Can Mickey save the industry?

Background

Obesity Epidemic

Low Nutritional value of Disney

Products

Change in strategy needed

Factors To Be Considered

FUN

NUTRITION

PRICING

SHORT TERM LOSSES

LONG TERM UNCERTAINITY

Disney’s Way Forward

1•Use market research to properly target

children•Phase out fatty/harmful food products from

its line.

2•Connect with producers (eg. Imagination

Farms)•Branch out networks for supply with

retailers.

3•Supplement the repositioning with a smart

marketing plan.•Build up a market share which will make up

for the losses due to repositioning.

Will the Disney brand be able to position itself in the nutritious food consumer product market?

It may be the correct decision ethically, but is it the right business decision?

Disney’s Dilemma

I would claim that this decision is in the right direction, for the future of Disney’s food products.

Hypothesis

Increase in operating income since repositioning

Proofs and Action

2003 2004 20050

10

20

30

40

50

60

Series 1

Series 1

In millions ($)

Private Label Opportunities for

Better for You

WHAT DOES THIS MEAN

IT MEANS GROWTH POTENTIAL !

Disney’s food product line is aimed at children, where it already rules roost in other sectors.

BRAND RECOGNITION IN TARGET MARKET

Mickey Mouse has 96%

recognition among children.

Brand Equity carries over

Higher positive recall increases

chances of buying.

AND THAT MATTERS BECAUSE?

Partnerships

2501 supermarkets

Largest pure grocery retailer in the US

Pricing and Brand Equity gives Disney the edge

And this is supplemented by….

Access to 80% of all outlets

in USA

Inevitable Outcome

• Growing awareness of importance of nutrition both among children and parents

• Stricter laws in advertising against unhealthy food

• Negative consequences due to associations. Eg- Disney’s association with McDonalds

• Pioneering this change may ensure Disney commands significant market share in the future

Actions Required

Pricing Strategy

1. Disney is a premium brand, but this category will have to be more moderately priced.

2. Higher or similar quality as its competitors (Nickelodeon etc), but at a lesser price.

1. Smart Advertising2. Signaling the change across the

company and using its vast resources

3. Leveraging its brand awareness to push for change

4. Smart associations with organizations like UNICEF etc which add to its cause.

Shifting children to nutritious food

Alternatives

Consider Disney Foods to be a short term investment, and hence concentrate on maximizing short term gain, by not overhauling the product line. Divest the profits into the main business, and keep the attention on the company’s core interests- entertainment for the family.

This presentation was made by Rushabh Menon (IIT Madras), as a part of the Marketing Internship by Prof. Sameer Mathur (IIM Lucknow)

DISCLAIMER