Johnson and Johnson - Term Paper Example

?Johnson and Johnson Table of Contents Table of Contents 2 Introduction 3 Company Background 4 Product Positioning 4 Impact of Advertisement on Product Positioning 6 Product Positioning Strategy of Johnson & Johnson 7 Impact of Advertising on Product Positioning of Johnson & Johnson 8 Conclusion 12 Works Cited 13 Introduction Product positioning is a vital marketing tool for any organization to make the products superior compared to other competitors’ products. It comprises developing a unique, reliable and standard customer insight about a company’s offerings and brand image. Organizations can position their products on the basis of utilization, cost, or quality. The advertisements play significant part for positioning the products and the offerings of organizations. Through advertisement, organizations position their products by the way of promoting the differentiators to the customers. To become successful, organizations need effective promotion, advertising and sales initiatives and without them there will be less opportunity for future development of business. The purpose of the paper is to describe the advertising and its impact on positioning of Johnson & Johnson Company. The objective will be accomplished by two phases, firstly describing the product positioning and illustrating how organizations can use it to position their products, secondly, how Johnson & Johnson had used advertisement for positioning one of its popular brands named Tylenol. The reason for choosing this topic is to know the relationship between positioning and advertising and to understand the importance of positioning in business. Company Background Johnson & Johnson is one of the most admired organizations, which trades pharmaceutical and healthcare products. Its business operations are expanded to around 60 nations with more than 250 business units. The company invests significant amount on marketing and advertising of their products to the customers. In the year 2010, Johnson & Johnson expended almost 19,424 USD for marketing and managerial purposes. The company provides significant importance on advertisements. The major advertisement media used by Johnson & Johnson are television, radio, print and internet. In the year 2010, the total advertisement spending on Johnson & Johnson was almost 2.4 billion USD which indicates that advertisements are used by the company for positioning the brand. Through advertisements, Johnson & Johnson seeks to maintain close relation with the customers and provide useful information about their products. Today, billions of people globally use the products of Johnson & Johnson which is possible due to efficient positioning strategy of the company (Johnson & Johnson Services, “Annual Report 2010”). Product Positioning Product positioning is an essential element of customers’ purchasing process. It provides the opportunity to encourage the customers’ insights regarding company’s products. Rich, brief and meaningful product positioning assists organizations to communicate message regarding products to customers so that they can accept and be familiar with the product offerings among other substitute products. For successful positioning, organizations need to undertake three steps. First, organizations should recognize the characteristics of target market, i.e. how target market makes their purchasing decisions. After that, organizations need to recognize the type of competition, i.e. how the rival companies are positioning their products and what strategies are they using for successful positioning. Then, organizations must find out the major strengths of their products and assess the purchasing criteria. If the purchasing criteria satisfy the requirements of target customers effectively, organizations can position their products and ultimately can yield better returns. If there is no vacant product position to be filled in the market, then the organization needs to find out the competitor to compete, with a certain product position that can ensure success (On The Mark, “Product positioning in Five Easy Steps”). An organization can claim that its products are better than other organizations in several ways such as much quicker, safer, inexpensive, steadier, friendlier, better quality and better value among others. However, it is significant to observe that for how long an organization can retain those positions in the customers mind. Products need to be acknowledged in best method so that it can express a sense towards people. Positioning is not subjective; therefore organizations should choose the positioning approach before production. There are several organizations which prefer to develop multi-positioning for their brand. For instance, if a pharmaceutical organization positions its product as fastest and most dependable product in the market, other companies can select to position its product as most inexpensive in the market. Generating appropriate brand image necessitates a rational and integrated planning. Positioning can be divided into three titles which are product leadership, operational advantage and customer familiarity. Certain customers’ desire best products in a particular category, some other customers’ desire most creative organization, and rest of them prefer organizations which can deliver best solutions for their requirements. Delivering all three advantages is challenging as well as expensive. A successful organization must be a leader in at least one of those stated positions (Karadeniz, “Product Positioning Strategy in Marketing Management”). Impact of Advertisement on Product Positioning The core objective of advertising is to communicate