Disney Consumer Products Marketing Nutrition to children

Harvard Business School Case

Players involved

Harry Dolman - Executive Vice President of DCP’s food, health and beauty group

Embola Ndi – Vice President of Disney’s product development category

Andy Mooney – President of Disney Consumer Products

Situation Analysis

Disney found itself in the middle of a maelstrom and the food treats it encourages were considered as one of the contributing factors to the growing obesity epidemic in 2004.

Managers at DCP saw the controversy as an opportunity to reconsider its entire range of food products.

Disney desired to provide leadership for the rest of the food industry and use its brand equity to reach out to children with its nutritious products.

Objectives of this case

To asses the viability of Disney’s entry into the food business.

To get an idea about how much loss the firm will hit in the short term because of this decision

To assess the variety of risks which the firm will be facing due to the strategy it is about to implement

Brand strength of Disney

DCP conducted a research to size the food business opportunity and to discover if Disney’s brand equity would transfer to a line of children’s food products

Group sessions and shopping trips with mothers of children aged between 2 to 13 years were the basis for the research.

DCP discovered that there was a gap between the foods children requested and the foods their mothers were willing to buy for them.

As a result, DCP understood the importance and value of balancing their portfolio.

Research conducted by DCP

DCP audit results of its food products in 2004

Disney had to phase out approximately a quarter of its products which would result in a considerable loss and Disney was aware of this.

Disney’s model assumed a daily 1800-calorie diet with each child consuming three meals, two snacks, one beverage and one treat.

Thus Disney decided to balance its portfolio such that 85% of its products could be classified as main meal, side dish, snack or beverage and only 15% could be categorized as treats.

Disney nutritional guidelines

Imagination farms Disney licensed its characters to Imagination farms, a national

fresh produce marketing company.

To differentiate certain commodities such as peaches and apples, PLU stickers were adorned with Disney characters. This had a very positive feedback from the consumers.

Revenues of Disney (in $ millions)

2003 2004 2005Walt Disney Company

27061 30752 31944

Disney Consumer Products (% of company revenue)

8.66% 8.17% 6.66%

DCP, Food and Grocery only (% of company revenue)

0.2% 0.17% 0.22%

Market share of top-earning fictional characters (in 2004)

Character Company Percent shareMickey Mouse Disney 23.02%Winnie the Pooh

Disney 22.22%

Frodo Baggins Tolkien Enterprises

11.51%

Harry Potter JK Rowling 11.11%Nemo Disney 7.94%Yu- Gi-Oh! Warner Bros. 6.35%SpongeBob SquarePants

Nickelodeon 5.95%

Spiderman Marvel Entertainment

5.16%

Market share of companies (Based on fictional characters)

Percent share

Disney 53.18%

Tolkien enterprises

11.51%

JK Rowling 11.11%

Others 24.20%

Percent share

Disney

Tolkien En-terprises

JK Rowling

Others

Risks faced Pricing and value: The shift from the standard premium pricing

of Disney to lower pricing of its food products was a marketing challenge for DCP.

Legacy: The change in brand positioning from the earlier fun and magic concept to the new ‘Better for you’ products created some uncertainty among the DCP managers.

Competition: DCP had competitors in marketing of healthy food products using fictional characters from Nickelodeon, Sesame Workshop and Warner Bros.

Summary In spite of all the risks, DCP focused on developing ‘Better for

you’ products and how they are going to get there.

The market share of their fictional characters were more than 50% percent and the Disney characters were more popular than any other.

The strong brand equity and the research conducted helped Disney in strategizing for their ‘Better for you’ products.

Disney were aware that they will take a multi-million dollar hit temporarily due to the products phased out but were confident that the future will be bright.

Disclaimer

Created by Arun M, IIT Madras, during a marketing internship with Prof. Sameer Mathur, IIM Lucknow.