Disney Consumer Products

Himadri Palikhe, Udaya Shahi, Upendra Tuladhar

Case Analysis – Disney consumer products: Marketing nutrition to children

Synopsis Given the problem of increased childhood obesity epidemic in America and Europe fueled by the increasing trend of child food advertisement on television (DCP and competitors) and its impact on eating habit of children, there has been an increased interest of government on healthy food for children. Likewise, implementation of tough government rules and regulation (IOM and USDA). After being accused of contributing towards the growing obesity epidemic, Disney, a household name associated with fun and magic reconsidered the nutritional value of their food products and came up with … product lines to establish credibility with the government, manufacturers, parents and nutritionist In June 2006, Disney Consumer Products ( DCP ) decided to change the nutritional content of their product and introduce new healthy foods for children under the slogan of “Better for you”. It also established Disney Nutritional Guidelines and used three licensing and distribution models. The company adopted three approaches toward creating Disney food products. First, DCP would offer products that already had broad appeal such as milk or peanut butter. “The challenge is how do you make the products they already love healthier?” said Ndi. The second was to take products that need to invent whole wheat pasta that tastes good- it is already out there. We need to partner with source manufacturers and take something that is already working and make it more fun. For example, we could mold wholewheat pasta into character shapes”, said Ndi. The third was to use packaging to inspire product sampling, such as making water bottles in the shape of characters.

Himadri Palikhe, Udaya Shahi, Upendra Tuladhar

Core issue Could Disney use its “magic” to get children to switch from sugary, processed foods and become lifelong converts to a more nutritious diet? So, the question here is, would Disney successfully change its customers’ (mainly kids aged between 2 to 13) eating behavior and shift them to healthier choices of product lines it came up with? Or would the new product line have a negative impact on Disney’s brand value whereby it loses its fun and magic component from its brand?

Analysis Challenges and risks Disney is running with a tough situation where Traditional line Vs Healthy Programme line equals to Children preferences Vs Parents Preference, where both the children and parents are key participants in purchase decision making. Making both the participants happy with one lie of product might be a daunting task. Further, with this new re-positioning, Disney will lose revenue as it phases out products that didn’t meet nutritional standards (muti-mllion dollar hit). Developing healthier food and beverages, serving smaller portions where broad based consumer demand is absent. More than 14000 new food and beverage products entered US marketplace each year but less than 6% were successful… 94% failed due to one or more factors – lack of consumer demand, ineffective marketing, lack of support from public health sector or cost. DCP faced all of these risks.

Himadri Palikhe, Udaya Shahi, Upendra Tuladhar

Strength

Weakness

• Rich in Product portfolio: High product range and SKU Offerings. 41% of existing products met the nutritional audit standards • Excellent Financial position: Capability of adopting new technology and business model as per required nutrition level • Good trade (Retail) relation: Kroger and Wal-Mart • Reach in all media vehicles • Execution of regular trend and market analysis – purchase pattern, influence in purchase decision making • Popular and high brand value Cartoon Characters: Mickey Mouse, Winnie the Pooh, Nemo etc.

• Characters are becoming older: Need of youthful campaign to sync with association of current trend and generation • Increased interest of government on healthy food for children • Implementation of tough government rules and regulation (IOM and USDA) • No new character introduction in the portfolio

Opportunity

Threat

•Can take the first mover advantage in current issue of childhood obesity epidemic •Opportunity to address and touch the parental feelings so that association could be enhanced accordingly

•Existence of strong competitor in the same consumer products industry: Nickelodeon, Pokemon, Warner Bros etc •High expectations of mother and Kid’s habit of being get always new one: Taste, Feel, Story and characters etc.

As per the SWOT analysis conducted above, DCP has good strengths to be successful in the re-positioning and gain good market. Some issues and concerns that might act as hurdles are dealt with in the recommendation portion.

Himadri Palikhe, Udaya Shahi, Upendra Tuladhar

Potential and recommended courses of actions 

Create demand Promotion starting from kindergarten to schools The basic target here being the kids, DCP must make increase the visibility of their products most where their target spend most of their time of the day – Kindergarten and / or schools. Also, since at this age peers shape all the habits of the kids including eating habit, it will be a good idea to have kids see other kids eat DCP. Integrate healthy concepts with existing or new characters A perfect example to cite here would be

King Features'

Popeye and his strength

associated with consumption of spinach. Disney could use this very basic yet effective idea to use its existing characters or create new ones and associate them closely with eating healthy like health fairy, etc. 

Emphasize on nutrition and quality and value F & B industry is guided by key factors: taste, palatability, cost, convenience, value, variety, availability, ethnic preferences and safety. Eg: product and meal size are sigifiant drivers of consumers; perceived value of foods and beverages they purchase. Disney is already on the right track of focusing on nutrition, variety, quality and value for its customers. Since they might be subject to skepticisms by critics, they must ensure these efforts are clearly communicated through medias, also using animated films like Charlie and the Chocolate factory to showcase their Imagination Farm. This can make sure imagination farm and its products are closely associated with the magic and fun part of Disney.

Himadri Palikhe, Udaya Shahi, Upendra Tuladhar

Since DCP is reliant heavily on licensing as well, they should monitor their licensees closely in order to ensure that they are as per the standards of Disney. 

Differentiation and Competiton DCP is relying on their broad product line, wide distribution and the disney brand with Disney magic to win over mom’s against their competition. However, disney must always maintain a close watc on the competitors’ moves in order not to be over taken by other food giants. Also, Disney must introduce composition of all nutrition and other contents (in calorie) in printed form on its packaging.

Conclusion

DCP products as explained in the case, will be healthful, child friendly and fun. However, DCP had been subject to vocal criticsms in the past and they can expect to encounter some skepticism for these repositioning efforts. Also, the task of changing eating behaviours of its customers who have developed this behavior over somewhat long period of time will not be easy. Disney’s efforts to make kids healthier must be complemented by good choices by parents and stricter regulations against unhealthy food by government and local authorities.