Names I.DManahil Al-Hassan 30062766 Ali Zaher Al-Taher 30071979Mayada Khalaf 30068944Salah Mufeed 30080085 MARKETING GROUP ASSIGNMENTASSIGNMENT# 2 Johnson & Johson’s Skin ID5/10/2009<br />CONTENT <br />1.0INTRODUCTION <br /> 1.1AIM OF THIS PROJECT<br /> 1.2COMPANY PROFILE <br /> 1.2.1PRODUCTS OF JOHNSON AND JOHNSON <br />2.0NEUTROGENA SKIN iD <br />2.1CURRENT MARKETING MIX FOR NEUTROGENA SKIN iD <br />2.1.1Product Strategy: <br />2.1.2Pricing Strategy:<br />2.1.3Promotion Strategy: <br />2.1.4Place or Distribution Strategy:<br />3.0MARKET ANALYSIS <br />3.1Neutrogena Skin iD’s Current Target Market <br />3.2Evaluating the basis of Neutrogena Skin iD target Market <br />4.0STRATEGIC ANALYSIS (SWOT analysis) <br />4.1INTERNAL ANALYSIS <br />4.2EXTERNAL ANALYSIS <br />5.0PROJECT RECOMMENDATION STRATEGIES <br />5.1.Market penetration via new products: <br />5.2Maximizing Sales Revenue <br />5.2.a. Home Delivery Service: <br />5.2.b Installing KIOSKS in different areas :<br />6.0ENVIRONMENTAL ANALYSIS OF J&J MARKET (PEST ANALYSIS) <br />CONCLUSION <br />REFERENCE<br />1.0INTRODUCTION<br />Johnson and Johnson has always been a company that stands ready to improve the quality of people’s everyday life. By offering products and information regarding baby care, skin and hair care, oral care, nutritionals, pain relief, topical care and much more, Johnson and Johnson has been able to create a well known when it comes to researching and developing meaningful innovation in health care within the Consumer lives. In the midst of all these high Research and Development (R&D), the possibility of seeing a failure results in new product development can never be overemphasized (Rossi, 2008).<br />Considering the current trend and practice in satisfying customer, one name that has gained much ground is mass customization (Fogliatto & da Silveira, 2008). It has been proven that one-size-fits-all solutions does not necessary address the full needs of every customers, hence affecting customer satisfaction to a great degree (Addis & Holbrook, 2001). Most industries, especially IT industry, have used this tool to greatly empower consumers in the area of delivery specifically to what consumers wants. Despite the impressive milestone mass customization has delivered to many industries, the complicated nature of other industry’s deliverables like that of the cosmetic industry, has over the years offer full customizable products to customers (Kumar, 2005).<br />As one of the leaders in the world cosmetics industry, Johnson and Johnson has proven its creativity by introducing a product line “Neutrogena Skin iD” which employs the mass customization concepts to ensure that each customer’s specific needs are met. So now, the question is why did we choose this product? What is special about it compared to general skin care products? The answer is simple, MASS CUSTOMIZATION. Since different people have different skin treatment, it is difficult for one product to be designed to satisfy everyone; therefore a dermatologist service is required in order to even make the right choice of cosmetics. Neutrogena Skin iD is an online portal for designed by Johnson and Johnson to acts a virtual dermatologist that will recommend a complete Johnson and Johnson skin solution kit (one with the right amount of active ingredients to cleanse, treat and protect your skin) for users after they have answer a few questions about themselves and their skin.<br />1.1AIM OF THIS PROJECT<br />The aim of this paper is therefore to analyze the Neutrogena Skin iD from a marketing perspective, in order to recommend some ideas on how Johnson and Johnson can realized its corporate goals through Neutrogena Skin iD product line.<br />1.2COMPANY PROFILE<br />Johnson & Johnson was founded in 1886 more than 120 years ago on a revolutionary idea: Doctors and nurses should use sterile sutures, dressings and bandages to treat peoples’ wounds. Since then, they brought the world new ideas and products that have transformed human health and well-being. Every invention, every product, every breakthrough has been powered by generations of employees who are inspired to make a difference.<br />125095133350<br />The founding Johnson brothers (from left, Robert Wood Johnson, James Wood Johnson, Edward Mead Johnson) who began the Company’s tradition of managing for the long term<br />The company has experienced astonishing growth over more than a century. They’ve grown through innovative ideas, products and services that make a difference in people’s lives. And they’ve grown through global expansion<br />Johnson & Johnson has more than 250 companies located in 57 countries around the world. The Family of Companies is organized into several business segments comprised of franchises and therapeutic categories.<br />Vision statement: “Bringing Science to the Art of Healthy Living”<br />J&J doesn't have a "
