Durex Condoms: An Integrated Marketing Communications        Analysis According to the Schultz Model                    Ni...
Background       Durex, owned by SSL International, Inc. and operated in the U.S. out of Georgia as SSLAmericas, Inc., has...
Audiences       While they are a global market leader, Durex’s share remains small compared to Trojanin the U.S. market. T...
are heterosexual, the widest base of the market equals approximately 81.27 millionAmericans.       Behavioral data begins ...
Present Customers       A 2005 Simmons Market Research analysis of demographic characteristics favoringcondom use by brand...
growing demographic of purchasers. Church & Dwight Co., Inc. was one of the first brands torealize that targeting women di...
Target Audience #1: Heterosexual, female, 25-34, college-educated, multiple sexual partners     Females 25-34 with a Bach...
websites and advocacy and education. All channels except for advocacy were deemedpositive impressions.Figure 3Initial Bran...
Figure 4:       To evaluate the brand audit, six in-depth interviews were conducted to assess theDurex brand, products and...
lacks consistency. Different communications channels range from dry and educational toraunchy and overtly sexual. The bran...
addition of packing and its importance to the customer. Consumer engagement wasremoved due to this development.Figure 5:Fi...
Figure 6:Revised the Marketing and Communications Approach: Return on ConsumerInvestment (ROCI)       With the recommended...
The identified target markets include heterosexual, sexually-active, college-educated,25-34 year old, higher-volume female...
online image based on that advertising would generate ROCI of 3.86% and $3.2 Million inrevenue. Figure 8 illustrates the f...
ROCI CalculationNet contribution scenario A                       $403,988   $1,150,475   $3,178,019Net contribution scena...
brand value of promoting education, evolving Durex’s online presence to include aspokesperson or known figure to provide s...
1  Retrieved from http://www.ssl-international.com/Presentations/SSL_AR_2009.pdf, December 12, 20092  Packaged Facts (July...
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Durex Condoms: An Integrated Marketing Communications Analysis According to the Schultz Model

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As part of the Integrated Marketing Communications Model, this paper is an in-depth analysis of market and industry research along with recommended outreach strategies.

Durex Condoms: An Integrated Marketing Communications Analysis According to the Schultz Model

  1. 1. Durex Condoms: An Integrated Marketing Communications Analysis According to the Schultz Model Nicole Cathcart Johns Hopkins University December 15, 2009
  2. 2. Background Durex, owned by SSL International, Inc. and operated in the U.S. out of Georgia as SSLAmericas, Inc., has supplied the world with condoms for nearly 80 years. Founded in London,Durex is now the world’s largest supplier of latex condoms. In the last twenty years, Durexhas expanded their product line to feature Polyurethane condoms, branded under the Avantiname, lubricants, vibrators and other items designed to enhance sexual pleasure. Althoughthe Durex brand features many different types of condoms, the brand remains known for theoverall thinnest line of condoms on the market. While Durex owns 35% of the global value share of condoms 1, their market share inthe U.S. trails behind Church & Dwight Co., Inc.’s dominant Trojan brand. In fact, SSLInternational records the Americas as only contributing to 5% of gross sales. In 2005, Church& Dwight Co, Inc. led the U.S. market with 68.33% retail share, followed by SSL Americas, Inc.at 15.18%. Rounding out the top three condom distributors in the U.S. was Ansell Healthcare,Inc. and their Lifestyles condom brand, at 11.46%2. The Durex brand promotes the responsible enjoyment of customers’ sex lives. Whilethe core of their brand, condoms, remains their top product, the proliferation of pleasure-enhancers such as lubricants and vibrators points to an emerging pleasure-centric brand.Compared to other leading brands, however, their focus is much more on education andsexual health. 2
  3. 3. Audiences While they are a global market leader, Durex’s share remains small compared to Trojanin the U.S. market. This analysis will consider only the state and future of the U.S. market. The largest group of condom users is in the 18-44 age range, with those in the 25-34range representing 35% of all condom users3. The Guttmacher Institute, a leader in sexualand reproductive health research, policy analysis and education, notes that by late teens, overthree-fourths of Americans are sexually active4. For frequency of intercourse, the KinseyInstitute reports that 18-29 year olds have sex an average of 112 times per year, 30-39 yearolds an average of 86 times per year, showing a marketed decline as individuals grow older 5.Once in their late 30s and