Johnson and Johnson
Group 4
Rachel Hagensen
Faye Lock
Nicole Williams
Elaine Saeger
Johnny Pham
Sound marketing is critical to the success of every organization. The goal of marketing is to create customer satisfaction with a product or service, while generating profits for the company. Based on information gathered in marketing research, a company formulates a market strategy that follows along with their overall objective. The following is an analysis of the marketing strategies used by a leading health care provider, Johnson and Johnson (J&J).
To more fully understand Johnson and Johnson's marketing strategy, our group first looked at the company's credo. In the credo, the overarching philosophy driving J&J in the health industry is clearly mapped out. The credo specifically outlines their four responsibilities. The first responsibility is to provide high quality products for doctors, nurses, patients and parents. This includes striving to keep products at reasonable prices and serving customers promptly and accurately.
The second responsibility is to their employees. Each employee is treated as an individual, with equal opportunities for development and advancement. They also try to be fair, and maintain clean, orderly and safe working conditions.
The third responsibility is to the community. Johnson and Johnson supports good works and charities. On April 24th, J&J are supporting a special Newsweek issue on critical importance of early childhood development. They also excel towards being a "good citizen" in every community by protecting the environment and natural resources.
The fourth responsibility is to the stockholders. This means making a sound profit, while continuing with research and development.
From the company credo our group derived specific criteria for evaluation. The specific criteria are listed below.
Is J&J first in the minds of their consumers?
Does J&J use “The Law Of Focus” when marketing products?
Is "The Law Of Acceleration" helping J&J to maintain their global contention?
Does J&J fully tackle the needs of their consumers, creating higher levels of
satisfaction?
This criteria directed our research toward more mature products with the largest percent of market share. Those products are, Band-Aid adhesive strips, Tylenol and Baby care items.
Band-Aid
Johnson and Johnson is a successful health care product provider because they satisfy customer needs. In the early 1920’s, J&J recognized a need for antiseptic wound treatment and developed Band-Aid Brand Adhesive Bandages. Today when someone asks for a Band-Aid, they may not necessarily mean the brand, but an adhesive bandage. This type of name reference is know as “The Law Of Focus” in The 22 Immutable Laws of MARKETING by Ries and Trout. The Law Of Focus is using simple words to "burn" a path in the mind by compressing the focus to a single word or concept. Johnson and Johnson's word choice of Band-Aid is now synonymous for adhesive strip.
In order to compete with variations of adhesive strips, J&J began extending their Band-Aid line. Some of the line extensions are, Sheer, Flexible Fabric, Endangered Species design, Sesame Street Design, and Space Design. “The Law of Line Extension” also in The 22 Immutable Laws of Marketing by Ries and Trout, warns that the expansion of a product line is not always for the best. The reasoning behind this is, instead of focusing all resources on one product, resources are spread thin while developing expansion products. Consumers no longer have cut and dry decisions on what to purchase, they now have choices. Inevitably choices within a line may end up competing against one another and reducing the impact of a narrower focus. According to Ries and Trout, “The leader in any category is the brand that is not line extended.”
When interviewing consumers, 20 out of 20 people refer to Band-Aids with any first aid supplies. When asked what style of Band-Aids they purchased, given a choice with previously mentioned designs, 15 said sheer and 5 said Flexible Fabric. None of the people interviewed would purchase those specific designs, even for their children.
Based on our Johnson and Johnson consumer survey, our group feels that J&J could either drop the design extensions or market it more toward young children. Band-Aids with designs are found at doctors' offices, when shots are given. Since Band-Aids are a mature product, Johnson and Johnson should try to capture a larger market share by more effectively introducing new designs. Some of the personal care products used to target children use Disney cartoon designs. Johnson and Johnson could use these same designs on Band-Aids. Placing the designed Band-Aids at a child's eye level will help attract more attention to the younger consumer.
Tylenol
Acetaminophen has been around on the market for 60 years. Johnson and Johnson decided to call their generic acetaminophen, Tylenol. Since the product debut, Tylenol has always been known as "gentle on your stomach." Meanwhile, competitors have been know as either harsh on the stomach or liver.
One campaign that has been running for years, which everyone in the United States should be able to recognize is, "My doctor recommended Tylenol for all of my aches and pains." Other ads that our group remembered were similar to, "Most doctors recommend," or "Nine out of ten doctors recommend Tylenol."
Since the cyanide poisonings of Tylenol capsules in 1982, Johnson and Johnson have taken many precautions, so similar accidents will not happen again. Today, there is no longer any capsule products on the market, except in prescription form. J&J may have taken away all of their capsule products from over the counter drugs, but they introduced new items as well. Some of the expansions of the Tylenol line are, Children's Tylenol, Tylenol Cold and Tylenol Gel Caps.
The creation of a child version for pain medication was brilliant. Before Children's Tylenol, there wasn't any over the counter medication to relieve fevers. Children's Tylenol was first, and also became first in the minds of consumers. After years of marketing Tylenol as a gentle product, The Law of Focus came into play. Now when anyone says Tylenol, people think gentle. By responding to demand with children's Tylenol, customers' needs and wants were satisfied. Thus, a higher level of satisfaction with Johnson and Johnson was accomplished.
During interviews with Johnson and Johnson consumers, our group found that 3 out of 5 people would choose Tylenol to relieve minor aches and pains. When asking what type of child medication a parent would use, 4 out of 5 people said Children's Tylenol or Tylenol Cold.
Based on the consumer survey and marketing tactics for Tylenol, our group believes that Johnson and Johnson are doing an excellent job with this product line.
