Disney Consumer Products: Marketing Nutrition to Children

HISTORY

1923: Disney Brothers Cartoon Studio (The Walt Disney Company)

1932: First Academy Award for Best Cartoon

1954: First Television Program (The Wonderful World of Disney)

1955: Disneyland, California

1980-1990: Renaissance of Disney Animation

1996: Purchased media Company Capital Cities/ABC for $19 billion

2003: First Studio to Surpass $3 billion in global Box Office

2004: Disney Consumer Products (DCP) on a mission to Improve nutritional value

$32 Billion Company in 2005

$2.5 Billion Net Income in 2005

Disney Consumer Products(A global product Organization comprised of following lines of business)

ToysHome & Infant

Publishing Buena Vista Games

FoodHealth & BeautyElectronicsStationary

Hard LinesApparel

FootwearAccessories

Soft Lines

World’s Largest Licensor

Retail Sales of $23 Billion in 90 countries- a 56% share of $41.2 billion character

licensing industry

10 year, $2 billion licensing deal with McDonald’s and to offer toys with the children’s meals.

Licensing of More than 2100 products.

DCP’S Merchandise Licensing

“Our Strategy then was,‘Disney is about fun. We should be in fun categories.’ ” -Reid Leslie Director of Food and Beverage (DCP)

$5.8 Billion

$5.6 Billion

DCP’s Distribution Models

Traditional Licensing Model

Sourcing

Direct to Retail(DTR)

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OBESITY

REASONS

INCREASED PORTION SIZES

SUGAR SWEETENED BEVERAGE(SSB)

TELEVISION ADVERTISING

DISNEY SAW IT AS AN OPPURTUNITY TO RECONSIDER ITS RANGE OF FOOD PRODUCTS

DISNEY FACED CRITICISM FOR CONTRIBUTING TO OBESITY EPIDEMIC

MARKETING NUTRITION TO CHILDREN

“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

Could Disney use its “magic” to switch children from sugary to more nutritious diet ? Could they sustain ?

“DCP DISCOVERED THAT THERE WAS A GAP BETWEEN FOOD CHILDREN REQUESTED AND FOOD THEIR MOTHERS ARE

WILLING TO BUY FOR THEM”

DISNEY’S BRAND EQUITY WOULD TRANSFER TO A LINE OF CHILDREN’S FOOD PRODUCTS SUCCESSFULLY OR NOT?

• PEER PRESSURE & ADVERTISING STRONGLY INFLUENCE KIDS

• THEY DEMAND NATIONAL OR CHARACTER-DRIVEN PRODUCTS

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

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

MOM’S BRAND LOYALTY

DISNEY NUTRITIONAL GUIDELINES

Control levels of added sugar

Prefer to use whole foods that intrinsically dense in nutrients

Promote fiber and calcium

Minimized the use of additives

Contain no trans or hydrogenated fats

GOAL

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

“BETTER FOR YOU”

APPROACHES

1HOW DO YOU MAKE THE PRODUCTS THEY ALREADY LOVE HEALTHIER?

2TAKE PRODUCTS THAT WERE ALREADY HEALTHY AND MAKE THEM MORE “FUN”.

3USE PACKAGING TO INSPIRE PRODUCT SAMPLING, SUCH AS MAKING THEM IN THE SHAPE OF CHARACTERS.

“The Bottom line is that the food has to taste good. Kids Have to like it. If the food is also nutritious , Moms like it too . That is a WIN FOR EVERYONE.”

- Embola Ndi, Vice President for product Development(DCP)

IMAGINATION FARMS

Peaches, Apples, PLU Stickers were adorned with Disney Characters

Through Product Preparation and Packaging

Yielding More Child-Friendly Foods

Differentiate Commodity produce through promotion

Create Value Added Products

Develop Exclusive Produce Varieties

Product Development StrategyThree-Pronged

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DCP &IMAGINATION FARMS

VALUE ADDED STRATEGY

• Don Goodwin, Product Marketing Consultant believed that this strategy would ultimately differentiate and build the brand.

