Disney Case Essay
The Walt Disney Company, founded in 1923, has been revolutionary in the American animation industry with the debut of Mickey Mouse in Steamboat Willie to be the very first cartoon ever with synchronized sound. In 1954, the company expanded and developed its very own television program known as The Wonderful World of Disney. Later on in the decade, the company further expanded beyond film and television to open amusement parks featuring characters from their beloved film and television series. Since then the company has further grown, deriving revenue from entertainment assets and consumer products and foods aimed at children. In 2004, The Walt Disney Company found itself in the middle of a maelstrom, specifically regarding nutrition levels of their consumer foods. The company was subject to growing criticism from activists, parents and governments around the world who believed that packaged good manufactures, fast food companies and media outlets that advertised Disney products were contributing to the growing obesity epidemic. Disney Consumer Products (DCP), a division of The Walt Disney Company responsible for product development and marketing of Disney-branded merchandise has seen this controversy as an opportunity to reconsider their entire range of food products.
Change is being implemented to transition the Disney brand from a large confectionery collection of foodinto one that offers a balanced nutritional diet. In regarding this issue, it is recommended Disney take an active approach and collaborate with their television channel in reaching out to children and teaching them the importance and advantages of healthy eating. As the Disney Channel garners a lot of views, this avenue will reach a wide amount of viewers and may be a positive influence with children. Another recommendation would be to maximize the leverage of the popularity of Disney characters by associating them with healthy eating. This would be similar to the idea of the Popeye character whose strength mainly comes from spinach. As well, it is also recommended that Disney employ a Healthy Food Campaign aimed at parents to establish credibility with them and the government to demonstrate that Disney is taking an active step to help reduce the obesity epidemic. Issue Statement
In 2004, health experts have characterized childhood obesity in the United States as epidemic and Europe as not far behind. The dramatic increases in childhood obesity and growing concern from activists, parents and the government have caused The Walt Disney Company to consider the nutritional value of their food products. DCP managers have realized that the company needs to establish credibility with the U.S. government, parents and nutritionists, however, this is a significant challenge due to the company’s existing licensing deals with various candy and treat manufactures and long-standing role as a toy supplier for McDonald’s who is also under constant attack as a significant contributor to the obesity epidemic. Though nobody expects Disney to solve the problem of childhood obesity single handedly, it is expected from Disney to at least take initiative and use its brand strength to reach children. Situational Analysis
The 4 P’s (Product, Price, Place and Promotion)
Disney has a great variety of products divided into 5 categories: main meal, side dish, snacks, drinks, and treats. In each category, there are a number of food products with 15% of all products can be classified as treats with
the rest of the 85% falling in the other 4 categories. As well, Disney has placed an emphasis on the quality of the goods under the Disney brand. A conducted research shows that mothers appreciated the fact that the products offered under the Disney brand were of high quality. This emphasis on high quality standards has continually positioned the company as the preferred food distributor. Price:
Though the retailers sell the products at the normal market price, there exists an extra cost of royalty charged by the company for the advertising effect. Disney wants to be affordable so measures have been taken to reduce costs. Place:
Disney has marketed their products through supermarkets such as Wal-Mart, Albertsons, and Safeway. 3 distribution channels have been used: Licensing, sourcing and Direct-to-retail. These channels bring in large steady streams of revenue without much cost. Promotion:
Many promotion strategies have been implemented by DCP such as the sticker promotion on various fruits, which have generated a lot of interest in young children.
The 5 C’s (Company, Competitor, Collaborator, Context, Customer) Company – Disney, DCP
Potential internal strengths:Potential internal weaknesses: -Corporation brand name has powerfully distinguished itself nationwide as one of the best in the entertainment business -Well-known brand name that has lead to high brand loyalty; synonymous with fun and magic -Disney has held the top spots for the world’s most valuable franchise characters. -DCP is the world’s largest licensor
-Children are very well familiar with Disney characters-Licensing with McDonalds and various candy and treat manufacturers -Growing criticism from activists, parents and governments around the world about contribution to the growing obesity epidemic -Does not own their own manufacturing
Competitor – Entertainment brands
DisneyNickelodeonSesame workshopWarner bros.
CharactersMickey Mouse, Winnie the Pooh, etc. SpongeBob, Dora the Explorer, etc. Elmo, Grover & Cookie MonsterHarry Potter, Looney Tunes
CollaborationKroger, Safeway, Albertson’s, Wal-MartLicensing partnershipDel Monte FoodsReady Pac
NetworkFilm & Television programNickelodeon channelSesame Street public television program —–
Concept“Better for You”“Every fruit a kid would want to eat with Nickelodeon character” “Healthy Habits for Life”“Healthier Snack Alternative” & “The Original Kid Pleasin’, mom-lovin’ dippity delicious snack!”