Walt Disney Company

• Disney was founded in the year 1923 by the Disney Brother, Walt Disney and Roy.O. Disney.

• Mickey Mouse made his first debut in Steamboat Willie in the year 1932.

• The company immediately became the cartoon animation industry giant and gained world wide recognition.

• In 1985, Michael Eisner took over the company and started expanding its horizons, by diversifying.

Company Subsidiaries and Business Segments

The four pillars of Walt Disney Company

Its job is to extend the Disney Brand to

merchandise by giving license

to retail companies and manufacturers

worldwide.

Product line of Disney Consumer Products. DCP was

responsible for extending Disney brand to merchandise

ranging from apparel, toys to interactive games and books.

In 2005, DCP was the

world’s largest licensor with more than

$21 billion sales.

Retail sales of DCP

licensed food products

accounted for $1.5

billion.

In 1996, Disney signed

an exclusive 10 year, $2

billion with McDonald’s contract giving it license

to feature Disney

characters in its

promotions and to offer

Disney toys with happy

meals.

Distribution Models used by DCP

• Traditional Licensing Model

Licensees handled manufacturing, product innovation, sales and

manufacturing. In turn, licensees would provide superior product

differentiation, distribution strength and category leadership.

• Sourcing Licensee would handle sales and marketing while Disney brand would

manufacture the products.

• Direct-to-Retail Partnering directly with retailers.

Childhood obesity epidemic:

• In the span of 10 years, obesity rates and

overweight number of children skyrocketed.

– Many of the studies pointed out that food

advertisements influence children’s consumption behaviours and food preferences.

• Eventually, IOM said that the fast food

retailers should “share responsibility” in preventing childhood obesity.

Current Situation Disney licensed confectionaries and sweet

treats

Challenge

Major challenges faced by DCP.

To find a way to substitute sugary

food with nutritious food and

Hypothesis

• Observations and studies

say that childrens’ eating habits is influenced by

television advertisements

and by their peers.

• So, DCP made sure that

their products should be

trustworthy and maintain

a good quality line.

Course of Action

Ndi, vice president of DCP,

addressed the issue and

Introduced a way to

improve the eating habits

and consumption ways of

children.

To meet the requirements of revised IOM guidelines,

DCP came up with the following products to add in its

portfolio.

• Main Meal

• Side dish

• Snacks

• Drinks and treats

Ndi’s motto : “Good food, great fun!”

DCP’s food and everage produ ts y eating o asion.

• DCP started reformulating

some products and

shrinking portions in the

others, by September

2005, 75% of its U.S

products complied to the

nutritional guidelines.

• Also revised guidelines in

its licensing contracts.

Results of DCP’s nutritional audit

suggested that

41% of its consumer

products(2,100 products)

were complying to the

nutritional guidelines set

by USDA.

Now, what about the

rest of the 59%??

Adopted 3 approaches towards

creating Disney food products.

1. Retaining essential food products.

2. Fun, healthy food.

3. Make packages more appealing.

Retainment of essential products like peanut butter and

milk.

Bringing nutrition to children. With healthy food on one hand

and fun(by imaging puzzles and child-engaging fun quotes) on

the other to get hildren’s attention.

Water bottles in the shape of characters, to promote product

sampling and making it more appealing to children

Imagination Foods Disney teamed up with Imagination

foods, fresh Fruits and vegetables

retailer. They had a three-ponged

development strategy: Product

differentiation, create value-added

products, exclusive produce

varieties.

Disney and Kroger Disney also aligned with Kroger, biggest grocery

retailing company, and established DTR

relationship with it for an exclusive line of

Disney-branded products.

With the help of Kroger, DCP launched Disney

Magic Selections.

Nickelodeon collaborated with Green Giant in the race

for provding nutritional food to children. Nickelodeon

being the boggest competitor to Disney.

Highest earning

animation studios.

Have good reputation.

Has its own brand

image.

Diversified company.

Lots of risks

Does not have its own

manufacturing unit.

Established a good brand

image, which helped with

moms.

Disney characters’ popularity.

Other companies,

competitors.

Food products do not

have that much

nutritional value.

Character familiarity percentages, the Mickey Mouse

and Cinderella are on the top for Disney characters.

Top most earning fictional characters, estimated value

in billion($).

Conclusion

DCP managers were excited about

their entry into the food and

beverage market and planned to

capitalizing on the vast resources of

the Walt Disney Company to gain

market share and acceptance for its

new undertaking.

By

- Mrudula Kavuri,

IIT Madras