Transforming the

“Yuck” to the “Yum”

The Disney Way

COMPANY

OVERVIEW

Was Founded in1923 by TwoBrothers WalterElias and RoyOliver Disney withthe Creation of

1923

1929

1953

1955

TIMELINE

2003’s TOP MAIN CHARACTERS

5.9

BILLION $

4.7

BILLION $

Media NetworkStudio

Entertainment

Parks and Resorts

Disney Consumer Products(DCP)

Walt Disney

By 2006

DISNEY CONSUMER PRODUCTS

Softlines Toys

Buena Vista Games

Home and Infant

Hard Lines Publishing

SIX LINES OF PRODUCT BUSINESS

DCP

Traditional Model

Direct to Retail Model(DTR)

Sourcing ModelIn January 2000, AndyMooney, the then president ofDCP introduced new licensingmodels

SITUATION

ANALYSIS

Link food with

MAGIC and FUN

Food items by Disney mainly focusedon were sweets, ice creamsand other confectionary items

that were a rich source of sugarand fats

30%AMERICAN KIDS

ARE OVERWEIGHT

14%AMERICAN KIDS

ARE OBESE

DISNEY FACED INCREASED

CRITICISMFOR THE

OBESITY EPIDEMIC

GOVERNMENT ENSURED THAT THE

BROADCASTERS FOLLOWED A TOUGH SET OF RULES AND MUST NOT ENCOURAGE EXCESSIVE CONSUMPTION OF FOOD

Effects on the Companies

INCREASED

INVESTMENTON

INCREASED MEDIA COVERAGE OF CHILDHOOD OBESITY SENSITIZED THE FOOD AND

BEVERAGE INDUSTRIES

HYPOTHESIS

Can Use Its “MAGIC”

To get children to switch fromsugary, processed foods andbecame lifelong converts to amore nutritious diet

QUESTIONS

• What will be the Challenges?

• How to set Nutritional

Guidelines within FDA’s limits?

• How to advertise to reach kids?

• Who will be the competitors?

• How to face Competitors?

• Can Disney set an example?

PROOF &

ACTION

PRODUCT EXTENSION

The product mix now included a wide range of “Better For You” Products

BRAND REPOSITIONING

Nutritionally Bad

Childrens’ Foods

• Appealed to Children Only

Nutritionally Good

Childrens’ Foods

• Appealed to both Children and

Parents

WHAT WILL BE THE CHALLENGES?

Pricing and Value

Legacy

Differentiation and

Competition

Growth and Distribution

DCP managers understood that its products had to be

“Forget where you are today, focus on developing

Products”

-Mooney

DPC’s managers believed that combination of a broad product

line , wide distribution & the

would win over Moms

¥ DCP signed an with Kroger.

¥ Disney wanted to License or Develop .

¥ Can using Characters, brand & price.

“Promote healthier categories, reformulate foods like cookies and cereal to be healthier and to control portions”

-Embola Ndi(Vice President, Product development)

HOW TO SET NUTRITIONAL GUIDELINES

WITHIN FDA’S LIMITS?

Our goal is to get kids to consume healthier products

If we decide to use an additive, we need to keep our focus on

we are using it

Recommendations for DCP after Nutritional Audit

Products to be Reformulated:7 %

Products Exempted from nutritional guidelines:15 %

Products to be phased out: 28%

No Changes Required:41 %

HOW TO ADVERTISE TO REACH KIDS?

Offer products that already had

broad appeal

Distributed Peaches with Daisy Duck & Goofy Stickers

Take products that are healthy &

make it interesting and fun

Mold whole wheat pasta into character shapes

Use packaging to inspire Product

SamplingWater Bottles were made in the shape of

characters

We expect competition & channel fraction, but we believe we can beat the competition because even if they develop & match our nutritional standards, they

cannot access Disney Magic

WHO WILL BE THE COMPETITORS?

-Ndi

A top rated U.S. basic cable network since 1996

Seen by 89 Million households

Del Monte Foods signed a licensing deal withSesame Workshop

Ready Pac (ready to eat fruits)signed a licensing deal with Warner Bros

WHAT WERE THE RISKS TAKEN?

Making Changes in the absence of

broad-based consumer demand

Phasing out successful yet unhealthy products

Could have arisen to losing out brand loyalty among its target customers i.e. Children

DID DISNEY SET AN EXAMPLE?

Even when Disney was making huge profits with

fast foods it took upon it as a

and also a huge risk to expose children to healthier

food alternatives.

"These slides were created by

Priyanka Sahoo, IIT Kharagpur as part of an internship done under the guidance of

Prof. Sameer Mathur, IIM Lucknow