DISNEY CONSUMER PRODUCTS:MARKETING NUTRITION TO CHILDREN !

WHAT IS DISNEY ??

WHO ARE THE MAIN PLAYERS ??

HARRY DOLMAN : EXECUTIVE VICE PRESIDENT ,DCP HERMAN KAY KAMEN : LICENSING REP , DCP

ANDY MONNEY : PRESIDENT FOR DCP

REID LESLIE : DIRECTOR FOR FOOD AND BEHAVIOUR , DCP

GOODWIN : CEO FOR IMAGINATION FARMS

JOHN HONECK : TEAM LEADER FOR DCP’S GROCERY BUSINESS

WHAT IS THE PRESENT SITUATION ?

SITUATION ANALYSIS :Synonymous to FUN and MAGIC

Children associated to FOOD TREATS

Stuck in a MALESTORM !!!

Government , activists and parents believed that it contributed to GROWING OBESITY EPIDEMIC !!!

In 2004, health experts estimated that more than 30% of American children between the ages of 5 and 9 years were overweight and 14% were obese.In Europe, childhood obesity rates in developed countries doubled from 1973 to 2003 with Italy, Spain, the Netherlands and the United Kingdom all reporting 10% or more children aged 5 to 9 years were obese

WHAT IS THE PROBLEM ?

• SOFTLINES • HARDLINES• HOME AND INFANT • BUENA VISTA GAMES • PUBLISHING• TOYS

DISNSEY CONSUMER PRODUCTS(DCP)

The Disney brothers hired Herman “Kay” Kamen as the company’s solelicensing representative; Kamen’s company had licensed Mickey Mouse and other characters to appear on products such as candy, cookies, and toothpaste, and in ad campaigns for bread, milk , orange juice , ice cream and breakfast cereal. —particularly food manufacturers , paid handsomely for the right to feature Disney characters on their packaging. in 1934, General Foods paid $1 million to feature Mickey Mouse cutouts In 1948, the company reported licensing income of over $1 million and retail sales of $100 millionIn 1954, Disney capitalized on the persuasive power of television when the company sold $300million in coonskin caps and other merchandise By the mid-1970s, collectors traded Disney memorabilia, leading to the first Sotheby’s auction for “Disneyana” merchandise1996, DCP signed an exclusive, 10-year, $2 billion licensing deal with McDonald’s

The PROBLEM :

After enjoying decades of 25% annual growth, in 1998 and 1999, DCP experienced 10-15% declines in sales

STRATEGY: THEN :“To co-brand withmanufacturers, premium price and passively license products,”

NOW :“To focus on the brand and we need a model that will support this goal.”

TWO OTHER MODELS :SOURCING : Contract manufacturing, where products were created and designed by Disney and featured the Disney brand, but the licensee would handle manufacturing , sales and marketing.DTR (DIRECT TO RETAIL) : Entailed partnering directly with retailers who were, in DCP’s estimation,“winners in their channel/marketplace.”

HYPOTHESIS!

DCP had been a long-time licensor of packaged foods, though the portfolio had consisted largelyof candy and ice cream

In 2004, DCP estimated that its branded food products accounted for lessthan 1% of the children’s food market.

And with the alarming rates of obesity in the country , DISNEY , decided it to be the right time to start a whole new line of food products and BROADEN its PRODUCT OFFEREINGS .

To interest both the mothers and kids , DCP manager- LESLIE , decided that to be successful, a newline would need to be moderately priced and be positioned as a fun line of products developedspecifically for children and should contain nutrition as well !

Factors for obesity rise :

*Consuming larger portion of food thanrequired.

*Television advertising is a primary factor. A study of children’s ability to recall advertised products and express product preferences found that advertising was highly effective in persuading children to request products.

IOM recommended that food and beverage companies:1. Actively promote healthful diets for children.2. Create or reformulate children’s products to reduce calories, fat, salt and added sugar whileimproving nutrient content.3. Develop an “empirically validated industry-wide rating system” for labeling and advertisingthat appealed to children and conveyed nutritional information.

4. Enforce strict marketing standards and adhere to self-regulatory guidelines for traditional advertising as well as “evolving vehicles” such as the Internet and “averages.”5. Avoid linking “nutritionally questionable” products to admired celebrities, sports figures, or cartoon characters (including the cross-promotion of food with branded children’s programming).

According to Ndi Embola , Vice President of DCP“Right now,kids eat the wrong foods—and too much of the wrong foods.”