Instead, they have a credo.<br />Johnson and Johnson’s Credo<br />14859001779905“We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers' orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit”<br />.<br />The Historic Chicago Operations<br />-151130247015<br />Plaster Making Machinery at Johnson & Johnson, 1912<br />-1874520139700<br />Old Advertising and Promotion collateral for Johnson and Johnson<br />1.2.1PRODUCTS OF JOHNSON AND JOHNSON <br />333629010414019964402851155026660104140199803253454Consumer Products:<br />Wound Care & TopicalsOral Health CareSkin & Hair CareBaby Care<br />321945037401519939051244515925805124454824966353325<br />Women's HealthVision CareNutritionalsOver-the-Counter Medicines<br />Medical Devices & Diagnostics Products:<br />This section delivers various technologies for doctors, nurses and hospitals operations in general. Some of the area of health that Johnson and Johnson caters for are Orthopaedics; Implants; Joint Replacements; Sports Medicine and Trauma;; and more.<br />Prescription Products:<br />882015588645Under this section, Johnson and Johnson has a variety of products that can be categorized in to 5 classes.<br />2.0NEUTROGENA SKIN iD<br />Neutrogena's Skin ID is one of the many innovations under the Skin and Hair Care section of Johnson and Johnson. Neutrogena's Skin ID is the first personalized acne solution clinically proven to stop 85% of emerging breakouts because it customized to specifically treat your skincare needs. Unlike other acne treatments, skin iD offers a comprehensive skin evaluation, and exclusive product line and an interactive Web site to treat acne needs on a individual basis.Over the year, this product line has become one of the most powerful acne products in the world cosmetic industry. Slowly loosening the tight grip that Proactiv (Neutrogena’s direct competitor) used to have in the acne (skin disease) cure industry. <br />Skin ID is one of the few products that tries to cater to the different skin type that each acne sufferer may have. <br />2.1CURRENT MARKETING MIX FOR NEUTROGENA SKIN iD<br />2.1.1Product Strategy:<br />Relating the product strategy for Neutrogena's Skin ID to that of Ansoff’s Product/Market Grid, it could be said that Johnson and Johnson is using Neutrogena's Skin ID in highly differentiated (Product Development Strategy) way to dominate the current high competition in the cosmetic industry.<br />Source: Adapted from Have, S., Have, W., Stevens, F., Elst, M. & Pol-Coyne, F. (2003), Key Management Models, Pearson Education Limited, Britain, p 10ProductDiversificationMarket DevelopmentMarket CurrentNewCurrentNewMarket PenetrationAnsoff’s Product/Market Grid<br />1942852381210<br />By identifying a customer’s skin type and thereafter providing them with unique numbers, Skin ID will recommend one product from each of the three skin care category which attempt to treat acne according to the different skin types., thus <br /><ul><li>Cleansers category (contains 12 different products);
Acne Treatments category (contains 32 different products); and
Moisturizers category (contains 53 different products); </li></ul>-147205149307<br />Sample of Neutrogena's Skin ID skin care products<br />2.1.2Pricing Strategy:<br />Although Johnson and Johnson is practicing differentiation strategy, its prices are still not still competitive to the average market price for skin care treatment. In other words, the recommended products given by the Neutrogena's Skin ID are neither priced so high nor so low. <br />The typical pricing strategy used in Neutrogena's Skin ID is the Bundle Pricing strategy (Petty et al., 2005). Here Johnson and Johnson bundles a group of products from all the three different categories and price it slightly lower, therefore making consumers perceive Neutrogena's Skin ID has even cheaper than the market price sometimes.