into their 40s, individuals’ condom use drops, as committed ormarried couples use female contraception, such as birth control, over condoms. Additionally,of sexually active adults in their 20s, 31% of men and 20% of women report having more thanone sexual partner in the last year; by their 30s and 40s, most report only one sexual partner 6.One of the driving factors for this shift is the greater percentage of married or committedcouples as individuals enter their 30s. The largest consumers of condoms are heterosexual couples, with the Center forDisease Control (CDC) reporting approximately 95.9% of women and men ages 18-44 in 2002as heterosexual7. According to the Census Department, the approximate number ofAmericans 18-44 is 37.5% of the population, or approximately 113 million individuals 8. Ifthree-fourths of those are known to be sexually active (as a conservative estimate) and 95.9% 3
  4. 4. are heterosexual, the widest base of the market equals approximately 81.27 millionAmericans. Behavioral data begins the segmentation process for the condom market—certainlysexual activity is the first defining factor. While sexual orientation is a demographic factor,engaging in heterosexual sex can also be considered a behavioral characteristic in thissegmentation process. Similarly, although marital status is a demographic factor, thebehavior of the unmarried individual engaging in sexual activity with multiple partners alsoincreases likelihood of condom usage. These behaviors shape the profiles of the presentcustomers, competitive customers and emerging users (see Figure 1). The Pareto rule statesthat, in most cases, approximately 80% of revenue is generated from 20% of customers; in thecase of Durex, the 20% of customers would be single individuals who are sexually active withmultiple partners9.Figure 1 4
  5. 5. Present Customers A 2005 Simmons Market Research analysis of demographic characteristics favoringcondom use by brand created unique market segments for the top three U.S. brands. Thefollowing characteristics typified the user who preferred the Durex brand: younger than otherbrand users, in the 18-24 age range, likely to male, Hispanic, living in the Pacific or Northeastregion of the U.S., unmarried, with household income in the $40-59,000 range and renting hisresidence10. This profile most accurately represents the present Durex customer.Competitive Customers Trojan customers trend older and are often more educated and affluent than Durexcustomers. Although both groups have heavy usage in the 18-24 range, Trojan leads in the25-34 range, the group identified to be the highest users of condoms. Both brands, andcondom usage in general, are strong in the Northeast, but Trojan has the highest index ofcollege graduates and incomes over $60,00011. The benefit of targeting this more educatedgroup means a limited focus on the health benefits of condoms, as those concerns are mostlikely already known or easier to communicate, and a greater focus on the pleasurablecharacteristics.Emerging Users Although the heterosexual union requires individuals of both sexes using the product,a reported 70% of condom purchasing is done by men12. However, young women are a 5
  6. 6. growing demographic of purchasers. Church & Dwight Co., Inc. was one of the first brands torealize that targeting women directly with a separately-branded product, especially whenconsidering package options, opened up more market options. Even the brand manager forDurex stated in 2005 that the number of women in the 18-25 age group that had purchasedcondoms increased by 16% from 2002-200313. As sexual attitudes in younger generationscontinue to grow less stringent, women will represent a growing market of condompurchasers. This analysis will focus on two key audiences (see Figure 2) within the emerging usercategory: women who fit the competitive customer model of college-educated, higher-volume condom users in the 25-34 age group and the emerging audience of 18-25 year oldfemales, with both groups practicing heterosexuals and sexually active.Figure 2 6
  7. 7. Target Audience #1: Heterosexual, female, 25-34, college-educated, multiple sexual partners  Females 25-34 with a Bachelor’s Degree or Higher: 6.45 million14  And heterosexual (95.9%): 6.18 million  And with multiple sexual partners (20%): 1.23 million Target audience #2: Heterosexual, female, 18-25, sexually active  Females 18-25: 14.37 million15  And Sexually active (75%): 10.77 million  And heterosexual (95.9%): 10.33 millionMessages and Incentives There are two main reasons for using condoms: to prevent pregnancy and to preventsexually-transmitted diseases (STDs). While the spread and fear of HIV/AIDS in the 1980sresulted in the first mass television advertisements for condoms, the messaging has shifted inthe last few decades to advertise pleasure over protection. As a generation has grown upunderstanding the need for condoms to protect against disease and unwanted pregnancy,the selling