Baby Care Products
Johnson and Johnson targets a specific segment for each of their products. For example, the baby care products use popular cartoons such as Winnie the Pooh and Pals, Pocahontas, and The Little Mermaid. The cartoon characters used by J&J appeal to both boys and girls.
Johnson and Johnson apply other tactics to attract more attention from children. For example, the use of shelf space at the grocery store. The colorful cartoon packaged products are placed at a child's eye level and within reach, so a child will be able to get the product themselves and ask mommy or daddy to buy it. At Costco, Winnie the Pooh and Pals Products are sold in groups of three (shampoo, conditioner and bubble bath), at a quantity discount. The discount appeals to parent's pocket books and satisfies the wants of a child, all in one sweep. According to the U.S. Census Bureau, 51 million children under the age of 12 draw more than $700 million dollars in the personal care market. 50 percent of the personal care market is in child care, which J&J dominates with a 40 percent share.
During interviews with Johnson and Johnson consumers, our group found that 20 out of 20 adults think of No More Tears Shampoo for a child. When asking children ages 10 and under what type of shampoo they use, 12 out of 15 said a cartoon character that is used on a J&J product.
To instill name brand recognition among young mothers, hospitals give Johnson and Johnson created care packages which hospitals give out. The packages are filled with baby care products and a few items for mom. There are also coupons for additional savings on J&J purchases. When the items in the care package are used with the newborn child, the mother is more apt to use those recommended products in the future. An upcoming special issue of Newsweek, "Reports on new research proving that the time from birth to age three is more critical to setting patterns for life than we ever knew," states Ralph S. Larsen CEO of Johnson and Johnson.
When mothers were asked what type of products they used to take care of their infants, 17 out 20 used a majority of Johnson and Johnson products. Some of the products mentioned were, Baby Bath and Lotion, No More Tears Shampoo and Conditioner, Baby Powder, Baby Cream and Health Flow baby bottles and accessories.
Based on this information, our group feels Johnson and Johnson is effectively marketing their baby care products to the correct consumer, the mother and the young child. The products mentioned in the above paragraph are first in the minds of the consumer, and have helped to maintain J&J as the world leader in personal care products. The capture of the largest market share in the child care segment was also a key influence on our decision.
Product, Place, Promotion, and Price
Most firms make a point of meeting the advertised prices of their competitors, and Johnson and Johnson is no exception. J&J price strategy is not to lower prices below those of their competitors, but instead to stimulate sales through special promotions. For example, 400 million .50 cent off coupons have been distributed recently to homes and out patient care units. Although aggressive marketing promotes market share, aggressive advertising campaigns can backfire.
Johnson and Johnson’s latest Tylenol advertisement counters an ad by Advil, which pointed out the potential danger of taking Tylenol. TV networks have declined to air either ad, so both parties didn’t gain any market share for their actions.
Johnson and Johnson’s sales reinforce the company’s position as the largest and most prominent health care organization in the world. J&J is committed to high quality standards and achieves success despite intense competition from other health care product producers. In 1996, $1.91 billion was reinvested in research and development to achieve advances in new products. Innovative advances are the driving force to become first in the market and in the minds of consumers. In fact, J&J received the National Medal of Technology for the highest science and engineering achievement in 1996. To develop products that improve the quality of life, J&J is currently forming alliances with other companies through joint ventures, acquisitions, and co-marketing agreements.
To stay as the number one health care provider, J&J must concentrate on creating products that are necessary now and will continue to be necessary. Referring to "The Law Of Acceleration," (a fad doesn't last long enough to strengthen a company.) Ries and Trout discuss the importance for corporations to build trends, not fads. This means that companies need to concentrate on building long-term demand for their products. Johnson and Johnson have been very successful in this by creating products for the long-term such as Band-Aid adhesive strips, Tylenol, and Baby care items. These three products are J&J's heart and soul for maintaining their competitive global edge. Johnson and Johnson has 150 locations world wide, and their products are sold in a 155 countries.
With mature products like Band-Aid adhesive strips, Tylenol, and Baby care items, J&J has built a financial cushion which allows them to experiment with new products such as Neutrogena, Clean & Clear, Mylanta, and Nicatrol. These new product lines represent the current tactics by J&J to ensure continued domination in the personal health care industry.
Conclusion
Johnson and Johnson met each of our group's criteria,
Is J&J first in the minds of their consumers?
Does J&J use “The Law Of Focus” when marketing products?
Is "The Law Of Acceleration" helping J&J to maintain their global contention?
Does J&J fully tackle the needs of their consumers, creating higher levels of satisfaction?
effectively proving they are the leader in the personal care industry.
Johnson and Johnson's Credo is given to their employees, ensuring their vision is shared by all. This Credo states:
As a group, we believe that Johnson and Johnson's continued success is due to their application of their four responsibilities and a clear, long-term marketing strategy.
BIBLIOGRAGHY
1. "Baby Boom in Toiletries Hits J&J"." Advertising Age. January 21, 1991, p. 16
2. "Cold Remedies for Children." Market Share Reporter-1997.
3. "Improving People's Lives." Johnson & Johnson 1996 Annual Report.
4. Johnson and Johnson Company Credo. http://www.jnj.com/credo/credong.htm
5. Johnson and Johnson Supports Newsweek Special Issue on Critical Importance of Early Childhood Development. Johnson and Johnson Press Release. April 15, 1997 http://www.jnj.com/news/family.htm
6. President Clinton Names Johnson and Johnson to Receive Nation's Highest Technology Honor. Johnson and Johnson Press Release. April 4, 1997 http://www.jnj.com/news/honor.htm
7. "Stomach Remedy Market." Market Share Reporter-1997.
8. "Top Adhesive Bandages." Market Share Reporter-1997.