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Disney consumer products
Disney faced criticism for contributing to childhood obesity through marketing unhealthy food products. In response, Disney implemented a two-pronged strategy: 1) Developing "Better For You" nutrition guidelines to reformulate products, and 2) Making healthier foods appealing to children through branding with popular characters. Disney partnered with produce companies to market fruits and vegetables branded with Disney characters. It also collaborated with major retailers like Kroger to develop and sell compliant grocery products. Disney's solution aimed to improve its portfolio's nutrition profile while still delivering an engaging experience for children.
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Disney consumer products
- 1. A Case Studyof Disney Consumer Products: Marketing Nutrition to Children The Mouse VS. The Fat
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- 4. 1932-1980 1923 The WaltDisney company with the debut of Mickey Mouse. 1932 Disney won the Academy Award for Best cartoon. 1954 Disney debuted its first television program, “the Wonderful World of Disney”. 1971 Walt Disney World was completed.
- 5. 1980-2003 1984 Disney began focusingmore on films for television. 1996 Disney purchased media company Capital Cities /ABC for $19 billion. 2003 Disney became the first studio to surpass $3 billion in global box office receipts.
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- 7. DCP’s 3 Licensing Models Tradition SourcingDirect to Retail(DTR) DCP:Wanted to focus on product innovation, creativity and quality, and building relationships with key retailers.
- 9. Obesity • In 2004,more than 30% of US children between the ages of 5 and 9 years were overweight and 14% were obese. • Experts characterized childhood obesity in the United States as epidemic • social trends such as increased portion sizes, eating out more often, increased consumption of sugar- sweetened foods and lack of exercise held responsible
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- 11. IOM recommendations: • Activelypromote healthful diets for children. • Create or reformulate children’s products to reduce calories, fat, salt and added sugar • Develop an “empirically validated industry- wide rating system”. • Enforce strict marketing standards and adhere to self-regulatory guidelines • Avoid linking “nutritionally questionable” products to popular figures.
- 12. Disney Reacted Fast •Reconsidered nutritional value of its entire range of products. • Sought to lead the rest of the food industry in fighting obesity by using its brand image. • Recognized need to establish credibility among parents, children, nutritionists and authorities. • Did a corporate level audit of its entire line of food and beverages and differentiated products based on their relevance to their new goals.
- 13. But can thecompany use its magic to get children to switch from sugary, processed foods to nutritious diets?
- 14. Product Development Alternatives withDisney Pros Cons Keep Traditional Line Keeping broad consumers base. Preferable by common children. Negative public opinion Not supporting by government regulation. Healthy Program Line Establish good image Strong Brand Strong distribution Channel Preferable by common parents. Possible to loss broad consumers base.
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- 16. Strength • Good brandimage and revenue • Extensive exposure media • Cooperates with big retailers (Kroger and Wal-Mart) • Consumers spend high amount of time on Disney products. • Licenses the top earning fictional characters.
- 17. Strong revenue andtherefore strong capital available for risky venture.
- 18. Total 9160 millionconsumer hours spend exposed to Disney entertainment activities.
- 19. WEAKNESS • No self-manufacturing facilityavailable to DCP. • With changing landscape, licensees not willing to have terms dictated to them. • Brand image of DCP as a sweets and treats brand. • Branded foods accounted for less than 1% of the children’s market.
- 20. Opportunity • High exposureof Toon Disney, its advertising cartoon-only channel. • Licensing of most valued products. • Top earning fictional character from its brand. • Great brand image and character awareness among children, who are the initiators and mothers, who are at the top of decision making hierarchy.
- 21. Licensor of topranked product with worldwide sale exceeding the next ranker by more than 3 times.
- 22. Value of toptwo characters more than twice that of any other brand.
- 24. Nickelodeon, Sesame Workshopand WB are some competitors of Disney who are challenging it, both in the entertainment segment and consumer products segment.
- 25. TOP RATED USBASIC CABLE NETWORK SINCE 1996 By 2005,unit sakes of darling clementives Increased by almost 25% after the DORA & SPONGEBOB character were added to the product packaging. In 2006,Nickelodeon announced plan to extend its fresh Fruit and vegetable line to apples, pears and cherries,soyabean And carrot and apple dips.
