Disney Consumer Products: Marketing Nutrition

to Children

Harvard Business School Case

DISNEY ‘S POPULAR CHARACTERS

HISTORY OF WALT DISNEY COMPANY.

COMPANY OVERVIEW.

PROBLEMS FACED AND CHALLENGES.

BUSINESS STRATEGIES.

ALTERNATIVE STRATEGIES.

CONCLUSION.

FUTURE VISION.

Walter Elias Disney and his brother, Roy, founded Disney Brothers Cartoon Studio, later renamed it as “The Walt Disney Company”.

1923 - Debut of Mickey Mouse.

1932 - Licensing became a formal business unit.

1950 – Expansion beyond film and television.

1955 - Opened Disneyland in Anaheim, California.

2004 - The obesity epidemic.

2006 - DCP launches offering of fresh fruits.

Studio Entertainment created animated and liveaction films.

Walt Disney Parks and Resorts operated or licensed 10 theme parks in North America, Europe and Asia as well as 35 Disney Vacation Club resorts and two luxury cruise ships.

DISNEY CONSUMER PRODUCT CATEGORIES

Soft lines (apparel, footwear, etc.)

Buena Vista Games

Home & infant

Hard lines(food, health & beauty, etc.)

Publishing

Toys

REASONS !!!!

Some industry experts pointed to progressive increases in portion sizes from 1977 to 1998 as a significant factor in rising obesity rates.

Other experts described television advertising as a primary factor.

Intake of high calorie, high fat foods and beverages such as candy, fast food etc. by children.

Eating out more often, increased consumption of sugar-sweetened foods and lack of exercise were major contributing factors.

DISNEY CURRENT OFFERING CONTRIBUTED TOWARD GROWING OBESITY AMONG CHILDREN & ADULTS.

Create food product standards and nutritional guidelines that would apply to both licensed and proprietary products.

Develop “a quality range of Disney integrated foods that answers children’s daily needs in an entertaining way—in short, good food, great fun.

Disney arrayed its portfolio of products into five categories: main meal, side dish, snacks, drinks and treats. Next, calories were allocated to each category. Disney’s goal was 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.

The first challenge was to make the products they already love healthier?

The second was to take products that were already healthy and make them more “fun.”

The third was to use packaging to inspire product sampling, such as making water bottles in the shape of characters.

The key to getting children to eat healthier was to provide plenty of choices.

IMAGINATION FARMS

It started marketing fresh fruits and vegetables by licensing its characters to Imagination Farms, a national fresh produce marketing company.

It used three-pronged product development strategy: differentiate commodity produce through promotion, create value-added products through product preparation or packaging, and develop exclusive produce varieties that would yield more child-friendly foods.

Disney Farms produce was sold in major supermarket chains, including Albertsons, Safeway, Supervalu and Wal-Mart, though the assortment varied significantly from one retailer to the next.

DISNEY BELIEVED THAT IT CAN BEAT COMPETITION BECAUSE OF ITS HIGH NUTRITIONAL STANDARDS AND ITS UNIQUE “DISNEY MAGIC”.

DISNEY AND THE KROGER

In addition to licensing produce through Imagination Farms, DCP developed a broad range of products with Cincinnati-based Kroger Supermarkets, the largest pure grocery retailer in the United States.

WE CAN CLEARLY SEE THAT KROGER HAD A LARGEST MARKET SHARE EVEN GREATER THAN WAL-MART.

ALTERNATIVE STRATEGIES

IT COULD HAVE USED ITS FILMS & TV SHOWS TO PERSUADE CHILDREN TO EAT HEALTHY FOODS.

IT COULD HAVE ADVERTISED THE NEED TO EAT NUTRITIONAL FOOD IN ITS MEDIA NETWORK AND DISNEY PARKS & RESORTS.

IT COULD HAVE SPECIFICALLY DEVELOPED ANIMATED CHARACTERS THAT PROMOTED THE NEED TO EAT HEALTHY FOOD.

PRICING AND VALUE

Though Kroger’s DMS products were priced similarly to private brands and Imagination Farms’ Disney Gardens products were priced competitively within the produce department, DCP managers understood that its products had to be affordable.

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

Products were healthful, child friendly & fun & they had a “DISNEY MAGIC” in them. So they were accepted by consumers & media.

LEGACY

DCP managers believed that the combination of a broad product line, wide distribution and the Disney brand would win over Moms.

They could beat the competition because even if they develop and match our nutritional standards, they cannot access “Disney magic”.

DIFFERENCIATION & COMPETITION

Disney wanted to license or develop additional lines. DCP managers believed that the company could differentiate additional lines using characters, brand and price.

Retailers won’t turn their products down because of the Kroger relationship. The chief concern is that our products must be profitable for retailers.

GROWTH & DISTRIBUTION

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 is also under consideration.

CREATED BYANUGRAH NIMAVATBTECH (ELECTRONICS & COMMUNICATION)NIT – SURAT

DURING MARKETING INTERNSHIP UNDER THE GUIDANCE OF

PROF. SAMEER MATHURIIM - LUCKNOW

DISCLAIMER