<br />161290213360<br />Sample Pricing for Neutrogena's Skin ID solution <br />2.1.3Promotion Strategy:<br />3600 Integrated Marketing CommunicationDue to the new product development strategy being practiced by Johnson and Johnson, promotion and product awareness is considered as a major part of Neutrogena Skin iD’s marketing. In view of this, the promotion of Neutrogena Skin iD employs 3600 Integrated Marketing Communication to create more awareness to both prospective and existing consumers.<br />470312321756<br />.<br />Sample Promotion Materials<br />470312-2004<br />User friendly web portal<br />2.1.4Place or Distribution Strategy:<br />4092286922803387185922803Currently all purchasing is done online and products are delivery is made to users address. Johnson and Johnson deployed this strategy to minimize the extra cost that could have been caused by many intermediaries, middlemen and distribution outlets. <br />Typical Distribution pathNeutrogena Skin iD distribution path<br />Practicing this strategy also enables Neutrogena Skin iD obtain direct feedback on their product from customer which helps them to design new specific treatment to customer’s needs efficiently and effectively. <br />3.0MARKET ANALYSIS<br />3.1Neutrogena Skin iD’s Current Target Market<br />Neutrogena Skin iD sole goal is to dominate the global cosmetic industry using capitalizing on its ability to deliver personalized cosmetic solutions to different types of market. In order for Neutrogena Skin iD to achieve this global branding, its target market has been divided based on: <br />Geographic Segmentation: <br />Scientifically, different users in different geographic regions have different skin types. The introduction of Neutrogena Skin iD careful considered this factor, hence during the skin evaluation or diagnosis, users are expected to specify the geographic region they belong to. Due to this, the specific recommended Neutrogena Skin iD solutions are categorised based on the continent one belongs to, thus either Africa; Asia⁄Pacific; Europe; Latin America; Middle East; And North America.<br />Demographic Segmentation: <br />Since Neutrogena Skin iD seeks to target global skin care market, Neutrogena Skin iD also focuses on attracting consumers based on some other demographic factors. Below is the demographic basis for the market segmentation for Neutrogena Skin iD:<br />Demographic VariablesBreakdownSexMale; FemaleAgeUnder 12; 13-25; 26-40; 41-55; 55 +Income (monthly)USD 300.00 and overReligionMuslims (Halal status); Non-Muslims (Non-Halal status)EducationDesigned for <br />3.2Evaluating the basis of Neutrogena Skin iD target Market<br />The Online feature of Neutrogena Skin iD allows Johnson and Johnson to reach a large number of customer base. With such a huge target market, the nature and number of distribution outlets contributes immensely to the success of such an organization. It is therefore not surprising that the delivery turnaround time for a complete Neutrogena Skin iD takes up to 7 days.<br />Although the amount of resources that Johnson and Johnson has is adequate enough to serve all this market, it does not ignore the fact that Neutrogena Skin iD’s target market is huge.<br />4.0STRATEGIC ANALYSIS (SWOT analysis)<br />With the use of SWOT analysis, both internal and external environmental factors affecting Johnson & Johnson could be identified, hence making strategic decisions more reliable (Aaker, 2005). Therefore the recommended strategies that will be discussed at the end of this paper will be stemmed from the analysis the internal environment coupled with its external environment as seen in the chart below by:<br /><ul><li>External AnalysisStrategic decisionsWhere to compete?How to compete?IdentificationTrends/Future eventsThreats/OpportunitiesStrategic uncertaintiesHow to compete?AnalysisInformation-Need areasScenario AnalysisInternal AnalysisStrategic Analysis</li></ul>Source: Adapted and modified from Aaker, D. A (1998), “Strategic Market Management”, 5th Edition, John Wiley & Sons, Inc., USA, p 40<br />4.1INTERNAL ANALYSIS<br /><ul><li>STRENGTHWEAKNESSDominant market player: Worldwide sales have grown 14% indicating a strong position for the global group.High Market share and Strong barnd: Huge Market share and strong branding in the area of produceing healthcare and consumer productsResearch & Development (R&D) to suit different target groups: Working with intensive scientific notions Johnson and Johnson utilise a varied expanse of problem solving techniques in order to challenge the standard practice and capitalise on growth through emerging markets which enables associated growth.Decentralized organizational structure that can make control difficult and even cannibalization of products from other departments: Due to the numerous departments and sub units used by Johnson and Johnson, the organizational structure appears more decentralized, hence making it very difficult to control and minimize the possible cannibalization of products from different departments.