Johnson and Johnson Sun Care Product - Report Example

Johnson and Johnson Sun Care Product, Competitor and Consumer Analysis Competitive Analysis Johnson & Johnson is a leading pharmaceutical and consumer packed products Company founded in 1886. Since that time, the company has developed a multibillion dollar business operating on the global scale. The company is located in the USA, but operates in 57 countries. The company employs 118,700 people and generates 63.747 Billion a year. For Johnson & Johnson, the essence of value unquestionably lies in providing products or services that fulfill customer needs. The main products produced by the company are the sun care products (sunscreen, suntan) and sunless products (sunless tanners, after burn). The long term success of the company in the marketplace is predicated upon its ability to react to, anticipate, and even create needs. Johnson & Johnson is a large corporation with 16.929 Billion of operating income. Total assets of the company are about 84.912 Billion and net income is 12.949 Billion (2008). Johnson & Johnson specializes in pharmaceutical products, medical devices, healthcare products, soaps, shampoos, toiletries, etc. Still, sun care, skin care, health and beauty products, OTC and drug products occupy a large market share. The famous brands of Johnson & Johnson are Johnson's Baby, Coach, Gynol, REACH, etc (Johnson & Johnson Annual Report 6). The company was founded in 1886 as a manufacture of ready-to-use surgical dressings. Robert Wood Johnson was the first president of Johnson & Johnson. The uniqueness of this company is diversification. The first consumer goods were manufactured in 1920s, toiletries were added in 1970s, and at the end of the 21st century the company developed a new division for medical and biopharmaceutical products (Johnson & Johnson Home Page). For Johnson & Johnson, the mingling of value construction and communication that occurs in businesses in which the customer enters the system is worth striving toward in manufacturing firms as well (Burke 3). Company's Importance in and Commitment to the Category In Johnson & Johnson, strategic marketing is based on strategic thinking which can be seen as a unique vision of the problem. The subject of decision making raises the larger issue of the planning organization's strategic thinking; specifically, the question is about prerogative and responsibility. Although most "professionally managed" organizations now subscribe to "participatory" decision making, there is nowhere any uniform understanding of exactly what that means. According to the company's annual report, "international sales were 10.3%, 9.6% and 11.2%, respectively 10.8% over 2007 with 8.3% of this change due to operational growth"" (Johnson & Johnson Annual Report 35), The opportunities of Sun care products include high potential to growth and profitability, professional management team and unique corporate culture, customized order system and discounts. There is a great opportunities for ssupermarkets in this field, because specialized shops, throughout the world are interested in goods produced in the environmentally friendly manner. "The Skin Care franchise sales grew by 10.8% to $3.4 billion in 2008. The sales growth was primarily due to the AVEENO, CLEAN & CLEAR, NEUTROGENA and JOHNSON'S" (Johnson & Johnson Annual Report 35). The company's market share is about 18 %. As for sun care products, the market share is about 11% of the total US market. For sun care products, the opportunities include high potential to development and expansion, professional approach to management and wider product range. Retail service assesses the areas in which the organization can benefit the most from greater emphasis on creativity and innovation. Competitive advantage serves both as a way of identifying what creative and innovative things competitors are doing as well as finding out for each of the areas requiring imagination and innovation who is the best. "Worldwide demand for products using natural ingredients continues to drive growth for the AVEENO brand, which uses a science-based approach to develop ActiVE NAturAls with superior efficacy" (Johnson & Johnson Annual Report 22). Both sun care brands, AVEENO and Neutrogena are growing (Aveeno Home Page). Innovations have a profound impact on competitive advantage of AVEENO and Neutrogena because they lead to new products and services appealing to consumers. Innovations allow the company to attract competitors' target audience and propose lower prices and higher quality of products and services. The exact nature of the innovation process may vary in these different settings, as will the problems faced and the solutions required, but economically innovative acts that create value for individuals and society can still take place. It is the act and its outcome, not the environment nor the setting that is the essence of innovations. AVEENO and Neutrogena succeed with many of its products because of solutions proposed to the target market. First of all, from a marketing and entrepreneurship perspective, an innovation must be defined as having sustainable profit potential, beyond pure windfall profits, and "one-shot" deals. "In 2008, AVEENO continued to grow, introducing