Presentation on Harvard Business School case study " Disney Consumer Products: Marketing Nutrition to Children "

2. INDEX
1)HISTORY
2)CURRENT SITUATION
ANALYSIS
3)PROBLEM
DEFINITION
4)ANALYSIS
5)RECOMMENDATIONS
6)CONCLUSION

4. • Debut of
Mickey
Mouse
1923
• licensing
became a
business unit
1932 • expand
beyond film
and television
1950
• opened
Disneyland in
California
1955
• the obesity
epidemic
2004 • DCP launches
offering of
fresh fruits
2006

5. Media
network
Parks
and
resorts
DCP
Studio
entertai
nment
By 2006 Walt Disney company was comprised
of 4 major business segments

6. Disney licensed it brand characters to merchandise to be sold
at retail outlets in the this category:

7. In 1996, DCP signed an exclusive, 10-year, $2 billion
licensing deal with McDonald’s

8. DCP’s licensing
and distribution
models
Traditional
licensing model
Sourcing
Direct-to-
Retailer(DTR)

9. 21$ billion
world wide retain
sales, 2005

10. 30%
American
kids are
overweight

11. 14%
American
kids are
obese

12. DISNEY FACED
CRITICISMFOR
CONTRIBUTING TO
OBESITY EPIDEMIC

13. GOVERNMENT IMPOSED RULES
ON BROADCASTERS ASKING
NOT TO ENCOURAGE
EXCESSIVE FOOD
CONSUMPTION

14. Kellogg and General
Mills increased their
advertising spending
on children television
channels

15. DISNEY SAW IT AS
AN
OPPURTUNITYTO
RECONSIDERITS RANGE
OF FOOD
PRODUCTS

16. MARKETING
NUTRITION
TO KIDS

17. CAN DISNEY
MEET THE
NUTRITIONAL
GUIDELINES
SETUP BY FDA

18. CAN DISNEY
USE IT’S
BRAND
IMAGE
TO REACH OUT TO
CHILDREN

19. OR DOES IT
BRING DOWN
THE
BRAND
VALUE
OF
THE DISNEY

20. HOW DO PEOPLE
PERCIEVE
THIS TRANSITION
OF THE DCP

21. WHO WILL
BE THEIR
COMPETITORS
AND HOW WILL THEY
FACE THEM

22. WHAT NEW
CHALLENGES
DO THEY FACE WITH
THIS TRANSITION

23. CAN DISNEY
PROVIDE
LEADERSHIP
TO REST OF THE
FOOD INDUSTRY

24. IN 2004, DCP’S
BRANDED FOOD
PRODUCTS
ACCOUNTED FOR
LESS THAN 1%
OF THE CHILDREN’S
FOOD MARKET

25. OUR STRATEGY THEN WAS,
DISNEY WAS ABOUT FUN.
WE SHOULD BE IN FUN CATEGORIES
-REID LESLIE, DIRECTOR OF FOOD AND BEVERAGES
“

26. IN WINTER 2004, DCP
CONDUCTED RESEARCH
TO DISCOVER IF
DISNEY’S BRAND
EQUITY WOULD
TRANSFER TO A LINE OF
CHILDREN’S FOOD
PRODUCTS

27. DCP DISCOVERED THAT THERE WAS A GAP BETWEEN
FOOD CHILDREN REQUESTED AND FOOD THEIR
MOTHERS ARE WILLING TO BUY FOR THEM

28. PEER PRESSURE &
ADVERTISING
STRONGLY
INFLUENCE KIDS

29. MOMS ASSOCIATE DISNEY STRONGLY WITH
MAGIC-EVEN WHEN IT COMES TO FOOD

30. THE PRODUCTS NEED TO MAKE KIDS
FEEL SPECIAL AND MUST BE NON-PATRONIZING
AND MOM-APPROVED

31. CAN DISNEY
MEET THE
NUTRITIONAL
GUIDELINES
SETUP BY FDA

32. RIGHT NOW, KIDS EAT THE WRONG FOODS -
AND TOO MUCH OF THE WRONG FOODS. THE
SOLUTION IS TO PROMOTE HEALTHIER
CATEGORIES
-EMBOLA NDI, VICE PRESIDENT, PRODUCT DEVELOPMENT
“

33. TO ANSWER
CHILDREN’S DAILY
NEEDS IN AN
ENTERTAINING
WAY—IN SHORT,
GOOD FOOD,
GREAT FUN

34. DCP DERIVED MANY
OF ITS
RECOMMENDATIONS
FROM THE FDA’S
DIETARY GUIDELINES

35. Of the products
compiled with the
standards
Of the
products are
planed to be
phase out
41%
28%

36. THE COMPANY
PLANNED TO HAVE
ALL ITS PRODUCTS
BROUGHT INTO
COMPLIANCE OR
PHASED OUT BY
2008

37. THE COMPANY ADOPTED THREE
APPROACHES TOWARD CREATING
DISNEY FOOD PRODUCTS
1
OFFER PRODUCTS
THAT ALREADY HAD
BROAD APPEAL

