Disney launches electronics line

The colorful, whimsical collection of TVs (one with mouse-ear speakers on top), DVD players, personal digital radios, CD boom boxes and clock radios will go on sale in prominent displays at Circuit City, Sears and Target stores.

The audio and video line — priced from $29.99 to $119.99 — comes in three design schemes: red and black (classic Disney colors), green and white (Buzz Lightyear for boys) or pink and blue (Princess for girls). Disney characters appear with on-screen controls — change the volume on one TV, for example, and Mickey Mouse crosses the screen.

The move into new territory is Disney’s latest in its effort to restore growth in consumer products. Disney has been on a two-year quest, working directly with retailers as well as designers to develop products that bear the Disney name and characters.

With the latest products, the company also is trying to apply lessons learned with other recent products, such as pricing. Kellogg has cut suggested prices for Disney cereals introduced a year ago, and Coca-Cola’s Minute Maid is pulling Disney Xtreme Coolers from most U.S. markets after missing sales goals.

”One of the things we learned with Coke and Kellogg was we were very aggressive (in price) with the product line,” says Andy Mooney, chairman of Disney Consumer Products Worldwide. ”And our belief that we could charge a 10% to 20% premium in those categories was not a good theory.”

The competitive $9 billion consumer electronics business is very price driven, but Disney thinks it came up with the right mix. How it came together:

* Design. Disney teamed with Silicon Valley design firm Frog Design on the style of the machines and features, such as the ”volume Mickey.” Electronics maker Memcorp is making the machines.

* Price. Disney’s electronics are priced at a 20% premium to retailers’ private-label brands but well below premium brands such as Sony. ”We took a very hard look at the pricing so we were not so premium that we had boutique potential rather than volume potential,” Mooney says.

* Distribution. As the line expands, Disney has its eye on Wal-Mart for additional distribution. ”We don’t have the price points to meet Wal-Mart’s demands right now,” Mooney says.

But Disney analyst Jeff Logsdon of Gerard Klauer Mattison says the select distribution should work well for the line. ”It provides uniqueness for the products and helps hold pricing for an industry notorious for discounting,” he says. ”They can go upscale or downscale from there if it works.”


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