30%More than thirty-percent of American children between the age of 5-9

years were overweight

14%Out of which fourteen-percent were obese

Then Now

Packaged goods companies increased their advertising spending on children’s cable TV stations

Roles & Responsibility of DCP in ‘Preventing Childhood Obesity’ and creating ‘Health in Balance’

• Harry Dolman: Executive VP, DCP-food, health & beauty group

• Michael Eisner: CEO, Disney

• Herman “Kay” Kamen: Disney’s Licensing Represntative

• Andy Mooney: President, DCP

• Lance Gatewood: VP, North America, DCP-food, health & beauty

• Embola Ndi: VP, Product Development, DCP

• John Honeck: Team Leader, DCP, grocery & drugs business

Can Disney be the leader in solving the Childhood Obesity

Problem?

* The Eisner Era(1980s-90s): More focus on revenue from entertainment assets

*Acquisition: Disney landed into TV, Media, Newspaper networks after purchasing Capital Cities/ABC in 1996.

Major Businesses: By 2006, the business had 4 major segments-Media Networks, Parks & Resorts, Studio Entertainment and DCP

$2.5billionWith this much net profit in 2006, the Walt Disney Company was the top

spot holder for the most valuable franchise character with Mickey Mouse , Winnie the Pooh, and the Disney Princess valuated at

57.1% of the total fictional characters earnings

6 Lines of Business:• Softlines (apparel, footwear and accessories)• Buena Vista Games• Home & Infant• Hardlines (food, health&beauty, electronics,

and stationery)• Publishing• Toys

$21billionWith this much worldwide retail sales, DCP was the leader in Licensors

of Character-Driven Entertainment Brands,2005

TLM

Sourcing

DTR

Key: (TLM: Traditional Licensing Model ); (DTR: Direct-to-Retail)

DCP established successful DTR relationships with Walmart and other large retailers.

The DTR model was popular among retailers.

“Research established that mothers transferred their perceptions of Disney brand as high quality, trustworthy and a familiar line of food and

beverages”

“Peer pressure and advertising strongly affect kids.”

“There is a gap between the food kids demand and the food that their mothers are willing to buy”

“Focus groups & Group discussions have contributed to the balancing of products portfolio”

“DCP managers decided to launch a whole new range of moderately priced fun line of products developed especially for children”

Fresh fruits Fresh vegetables

SKU: Store Keeping Units

“Most American children didn’t observe the USDA’s dietary guidelines or consume the recommended servings.”

Key: (USDA: U.S. Department of Agriculture)

0

2

4

6

8

10

12

14

16

18

20

1 9 7 5 2005

OBESITY TRENDS

2-5 yrs old

6-11 yrs old

12-19 yrs old

“Growth in % obesity in different age groups of children from 1975 to 2005”

40,000Television commercials were viewed by an average children in 2005

out of which

50%Were for high calorie, high fat foods, and beverages

Increased media coverage of childhood obesity led to public attention and sanitization in food industry

DCP saw the obesity epidemic as the opportunity to create a new market for food products which are staple including farm fresh fruits and

vegetables

Main Meal

Side Dish Snacks Drinks Treats

Quantity

Meals Snacks Beverage Treat

75%of DCP’s U.S. based products were complied with the nutritional

standards by September,2005.The company planned to have all its products being complied or being

phased-out by 2008

3 approaches:

• Offering products that already had broad appeal.

• Take healthier products, and make them more “fun”.

• Partner with manufacturers and take something that is already working and make it more “fun”.

Disney began licensing its characters to Imagination Farms, a national fresh produce company, to serve as a licensee to DCP in March,2006

Three-pronged product development strategy:

• Differentiate commodity produce through promotion

• Create value-added products through product preparation

• Develop exclusive produce varieties that would yield more child-friendly foods

Using PLU stickers as a means to differentiate between commodities like peaches and apples

Explaining nutrition to children through important messages or fun facts on the product packaging.

To market staple food items, DCP came up with establishing SKUs : Store Keeping Units

Is Disney alone fighting against

Obesity?

Some of the competitors who were already in the food products market and on the supermarket shelves, still failed to create the ‘Magic’ that

DCP was able to deliver

Disney along with Kroger, the largest pure grocery retailer in US, established a new brand- Disney Magic Selections(DMS)

Disney used story-telling through its characters to understand and internalize information, to communicate to kids in a fun way- Disney way

14,000More than fourteen thousand new food & beverage products entered

the US marketplace each year but less than

6%were successful; remaining failed due to many reasons like- inadequate

marketing, lack of support for public health sector or cost

DCP also had to face all

these risks!

DCP faced the marketing challenge of delivering best quality in affordable prices

DCP’s strategy was to focus on current “Better for you”

strategy rather than its legacy

Competition and channel friction is necessaryBut ‘Disney’s Magic’ sets it apart from all rest

To develop additional lines and more licenses, opening up of DTR relationship was important.

Disney was able to create its magic in

nutritional food products fighting against Obesity!

The slides were made by, Nilesh Raj, as a part of an internship under the guidance of

Prof. Sameer Mathur(www.iiminternship.com)