the AVEENO POsitiVElY AGElEss Lifting and Firming Facial Skincare line with Natural Shiitake Complex and Natural Wheat Protein" (Johnson & Johnson Annual Report 22). The uniqueness of Neutrogena is that the scientists follow personalized approach trying to meet unique needs and demands of each customer (Johnson & Johnson Home Page). In the sun care industry, both AVEENO and Neutrogena are market leaders. A market position is supported by a combination of resources, and obviously a market position is only sustainable if the underlying resource combination is competitive. From the perspective of strategic marketing, competitive advantage is normally seen as the domain of business strategy, that is, at the product/market (industry) level, because direct competition takes place at this level. By strategic thinking managers mean the intuitive ability to understand the dynamics of market structures, competition, customer needs, timing, synergies, and the like. It is an ability to proceed with tentative, incomplete information, always leaving one's options as open as possible, waiting for the right moment (Dobson and Starkey 44). Company's Product Portfolio in the Category Neutrogena is positioned as a premium brand with unique image and innovative products. The company report describes a potential customer and her choice: "While drugstore shelves offered so many options, she never knew which to choose, and those she tried just weren't right for her. Then she found out about skin iD from Neutrogena Corporation, the first personalized acne solution that's based on an individual's" (Johnson & Johnson Annual Report 11). The Neutrogena operates on the global scale in order to achieve competitive advantage and attract millions of buyers. The functions of retailers in the channel have been to assemble merchandise, maintain an inventory, price, promote, advertise, sell, and account for the merchandise, again as a service to the manufacturer and the ultimate consumer. Further, retailers have also provided a place for consumers to shop and find other services that might assist them in obtaining or using the available goods (Neutrogena Home Page). Similar to Neutrogena, AVEENO is positioned as personalized sun care brand aimed to meet diverse customers' needs. Both brands are growing and this growth is based on innovative approaches in medicine and huge investments in laboratory research. AVEENO has a unique target market and is high priced. The channel systems that have developed and, granted, have been improved over the years, have been built on some very basic beliefs about consumers, their needs and wants, and what they are willing to accept from channel members (Drejer 82). Neutrogena's customers demand increasingly differentiated and even personalized products. As this occurs, the traditional economies of scale that have accrued to those manufacturers and retailers with extensive facilities and large sales volumes are no longer important in the marketplace. Smaller companies, using technology and direct and database marketing approaches, can compete not only effectively, but in many cases more efficiently than can large companies. As technology expands and sales-driven inventorying become more prevalent, the balance will shift to direct/database marketers simply because of their ability to respond more quickly and more effectively to consumer demand (Neutrogena Home Page). Neutrogena launched a line of new products for babies including usch subcategories as "Pure and free babies" and Helioplex. In recent years, marketing professors have increasingly realized that some or most sectors of the service industries, those establishments engaged in selling intangibles, have many location, operational, and promotional opportunities and problems analogous to those of merchandise retailers. Marketplace changes in buying behavior, values, and accessibility will impact product lines offered and mechanisms for channeling them to buyers. Thus, it may be that direct/database marketing, if only because of the lower capital requirements, may become the retailing form of choice for new businesses around the world. In this industry, customer behavior and response, a competitor's action, and the impact of socioeconomic forces, all fit this prescription. How well Neutrogena, AVEENO prosper in the future will depend on how well the opportunities offered will match the various rewards sought by this legion of independent performers as their needs and life styles evolve (Drucker 33). They are complex factors beyond the control of the marketing decision-maker, though having a marked impact on the results of decisions (Burke 3). For instance, a favorable economic climate, though uncontrollable by the decision maker, may nevertheless affect the payoff of any particular strategy. Similarly, competitors' actions, which cannot be controlled by an individual may easily affect the market impact of any alternative choice. While decision makers "control" the acts, nature "controls" the events. In determining which alternative to choose, therefore, it is desirable to try to assess future states of nature. Complete assessment can never be attained, since it is difficult, if not impossible, to identify all these states (Kotler and Keller 