</li></ul>4.2EXTERNAL ANALYSIS<br /><ul><li>OPPORTUNITIESTHREATSConsumers attach more & more importance to quality & local/global brands: As the years goes by, consumers become more aware of brands and demand more value for their money. With Johnson and Johnson global as brand, it could be safely forecast that future sales for Johnson and Johnson will be good.Target groups with growth potential: The introduction of personalized cosmetic solution proves Johnson and Johnson the opportunity to target and deliver to a wider range of consumers.Strong Competitors either from within or outside the cosmetics industry: Technological developments with bio-tech concepts can easily be copied. This can greatly affects Johnson and Johnson’s ability to have a sustainable competitive advantage. Furthermore, generally within the main pharmaceutical companies there is a high level of competition for the generics markets where patents finish and it is the first to entry where success will generally be determined. Threats from the downturn in the global economy: Most of Johnson and Johnson products are luxuries that could be hurt by an economic downturn.</li></ul>5.0PROJECT RECOMMENDATION STRATEGIES<br />In this part we thought of two main strategies that can increase the sales revenue, and generate more money. Yet our focus is not only on creating new products, but also on increasing sales for old products that are essential and people still use.<br />5.1.Market penetration via new products:<br />190501510665Johnson & Johnson is a very huge company, and since it’s launching a wide range of skin products from Skin ID, this is actually an opportunity to penetrate the market via cosmetics production and perfume under the same mass customization or personalization concept.. Skin Id is a skin caring product, and people will have more trust in using their line of cosmetics and perfumes.<br />3892989131123<br />Cosmetics Sample Cosmetics Sample <br />7905752609853890010260985<br />Cosmetics Sample Sample Perfume<br />Product strategy: The product should be aimed at females ,the benefit they may expect is having a healthy, safe skin cosmetic products, that is also varied according to skin type. For instance females with oily skin would have to buy a specific type of face powder and foundation cream, yet people with skin acne will have a product for concealing the acne on the face, etc…for the perfume launched by skin ID the strategy should carry out also the idea of freshness, baby like fragrance connecting it to Johnson’s and Johnson’s baby products which all customers have in mind.<br />Pricing strategy: The price for cosmetics should be placed in comparison of competitors and not higher, since it’s a new product penetrating the market, it should offer affordable prices to market the product and to generate more income and customers satisfaction.<br />Promotion strategy: Besides low pricing, when a product is newly penetrating the market it should be advertised via special promotion for consumers to know it, this can be done by promoting online, via T.V, in-store presence, adding free gifts and promotion packs..etc…<br />Place strategy: Since these two new product are targeting females, then they should be sole at places where women visit mostly, for instance supermarkets, beauty salons etc..<br />5.2Maximizing Sales Revenue <br />5.2.a. Home Delivery Service: <br />Currently Johnson and Johnson takes up to 7 days to deliver a complete solution to one’s doorstep. The turnaround time for deliver to continuous to be of major concern if Johnson and Johnson wants to maximize their sales revenue. As a result of that, Johnson and Johnson and Johnson will need to re-assess its value chain in order to minimize the turnaround time from 7 days to 3 days, without compromised on the integrity of their deliverables. Nevertheless this improvement should not be charged to the user but rather be used as a promoting tool to attract more users. <br />1158875178435<br />-466744217677815.2.b Installing KIOSKS in different areas :<br />The KIOSK installation is done for the purpose of sales increase. Many people don’t