A HARVARD CASE STUDY ANALYSIS CREATED BY TRIJYA SAINI,COLLEGE OF TECHNOLOGY,PANTNAGAR DURING MARKETING INTERNSHIP UNDER PROF. SAMEER MATHUR,IIM LUCKNOW.

1. DISNEY CONSUMER PRODUCTS :
MARKETING NUTRITION TO CHILDREN

4. 1923:Founded by Walt and Roy Disney
1932:Disney Licensing becomes a formal
business unit.
1950:Disney expands beyond movies and
television
1955:Disneyland opens in Anahelm
California.
1984:Michael Eisner becomes CEO
1996:Bought ABC
2004:Obesity becomes a major problem.
2006:DCP launches “better for you”
campaign.

5.  32 $ BILLION
COMPANY IN 2005
 2.5 $ BILLION NET
INCOME IN 2005

6. MAJOR BUSINESS SEGMENTS
 MEDIA NETWORKS  PARKS AND RESORTS
 DISNEY CONSUMER PRODUCTS  STUDIO ENTERTAINMENT

7. Disney Consumer Products was responsible for
extending the Disney brand to merchandise
ranging from apparel, toys, home décor and books to
interactive games, food and beverages,
electronics and animation art.

10. IN 2005,DCP WASTHE
WORLD’S LARGEST
LICENSORWITH MORE
THAN $ 21 BILLION SALES.
RETAIL SALES OF DCP
LICENSED PRODUCTS
ACCOUNTED FOR $ 1.5
BILLION.

11. DCP’S LICENSING MODELS
 TRADITIONAL LICENSING MODEL:
Licensees handled manufacturing, product innovation and
sales. In turn, licensees would provide with superior product
differentiation, distribution strength and category
leadership.
 SOURCING MODEL
Licensee would handle sales and marketing while Disney
would manufacture the products.
 DIRECT-TO-RETAIL MODEL
Selling brand and character rights directly to retailers,
bypassing whole sale licenses.

12. CURRENT SITUATION

14. 30 % OF THE AMERICAN
KIDS ARE OVERWEIGHT.
14 % OF THE AMERICAN
KIDS ARE OBESE.
INCREASE IN OBESE AND
OVER WEIGHT CHILDREN
OVER THE SPAN OF 10
YEARS:
• 2-5 YEAR OLD 5%-14 %
• 6-11 YEAR OLD 4%-19%
• 12-19 YEAR OLD 5%-17%

15. DISNEY IS ACCUSED OF
CONTRIBUTING TO THE GROWING
OBESITY EPIDEMIC.
DISNEY WAS LICENSED FOR HIGH
CALORIE FOODS THAT LED TO
OBESITY HENCE IT FACED WORLD
WIDE CRITICISM.
PACKAGED GOODS
MANUFACTURERS,FAST FOOD
COMPANIES WERE SUBJECT TO
GROWING CRITICISM FROM
ACTIVISTS,PARENTS AND GOVERNMENT
AROUND THE WORLD.

16.  In 2005 and 2006, IOM recommended that the
USDA develop standards for marketing foods and
beverages to children based on portion sizes,
calories, fat, sugar and sodium and issued a set of
product development and marketing
recommendations regarding the responsibilities of
food and beverage companies to halt the obesity
epidemic.
Government imposed rules
on broadcasters asking
not to encourage
excessive food
consumption.

17. Dramatic increases in
childhood obesity caused the
company to consider the
nutritional value of
its own food products.

18. WHAT WERE
THE DCP’S
TRANSITONS
AND HOW
DID PEOPLE
REACTED TO
THEM?

19. To meet the
requirements of revised
IOM guidelines , DCP
arrayed it portfolio of
products into five
categories:
-Main Meal
-Side Dish
-Snacks
-Drinks
-Treats

20. To meet DCP’s “better for you” nutritional guidelines—DCP’s
internal nomenclature for its evolving healthier product line—
products would be minimally processed, have controlled levels
of added sugar, and contain no trans or hydrogenated fats.
Calories were limited by either adjusting a food’s formulation
or its portion size. In addition, the company minimized the use
of additives.

21. DCP derived many of its
recommendations from the FDA’s
dietary guidelines, which prescribed
optimum consumption levels for foods
as well as caloric intake
recommendations for children.

22. DCP began reformulating some
products and shrinking
portions for others; as a
result, by September 2005,
75% of its U.S. products
complied with its nutritional
standards.
The company
planned to have all its products
brought into compliance or
phased out by 2008.

