“BETTER FOR YOU”

IN 2005,AMERICA WAS HIT BY AN EPIDEMIC

OBESITY

BUT AT THE SAME TIME,SOMETHING INTERESTING HAPPENED

DISNEY CONSUMER PRODUCTS IN 2004 ESTIMATED THAT IT’S FOOD PRODUCTS ACCOUNTED FOR LESS THAN 1% OF CHILDREN’S FOOD MARKET

THIS LED TO AN IDEA

DISNEY DECIDED TO ENTER THE FOOD AND BEVERAGE INDUSTRY.

BUT THEY WANTED TO DO IT IN A HEALTHY WAY

THIS WAS ALSO NEEDED BECAUSE….

THEIR PORTFOLIO MOSTLY CONSISTED OF FATTY STUFF.THIS WAS ALSO REFLECTED IN THEIR CO-BRANDING EFFORTS WITH BRANDS LIKE MC DONALDS

BUT BEFORE ANYTHING, THEY FACED SOME FRICTIONING ELEMENTS

CRITISIZM

COMPETITION

DISTRIBUTION PROBLEMS

NEVERTHELESS,THEY WENT ON TO CAUSE AREVOLUTION

MEANWHILE,IN 2005 & 2006FDA AND IOM PUSHED HARD TO PROMOTE NUTRITION

AND THUS,THE TIMINGS WERE RIGHT FOR DISNEY

FIRST THINGS FIRST

THE COMPANY AUDITED 2100 OF IT’S FOOD PRODUCTS

WHILE 41% OF PRODUCTS ALREADY COMPLIED THE GUIDELINES BY FDI,MORE THAN A QUARTER NEEDED TO BE PHASED OUT

NOW IF THEY WERE TO SUCCEED,THE COMPANY NEEDED GOOD BUSINESS MODELS

3 WAYS TO GO

TRADITIONAL

LICENSINGSOURCING DIRECT TO

TRADE

#1 TRADITIONAL LICENSING

LINCENSEES HANDLED

PRODUCT INNOVATIONMANUFACTURINGSALESAND MARKETING

#2 SOURCING

CREATED AND DESIGNED BY DISNEY,MANUFACTURED, SOLD AND MARKETED BY THE LICENSEE

#3 DIRECT TO RETAIL

SELLING THE BRAND RIGHTS AND CHARACTERS TO RETAILERS WITH STRONG CONNECTIONS,RETAILERS HANDLED MANUFACTURING AND MARKETING

NOW,TWO BIG THINGS HAPPENED TO DISNEY

#1 IMAGINATION FARMS

THIS WAS A COMPANY FOUNDED IN 2006,TO SERVE AS A LICENSEE TO DCP

AND THE PEOPLE AT IMAGINATION FARMS USED VARIOUS MEANS TO EARN SUCCESS

DISNEY CHARACTERS WERE USED EFFICIENTLY TO ATTRACT THE CHILDREN

PLU STICKERS WITH DISNEY CHARACTERS WERE USED ONTHE FRUITS

BAGGED FRUITS AND VEGETABLES FEATURED A BACK PANEL WITH NUTRITIONAL INFORMATIONFOR CHILDREN

#2 DISNEY AND KROGER

THIS WAS A DTR RELATIONSHIP,AND KROGER WAS SELECTED BECAUSE IT HAD A 12% MARKET SHAREIN US GROCERY MARKET

AND THIS GAVE BIRTH TO “DISNEY MAGIC SELECTIONS”

THE PRODUCTS SOLD HAD A “BETTER FOR YOU”CALLOUT

CHEF MICKEY APPEARED ON PACKAGED FOOD

FARMER MICKEY APPEARED ON FRESH FRUITS AND VEGETABLES

PACKAGES BACK PANELS FEATURED MAZES AND PUZZLES FOR CHILDREN

AND ALL THESE MARKETING EFFORTS WERE DONETO MAKE THE CHILDREN FALL IN LOVE WITH THE BRAND

AND AS A RESULT OF THESE AND MANY MORE SUCH BUSINESS ENDEAVOURS,DISNEY WAS FINALLY ABLE TO “MARKET NUTRITION TO CHILDREN”

BUT,

IN THE PROCESS,DISNEY TOOK A MULTI MILLION DOLLAR HIT FOR ALL THE PRODUCTS IT DISCONTINUED

BUT IT WAS NOT ABOUTTHE PROFITS IN THE FIRST PLACE

FOR DISNEY IT WAS FOR SOMETHING BIGGER THAN THAT

VALUE TO IT’S CUSTOMERS

SUMMARY-IN 2005 AMERICA WAS HIT HARD BY OBESITY

-DISNEY ENTERED THE FOOD MARKET AS IT SAW THE OPPORTUNITY

-IT FOLLOWED THE RECOMMENDATIONS OF FDA

-3 BUSSINESS MODELS WERE PREPARED (LICENSING,SOURCING AND TDR)

-IMAGINATION FARMS AND DISNEY MAGIC SELECTIONS WERE CREATED IN THE PROCESS

-FINALLY DISNEY MARKETED NUTRITION TO CHILDREN AND EARNED BRAND EQUITY BY TAKING A MULTI MILLION DOLLAR HIT THROUGH IT’S EFFORTS

DISCLAIMER

CREATED BY SAMEER TIWARI, NIT RAIPUR DURING AN INTERNSHIP UNDER PROFESSOR SAMEER MATHUR, IIM LUCKNOW.