• To Debut a Lunch Box Program where fruit and vegetables would be packed in 3-ounce bags.

• Working with Produce Breeders to identify items in their portfolios which suited to children.

• Retailers Sold Disney Farm Products at Market Prices.

• Shipping more than 1 million cases of produce across 60 SKUs.

“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

THE COMPETITION

NICKELODEON• TOP RATED U.S. BASIC CABLE NETWORK SINCE 1996

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

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

• “MY GOAL IS TO HAVE EVERY FRUIT A KID WOULD WANT TO EAT WITH A NICKELODEON CHARACTER.”

-TORRES, LICENSING VICE PRESIDENT

• Preschoolers’ consumption of broccoli increased by 28%when branded with a Sesame Street character.

• In June,2006 Del Monte Foods, a $3 billion U.S. manufacturer Of canned vegetables and fruits signed the licensing deal with the Sesame Workshop.

• Del Monte peas , corn and green beans featured Elmo, Grover and Cookie monster characters on its labels.

• READY-TO-EAT FRUITS AND VEGETABLES

• Ready Pac planned to feature Warner’s Bug Bunny, Tweety and Tasmanian Devil Characters on its Cool cut ready snacks package which contained two, 2-ounce packages each of grapes, apples and carrots.

DISNEY MAGIC SELECTIONSPRODUCTS

“We wanted to use Disney’s storytelling and characters to help kids understand and internalize information-to communicate to kids in fun , Disney way”

-John Henock, Team Leader DCP Grocery Business

• 2nd LARGEST U.S. SUPERMRKET COMPANY

• PRICING AND BRAND EXCLUSIVITY WERE KEY TO DISNEY’S DTR STRATEGY WITH KROGER

• TOGETHER , DISNEY AND KROGER SIZED THE OPPORTUNITY AT $250 MILLION IN ANNUAL REVENUE

DISNEY

KROGER

SWOT Analysis

Strengths Weaknesses

O T

Opportunities Threats

S W

Strengths

• Good image of brand• Largest Licensor of

character based merchandise

• Unique and Diversified Products

• Large Base of protected intellectual property

• Co-operation with big retailers (Kroger and Wal-Mart)

Weaknesses

• Doesn’t have own manufacturing for DCP

• Growing criticism from activists, parents and governments around the world about contribution to the growing obesity epidemic.

Opportunities

• Moms’ beliefs and expectations about DCP

Disney channel• Leading licensors of

character • Growth through New

Markets• Changes in Technology

and Consumption Patterns

Threats

• Competitors like Sesame Street , Nickelodeon etc.

• High expectations from mothers

• Availabilities of Substitutes

• Piracy and Infringements

of Intellectual Property Rights

PRICING & VALUE

LEGACY

DIFFERENCIATION & COMPETITION

GROWTH & DISTRIBUTION

CHALLANGES

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

SOLUTIONS

SOLUTIONS

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01Collaborate healthy foods with Disney programs

• Disney films shows healthy foods consumed by the Disney’s characters to affect the children who watched the film to also consume healthy foods.

• Tell children who watch Disney’s programs, the disadvantages if they consume non-healthy foods.

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01Healthy Food campaign for parents

• Tell the parents that Disney already has the products that meets the healthy food standards

• Parents must understand the importance and advantages if their children consume healthy foods on a right proportion

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01Introducing New Characters

• Disney could create new character that has the advantage of healthy foods on their adventure. Children like adventure and healthy foods could be a big part on their adventure.

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01 Awareness from the Very Start

• Create children’s habit to eat healthy foods since kindergarten

• Children must understand the advantage of healthy foods and the amount of foods they must consumed

THANK YOU

DISCLAIMERThis presentation was created by Manal Shah under the guidance of Prof. Sameer Mathur, during a summer internship mentored by him.

Prof. Sameer MathurIIM Lucknow

Manal ShahNIT Jaipur