point becomes which condom within a wide range of options is most pleasurable. A brand audit revealed four main communication channels: the Durex websites(Durex.com and thatsmypleasure.com), consumer engagement, traditional advertising (in theU.S. primarily print ads), and advocacy and education. Unlike their Trojan competitors, Durexhas limited experience with mass advertising through television in the U.S. While theiradvocacy and educational focus shines on their website, they have limited mass advertisingexperience in the U.S. The initial brand audit showed high importance for every channel savewebsites. Figure 3 presents the initial brand audit, showing sufficient spending in consumerengagement and traditional advertising, while under spending in online presence through 7
  8. 8. websites and advocacy and education. All channels except for advocacy were deemedpositive impressions.Figure 3Initial Brand Audit Brand Contact Importance Impress. Customer Customer Message Sent Resources Evaluation Evaluatio Expectation Experience Allocated n. (+/-) Websites Low + •Information •Detailed A) The product is safe Under spending •Entertainment information and important for a (limited social on products healthy sexual lifestyle. networking, viral •Use B) This product will video, etc.) • Myths make me and my partner feel good. Consumer Medium-High + •Information •Entertained We care about our Sufficient Engagement •Entertainment •Informed customer and their satisfaction. Durex is dedicated to taking a 360 degree look at its customer. Our products reflect the new definition of the Durex customer: The Pleasurati Traditional High + •Persuasion •Persuaded Durex considers Sufficient Advertising •Entertainment •Entertained pleasure to be just as important as safe sex. Advocacy & High - •Accessible •Inconsistent Company advances Under spending Education Information •Hands-off scientific research and Approach awareness through minimal and inconstant interfacing with the customer. By plotting the current communication channels in a messaging strategy quadrant inFigure 4, the goal is move the important, but negative channel of consumer advocacy tobecome a positive channel. Although consumer engagement and websites (online) wereconsidered less important than the other channels, they were considered to be overall,positive impressions in the market. 8
  9. 9. Figure 4: To evaluate the brand audit, six in-depth interviews were conducted to assess theDurex brand, products and communications channels. The six interviews were all female andrepresentative of the emerging markets, including 1) single 36-year old white publishingprofessional; 2) monogamous 29-year old white lawyer; 3) single 28-year old black videoeditor; 4) single 23-year old white contractor; 5) monogamous 31-year old mixed race unionorganizer; and 6) married 32-year old graduate student. Five of the six subjects usedcondoms as their primary method of birth control. Interviews were used because of thesensitive topic. Two main themes emerged from the interviews. First, while the Trojan brand hassignificant recall and market recognition (half of the subjects specifically recalled watching aTrojan commercial), none recalled seeing any Durex advertising prior to participation in theinterview. In fact, Trojan had double the overall brand recognition of Durex and Lifestylescondoms, respectively. Secondly, in addition to a lack of brand awareness, the existing brand 9
  10. 10. lacks consistency. Different communications channels range from dry and educational toraunchy and overtly sexual. The brand personality is fractured across the representativemedia. The strength of the Trojan brand compared to Durex indicates that the traditionalmass media channel is significantly underutilized, especially since subjects noted choosingcondom brands based on prior knowledge, and most subjects remembered Trojancommercials. Certainly, Trojan’s creative and catchy commercials in the past are factors in therecall of those advertisements, but their effectiveness cannot be constrained to that creative.The viral videos created by Durex, namely one that features balloon animals, were hugelymemorable for the subjects, so the brand’s ability to engage its audience is not in question.To be competitive in the U.S. market, Durex must attempt to compete with Trojan throughmass consumer advertising, including television. Although a considerable spend, thismethod of advertising will give Durex the legitimacy and brand recognition it needs tocompete with market leader Trojan. The role of product packaging emerged as a key communications channel for thefemale consumer. The stigma associated with purchasing condoms in retail locations,although not prohibitive, could be lessened with better, more attractive and streamlinedpackaging. Although Durex includes consumer engagement elements on their websites andthrough social networking, the packaging element is one of the most important features inthe purchasing process for consumers. A revised brand audit table (see Figure 5) reflects the 10