DIET PLAN !!!!!

Disney’s portfolio:Main meal, Side dish, Snacks, Drinks andTreats.

Table A Recommendations for Disney-branded Foods after Nutritional Audit % of portfolioProducts met nutritional guidelines for category— nochanges required 41%Products classified as occasional treats— exemptedfrom nutritional guidelines 15%Products out of compliance but able to meetguidelines after portion sizes adjusted 9%Products out of compliance—to be reformulated 7%Products out of compliance—to be phased out 28%Total 100%

Disney adopted three approaches toward creating Disney food products. *First, DCP would offer products that already had broad appeal and make the products they already love healthier ! *The second was to take products that were already healthy and make them more “fun.” *Third was to use packaging to inspire product sampling, such as making water bottles in the shape of characters.

PROOFS/ACTION :

According to Ndi ‘s points ,Disney started to make deals and partnershipswith other brands to meet its requirements.

IMAGINATION FARM PRODUCTS

KROGGER PRODUCTS

IMAGINATION FARMS AND DISNEY :

DCP Markets embraced a “whole foods first” philosophy and as a result, marketed fresh fruits and vegetables in addition to its package products.

They also worked with ones which produce breeders to identify items in their portfolios which were particularly suited to children

Imagination farms products were all children friendly , with :

*All the nutrient values explained in kid friendly way

*potatoes usually weigh 6-7 ounce are made into 3-4 ounce which is enough for the kid and sold , so making sure only the required quantity food is in taken !!

KROGER AND DISNEY :

Along with FRESH PRODUCTS , Disney wanted to make its own line GROCERY STORES and thus made deals with KROGER the largest pure grocery retailer in The United States ( 12% share of the US grocery market )

*Together, Disney and Kroger sized the opportunity at $250 million in annual revenue and usedfocus groups and Nielsen data to validate the categories and products they had selected .As well as the brand name : Disney Magic Selections

*Kroger had exclusive U.S. use of two food-specific character personas: Chef Mickey appeared on packaged foods and featured Mickey outfitted in a chef’s hat;Farmer Mickey adorned fresh fruits and vegetables and appeared in a farmer’s hat !

*Together, Disney and Kroger sized the opportunity at $250 million in annual revenue and usedfocus groups and Nielsen data to validate the categories and products they had selected .As well as the brand name : Disney Magic Selections

*Kroger had exclusive U.S. use of two food-specific character personas: Chef Mickey appeared on packaged foods and featured Mickey outfitted in a chef’s hat;

DCP’s Food and Beverage CategoriesHealthy Categories Staples TreatsWater pasta ConfectionsJuice Soups Ice CreamMilk Carbs/Breads CookiesFruit YogurtsVegetables Meats/Cheese

Exhibit 10 Private Label Opportunity by Category for “Better-for-You” Products, 2006Kid-Driven Categories Private Label Share of Mainstream Private Label Share of “Better for You”Bread 27% 0%Carbonated Soft Drinks 11% 8%Cheese 32% 19%Chocolate Candy & Chewing Gum 2% 0%Cookies 14% 2%Crackers 11% 9%Frozen, Hand-Held Entrees 5% 0% Ice Cream/Novelties 21% 10%Lunch Combos & Lunch Meats 9% 11%Portable Breakfast & Snack Foods 10% 6%Ready-To-Eat Cereal 10% 11%Salty Snacks 5% 7%Shelf-Stable Juice Drinks 19% 0%Soup 12% 9%Sport & Energy Drinks NA 1%Yogurt & Yogurt Drinks 15% 19%

ALTERNATIVES :

Despite all the positive points and strategies ,There still might be slight chances of failure of the strategies … reasons could be :*Serving SMALLER PORTION SIZES may beviewed by some private sector businesses as risks rather than as opportunities;

*COMPETITORS : NICKELODEON , SESAME WORKSHOP , WARNER BROS. etc., who follow similar strategies like that of DISNEY !

*PRICING AND VALUES : These commodities are priced according to their competitors , but are still high priced !

*LEGACY : if the public—and particularly the media—wouldembrace the new food products. Though they were confident that the products would be healthful,child-friendly and fun, they had been subject to vocal criticism in the past and expected to encounter

DISCLAIMER:Created by HASITHA RAMINI,NIT TRICHY, during a MARKETING INTERNSHIP by Prof.SAMEER MATHUR,IIM LUCKNOW.