Case study analysis of Disney Consumer Products. Made under the guidance of Prof. Sameer Mathur, IIM Lucknow

1. Disney Consumer Products:
Marketing Nutrition to
Children

2. Four Segments of the Walt Disney Company

3. $32 Billion
Company in
2005

4. $2.5 Billion
Net Income in
2005

5. Consume
rs spent
9160
hours
annually
with
Disney

6. $5.8
Billion
Worth
96% kids are
familiar with
him

7. $5.6
Billion
Worth
92% kids are
familiar with
this guy!

8. The lines of Business:
Clothing and Apparel
Buena Vista Games
Home & Infant
Food, Electronics, Health and Beauty
Publishing
Toys

9. Merchandise Licensing
Licensing and Distribution Models
DCP had three types
1. Traditional Licensing Model
2. Sourcing
3. Direct to Retail ( DTR)
The DTR model was particularly successful!
Relations with Wal-Mart and other retailers

10. Market Analysis:
Organised focus groups, group sessions and
shopping trips with Mothers to understand the
children’s Food Market.

11. In We Trust!
Research proved that Mothers associated Disney with high
quality & trustworthiness
And they extended these perceptions to DCP as well!

12. Children influence purchasing patterns
Peer Pressure affected the preferences

13. Finally,
Mothers
wanted
Kids
wanted
Controlled
Portions, High
Quality
Reduced
Sugar and fat
Fun Graphics,
Good taste,
Fun

14. The Goal
Good Food, Great Fun

16. The Obesity Epidemic
30% The Percentage of American Children between 5 and 9 years
of age who were overweight

17. Increased Portion Sizes

18. Sugar Sweetened Products

19. Lack of Exercise

20. Disney Consumer Products was blamed as a
contributor

21. But DCP saw an
opportunity.
Revamping their entire
product line to meet
the IOM guidelines

23. Product Portfolio
Main Meal Side Dish Snacks Drinks Treats
41 % No changes required
7 % To be reformulated
28% To be phased out
To
meet Nutritional
Guidelines

24. Three approaches to creating new, compliant
Disney Food Products
1.Marketing products that already had a broad
appeal
2.Taking Healthier products and making them
more fun
3.Partner with manufacturers and take something
that is already working and make it more fun

25. Licensing contract to Imagination Farms
Fresh produce company

26. Three Pronged Strategy:
•Differentiate Commodity Produce through
promotion
•Create value-added products through product
preparation
•Develop exclusive produce varieties that would
yield more child-friendly foods

27. PLU Stickers and Innovative Packaging
One Mum said “ My daughter doesn’t pick up an apple or a
peach. She picks up her favourite Disney Character”

28. The Competition
Though they were in the business
since long, these competitors were
not able to portray the magic that
Disney did!

29. Partnership with Kroger:
Largest pure grocery retailer in the U.S
A New Brand: Disney Magic Selections

30. SWOT Analysis

31. Strengths
Strong Diversification
Kroger Partnership
Innovative products
Brand recognition
Dynamic response to
market
Weaknesses
Losses due to revamping
products
Outsourced manufacturing
Costs for innovation
Internal competition among
brands
Opportunities
Disney’s Character
familiarity
Mothers’ acceptance
Responsiveness to the
obesity epidemic
Threats
Competitors like Nick,
WB
Pricing Competition
Ability to differentiate

32. The Disney Way
Used
story telling
and enabled
its characters
to
communicate
to the children

33. The Result
Disney made its contribution to fight
Child obesity.
They revamped their product-line to
suit the nutritional guidelines.
Kids are happy. Moms are happy.
Disney was happy. But they took their
short term financial hit.

34. Pricing and Value:
Struggle to make
quality products at
competitive pricing
Legacy:
Put emotion aside and
concentrate on “Better
for you” strategy
Competition:
Competitive strategies
from Nick, WB and
Sesame Street
Growth:
Opening many product
lines made them
compete against
themselves.

35. Looking Forward
What should
Disney do?

36. Create New Characters
Will ensure expansion of Market share

37. Healthy Foods on Disney Programs
Disney should show its characters eating
healthy foods to promote a healthy lifestyle

38. Health Campaigns for Parents
Provide proper information to parents
about good food habits and then market
Disney products to them

40. Disclaimer:
Created by,
Jayanth Narayan,
BITS Hyderabad,
during a marketing
internship under
Prof. Sameer Mathur,
IIM Lucknow