DCP managers were excited about their entry into the food and beverage 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; could the company use its “magic” to get children to switch from sugary, processed foods and become lifelong converts to a more nutritious diet? What was the food industry’s responsibility in this controversial space?
4. It comprises of four major business segments:
Media Networks, Parks and Resorts, Studio
Entertainment, and DCP.
5. Disney held the top spots for the world’s most
valuable franchise characters with Mickey Mouse &
friends valued at over $5.8 billion.
6. DCP licensed it brand characters to merchandise to be
sold at retail outlets in the following category:
Soft lines , Buena Vista Games, home & infant,
Hardlines, publishing and toys.
7. DCP came up with Two more sales model along with
its traditional licensing model.
8. A Sourcing Model was essentially contract manufacturing,
where products were created and designed by Disney and
featured the Disney brand, but the licensee would handle
manufacturing, sales and marketing.
9. The Direct to Retail model, entailed partnering directly with
retailers who were, in DCP’s estimation, “winners in their
channel/marketplace.” The DTR distribution model meant selling
brand and character rights directly to retailers.
10. Using the new models, DCP now could focus on
Development and Innovation. These models also
happened to be popular with retailers.
11. Disney became the first studio to surpass $3
billion in global box office receipts in 2003.
12. In 2004, The Walt Disney Company found
itself in the middle of a maelstrom.
13. The percentage of overweight children
around the world started to increase.
14.
15. Disney Consumer Products (DCP) saw it as an
opportunity to reconsider its entire range of food
products but this was a risk in the eyes of many.
16. DCP leadership embarked on a mission to improve
the nutritional value of its licensed food products
17. DCP managers realized the company would need to
establish credibility with the U.S. government,
parents and nutritionist
18. They organized focus groups, group sessions and
shopping trips with mothers to size the children’s
food market.
19. OBSERVATION 1:
Mothers perceived Disney products with high quality, and
trustworthy to line of food and beverages. They associated
Disney with “Magic”.
20. OBSERVATION 2:
Peer pressure and advertisement influences children’s
preferences which in turn influenced purchase decisions.
21. To appeal the mothers, products needed to be portion controlled,
be high quality, taste good, omit or reduce fat and sugar and be
requested by their children & Kids just want fun graphics and
shapes, good taste, and great fun
22. DCP made efforts to create food product standards &
nutritional guidelines that would apply to both licensed
and proprietary products for new product lines.
23. With Vision: “a quality range of Disney integrated
foods that answers children’s daily needs in an
entertaining way—in short, good food, great fun.”
24. Hence DCP had to reformulate some products ,
shrinking portion for others and phase out some
products that could not meet the guidelines.
27. First, DCP would offer products that already had
broad appeal such as milk or peanut butter. They
would try to make it healthier.
28. The second was to take products that were already
healthy and make them more “fun.”
29. The third was to use packaging to inspire product
sampling, such as making water bottles in the shape
of characters.
30. DCP introduced its first offerings: fresh fruits
marketed by a new licensor, Imagination Farms.
31. Though fruit was naturally nutritious, DCP management knew
that it would take some time to bring all of its products into
compliance with its newly developed nutritional requirements
and set a target of 2008.
33. DCP developed a broad range of products with Cincinnati-based
Kroger Supermarkets. Together, Disney and Kroger sized the
opportunity at $250 million in annual revenue
34. They used focus groups and Nielsen data to validate the
categories and products they had selected as well as the brand
name: Disney Magic Selections.
35. Future:
Managers envision publishing cookbooks, televising cooking
shows for children, and linking its nutritional efforts with exercise
programs..
36. Future:
Extending its offerings from retail supermarket products to food
service (school lunch programs) and out-of-home consumption in
restaurants was also under consideration.
37.
38. Strength: Everyone believes in the quality provided by Disney is
the best.
Consumers think that The Brand symbolizes magic.
Also the goodwill of the company is pretty high.
39. Weakness: Large R&D costs and it doesn’t have its own
manufacturing units.
The Brand is not going for producing revenues which
might come handy during hardships.
40. Opportunities: Wide range of products available to design in
accordance with their characters.
Huge improvement possible in online stores.
41. Threats: Disney is facing really tough competition.
The company faces huge risks in product innovation,
also some of the retailers might turn on Disney.
42.
43. Disclaimer: Created by Dhruv Kulshreshtha, BITS Hyderabad,
during a marketing internship by Prof. Sameer Mather
IIM Lucknow.