  11. 11. addition of packing and its importance to the customer. Consumer engagement wasremoved due to this development.Figure 5:Final Brand Audit Brand Contact Importance Impress. Customer Customer Message Sent Resources Evaluation Evaluatio Expectation Experience Allocated n. (+/-) Websites Low - •Information •Detailed A) The product is safe Under spending •Entertainment information on and important for a (limited social products healthy sexual lifestyle. networking, viral •Use B) This product will video, etc.) • Myths make me and my partner feel good. Packaging Low - •Discretion •Underwhelming A) The product is not Under spending •Informative branding the highest quality •Lack of or value available sophistication B) The product has several pleasurable options available. Traditional Low + •Persuasion •Persuaded Durex considers Under spending Advertising (U.S. •Entertainment •Entertained pleasure to be just as Print Ads) important as safe sex. Advocacy & High - •Accessible •Inconsistent Company advances Over spending Education Information •Hands-off scientific research and Approach awareness through minimal and inconstant interfacing with the customer. The research performed presents clear suggestions for increasing the advertisingbudget to include mass media, such as television advertising, and adding budget to testpackaging options. Additionally, a shift from an online presence prioritizing advocacy andeducation, at least in the U.S. market, should increase market share for Durex. The suggestedrevisions to the messaging strategy are plotted in Figure 6. 11
  12. 12. Figure 6:Revised the Marketing and Communications Approach: Return on ConsumerInvestment (ROCI) With the recommended aggregated audiences primed for growth and a direction toincrease positive perception and brand awareness through key communications channels, aROCI Calculation presents an analytical approach to what tactical elements and investmentmakes the most financial sense for Durex. The following sample scenarios reflect a broaderbase market and the target markets identified for growth . The first step in ROCI is to determine the estimated category demand. For the U.S.retail condom market (excluding the U.S. Government market, or non-consumer audience)totaled $398.3 million in 200516. The 2001-2005 combined annual growth rate (CAGR) was2.8%, resulting in an estimated $409.5 million market in 2009 17. The base share ofrequirement for Durex was $36 million in 2005, bringing the total to $36.9 million with theestimated CAGR. 12
  13. 13. The identified target markets include heterosexual, sexually-active, college-educated,25-34 year old, higher-volume female condom users (Group A); heterosexual, sexually-active,18-25 year old females (Group B); and the base audience of heterosexual, sexually-active, 18-44 year old adults (Group C). Factoring in the relative size and usage volume of eachaudience (with an average price per condom of $1.33 and average “always” use of condomsat 16.5%) combined with a conservative sexual frequency that assumes split purchasingresponsibilities, Figure 7 reflects an estimated Group Category Demand for each group.Figure 7:Group Category DemandMarket Consistency of Sexual Frequency Size of Market Average Unit Group Category condom use: (per year) (in Millions) Price Demand (in Millions) AlwaysGroup A 16.5% 75 1.23 $1.33 $20.25Group B 16.5% 20 10.33 $1.33 $45.33Group C 16.5% 5 81.27 $1.33 $89.17 For each of the three groups, two scenarios were run; one with no communicationsinvestment and one with a unique plan for each target. For Group A, an investment inpackaging redesign and a series of ads in a women’s magazine that attracts a young, singleand sexually liberal woman. Because of the relatively small market size and base share ofrequirement, a total of $230,000 would yield an incremental ROCI of 38.67%, or a total of$492,925. For Group B, the same investments as in Group A plus a $200,000 televisionadvertising campaign would generate ROCI of 57.56% or $1.4 Million in revenue. Finally, forGroup C, an investment of $850,000 in television advertising and enhancing the brand’s 13
  14. 14. online image based on that advertising would generate ROCI of 3.86% and $3.2 Million inrevenue. Figure 8 illustrates the full ROCI Calculation:Figure 8:ROCI Calculation Aggregated Customer Groups Group A Group B Group CBehavioral Goal Increase Increase MaintainCategory Requirement AssumptionsEstimated Category Demand $20,250,000 $45,330,000 $89,170,000Base Income Flow AssumptionsBase share of requirement 7.00% 9.00% 11.00%Base income flow to us 1417500 4079700 9808700Noncommunication costs 70.00% 70.00% 64.00%Contribution Margin % 30.00% 30.00% 36.00%Contribution Margin $ $425,250 $1,223,910 $3,531,132Scenario A: No Communications InvestmentChange in share of requirement -5.00% -6.00% -10.00%Resulting share of requirement 6.7% 8.5% 