51). Competitive Advantages/Disadvantages For Neutrogena and AVEENO, competition is the main threat. In spite of weaknesses and threats, Neutrogena has an attractive position based on a combination of cost management and customer services. In spite of weaknesses and threats, AVEENO has an attractive position based on a combination of cost management and customer services. They also provide research challenges from a creative and innovative management perspective. Research challenges fall into two major approaches of further success: one deals with methodologies and the other deals with issues to rethink, realign and reorganize large-scale retail companies. The main threat for Neutrogena and AVEENO is increased competition from Proctor and Gambler products and its monopolistic position of other entailers on the market. New methods of accountability will be needed to ensure that creative and pioneering activities are truly better than traditional ways. The case of both companies shows that firms can behave this way because they are big and powerful. Therefore, they reinforce survival of the fattest. Though, these companies must realize that by not being proactive and not attempting to counteract instability in business is likely to lose money in both the present and future (Kotler and Keller 49). Consumer Analysis A customer of both companies can be described as a young woman who cares about her family and herself. The majority of consumers live in urban areas, so Neutrogena and AVEENO pay a special attention to the effect of increased leisure time, suburban living, shopping centers and widespread geographic shifts on consumer wants and needs. The shift from rural to urban populations, the growing number of women employed in industry, the decrease in the length of the work week, increasing productivity, and higher incomes all shape consumer behavior and, hence, market opportunity. Purchasing decisions are affected by the customer's life space (Bearden et al 51). The life space is segmented into an action and an orientation space. The action space refers to the arena and methods by which transactions take place, including organizational constraints imposed by business. The orientation space includes numerous economic, psychological, and source factors influencing buyer behavior. The majority of buyers are employed men and women from 20 to 60 years. Also, target market involves students both domestic and international, and retirees. Thus, there are no special campaigns for the latter group. 80 % of the market is employed men and women. For this group, the purchasing process and the related acts of accumulation and consumption are means of achieving goals both of the purchaser and those he represents (Perreault et al 82). Neutrogena and AVEENO are essentially engaged in solving problems. In the household, performing purchasing activities to satisfy all the wants of one's family and friends through the evaluation of an overwhelming array of available goods and services is an impossible task (Johnson & Johnson Annual Report 2008). Within a family unit, wants and needs are not directly known. Usually one decision maker, the wife, purchases for the group. She acts as household purchasing agent with the responsibility of maintaining and improving the family's stock of goods in order to provide for the wants and needs of members of the household. The housewife, therefore, must anticipate consumption needs and try to obtain the best value for the money. Uncertainty exists in the purchasing-consumption cycle, since present purchases are made for future consumption. Male group of consumers is still not well served. Thus, the consumer purchasing agent (housewife) is constrained by limited resources and information. This process may even be more complex for some industrial goods. Obviously it is impossible to determine precisely future needs for each member of a group; it is even more difficult to determine how valuable various desires are to each member, and then to arrive at a rational means of making total purchasing decisions. The majority of consumers value unique brand image and a family system available for all consumers. Works Cited Aveeno Home Page. Web. 01 October 2009 Bearden, W. O., Ingram, Th. N., LaForge, L.W. Marketing, Prentice Hall, 2004. Burke, L. T. A new direction in sun protection: sun care marketers roll out an array of UV solutions. Household and Personal Products Industry. March 2008. Web. 01 October 2009, http://findarticles.com/p/articles/mi_hb3042/is_3_45/ai_n29421282/ Dobson, P., Starkey, K. The Strategic Management: Issues and Cases. Blackwell Publishing, 2004. Drejer, A. Strategic Management and Core Competencies: Theory and Application. Quorum Books, 2002. Drucker P. F. Management: Tasks, Responsibilities, Practices. New York: Harper Collins, 2003. Johnson & Johnson Home Page. 2009. Web. 01 October 2009 Johnson & Johnson Annual Report 2008. Web. 01 October 2009, http://www.myvirtualpaper.com/doc/jnj/Johnson-And-Johnson/2009030501/ Kotler, Ph, Keller, K. Marketing Management. Prentice Hall, 2005. Neutrogena Home Page. 2009. Web. 01 October 2009 Perreault, W.D., Cannon, J.P., McCarthy, E.J. Marketing: Principles and Perspectives. McGraw-Hill/Irwin; 4 edition, 2003. Read More