MSc Business Administration 2008/9

1. Academiejaar 2008-2009
UNIVERSITEIT ANTWERPEN
FACULTEIT TOEGEPASTE ECONOMISCHE WETENSCHAPPEN
CASE STUDY:
Johnson Wax: Enhance
Nathalie Goubau
Serena Boccardo
Koen Van Doorselaer
Mathias De Bruycker
Lenka Machova
Werner Rietveld
Christina Kosta-Kafetzi
Paper in the context of the course Supervisors : Prof. Marcel Weverbergh
“Product and Price Management” and Sara Weyns

2. 1
Table of content
1. Introduction and problem definition...................................................................................2
2. Core issues .................................................................................................................................3
3. The tests executed by Johnson Wax......................................................................................4
3.1. Blind comparison................................................................................................................4
3.2. ASSESSOR pre-test-market procedure............................................................................4
4. Recommendations....................................................................................................................7

3. 1. Introduction and problem definition
The case of ‘Johnson Wax: Enhance’ tells the story of the tests that were performed by
the company S.C. Johnson & Company, in order to make some recommendations about
the necessary next steps for the launching of the product Enhance. Enhance is a new
instant hair conditioner, ment to be a companion product for their first hair-care product
Agree. In the past, Johnson Wax had a standard procedure in new product
development: they applied commercial feasibility studies, they did performance tests
against competitive products, and before national introduction, the product was
launched on a test market. However, this standard procedure became much to
expensive, so in recent years the company started using blind comparisons and the pre-
test-market test ASSESSOR as a cheaper method in new product development. The pre-
test market testing procedure had convinced top management that such research was
valuable. This is why the company decided to execute these two tests for Enhance too.
Based on the results of both tests, it is now the responsibility of John Sherman, the
product development manager for S.C. Johnson & Company, to make some
recommendations about Enhance. We will try to help John in making the right
recommendations towards the higher management, that will make the final decision.
Should he recommend to eliminate Enhance or reformulate the product? Is retesting
advised or should Sherman recommend a national introduction of the product? In
order to give him the right support, we will first have a look at the core issues.
Afterwards, a profound analysis of the testing results will allow us to understand
potential problems, and help John make the right recommendations. Finally, we will
offer him a list of our recommendations.

4. 3
2. Core issues
S.C. Johnson & Company is better known throughout the world as Johnson Wax. It is a
worldwide company which employs more than 13000 people. The company was active
on markets such as outdoor-recreation and leisure-time activities, products for home,
auto, and personal care. The latter is of particular interest in this case. The numerous
product lines the company has developed over the years give them a high level of
experience in new product development.
In 1977, the company entered the market of hair care products with Agree Cream Rinse
and Conditioner, soon followed by Agree Shampoo. For the development of Agree,
Johnson Wax discovered a unique position in the market. All of the existing conditioners
contained oil, which made them a bad application for people with an oily hairtype.
Agree targeted people with oily hair with the introduction of an oil-free product which
helped to stop the greasies. The development and introduction of Agree was very
succesful. After one year, Agree had a market share of 4,5% on the shampoo market and
15,2% on the conditioner market. With these figures, Agree meets the expectations of the
management team with an average market share of almost 10% after one year. The
succes of Agree might give them a strong brand recognition to start with for launching
Enhance.
Is it realistic that the management expects the same market share for Enhance? With
Agree, they entered the market with an oil-free product that responded to the unmet
needs of the people with oily hair. It seems that the management concludes that
focusing on a niche (oily hair, dry hair, coloured hair,…) should always be very
profitable and should always obtain the same level of succes. However, they should

5. 4
consider the competition while making expectations about the future market share. As
most of the conditioners on the market include oil in their formula, the competition for a
conditioner targeting people with dry hair will probably be significantly higher. The
target group is large and substantial, but the market is mature with a lot of existing and
new competitors. In vieuw of this, Enhance is not innovative enough.
3. The tests executed by Johnson Wax
3.1. Blind comparison
The test wanted to reveal the overall preference levels, as well as preference levels on
specific performance attributes, for Enhance versus Flex. The panel had to compare both
products, and after 6 weeks they were interviewed about their preferences and
behaviour. The final results were that there was no great difference between the
products. This does not seem positive at all. On the other hand, the differences that exist
were in favour of Enhance and focused on the problems Enhance wants to address.
Based on the blind comparison test, we could recommend to do some effort to enlarge
the difference with their competitors. If the results of the pre-test-market test are good,
they could already launch the product in a test-market.
3.2. ASSESSOR pre-test-market procedure
The Enhance ASSESSOR consisted of a laboratory and a call-back phase. During the
laboratory phase, they tried to find people from the target segment who were willing to
participate in a test market. These people went through a five-step procedure consisting
of initial and preference questionnaires, advertising recall measurement, simulated
shopping stores and brand ratings. In the call-back phase, information was collected

