DISNEY CONSUMER PRODUCTS: MARKETING NUTRITION TO CHILDREN

MARKETING NUTRITION TO CHILDREN:

THE CHALLENGE FOR “MAGIC” MAKERS DISNEY

THE WALT DISNEY WONDER IT ALL STARTED WITH A MOUSE

A BRIEF HISTORY OF DISNEY:THE COMPANY WHICH TOOK THE WORLD BY STORM

DISNEY BUSINESS SEGMENTS

DISNEY IS NUMBERS

IN FOCUS: DISNEY

CONSUMER PRODUCTS

DCP EXTENDED THE DISNEY BRAND TO MERCHANDISE AND DISNEYLICENSING BECAME A FORMALBUSINESS IN 1932.

TODAY IT ACCOUNTS FOR RETAIL SALES WORTH $23 BILLION IN 90 COUNTRIES.

THE DISNEY MERCHANDISE PORTFOLIO

RESHAPING DCP LICENSING MODEL: 3 WAY APPROACH

TRADITIONAL LICENSING

MODEL

SOURCING MODELCONTRACT

MANUFACTURING

DIRECT-TO-RETAILMODEL(DTR)

IN 2004, DCP USED ALL 3 MODELS WITH ITSFOOD AND BEVERAGE PRODUCTS, BUTDOLMON NOTED THAT THE BUSINESSSEGMENT RELIED HEAVILY ON “DISNEY-BRANDED, VALUE PRICES, ACTIVELYLICENSING MODEL”.

PROBLEM

IN 2004, THE WALT DISNEY COMPANY WAS SUBJECTED TO GROWING CRITICISMS FROM ACTIVISTS, PARENTS AND GOVERNMENTS AROUND THE WORLD WHICH BLAMED IT FOR CONTRIBUTING TO THE GROWING OBESITY ENDEMIC.

STAGGERING FIGURES!

FROM 1975-2005, THE RATES OF OBESITY IN CHILDREN HAD SKYROCKETED FROM 5% TO14% AMONG 2-5 YEAR OLDS, FROM 4%-19% FOR 6-11 YEAR OLDS AND FROM 5-17% FOR 12-19 YEAR OLDS!

MORE THAN 65% OF THE US POPULATION WAS CLASSIFIED AS OVRWEIGHT OR OBESE!

MED FOR

PROGRESSIVE INCREASES INPORTION SIZES, TELEVISION ADVERTISING CONDONING E BLA

LARMING TRENDS IN CHILDHOOD OBESITY.

ACTIVITS BLAMED DISNEY-BRANDED CONFECTIONS SOLD AT THEME PARKS

AND SUPERMARKETS AND TELEVISION COMMERCIALS

PROMOTING INCREASED FOOD PORTIONS FOR THE

OBESITY ENDEMIC.

DISNEY WAS IN LONG STANDING ROLE AS A TOY SUPPLIER TO MCDONALDS, ITSELF UNDER CONSTANT ATTACK AS CONTRIBUTOR TO THE OBESITY ENDEMIC!

EARLIER DCP PRODUCTS WERE CO-BRANDED AND IN PARTNERSHIPSWITH BRANDS SUCH AS KELLOG’S AND CADBURY .

IN 2004, DCP ESTIMATED THAT ITS BRANDED FOODPRODUCTS ACCOUNTED FORLESS THAN 1% OF THE CHILDREN’S FOOD MARKET.

DECISION (1 /2) DCP EXECUTIVES SAW THE CHANGINGLICENSING MODELS, RETAIL INDUSTRY CONSOLIDATION AND OBESITY ENDEMIC OFFERING AN OPPPORTUNITY TO SIMULTANEOUSLY BROADEN AND RATIONALIZEITS PRODUCTS OFFERINGS.

DECISION (2/2) THE

THE COMPANY,IN 2006,ANNOUNCED THAT IN ADDITION TO DCP’s NUTRITIONAL EFFORTS, IT WOULD ALSO MAKE “NUTRITIONALLY-BENEFICIAL CHANGES” TO THE MEALS SERVED TO CHILDREN IN ALL DISNEY-OPERATED RESTAURANTS IN ITS PARKS AND RESORTS.

DECISION {2/2}

DCP CONDUCTED SHOPPING TRIPS WITH MOTHERS OF CHILDREN AGES 2 TO 13 YEARS OLD, AND DISCOVERED A GAP BETWEEN THE FOODS CHILDREN REQUESTED AND THE FOODS THEIR MOTHERS

WERE WILLING TO BUY THEM.

DISNEY KNEW THAT MOM’s BRAND ROYALTY WAS STRONG AND THEY TRANSLATED THIS INTO A LINE OF BEVERAGES AND FOOD.

FOR MOMS, DISNEY WAS MAGIC

TO APPEAL TO MOTHERS, PRODUCTS NEEDED TO BE PORTION CONTROLLED, BE HIGH-QUALITY TASTE GOOD, OMIT OR REDUCE FAT AND SUGAR AND BE REQUESTED BY THEIR CHILDREN

RULES AND GUIDELINES DISNEY HAD TO ADHERE TO

IN 2005 AND 2006, INSTITUTE OFMEDICINE RECOMMENDED THAT USDA DEVELOP STANDARDS FOR MARKETING FOODS AND BEVERAGES TO CHILDREN BASED ON PORTION SIZES, FAT, SUGARAND SODIUM

IOM ISSUED A SET OF PRODUCT DEVELOPMENT AND MARKETING RECOMMENDATIONS REGARDING THE RESPONSIBILITIES OF FOOD AND BEVERAGE COMPANIES TO HALT THE OBESITY ENDEMIC.

