hbr case study: disney consumer products nutrition marketing for children

Disney Consumer Products: Marketing Nutrition for children

History Problem Definition

Analysis Solution Conclusion

HISTORY

1923Debut of Mickey Mouse in Steamboat Willie

1932Licensing became a formal business unit

1954Debut in first television program1955Opened Disneyland in Anaheim, California

1980 s – 1990sRenaissance of Disney Animation1984Focus on entertainment assets

2004 The obesity epidemic2006 DCP Launched offerings of fresh fruits

Disney’s Chapter

1950Expand beyond film and television

Disney Consumer ProductsResponsible for extending the Disney brand

to merchandise

• Soft lines• Apparel• Footwear• Accessories

• Buena vista games• Home and infant

• Hard lines• Food• Health and beauty• Electronics and

stationery• Publishing • Toys

Consists of 6 lines of business

Retail stores in Europe and the US stocked the DCP

The main model presupposed getting the license for the use of Disney brand on quality products made by

other companies

In 1998 - 1999 the sales on US and Japanese markets decreased by 10% and 15%

Andy Mooney introduce direct to retail(DTR) and DTR distribution model, and also keep the traditional

licensing model

Business Situation

Problem Definition

Disney branded was accused contributing towards the growing obesity epidemic(Confectionery products, Uncontrolled eating habit)

Healthy foods for children Disney need to reconsider the nutritional value of their food products

Establish credibility with the government, manufacturers, parents and nutritionist

Problem Analysis

Children’s taste impact the consumption

Could Disney use it “magic” to switch children from sugary to more nutritious diet ? Could

they sustain ?

Problem Definition

Product Development

AlternativesPro’s Con’s

Keep Traditional LineKeeping broad consumers base.Preferable by common children.

Negative public opinionNot supporting by government regulation.

Healthy Program Line

Establish good imageStrong Brand Strong distribution ChannelPreferable by common parents.

Possible to loss broad consumers base.

What they did?

June 2006, Disney Consumer Products ( DCP ) decided to change the nutritional content of their product and

introduce new healthy foods for children under the slogan of “Better for you”

Establish Disney Nutritional Guidelines Using three licensing and distribution models

Disney Nutritional Guidelines

Nutrition control1. Control levels of added sugar2. Contain no trans or hydrogenated fats3. Promote fiber and calcium4. Minimized the use of additives5. Prefer to use whole foods that intrinsically

dense in nutrients

Reformulating some products, shrinking portions for others and phase out some products.

DCP’s Three Models

Traditional Licensing Model

Sourcing(Designed and create products by Disney but manufactured and

marketed by licensee)

Direct-to-retail (DTR)(Entailed partnering directly with retailers)

Analysis

SWOT Analysis

Strength• Good image of brand• Strong characteristic• Cooperate with big retailers (Kroger and Wal-Mart)

Weakness• Doesn’t have own

manufacturing for DCP• Growing criticism from

activists, parents and governments around the world about contribution to the growing obesity epidemic

Opportunity • Mothers beliefs and

expectations about DCP• Disney channel• Leading licensors of

character (exhibit 5)

Threats • Competitors• High expectations from

mothers

Five C’s

5C Company (Disney , DCP)

Customer (Children and

parent)

Collaborator (Imaginator

Farm, Kroger) Context (Increasing Obesity in Children &

Adults)

Competitor (Nickelodeon, Warner, etc.)

Potential Internal Strengths Potential Internal Weaknesses1. Corporation brand name has powerfully

distinguished itself nationwide as one of the best in the entertainment business.

1. Growing critics from activists, parents, and government believed that Disney companies contributed to the growing obesity epidemic.

2. Well -known brand name that has lead to high brand loyalty where Disney brand was synonymous with fun and magic.

2. Licensing with McD.

3. Children familiar with Disney characters. 3. The packaged foods portfolio of Disney was mostly sweets and treats.

4. The Little Mermaid, The Lion King and The Beauty and the Beast-the only animated ever nominated film for the Academy Award for Best Picture. The Lion King won the Tony Award for best musical in 1997.