information. Advertising in pharmaceutical companies is aimed to communicate the benefits and the features of products. Pharmaceutical companies like Johnson & Johnson designs the advertisements to make a position of their products in the customers mind. In the area of packaged products, positioning has greater importance which accurately tells about product’s usage, package size, and cost in contrast to other competitors’ offerings. Generally, people can remember maximum seven names of any particular product category and thus it is important for organizations to create a strong position in the minds of customers. The advertisement can act as a way to guard the brand from barrage of communication and thus facilitate to develop a correct position in the market (Smith, M. C., “Principles of Pharmaceutical Marketing, Third Edition”). Product positioning refers to the decisions and the actions planned to generate and maintain a positive idea of company’s product relative to competitors’ brands. Product differentiation is competitive approach which appeals to the requirements of a specific customer segment. Through advertisement, organizations can notify customers about how their products are different from other companies. In this context, it can be stated that the differentiation can either be actual or perceived. Actual product differentiations are based on product features, product cost or product quality; on the other hand, perceived differentiations are typically based on product’s image. Whether differentiations between products are actual or perceived, all organizations take appropriate measures to certify that those differences exist. To position new product or reposition current product, organizations need to understand how target customers distinguish them in a particular product category (Lee, M. & Johnson, C., “Principles of Advertising: A Global Perspective”). Advertisements which are intended for applying associative plans can be categorized by two significant dimensions which are “Direct Comparative” or “Non - Comparative”. Direct competitive advertisements seek to compare new brand with leading brand. By identifying the comparisons of leading brand this kind of advertisements try to anchor new brand to the position of leading brand in customers’ perceptual mind. In case of non-comparative advertisement, the leading brand is not denoted directly therefore, association of product features is more understated and should be contingent. By using strategy of association with a leading renowned brand, a new brand can accomplish fast and accurate positioning. This strategy includes brand name, package strategy, advertising statement, and ‘point of purchase’ which imitates the leading brand and therefore stimulates the desired reminder in the mind of customers. Advertising has a crucial part in organization as it communicates the information on which association about product is dependent (Droge & Darmon, “Associative Positioning Strategies through Comparative Advertising: Attribute Verses Overall Similarity Approaches”). Product Positioning Strategy of Johnson & Johnson Johnson & Johnson has positioned its products in an effective way and developed a strong place in the market. At present, the company is known as one of the leading organizations in pharmaceutical and cosmetics products. In order to make a competitive position, Johnson & Johnson had taken ranges of methods to recognize and diminish the threats of imitation of their products offerings. Johnson & Johnson produces varieties of products with packaging security processes which help to differentiate the genuine products from imitation, and helps in reducing the potential for interfering (Johnson & Johnson Services, “Counterfeit Health Care Products… The Johnson & Johnson Position”). Johnson & Johnson has effectively positioned itself as providing natural products with lack of harmful chemicals. Therefore, customers have faith in the products of Johnson & Johnson to be free from any kind of harmful components and safe to use for children, new born, youths and aged people. It has successfully developed a positive brand image in the minds of customers through effective positioning. In order to position the products, Johnson & Johnson has segmented the market for targeting children, youths, females and those people who are sensible about using natural products. The company has intensely covered the market by differentiating their product categories. The products of Johnson & Johnson include skin care, pharmaceutical and baby care categories. In order to position the brand, organizations need to assess the competitors’ offerings. In skin care product, the major competitors of Johnson & Johnson are Nivea, Proctor & Gamble and Zydus Cedilla among others. Johnson & Johnson has positioned their products in several countries by considering the socio-cultural environment in an attempt to enhance and adjust with the personalities of the customers. The pricing has been set in similar fashion of the other competitors’ pricing which has helped to satisfy the target customers. A successful positioning requires identification of strengths and assessment of purchasing criteria. The major strengths of the products of Johnson & Johnson are better quality, recognized brand, broad marketing coverage, and constancy in pricing. The attributes of Johnson & Johnson satisfy the requirements of target customers (Hassan & Et. Al., “Repositioning of Clean & Clear Face Wash”). Impact of Advertising on Product Positioning of Johnson & Johnson Johnson & Johnson uses advertising strategy to communicate with their customers. The advertisements of Johnson & Johnson are aimed to generate an awareness