Disney Consumer products :

MARKETING NUTRITION

TO CHILDREN

Harvard Business School Case

PROBLEM DEFINITION ANALYSIS

SOLUTION CONCLUSION

HISTORY

THE WALT DISNEY COMPANY

HISTORY

1923Debut of Mickey Mouse in Steamboat Willie

1932Licensing became a formal business unit

DECIDED TO EXPAND 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

In 2006, The Walt Disney company had 4 business segments

MEDIA NETWORKS PARKS & RESORTS

STUDIO ENTERTAINMENTDISNEY CONSUMER PRODUCTS

Responsible for

product developme

nt and marketing of Disney-branded

merchandise

(DCP)

DCP’s 6 lines of business

Hardlines

FoodHealth & beauty

Stationary & electronics

Buena vista games

Softlines publishing

Home & infant

toys

Why DCP had to enter into market of nutritious food?

Because of the dramatic increase in child OBESITY

Let’s try to DEFINE THE PROBLEM

here

Disney was accused contributing towards the growing obesity epidemic

Healthy foods for children :Disney need to reconsider the nutritional

value of their food products

Establish credibility with the government, manufacturers, parents and nutritionist

Children’s taste impact the consumption

Could DCP solve the problem of childhood obesity ?

OR

could Disney provide leadership for rest of the food industry and use its brand

strength to reach children?

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

SUSTAIN ?

Steps taken by Disney

To become global consumer products’ company

Disney focused on

Product innovation

Creativity

Quality

Building relationships

with key retailers

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“Better for you”

Nutrition control healthier product line

1. 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 nutrients6. Minimally processed7. Calorie adjusted

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

NEED A FRAMEWORK OF HOW CHILDREN EAT

Made portfolio of products into 5 categories

Treats

Snacks

Beverages

Main meal

Side dishes

1

Calories were allocated to each category

2

Balance its portfolio so that 85% of its products could be classified as main meal, side dishes, snacks or beverages

and only 15% could be categorised as treats.

3

In 2004 DCP estimated that its branded products accounted

for less than 1% of children’s food market

Disney conducted a research to size food business opportunity

Research objective- To see the difference between what mothers bought and what kids wanted

Research Methodology- focus group, group sessions and shopping trips with mothers of children ages 2 to 13 years old were conducted

RESEARCH FINDINGS:1.there was a gap between “what moms bought” and “what kids wanted”2.peer pressure and advertising strongly influence kids’ preferences3.Mothers saw Disney brand as high quality, trustworthy and familiar (strong brand loyalty)

DCP’s Three Models of distribution

Traditional Licensing Model

SourcingProducts were designed and created by Disney but manufactured and

marketed by licensee)

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

3 approaches adopted by Disney

Offer products which already had broad appeal• Eg. Milk, peanut

butter

Already healthy products: make them more “FUN”• Eg. Mold whole

wheat pasta into character shapes

Use packaging to improve product sampling• Eg. Water bottles

in the shape of characters

DCP and Imagination farms used three-pronged product development strategy

1. Differentiate commodity2. Create value added products3. Develop exclusive product

varieties

Imagination farms ( new licenser of DCP)

Contracted 15 US

growers to provide organic produce

under the Disney Garden brand

Provided retailers with customised marketing programs

Disney’s DTR relationship with Kroger (largest pure grocery retailer in US)

Working together they developed DISNEY MAGIC SELECTIONS as a

PRIVATE LABEL

ANALYSIS

Disney34%

Warner10%

Nickelodeon8%Marvel

8%Sanrio

7%

Lucas5%

4Kids5%

HIT4%

Mattel4%

Universal3%

20th Century Fox2%

Pokemon2%

Sesame2% Others

7%

Market Share

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

Threats

• Competitors• High expectations from

mothers• More than 14000 new food

and beverage entered US market each year but less

than 6% were successful• Bear risk, financial hit to

DCP

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”

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

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

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

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

Key to getting children to eat healthier food

Kids have to like it taste goodMoms like it too nutritious

Created by :Tanvi Maheshwari

Lady Shri Ram College for Women,

during an internship by Prof. Sameer Mathur,

IIM Lucknow(www.IIMInternship.com)