Disney Consumer Products: Marketing

Nutrition to Children

DISNEY TIMELINE

1923

19321950

1955 20062004

Disney is founded by Walt and Roy Disney

Disney Licensing becomes a formal business unit

Disney expands beyond film and television

Disneyland opens in Anaheim,California

Obesity becomes a major problem

DCP launches “Better for You” campaign

CURRENT MARKET POSITIONING4 SEGMENTS

Media Networks

Disney Consumer Products

Studio Entertainment

Parks and Resorts

Line of Products

Softlines

Apparel Footwear Accessories

Buena Vista

Games

Home and

InfantPublishin

g Toys Hardlines

FoodHealth

and beauty

Electronics

Stationery

DISNEY PRODUCT WIDTH

9.16 billion hours in Disney-branded experience

Net Income $2.5 billion

World’s most valuable franchise characters

$5.8 billion

$5.6 billion

DCP’s Licensing methods• Licensing–only Model

Gave licenses to company to feature Disney characters on their products and the company was responsible for manufacturing, sales and promotion.• Source Model

Contract manufacturingProducts were created and designed by Disney and

featured the Disney brand, but the licensee would handle manufacturing, sales and marketing. • Direct-to-Retail Model

Partnering directly with retailersEstablished successful DTR relationships for apparel

with Target, Wal-Mart and other large retailers

Packaged food portfolio mostly sweets and treats.

Disney stood for “Fun” and “Magic” to appeal children

OBESITY EPIDEMICIncrease in obese and overweight children

• 2-5 year old 5%-14%

• 6-11 year old 4%-19%

• 12-19 year old 5%-17%

Increase in portion size

Disney’s exclusive partnership with McDonald’s made it indirect factor

Televised ads

Food advertisements promote food purchase requests by children to parents, have an impact on children’s product and brand preferences, and affect consumer dietary behaviour

FACTORS

Institute of Medicine recommends USDA to develop standards for marketing foods beverages to children based on portion sizes and quantitative distribution of constituent products.

“Dietary Guidelines for Americans” recommended that

children and adults adopt a “balanced eating pattern,” consume a variety of nutrient-dense foods and

beverages and limit their intake of saturated and trans fats, cholesterol, added sugars, and salt.

What was Disney’s response to this ?

DCP saw this obesity epidemic as an opportunity to revamp its product line, rationalize and broaden its product and services width.

DISNEY’S MARKET ANALYSIS To size the food business opportunity To discover if Disney’s brand equity would transfer to

a children’s line of products

METHODOLOGY

Used focus groups, group sessions and shopping trips with mothers of children aged 2 to 13 year olds to determine which product categories to target

OBSERVATIONS1. There was a gap between the

foods children requested and the foods their mothers are willing to buy

2. Children influence purchase decisions, even in their absence at stores.

3. Mothers associate Disney strongly with magic even when it comes to food.

4. Peer pressure and advertising strongly influence kids preferences.

WHAT TO BE DONE NOW?

1. Packaged food portfolio needed to be balanced.

2. Introduction of a new product line which is moderately priced and positioned to be fun inducing to appeal the children

3. To appeal the mothers, products needed to be portion-controlled, be high quality, omit trans fat.

4. Products must be non-patronizing and Mom-approved.

Could Disney provide leadership for the rest of the food industry and use its brand strength to reach children?

Could the company use its “magic” to get children switch from sugary, processed foods to a more nutritious diet?

Disney Nutritional GuidelinesQuality range of Disney integrated foods that answers children’s daily calorie requirement in an entertaining way.

GOOD FOOD , GREAT FUNBalance portfolio • 85% main meals • 15% treats

Divided its array of food into 5 categories and assigned calorie value to each

• Main meal• Side dish• Snacks• Drinks• Treats

Products would be minimally processed and contain controlled level of added sugar and no trans fat.

Minimized use of additives

Reformulated some products and shrunk portions of some

3 APPROACHES TO CREATION OF DISNEY FOOD PRODUCTS

Offer products that already has broad appeal e.g. milk , peanut butter

Take products which were already healthy and make them more “fun” e.g. Whole wheat pasta

Use packaging to inspire product sampling e.g. making water bottles in shape of characters

Imagination Farms Marketed fresh fruits and packaged good

with licensed Disney characters.

Provided retailers with customised marketing programs such as seasonal promotions, tie-ins with DVD releases

DTR Relationship with Kroger SupermarketsLaunched exclusive Disney line of products called

“Disney Magic Selections”

Who were Disney’s Competitors?

Nicklodean

Sesame WorkshopLicensing deal with Del Monte Foods

Del Monte peas, corn and green beans featured Elmo, Grover andCookie Monster characters

“Healthy Habits for Life” campaign

Warner Bros.Signed licensing agreement with Ready Pac

Featured Warner’s Bugs Bunny, Tweety and Tasmanian Devil characters

Promoted lunchbox alternatives instead of source produce

WHAT RISKS DOES DISNEY FACE?

Immediate loss of revenue from this share of products

Pricing: Had to be competitively

priced within produce department and private brands

Had to live up to the premium-value image as well

Legacy:Scepticism from media and public was expected regarding the new products

Differentiation and Competition Disney was a late-entry

into the healthy food-promotion sector

Had to rely on wide distribution and broad product line to sustain competitors

Growth and Distribution Disney wanted to license and

develop additional lines.

Imagination Farms produce had to co-exist with Krogers, thus posing threat of internal competition.

WHAT MORE CAN DISNEY DO?

License other characters than Mickey and Winnie to expand market share and ease product differentiation

Appeal not only the children but also educate parents to go for healthy food in right proportions

Introduce food programs to educate kids on the disadvantages of unhealthy food

Perfect co-ordination between stakeholders and Disney

Licensees must learn the mode and method of promoting healthy eating habits while keeping the core values of Disney intact

The success of Disney to successfully inculcate healthy eating habits in kids will take time as bad habits take time to be replaced with new one.

Disney has to counter the risks posed by this bold step and not get deterred by short term losses. On a long term and with effecting product development and marketing strategy , the company shall reap huge profits.

• History of Disney• Current situation

analysis• The obesity epidemic• Market analysis by

Disney• Disney’s course of

Action• Competition in market• Risks faced • Recommendations• Conclusions

DISCLAIMERThis presentation was repared by Swati Samikshya Sahoo, NIT Rourkela as a part of internship under Prof. Sameer Mathur, IIM Lucknow.