Disney Consumer Products: Marketing Nutrition to Children

•Year – 2004•American Children aged 5-9 years-Overweight 30%-Obese 14%

Obesity is Characterised as a epidemic by US government

As a result Disney Consumer products were criticised for advertising and selling obesity inducing products

Disney decided to reconsider its entire range of food products

What is the current Situation ?

Income Statement

Consumer time investment

Character Awareness

Top Earning Characters

Share of total licensing Industry to Disney

Disney has

56% Share of the estimated

$41.2 Dollar

Share of total licensing Industry to Disney

What is the Objective of the

Case ?

Objective-1/3•To determine the role/objective responsibility for-profit company in addressing social issues namely Obesity and steps taken by the company to address that.

Objective-2/3•To understand the risks associated with the company converting its business model in the absence of broad based consumer demand.

Objective-3/3•Steps taken by the company to avoid these risks.

What are the issues addressed

by the case?

Issue-1/3

• Research done by

Disney for introducing better

Nutritious diet for children

Issue-2/3

• Steps taken by Disney for introducing better

Nutritious diet for children

Issue-3/3

• Future RISKS associated with

Disney’s new venture

Issue-1/3

• Research done by

Disney for introducing better

Nutritious diet for children

Disney at Supermarket

What Mothers Buy• Moderately priced good• High quality • Nutritious • Taste good• Reduce Fat and Sugar• Requested By Children

So....

• Disney needs

Kid-pleasing’ mom-loving’ dippity delicious snack!

Institute of medicine asked Companies to

share responsibility for Childhood Obesity

prevention

So....•Disney did a Nutritional audit of its products and

MADE Disney Nutritional

Guidelines

Issue-2/3

• Steps taken by Disney for introducing better

Nutritious diet for children

License Distribution Model

“We wanted to focus on product innovation creativity and quality and building relationship with key retailers”

-Harry Dolman

So....Disney gave three models for converting

from

Licensing-only business modelsto

Global consumers product company

Models-1/3

• Traditional Licensing model

Models-2/3

•Sourcing model

Models-3/3

• Direct to Retail

Models-3/3• Direct to Retail -Imagination Farm- fresh food producing company founded to license DCP

Disney Magic Selection (private Label)

Models-3/3• Direct to Retail -Kroger Supermarket- The largest pure grocery retailer in the US in 2005 sales- It has 12% share of US Grocery Market

But… In futureDisney would rely heavily on

Disney-branded, value priced active licensing

model

Creating Disney food products

Three approaches1. Approaching products that already

had appeal like milk/butter2. Take Products that were already

healthy and make them fun3. Use Packaging to inspire product

sampling

So…

Issue-3/3

• Future RISKS associated with

Disney’s new venture

Short term financial multi million dollar hit

Products have to be affordable and have value

Differentiation and Competition

Growth and Distribution

Created by Pankaj Goyal, IIT Kanpur, during an internship byProf. Sameer Mathur, IIM Lucknow.www.IIMInternship.com