38. THE COMPANY ADOPTED THREE
APPROACHES TOWARD CREATING
DISNEY FOOD PRODUCTS
2
TAKE PRODUCTS THAT
WERE ALREADY
HEALTHY AND MAKE
THEM MORE “FUN”

39. THE COMPANY ADOPTED THREE
APPROACHES TOWARD CREATING
DISNEY FOOD PRODUCTS
3
USE PACKAGING
TO INSPIRE
PRODUCT SAMPLING

41. TO DIFFERENTIATE
COMMODITIES SUCH
AS PEACHES AND
APPLES, PLU
STICKERS WERE
ADORNED
WITH DISNEY
CHARACTERS

42. PACKAGE FOUR OR
FIVE OUNCE
POTATOES FOR KIDS
OR
PERHAPS HIGHER-
FLAVOR, YELLOW
POTATOES

43. A LUNCH BOX
PROGRAM WHERE
FRUIT AND
VEGETABLES
WOULD BE
PACKED IN 3-OUNCE
BAGS.

44. DISNEY MAGIC SELECTION PRODUCTS

45. 2ndLARGEST U.S.
SUPERMRKET COMPANY
PRICING AND
BRAND
EXCLUSIVITY WERE
KEY TO DISNEY’S
DTR STRATEGY

47. WHO WILL BE THEIR
COMPETITORS
AND HOW WILL
DISNEY FACE THEM?

48. TOP RATED
U.S. BASIC
CABLE
NETWORK
SINCE 1996

49. Sales of Darling
clementine's increased by
almost 25% after the
Dora and SpongeBob
characters were added to
the product packaging

50. MY GOAL IS TO HAVE EVERY FRUIT A KID
WOULD
WANT TO EAT WITH A NICKELODEON
CHARACTER
-TORRES, LICENSING VICE PRESIDENT
“

51. In June 2006,
They Extended Fresh Fruit And Vegetable Line To
Apples, Pears And Carrots

52. consumption of
broccoli increased
by 28% when
branded with a
Sesame Street
character

53. READY-TO-EAT
FRUITS AND
VEGETABLES

54. WE EXPECT COMPETITION, BUT WE BELIEVE WE
CAN BEAT THE COMPETITION BECAUSE EVEN IF
THEY DEVELOP AND
MATCH OUR NUTRITIONAL STANDARDS, THEY
CANNOT ACCESS DISNEY MAGIC
-EMBOLA NDI, VICE PRESIDENT, PRODUCT DEVELOPMENT
“

55. WHAT NEW
CHALLENGES
DO THEY FACE WITH
THIS TRANSITION

56. 1
Pricing and Value
BUT FOR THESE
PRODUCTS,
AFFORDABLE EQUALS
VALUE, NOT PRICE. WE
HAVE TO DELIVER
QUALITY TO REPRESENT
OUR BRAND WELL
-MOONEY
“

57. 2
Legacy
THOUGH PRODUCTS
WILLL BE HEALTHFUL AND
FUN, BASED ON THE PAST
CRITICISM, THEY
EXPECTED SOME
SKEPTICSM. THIS IS THE
TIME TO LEAVE BACK THE
LEGACY

58. 3
Competition
DCP MANAGERS BELIEVED
THAT THE COMBINATION
OF A BROAD
PRODUCT LINE, WIDE
DISTRIBUTION AND
THE DISNEY BRAND
WOULD WIN OVER MOMS

59. 4
Growth and distribution
DISNEY WANTED TO
LICENSE OR DEVELOP
ADDITIONAL LINES
OTHER THAN KROGER
AND DIFFERENTIATE
ADDITIONAL LINES USING
CHARACTERS, BRAND
AND PRICE

60. WITHIN DCP WE WILL TAKE A SHORT TERM HIT
FINANCIALLY, BUT WE’RE DOING THE RIGHT
THING AND GETTING GOOD BUSINESS RESULTS
-MOONEY AND DOLMON
“

61. CAN DISNEY PROVIDE
LEADERSHIP
TO REST OF THE
FOOD INDUSTRY

62. WIN-WIN
SOLUTION
FOR MOMS, KIDS AND DISNEY
CONSUMER PRODUCST

65. Disclaimer
Created by Zubeen Lapsiwala [NIT Surat]during a marketing
internship by Prof. Sameer Mathur , IIM Lucknow.