23. HOW DID DCP REACHED OUT TO
CHILDREN WHILE MAINTAINING ITS
BRAND IMAGE?

24. The company
adopted three
approaches
toward
creating
Disney food
products.

25. First, DCP would
offer products
that already had
broad appeal
such as milk or
peanut butter.

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

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

28. DCP embraced a “whole foods first” philosophy and as a result, marketed fresh
fruits and vegetables in addition to its package products.
Disney began licensing its characters to Imagination Farms, a national fresh
produce marketing company founded specifically to serve as a licensee to DCP, in
March 2006.

29. DCP and Imagination Farms used a three-pronged product
development strategy:
 Differentiate commodity produce through promotion.
 Create value-added products through product preparation or
packaging.
 Develop exclusive produce varieties that would yield more child-
friendly foods.

30. To differentiate commodities
such as peaches and apples, PLU
stickers (labels affixed to
individual pieces of fruit with 4-
digit codes used to identify the
fruit at the register) were
adorned with Disney characters.
Imagination Farms was also
working with produce
breeders to identify items in
their portfolios which were
particularly suited to
children.

31. DISNEY AND KROGER

32.  DCP developed a broad range of products with Cincinnati-based Kroger
Supermarkets, the largest pure grocery retailer in the United States with fiscal
year 2005 sales of $60.6 billion.
 Together, they selected grocery categories that supported Disney’s efforts.
 Pricing and brand exclusivity were key to Disney’s DTR strategy.

33. LAUNCHING DISNEY MAGIC
SELECTIONS

34. WHO WILL BE THEIR COMPETITORS AND
HOW WILL THEY FACE THEM?

35. The company, a division of
Viacom International Inc.,
launched its network in 1980
In Fall 2005, spinach, baby carrots
and clementine bearing SpongeBob
Square pants and Dora the Explorer
character images, licensed by
Nickelodeon, began to appear on
supermarket shelves increasing the
sales by almost 25%.

36. In June 2006 Del Monte Foods,
signed a licensing deal with Sesame
Workshop, best known for its
Sesame Street public television
program.
2003 study conducted by
Sesame Workshop found that pre-
schoolers' consumption of broccoli
increased by 28% when the
vegetable was branded with a
Sesame Street character.

37. In 2006, Ready Pac, a produce company that
packaged washed, cut and ready-to-eat fruits and
vegetables for supermarkets and food service,
signed a licensing agreement with Warner Bros.
Ready Pac planned to feature Warner’s Bugs
Bunny, Tweety and Tasmanian Devil characters on
its Cool Cuts Ready Snacks single-serving
packages of fruit.

38. WHAT ARE THE
RISKS AND
CHALLENGES
FACED BY DCP
BECAUSE OF
THIS
TRANSITION?

39. 1. PRICING AND VALUE
Had to be competitively
priced within produce
departments and private
brands.
“But for these products,
affordable equals value,
not price.”
-Mooney

40. 2. LEGACY
•Skepticism from media and public was
expected regarding the new products.
“It isn’t useful to ask where are we are today—that’s based on decisions made many
years in the past. Now we are focused on developing ‘better for you’ products and
how we’re going to get there,” said Mooney.

41. 3.DIFFERENTIATION AND COMPETITION
“We expect competition and channel friction, but we
believe we can beat the competition because even if they
develop and match our nutritional standards, they cannot
access Disney magic,” said Ndi.

42. 4. GROWTH AND DISTRIBUTION
 DCP managers believed that the company
could differentiate additional lines using
characters, brand and price.
“Other retailers won’t turn our
products down because of the
Kroger relationship. We need to
find exclusives for them, too.
Their chief concern—and ours—
is that our products are
profitable for them,” said
Mooney.

43. WHAT MORE CAN DISNEY DO IN FUTURE?

44. APPEAL NOT ONLY THE CHILDREN BUT ALSO EDUCATE PARENTS TO GO FOR HEALTHY DIET.
PUBLISH COOKBOOKS,TELEVISING COOKING SHOWS FOR CHILDREN,AND LINKING ITS
NUTRITIONAL EFFORTS WITH EXERCISE PROGRAMS.
EXTEND ITS OFFERINGS FROM RETAIL SUPERMARKET PRODUCTS TO FOOD SERVICES
(SCHOOL LUNCH PROGRAMS)AND OUT-OF HOME CONSUMPTION IN RESTAURANTS.

45. DISNEY MUST
BECOME
REALISE ITS
CORPORATE
SOCIAL
RESPONSIBILTY
AND BECOME A
LEADER IN IT.

48. DISCLAIMER
CREATED BY TRIJYA
SAINI,COLLEGE OF
TECHNOLOGY,PANTNAGAR
DURING MARKETING
INTERNSHIP UNDER
PROF. SAMEER MATHUR,
IIM LUCKNOW.