4. Disney doesn’t have their own manufacturing.

5. Disney held the top spots for the world’s most valuable franchise characters.

6. Disney Consumer Products (DCP) was the world’s largest licensor.

Company

Competitoro Commodity produce:

Dole, Green Giant and Fresh Expresso Entertainment brands:

Nickelodeon Warner Bros Sesame Workshop Disney

Characters SpongeBob, Dora the Explorer, The Fairly Odd parents

Harry Potter, Looney Tunes

Elmo, Grover, Cookie Monster

Mickey Mouse, Winnie the Pooh, etc .

Networks Television channel Nickelodeon

Sesame Street public television program

Film and Television program

Collaboration Licensing partnership Ready Pac Del Monte Foods, Sunkist

Kroger, Safeway and Albertson’s supermarket, Carrefour, Wal-Mart

Concept “Every fruit a kid would want to eat with Nickelodeon character”

“Healthier Snack Alternative”, “The Original Kid Pleasin’, mom-lovin’ dippity delicious snack!”

‘Healthy Habits for Life”

“Better For You”

Disney34%

Warner10%

Nickelodeon8%Marvel

8%Sanrio

7%

Lucas5%

4Kids5%

HIT4%

Mattel4%

Universal3%

20th Century Fox2%

Pokemon2%

Sesame2% Others

7%

Market Share

Licensees:General Foods, Standard Oil, DuPont, General Mills, Amour Meats, Life Savers, McDonalds, Imagination Farms

Direct to Retail (DTR)

Partnership:Target, Wal-Mart, Other large retailersKellogg's and Cadbury

Collaboration

Context

Political & Regulatory environment

Social/Cultural environment

Customer

Geographic segmentation:All over the world

Demographic segmentation :Age : Children and adultGender : Male and FemalePsychographic : Lower class, Middle class, Upper class

Behavioral segmentation:Taste Fun and “Magic”

Customer -- National CultureThe collectivism is high rather than individualismPower distance is low that children could affect decisions

In USA, the extended family been replaced as the most common mode of living by the nuclear family

Uncertainty avoidance is high the parents has important role that determining the purchase and healthy become the main factor which consider by the parents

Customer -- Household

Most of American Household type is Nuclear family, consist of a father, a mother and children.

The Household Decision-Making Process for Children’s Products

Influencers(children)

Communicationstargeted at children(taste, image)

Communicationstargeted at parents(nutrition)

Purchasers(parents)

User(children)

Informationgatherers(parents)

Initiators(parents,(children)

Decisionmakers

(parents,children)

Needs and Wants

Needs(Food)

Parents Wants(Nutritious Foods)

Children Wants(Tasty & Fun Foods)

Uses the behaviors and opinions of others as useful informationInformational

When an individual fulfills group expectations to gain a reward or avoid a sanction

Normative

Individuals have internalized the group’s values and normsValue Expression

Type of Influence

Solutions

Solution

Collaborate healthy foods with Disney programs

Healthy food campaign for parents

New character

Promotion through kindergarten

Collaborate 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

Healthy Food campaign for parents

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

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

Parents must also tell their children about the advantage of healthy foods and give the children healthy foods on the right proportion

New character

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

Promotion through kindergarten

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

Create children’s habit to eat healthy foods since kindergarten

Conclusion

Conclusion

Not easy for Disney to change the market taste, because it would take a long time to replace the old habit into a new one

There must be coordination between Disney and its stakeholder to get the objectives that Disney wants

THIS SLIDES WERE PREPARED BY RIDHAM PATOLIYA UNDER GUIDANCE OF PROF. SAMEER MATHUR, IIM LUCKNOW UNDER

SUMMER MARKETING INTERNSHIP, 2016