Disney Consumer Products: Quality, Innovation, and Storytelling

“We maintain a commitment to quality, innovation, and storytelling,” said Klaseus. “Quality has been a really important focal point over the past few years for Bob Iger, Disney’s president and CEO. In the toy division, we have really elevated our focus on quality and worked with partners who stand for that.”

By combining Disney’s long history with the commitment to quality, Disney Consumer Products has had a large and steady presence in the toy marketplace. As other toy companies were hit by the recession, Disney had a strong holiday season and is in position for continued growth in 2010.

“If Disney Consumer Products was a toy manufacturer, it would be the third largest toy company in the world,” Klaseus said. “During the last holiday season, we are very pleased with our results. We saw a lot of our core products gain share and surpass expectations.”

There were a number of product lines that did well during the holidays, he said, including toys associated with the “The Princess and the Frog” and “Cars.” “‘Cars’ truly is a strong evergreen brand, and we came out with a lot of exciting product introductions last year,” Klaseus said. “We’ll also be introducing some new products this year in anticipation of the release of ‘Cars 2’ in 2011.”

The company also saw successful growth with some of its newer products in the preschool market, including those based on ‘Handy Manny’ and Disney Fairies. The ever popular Toy Story franchise also had a big year in 2009.

“We did an early re-release of Toy Story 1 and 2 toys this past fall leading up to the release of ‘Toy Story 3’ in June,” Klaseus said. “Our deluxe Buzz and Woody action figures, in particular, did really well.”

Overcoming obstacles

Disney Consumer Products faced many of the same economic obstacles as many other companies in 2009, but because of the strength of the brand, Klaseus said many consumers turned toward Disney toys. “People were looking for brands they trusted that they knew their children would be receptive to,” he said. “The economy was a challenge, and we didn’t come out unscathed, but we did well in many areas.”

Klaseus said the company did see some fall off in the demand for products based on tween shows and movies, but that some of the new preschool items as well as the longer running evergreen products helped make up the difference. “Our tween business really shifted in 2009 at the same time the economy hit the skids,” he said. “While there was some erosion in lines like High School Musical, for example, we did see things pick up around products based on ‘Toy Story’ and ‘Handy Manny.’”

Having the Disney name does make the company unique, Klaseus said. “If you look at a lot of other entertainment companies, no one else has a brand that stands for something the way Disney does, so that alone gives us a leg up,” he said. “We also have a portfolio of truly evergreen properties that perform day in and day out, which gives us a reliable and stable foundation. On top of that, we have a huge portfolio of new content that continues to come to us.”

No matter the demographic the entertainment or toys are aimed at, Klaseus said the success of the company always comes back to the commitment to quality and storytelling. “John Lasseter, the chief creative officer of Walt Disney and Pixar Animation Studios, once said that quality is the best business model, and I think that holds true with his commitment to Disney’s animated properties,” he said. “If there’s a great story and the characters really resonate with the kids, the majority of the time that is going to work for us. We are working off the love of those characters and the kids wanting to incorporate those characters into their lives.”

Toys give kids a chance to bring the characters they love into their lives after they leave the theater. “I think the quality mantra really holds true,” Klaseus said. “If quality is delivered in all facets of the company, it will translate to toys.”

Quality partnerships

The focus on quality extends beyond the relationships within the Disney brand. The consumer toys division also strives to build relationships with licensees who have the same kind of commitment to quality and innovation.

“Mattel is a great example of a long-term partner that works with us on many of our different properties,” Klaseus said. “Lego is another partner of ours that stands for everything we believe in and is a great complement to the Disney brand. We work with a lot of the leaders in the toy industry, and we are very proud of our approach and how we work with them in a collaborative partnership.”

Over the past decade, Disney Consumer Products has shifted the way it does business. “We’ve gone from a more traditional licensing approach to being a much more active product organization,” Klaseus said. “As part of that effort, we started developing a more robust sales team and located offices near some of our key accounts. We have one in Bentonville for Walmart and one in Minneapolis for Target.”

During the next several years, there will be no lack of opportunities for the company to extend its reach and develop more quality toys and products. “There are a lot of fantastic new

stories and content coming up behind our core properties,” he said. “Disney will continue to have a significant push with the Princess line, with ‘The Princess and the Frog’ last year and two new Disney Princess films due out in 2010 and 2011. We also have ‘Toy Story 3’ and ‘Cars 2’ coming out soon, as well as several new Disney Fairies DVD releases.”