- 26. SESAME WORKSHOP In 2006,Del Monte food signed a licensing deal with Sesame workshop. Preschoolers’ consumption of broccoli increased By 28% when branded with sesame street character.
- 27. In 2006, ReadyPac ,a produce company that packaged , washed and cut ready to eat fruits and vegetables signed a licensing agreement with Warner Bros.
- 28. Warner`s bugs bunny, Tweety and Tasmanian Devil character are featured on cut and ready-to-eat snack single-serving package of fruits. They also marketed carrots and celery served with ranchdip or peanut butter.
- 30. Disney’s solution was atwo-pronged approach. 1) Improving its product line on a nutritional basis. 2) Making the food appealing to children and delivering on the Disney promise of “magic”
- 31. Better for You Guidelines •DEVISED BETTER FOR YOU NUTRITION GUIDELINES BORROWING FROM THE FDA’S DIETARY GUIDELINES, WHICH PRESCRIBED OPTIMUM CONSUMPTION LEVELS FOR FOODS AS WELL AS CALORIC INTAKE RECOMMENDATIONS FOR CHILDREN. • ARRAYED ITS PORTFOLIO OF PRODUCTS INTO FIVE CATEGORIES: MAIN MEAL, SIDE DISH, SNACKS, DRINKS AND TREATS, WITH CALORIES ALLOCATED TO EACH CATEGORY. • UNDERTOOK A GOAL 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.
- 33. • Before officiallyimplementing its nutrition guidelines, DCP audited 2,100 of its food products. • Reformulated some products and shrunk portions for others; as a result, by September 2005, 75% of its U.S. products complied with its nutritional standards. • Planned to have all its products brought into compliance or phased out by 2008.
- 34. Demographic Segmentation : Age: Children and adults Gender : Male and Female Psychographic : Lower class, Middle class, Upper class Behavioral Segmentation: Taste, Fun and Magic Geographic Segmentation: Europe and U.S.A Disney effectively segmented its consumer base before launching its new product line.
- 35. IMAGINATION FARMS • Disneybegan licensing its characters to Imagination Farms, a national fresh produce marketing company founded specifically to serve as a licensee to DCP, in March 2006. • DCP and Imagination Farms used a three-pronged product development strategy. • Disney Farms produce was sold in major supermarket chains, including Albertsons, Safeway, Supervalu and Wal-Mart at a competitive wholesale price.
- 36. Disney and Kroger •DCP developed a broad range of products with Cincinnati- based Kroger Supermarkets. • Disney and Kroger sized the opportunity at $250 million in annual revenue and used focus groups and Nielsen data to validate the categories and products they had selected. • Together, they selected grocery that supported Disney’s efforts and fit its Better for You nutritional guidelines.
- 37. 12% market sharewith max. no. of supermarkets.
- 40. Encircled products areopportunities to grow for Disney and Kroger as they have reasonable Private label Mainstream share but contrastingly less Better for You share
- 41. Other Ventures • InJanuary 2005 the company launched a 15- item range with Carrefour, a France-based international supermarket group. • In March 2005 introduced a 10-item line with Metro, Europe’s second largest retailer after Carrefour.
- 43. Changing children’s perspectiveand their habits will be an uphill task for Disney The company will need to closely collaborate with other stakeholders Advertising and Marketing will continue to remain the key to this strategy as they will influence the mindset of the consumers the most However, if Disney succeeds in effectively fighting the obesity epidemic and sets a leadership example, it will witness unprecedented brand loyalty in its future. Its sales will also drastically increase and it is a question of when, not how, given the fact that the world is becoming increasingly health conscious.
- 44. Disclaimer Prof. Sameer Mathur IndianInstitute of Management , Lucknow Marketing Professor: August 2013 – Present McGill University Marketing Professor: July 2009 – July 2013 Carnegie Mellon University Ph.D. in Marketing : August 2003 – June 2009 These slides are created by Divyansh Khare, ISM Dhanbad, as part of a Marketing Internship under Prof. Sameer Mathur.