DISNEY NUTRITIONAL GUIDLINES

THE “BETTER FOR YOU” DISNEY FOOD PRODUCTS

DCP’s “BETTER FOR YOU” NUTRITIONAL GUIDELINES-WAS DCP’s INTERNAL NOMENCLATURE FOR ITS

EVOLVING HEALTHIER PRODUCT LINES

DCP DERIVED ITS RECOMMENDATIONS FROM FDA’s DIETARY GUIDELINES WHICH PRESCRIBED OPTIMUM CONSUMPTION LEVELS FOR FOODS AN CALORIE INTAKE FOR CHILDREN

DCP SHARED ITS NUTRITIONAL GUIDELINES WITH ITS LICENSEES AND THUS DEVELOPED HEALTHIER PRODUCTS

AT A MUCH LARGER SCALE

THE CHALLENGE

THE FOOD MUST DELIVER ON THE BRAND’S PROMISE OF DISNEY MAGIC AND APPEAL TO CHILDREN

THUS CAME THE THREE APPROACHES TOWARD CREATING DISNEY FOOD PRODUCTS

FIRST: MAKING THE PRODUCTS THE KIDS ALREADY LOVE HEALTHIER

SECOND: MAKING THE HEALTHY PRODUCTS MORE FUN

THIRD: USING PACKAGING TO INSPIRE PRODUCT SAMPLING

EMBRACING THIS “WHOLE FOODS FIRST” PHILOSOPHY BY COLLABORATING WITHIMAGINATION FARMS

IMAGINATION FARMS: A NATIONAL FRESH PRODUCE MARKETING COMPANY FOUNDED SPECIFICALLY TO SERVE AS LICENSEE TO DCP

THEY EXPLAINED NUTRITION IN A KID FRIENDLY WAY

THE DISNEY AND KROGER DTR SYMBIOIS

WHY KROGER?

LARGEST PURE GROCERY RETAILER IN UNITED STATES

FISCAL YEAR SALES OF 60.6BILLION IN 2005

3700 STORES IN 30 STATES

DISNEY AND KROGER SIZED THE OPPORTUNITY AT $250 MILLION

AND THUS LAUNCHED THE“DISNEY MAGIC SELECTIONS”

DISNEY MAGIC SELECTIONS

EXCLUSIVE DISNEY LINE FEATURING “CHEF MICKEY” AND OTHER FAVORITE CHARACTERS DEBUTS WITH FOOD RANGE INCLUDING ASSORTMENT OF HEALTHY ITEMS

STRENGTHTHE DISNEY BRAND

WAST RESOURCES OF WALT DISNEY COMPANY

THE ASSOCIATION OF QUALITY, TRUST AND “MAGIC” WITH THE DISNEY BRAND FOR MOMS

STRONG IMAGE AS A “FUN BRAND” AMONGST CHILDREN

WEAKNESS SCEPTICISM SURROUNDING THE FOOD PRODUCTS FOLLOWING VOCAL CRITICISM IN THE PAST

HIGH INTIAL COST OF OPERATIONS AND PRODUCT LAUNCH

CONCENTRATION IN THE NORTH-AMERICAN MARKET

OPPORTUNITY UNTAPPED MARKET SEGMENT TO DELIVER “FUN” AND “HEALTHY” FOOD PRODUCTS

BROAD-BASED APPEAL AND MULTIPLE CATEGORIES

RELEASE OF NEW SUCCESSFUL STORIES AND CHARACTERS

THREAT (1/4)

LACK OF CONSUMER DEMAND: NEARLY 94% OF THE PRODUCTS OUT OF 14,000 NEW FOOD PRODUCTS LAUNCHED IN U.S. MARKET FAIL.

THREAT (2/4)PRICING AND VALUE

-EVEN THOUGH KROGER’S DMS PRODUCTS AND IMAGINATION FARM PRODUCTS WERE COMPETITIVELY PRICED, THEY STILL NEED TO BE AFFORDABLE

THREAT (3/4)COMPETITION FROM BRANDSSUCH AS NICKELDEON, SESAME WORKSHOP, AND WARNER BROS

NICKELDEON: OFFERING SERIOUS COMPETITION

THREAT (4/4)GROWTH AND DISTRIBUTION:IN ORDER TO THRIVE, DISNEY NEEDS TO DEVELOP ADDITIONAL LINES

CONCLUSIONDISNEY-SO FAR-HAS BEEN SUCCESSFULLY ABLE TO ENTER INTO THE FOOD MARKET, BUT THEY STILL HAVE A LONG WAY TO GO TO SPREAD THE MAGIC, ESPECIALLY IF THEY WANT TO PURSUADE CHILDREN TO SWITCH TO MORE NUTRITIOUS DIETS

THANK YOU

DISCLAIMER

Created by Pooja Goel, IGDTUW, during a marketing internship under the guidance of Prof. Sameer Mathur, IIM Lucknow