have time to access different internet webpage’s , therefore they may not get the chance to learn about the new product of Skin ID at outlets at drugstores and supermarkets. Therefore KIOSK are convenient and many people can do the skin testing online while they are going shopping. <br />Pricing strategy should be the same as the price of the original product, the place should be mostly in supermarket in facial and cosmetic isle, so that we people want to shop for skin care products they may do the testing and get the product that will give them the best results. People who have done the testing before can have membership cards that they insert inside the Kiosk and get the product the usually use.<br />102178179681Sample Kiosk<br />6.0ENVIRONMENTAL ANALYSIS OF J&J MARKET (PEST ANALYSIS)<br />Political Factors: The political challenge is that Johnson and Johnson may face could be to conform to all the different government leadership styles in various countries it operates within. Certain countries have extreme legislation or restrictions in their use of certain kinds of chemicals, especially in the cosmetic industry which might seem carcinogenic. As a result of that, Johnson and Johnson will be obligated to produce only safe products that do not contain any harmful substances. Also, different legislation for advertising in different countries could also affecting Johnson and Johnson advertising and Promotion. <br />Economic Factors: Johnson and Johnson may have adapt to all the different economic environments and problems in all countries it operates in. Luckily, the economics have predicted a recovery from the current economic downturn. This means that consumer’s disposal income may be increasing in the coming years, hence there will be more money for consumers to spend on luxury Products like cosmetics.<br />Socio-Cultural Factors: The high diversity in people from different geographic region continues to raise a lot of challenges on the how Johnson and Johnson able to deliver to all the target groups they want to serve. Nevertheless, Johnson and Johnson is able to mitigate the effect of the difference in Socio-cultural factors by having a decentralized geographic system to serve the various market.<br />Technological Factors: Many people are becoming more IT savvy, this creates an opportunity for Johnson and Johnson to launch more internet selling product. <br />On the other hand, competitors are also building improving on their technologies and their deliverable. This calls for more work to be done on R&D for Johnson, if they want to continue to enjoy their current sustainable competitive advantage.<br />CONCLUSION<br />Neutrogena's Skin ID is a new skin care solution under Johnson and Johnson which provides personalized skin care treatment for acne. Johnson and Johns is the first cosmetic brand to come out with a personalized mass customization product in the cosmetic industry.<br />Despite their strength inthis sector, there could be some potential threats in the future which might negatively affect Johnsons and Johnson’s competitive edge if not properly dealt with. Two areas where Johnson and Johnson may be required to focus on is to develop more new products with the same personalization concept and also to strengthened the distribution value chain in such a way that sale could increase, and at the same time maintaining their competitive edge.<br />REFERENCE<br />Addis, M. and Holbrook, M.B. (2001), “On the conceptual link between previous termmassnext term customisation and experiential consumption: An explosion of subjectivity”, Journal of Consumer Behavior, pp. 50–66.<br />Aaker, D. A (1998), “Strategic Market Management”, 5th Edition, John Wiley & Sons, Inc., USA.<br />Fogliatto, F. S. and da Silveira, G. J (2008), “Mass customization: A method for market segmentation and choice menu design”, International Journal of Production Economics, Vol. 111, No. 2, pp 606-622.<br />Have, S., Have, W., Stevens, F., Elst, M. & Pol-Coyne, F. (2003), “Key Management Models”, Pearson Education Limited, Britain.<br />Kumar, S. (2005), "
Exploratory analysis of global cosmetic industry: major players, technology and market trends"
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, 4th Edition, Frenchs Forest, NSW: Pearson Education Australia.<br />Rossi, F. (2008), “Modeling Product Entry and Pricing Decisions”, URL: http://www.unc.edu/~rossif/attach/FedericoRossi_entry.pdf (Accessed on 29th September, 2009).<br />