of healthy lifestyle to people. For instance, Tylenol brand, which has positioned itself as one of the leading brands in pain relief, has accomplished this place through long sequence of marketing activities. Tylenol is perceived by people as much gentler compared to other competitive products such as Bayer Bufferin and Anacin. Tylenol has low rate of side effect which helped the brand to secure a unique position in the market. The following picture will represent the positioning of Tylenol in comparison with other brands: Source: (Hauser, “Note on Defensive Marketing Strategy”). From the above figure, it can be observed that Tylenol had positioned itself as gentleness product in the market. In order to maintain its position there was two options for Johnson & Johnson; one is to position the brand more towards gentleness through advertisement or reposition the brand towards effectiveness through reducing the price. These actions rely on spending on advertisements, variations in product and modifications in packaging. Advertisement has two major effects which are increased attention of customers and repositioning. The expenditures of advertisement have major effect on prompting potential customers to consider a brand in their selection. The more a company spends on advertisement, the more customers can consider the brand. Advertisement can affect the position of the product. Traditionally, Tylenol was not recognized as high advertised brand until it confronted huge competition from the arrival of Datril which had also positioned itself as a ‘gentleness’ product. The following graph will describe the position of Datril with respect to Tylenol and other brands: Source: (Hauser, “Note on Defensive Marketing Strategy”). Datril had expended huge amount on advertisements and positioned itself not only as gentleness but also inexpensive compared to Tylenol. Through ‘direct comparative’ advertisement Datril had positioned itself in comparatively better place than Tylenol. Tylenol’s strong and profitable position in the market was in risk due to the position of Datril. In order to react to the strategy of Datril, Johnson & Johnson influenced customers through television advertising and secured the brand position. The Tylenol brand of Johnson & Johnson became a strong advertising brand and successfully caught potential consumers’ interests. Johnson & Johnson had developed several advertisement campaigns to develop an image of ‘healthy and caring’ brand. For example, “Having a Baby Changes Everything Campaign” was intended to communicate the image of safety and healthy. Through this advertising campaign the company tried to develop a constructive position in the minds of parents (Johnson & Johnson Services, “Having a Baby Changes Everything Campaign”). The company has maintained a strong connection with the customers by developing advertising campaigns targeted for specific customer segments. Wipro, which is recognized as one of the competitors in the baby soap segment, is unable to match up with the strong positioning of Johnson & Johnson. The baby products of Johnson & Johnson are admired and acknowledged by many female customers and till now the competitors seek to foray into the baby product segment through advertisement and positioning strategies (Banerjee, “Johnson & Johnson Baby Ads: Then & Now”). Conclusion For any successful positioning, advertisement has great impact because it can draw the attention of customers towards a brand’s offerings. It is an effective tool used by organizations for successful marketing and creating considerable opportunities (Isnerr, “Creating a Brand Through Advertising”). From the discussions, it can be observed that Johnson & Johnson has strong position for their brands and, advertisement has played vital part to maintain it. Though the quality of products of Johnson & Johnson is already known to the customers, advertisements have helped the organization to successfully differentiate them from other competitive brands and also to reposition the brand when needed. A successful brand message through advertisement can help to make a unique position in the mind of customer which can influence repeat purchase and entice new customers to purchase the products of the brand that is being promoted. Works Cited Banerjee, Rajiv. “Johnson & Johnson Baby Ads: Then & Now”. November 23, 2011. The Economic Times, 2011. Droge, Cornelia. & Darmon, Rene Y. “Associative Positioning Strategies through Comparative Advertising: Attribute Verses Overall Similarity Approaches”. November 23, 2011. Journal of Marketing Research, 1987. Hauser, John R. “Note on Defensive Marketing Strategy”. November 23, 2011. MITS Loan Courseware, No Date. Hassan, Sami. & Et. Al. “Repositioning of Clean & Clear Face Wash”. November 23, 2011. Karachi University Business School, 2009. Isnerr, Terri. “Creating a Brand Through Advertising”. November 23, 2011. American Bar Association, 2005. Johnson & Johnson Services. “Annual Report 2010”. November 23, 2011. Celebrating 125 Years, 2010. Johnson & Johnson Services. “Counterfeit Health Care Products… The Johnson & Johnson Position”. November 23, 2011. Connect, 2011. Johnson & Johnson Services. “Having a Baby Changes Everything Campaign”. November 23, 2011. Connect, 2011. Karadeniz, Mustafa. “Product Positioning Strategy in Marketing Management”. November 23, 2011. Journal of Naval Science and Engineering, 2009. Lee, Monle. & Johnson, Carla. Principles of Advertising: A Global Perspective. Routledge, 2005. On The Mark, “Product positioning in Five Easy Steps”. November 23, 2011. Portals, 2005. Smith, Mickey C. Principles of Pharmaceutical Marketing, Third Edition. Routledge, 1988. Read More