Pricing and Promotion Strategy - Johnson & Johnson, Inc - Essay Example

Johnson & Johnson (J&J) is the leading consumer health company in the entire world, is involved in the research and development, production and selling of the products for consumer health care, and also provides medical and pharmaceuticals devices and diagnostics services to its customers. The organization operates with over 250 companies that are operating around the world. The major three segments of the company constitute consumers, medical devices and diagnostics, and pharmaceuticals. The consumer segment of the J&J develops, produces and promotes a variety of oral care, skincare, wound care, baby care, and products for women’s health care. There are over-the-counter (OTC) pharmaceutical products and nutritional products offered by the company too.

The major brands manufactured by the company include Band-Aid (adhesive bandages); Aveeno (skincare products); Clean & Clear (skincare products for teens); Carefree (panty liners); Motrin IB (ibuprofen products); Johnson's baby and adult lines of products; RoC (skincare products); Neutrogena (skin and hair care products); Stayfree (sanitary protection products); Listerine and Reach (oral care products); Tylenol (acetaminophen products)Zyrtec (allergy products); Pepcid AC (acid controller); Dabao (moisturizers); and Splenda (sweetener). The products of the company are supplied and sold to the wholesalers and the retail chain outlets which are independently functioning all across the globe.

Pricing and Promotion Strategy

Competitive Pricing
Johnson and Johnson aim to keep its pricing at parity with its competitors in the industry. It aims to undertake a penetration pricing strategy for its products and strives to enter new markets to market its new products. However, for some established products like baby care products, the company has established a premium pricing strategy. The major competitors of the company lie in the pharmaceutical and drug industry. They include Pfizer Inc., GlaxoSmithKline plc, and others operating in the industry. Moreover, the consumer sector also comprises the competitors of the company that includes Proctor and Gamble, Kimberley Clark and Unilever.

Pricing Objectives
The company’s basic pricing strategy is the premium pricing for its established brands while it applies the penetration strategy for the other brands. There are other elements such as cost of production and overheads expenses, net selling price and distributors’ price which make up the total price of the company’s products. The pricing objective of Johnsons and Johnson Inc. is to maximize its long-term profits, increase the market share for its products, and by maintaining the product leadership, it aims to stop the new entrants in the industry and create further competition. In this manner, the company attains a competitive advantage for its major brands in the industry. The company also tends to maintain customer and supplier loyalty by enhancing its own goodwill and boosting the image of products and brands. All these objectives let the company enjoy a wide customer segment and various pricing strategies that it can apply to its loyal, brand-conscious customers.

Promotional Strategies
In order to provide a complimenting advertising strategy, Johnson and Johnson undertake to promote its products through various communication media. Its major media include television and the internet currently; however, in the past, the company has also adopted billboards and print media as its major communication tools. Moreover, the company has discovered that the sales force is one of its most important channels of promotion and the vital stakeholders which enable the company’s products to be sold. Therefore, in order to attain a successful; promotion, the company provides incentives to its sales force in order to achieve high sales targets and greater volume. Moreover higher sales commission and bonuses are offered to the company’s sales force in order to encourage them for further support.

Sales Promotion Tools
Johnson and Johnson apply successful sales promotion tools to achieve its targets and earn revenues. It holds sales events, exhibitions, and offers discounts and incentives to its consumers. The company undertakes to advertise and promotes its products for the informative, persuasion and reminder objectives. The company also obtains the reputation and promotional attributes by applying the corporate social responsibility functions into its successful strategies. It responds to disasters and provides educational facilities and absolute health and skincare resources to the consumer segments thus, increasing its brand loyalty and sales (Johnson and Johnson, 2008). This is called the public relation tool of the marketing communication mix.
Public Relations Activity

The company engages in community activities and social media advertising sources. Johnson and Johnson own its own promotional pages on Facebook and other social platforms. Moreover, it holds exhibitions, and sales events along with active participation in the community services, charities and donations. For instance, it responded to the cyclones occurring in Bangladesh, floods in Mexico, and is working to prevent HIV-positive transmission from mothers to babies. It also sponsors the Olympic Games and has invested in women’s and children’s education.

Differentiation Strategy
Johnson and Johnson apply both pricing and promotional strategies to achieve differentiation for its products in the market. However, in my opinion, the product quality and competitive pricing strategy give it a differentiated standing and firm footing in the market. The unrivaled leadership of the company’s product gives it a competitive edge in the industry (Johnson and Johnson, 2011). Read More