9.9%Resulting customer inflow to us 1346625 3834918 8827830Less non-communication costs -942637.5 -2684442.6 -5649811.2Less marketing communication costs 0 0 0Net contribution $403,988 $1,150,475 $3,178,019Scenario B: Communication InvestmentTV Advertising $0 $200,000 $800,000Radio Advertising $0 $5,000 $0Consumer Magazines $200,000 $200,000 $0Direct Mail $0 $0 $0Sales Promotion $0 $0 $0Public Relations $0 $0 $0Special events/sponsorships $0 $0 $0Custom Media $30,000 $30,000 $50,000Customer Service Improvements $0 $0 $0Total Brand Communications Investment $230,000 $435,000 $850,000Change in the share of requirement 70.00% 50.00% 15.00%Resulting share of requirement 11.9% 13.5% 12.7%Resulting customer income flow to us 2409750 6119550 11280005Less noncommunication cost 1686825 4283685 7219203.2Less brand communication cost 230000 435000 850000Net contribution $492,925 $1,400,865 $3,210,802 14
  15. 15. ROCI CalculationNet contribution scenario A $403,988 $1,150,475 $3,178,019Net contribution scenario B $492,925 $1,400,865 $3,210,802Incremental gain/loss v. No investment scenario $88,937 $250,390 $32,783Incremental ROCI 38.67% 57.56% 3.86% This analysis suggests Durex should consider first increasing market share in Group B,sexually-active, heterosexual single women in the 25-34 age range with a conservativeadvertising campaign and packaging redesign effort . While a smaller share of the marketthan Group C, the incremental return would be greater by capturing this audience with alimited marketing budget. The affects of targeting this audience may also affect Group A,which is essentially a subset of B, and Group C, which is a superset of B.Summary Analysis With its status as the global condom market leader, it appears that Durex made aconscious decision not to pursue market domination in the U.S. market. Certainly, theirexperience in the European market would serve as a great starting point to gain market sharein the U.S., despite the heavy competition from Trojan. However, the U.S. market remains anaffluent and high-usage market. Young women still report being less comfortable purchasing condoms then men 18.However, as younger women grow more comfortable with sexuality in general, they becomea key target market for Durex. Although these women do not represent a strong currentcustomer, the Durex brand has the ability to transform into a more sophisticated, women-friendly option, as compared to the male-centric Trojan. For these emerging, youngerpurchasers, a more engaging online brand is of growing concern. While preserving the Durex 15
  16. 16. brand value of promoting education, evolving Durex’s online presence to include aspokesperson or known figure to provide sex advice would build trust and equity in thebrand. Utilizing a trusted figure, or icon, would enable Durex to build that credibility and trustnecessary in a product that ultimately benefits its users by keeping them safe and healthy.Young, female condom purchasers tend to utilize friends for product suggestions, so a trustedsource of information will help Durex during point-of-purchase brand selection 19. A financially comfortable and stable company, in an industry that can resist even arecession, Durex has the opportunity to strategically capture underserved and growingsegments of the U.S. condom market. They proved with their “That’s my Pleasure” web sitethat they can be a sophisticated option for what can be an embarrassing product line—takingthat to the next step and customizing packaging and further messaging just to women canmean growing and sustained success in the U.S. market.Endnotes 16
  17. 17. 1 Retrieved from http://www.ssl-international.com/Presentations/SSL_AR_2009.pdf, December 12, 20092 Packaged Facts (July 2006). Condoms in the U.S.3 IBID4 Retrieved from http://www.guttmacher.org/pubs/fb_10-02.html, December 15, 2009Retrieved from http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2008_3YR_G00_S0101&-ds_name=ACS_2008_3YR_G00_, December 12, 20095 Retrieved from http://www.kinseyinstitute.org/resources/FAQ.html, December 10, 20096 Lindberg, L.D., & Singh, S. (2008). Sexual Behavior of Single Adult American Women. Perspectives on Sexual and ReproductiveHealth, 40(1), 27-33.7 Retrieved from http://www.cdc.gov/nchs/nsfg/abc_list_s.htm#sexualmales, December 16, 2009.8 Retrieved from http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2008_3YR_G00_S0101&-ds_name=ACS_2008_3YR_G00_, December 12, 20099 Schultz, D., & Shultz H. (2004). IMC, the next generation. New York: McGraw-Hill.10 Packaged Facts (July 2006). Condoms in the U.S.11 Ibid.12 Ibid.13 Ibid.14 Retrieved from http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2008_3YR_G00_S0101&-ds_name=ACS_2008_3YR_G00_, December 12, 200915 Ibid.16 Packaged Facts (July 2006). Condoms in the U.S.17 Ibid.18 Brackett, K.P. (2004). College students’ condom purchase strategies. The Social Science Journal, 41, 459-464.19 Ibid.

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