No self-manufacturing
facility available to DCP.• With changing landscape,
licensees not willing to have terms dictated to them.
• Brand image of DCP as a sweets and treats brand.
• Branded foods accounted for less than 1% of the children’s market.
Opportunity• High exposure of Toon
Disney, its advertising cartoon-only channel.
• Licensing of most valued products.
• Top earning fictional character from its brand.
• Great brand image and character awareness among children, who are the initiators and mothers, who are at the top of decision making hierarchy.
Licensor of top ranked product with worldwide sale exceeding the next ranker by more than 3 times.
Value of top two characters more than twice that of any other brand.
Nickelodeon, Sesame Workshop and WB are some competitors of Disney who are challenging it, both in the entertainment segment and consumer products segment.
TOP RATED US BASIC CABLE NETWORK SINCE 1996
By 2005,unit sakes of darling clementivesIncreased by almost 25% after the DORA & SPONGEBOB character were added to the product packaging.
In 2006,Nickelodeon announced plan to extend its freshFruit and vegetable line to apples, pears and cherries,soyabean And carrot and apple dips.
SESAME WORKSHOPNon profit educational organization
In 2006, Del Monte food signed a licensing deal with Sesame workshop.
Preschoolers’ consumption of broccoli increasedBy 28% when branded with sesame street character.
In 2006, Ready Pac ,a produce company that packaged , washed and cut ready to eat fruits and vegetables signed a licensing agreement with Warner Bros.
Warner`s bugs bunny , Tweety and Tasmanian Devil character are featured on cut and ready-to-eat snack single-serving package of fruits.
They also marketed carrots and celery served with ranchdip or peanut butter.
Disney’s solution was a two-pronged approach.1) Improving its
product line on a nutritional basis.
2) Making the food appealing to children and delivering on the Disney promise of “magic”
Better for You Guidelines
• DEVISED BETTER FOR YOU NUTRITION GUIDELINES BORROWING FROM THE FDA’S DIETARY GUIDELINES, WHICH PRESCRIBED OPTIMUM CONSUMPTION LEVELS FOR FOODS AS WELL AS CALORIC INTAKE RECOMMENDATIONS FOR CHILDREN.
• ARRAYED ITS PORTFOLIO OF PRODUCTS INTO FIVE CATEGORIES: MAIN MEAL, SIDE DISH, SNACKS, DRINKS AND TREATS, WITH CALORIES ALLOCATED TO EACH CATEGORY.
• UNDERTOOK A GOAL TO BALANCE ITS PORTFOLIO SO THAT 85% OF ITS PRODUCTS COULD BE CLASSIFIED AS MAIN MEAL, SIDE DISH, SNACK OR BEVERAGE AND ONLY 15% COULD BE CATEGORIZED AS TREATS.
• Before officially implementing its nutrition guidelines, DCP audited 2,100 of its food products.
• Reformulated some products and shrunk portions for others; as a result, by September 2005, 75% of its U.S. products complied with its nutritional standards.
• Planned to have all its products brought into compliance or phased out by 2008.
Demographic Segmentation :Age : Children and adultsGender : Male and FemalePsychographic : Lower class, Middle class, Upper class
Behavioral Segmentation:Taste, Fun and Magic
Geographic Segmentation:Europe and U.S.A
Disney effectively segmented its consumer base before launching its new product line.
IMAGINATION FARMS• Disney began licensing its
characters to Imagination Farms, 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.
• Disney Farms produce was sold in major supermarket chains, including Albertsons, Safeway, Supervalu and Wal-Mart at a competitive wholesale price.
Disney and Kroger• DCP developed a broad range
of products with Cincinnati-based Kroger Supermarkets.
• Disney and Kroger sized the opportunity at $250 million in annual revenue and used focus groups and Nielsen data to validate the categories and products they had selected.
• Together, they selected grocery that supported Disney’s efforts and fit its Better for You nutritional guidelines.
12% market share with max. no. of supermarkets.
Product candidates for Disney Magic
Selections
Product candidates for Disney Magic Selections
Encircled products are opportunities to grow for Disney and Kroger as they have reasonable Private label Mainstream share but contrastingly less Better for You share
Other Ventures• In January 2005 the
company launched a 15-item range with Carrefour, a France-based international supermarket group.
• In March 2005 introduced a 10-item line with Metro, Europe’s second largest retailer after Carrefour.
Changing children’s perspective and their habits will be an uphill task for Disney
The company will need to closely collaborate with other stakeholders
Advertising and Marketing will continue to remain the key to this strategy as they will influence the mindset of the consumers the mostHowever, if Disney succeeds in effectively fighting the obesity epidemic and sets a leadership example, it will witness unprecedented brand loyalty in its future.Its sales will also drastically increase and it is a question of when, not how, given the fact that the world is becoming increasingly health conscious.
Disclaimer
Prof. Sameer MathurIndian Institute of Management , LucknowMarketing Professor: August 2013 – Present
McGill UniversityMarketing Professor: July 2009 – July 2013
Carnegie Mellon UniversityPh.D. in Marketing : August 2003 – June 2009
These slides are created by Divyansh Khare, ISM Dhanbad, as part of a Marketing Internship under Prof. Sameer Mathur.