6. 5
concerning after-use preference, repeat purchase rate, and product performance. These
interviews were executed four weeks after purchase.
The ASSESSOR test gives information about the market structure, advertising recall,
trial, repeat purchase, product acceptance, market share prediction, cannibalization, and
sampling response.
To obtain a better understanding of the market structure, the respondents had to give
their evoked brands a score on 22 product attributes. Factor analysis revealed that their
were four important dimensions to evaluate products: conditioning, clean,
manageability and fragrance. Perceptual maps reveal that Enhance has a rather high
position for conditioning, a rather low position for the dimension clean, and an average
position for manageability. However, to capture a significant portion of the market, it
was important to focus on the four dimensions instead of focusing on only one.
Unaided advertising recall was measured to be 76%, an average score for ASSESSOR-
tested products, but a rather low score for Johnson Wax products. Only 50% of the
people recalling the ad, also recalled it was a product for dry hair. Even worse, only 20%
mentioned it was a conditioning product.
The third revelation of the ASSESSOR test was a trial rate of 23%, which is not good
compared to a trial rate of 33% for Agree in the past and compared to other health and
beauty aid products. One of the results of the callback phase was that only 60% (against
78% for Agree) of the buyers in the laboratory phase would buy Enhance again. The
respondents who did not buy the product, received a sample. 43% (against 63%) of these
persons considers to buy the product in the future. The trial rates, as well as the repeat
rates, differ significantly from the results Agree obtained in the past.

7. 6
Concerning product acceptance, manageability was mentioned most when the
respondents were asked what they liked most about Enhance: 48% of the repeaters
mentioned manageability, versus only 12% mentioning conditioning. Enhance seems to
have a problem with their positioning strategy.
The potential market share of Enhance was calculated with two different methods: the
trial and repeat model, and the preference model. Both methods predict a market share
of more or less 3,9%. This is again a bad figure, taking into account a predicted market
share of 8,1% for Agree.
To increase market share, the company could perform sampling efforts. The
incremental share from sampling is estimated to be only 2%. This would bring the
market share predictions up to 5,9%. This is only a little more then the 10% target
market share set by the management of Johnson Wax. If we translate this into sales
predictions for 1979, Enhance would only have a total sales figure of 13,85 million $
against 250 million $ sales on the whole market.
Cannibalization does not hinder the development process or launching of Enhance.
Enhance would only take less than half a share point from Agree.
Based on the results of both tests, we will now try to make some recommendations to
help John Sherman in making his final recommendations towards the management of
the firm.

8. 7
4. Recommendations
The following table summarizes the main results from the blind comparison test and the
pre-test-market test ASSESSOR:
Results
Blind comparison test: no great difference with leading conditioning product
ASSESSOR:
- Market structure: not sufficient to only position on one dimension
- Advertising recall: 76% unaided recall, lower figures for specific attributes
- Trial rate: 23%, 10% lower than for Agree
- Repeat rate: 60% among buyers, 43% among nonbuyers
- Product acceptance:
manageability, instead of conditioning, mentioned the
most
- Market share prediction: 3,9%
- Cannibalisation: no problem
- Incremental share from sampling: 2%
The perceptual map illustrated a decrease in the perception on the effectivity of Enhance
after the product was used. This is a very undesirable outcome. The perception about
the cleanliness evolved positively, but this might not be seen as a compensation for the
negative evolution of the effectivity. The ASSESSOR test revealed that it is important to
offer a product which is perceived as good in all four dimensions. Therefore, a product
modification might be recommended to turn the negative evolution of the perception
about the effectivity into a positive one. Once this is done, advertising might stress on
this improvement.
On the other hand, Sherman has to weigh up the potential increase in market share
because of the product modification against the costs of this modification. Will this
modification mean a great support towards the 10% target market share set up by the
management? If not, a product withdrawal of Enhance might be a better option.

9. 8
As has been mentioned already before, it is not that unacceptable that the results from
the tests are not as good as they were while testing Agree. The market Enhance wants to
enter is already being captured by some big hair product manufacturers. This involves
that it will be much more difficult for Enhance to get into the evoked set of brands in
consumers minds. To overcome this barrier, we can recommend the firm to increase the
level of innovativeness. Increasing the level of innovativeness has to be integrated in all
the different steps. They have to look for the right positioning strategy, they might have
to modify the product according to the new positioning, and they have to apply the
right marketing strategy.
Enhance failed in trying to obtain a position as being an effective conditioning product.
Manageability was mentioned the most when the respondents were asked what they
liked the most about Enhance. This might be a signal directing towards a repositioning
strategy. If the firm would consider this recommendation, it is important not to forget
the other important perceptual dimensions. Repositioning would still involve in any
case a modification of the product towards a higher effectivity. By rather positioning on
manageability, the product might appeal to a broader segment. The part of the market
that did not buy the product because it targeted on people with dry hair, could be
captured in this way. As a result, the poor market share predictions might improve.
Unlike the unfavorable outcomes about product acceptance, the blind comparison test
revealed good results coming from the target segment. People above 35 years old and
people with dry hair preferred Enhance instead of Flex. In view of this, the company
might decide not to reposition towards a broader segment, but invest a little more in
R&D in order to offer the initial target segment not a better, but a really superior
product.

10. 9
Sampling caused an incremental market share of 2%. On the one hand, this does not
seem very optimistic. On the other hand, compared to the market share without
sampling of 3,9%, this means a 50% relative increase in market share (5,9%=3,9%*150%).
In case of both positioning strategies mentioned above, innovative marketing strategy
could consist of very intensive sampling efforts, supported by a national advertising
campaign. When positioning more as a ‘high-manageability-product’ they might loose
some customers who bought the product especially to combat dry hair, when improving
their position as a ‘conditioning-product’ they might loose customers not having dry
hair problems. In both cases creative marketing techniques have to ensure the products’
position in the market, resulting in a greater increase in new customers than loss of
existing customers.