Johnson and Johnsons Company Marketing Research
Document Type:Essay
Subject Area:Engineering
In the Pharmaceutical and Medical Products segments, the primary target audience is composed of medical professionals with a secondary target audience of consumers in the general-public. The company markets these products through media aimed at healthcare professionals and promotional activities at locations frequented by professionals. The firm has had a successful marketing campaign with "BabyCenter" to promote products for infants. It's "Girl's Talking" campaign was less successful because the campaign failed to account for cultural variables. The firm should adopt a "Trust" campaign for Tylenol and other products to restore damage to the reputation of the brands. In addition, the firm markets some of the products produced by the Medical Devices segment to consumers such as insulin monitoring devices, (Haire, 2013). At the corporate level, Johnson & Johnson appears to have developed a generic marketing strategy that involves product differentiation, ("Strategic Marketing," n.
d. The firm pursues its general strategy with horizontal integration through the acquisition of firms with products and capabilities that differ from competitors. It also engages in extensive research and development to develop new products with attributes not available from competitors. Proposed Branding Approach Although Johnson & Johnson relies on a core branding and marketing strategy, it nonetheless adopts a decentralized approach to marketing, which it believes allows the various brand managers to be closer to each market. Each product or product group develops its own specific marketing strategy within the general framework established by the company. This approach provides the product and brand managers at the firm with a substantial amount of flexibility in designing specific marketing campaigns that match produces with specific target audiences, ("Johnson & Johnson Products | Johnson & Johnson," n.
d. Nonetheless, the marketing approaches in each business segment have some degree of similarity because of the nature of the products and the constraints of marketing medications. The target audience for the brands in the Medical Devices segment at Johnson & Johnson combines elements of marketing in both the Consumer and Pharmaceutical segments. The firm makes medical devices aimed at both consumers in the general public and health care professionals that make decisions concerning the use of devices such as implants or artificial joints. Many of the devices are marketed to a target audience consisting of physicians, hospitals and other healthcare institutions, (Beach & Johnson, 1958). Some of the medical devices, however, are similar to healthcare products and are designed for a consumer target audience, with the end user rather than the medical practitioner making the purchase decision.
Nonetheless, the Medical Devices segment primarily focuses on the healthcare professional target audience. The firm implements this approach by acquiring smaller firms with products that are already in the marketplace or have new products under development. The firm also relies on internal research and development efforts to develop new products and to improve existing products. Internal research and development costs in 2012 amounted to $7. billion or 11. of total sales. In the Medical Devices segment, the firm designs its products to meet both consumer and professional needs based on the type of device. In general, the firm focuses on producing innovations for the devices used by medical professionals such as orthopedic implants and cardiovascular devices. With these types of products, the firm can more easily market innovative designs that provide a benefit not available in the products offered by competitors.
Place The place component of the marketing strategy for the products in the Consumer segment focuses on distribution through retail outlets and distributors. The objective of the distribution strategy is to ensure that the products are at the appropriate point of sale depending on the type of product. All segments have some type of promotional activities using advertising. The advertising aspect of the promotional strategy relies on television, radio, print media, and the Internet to communicate with the target audience of each segment. The advertising budget for the firm in 2013 was $2. billion or 3. of sales. In the United States as well as many other nations, various laws and regulations limit the types and methods of promoting pharmaceutical products and medical devices to professionals. An approach that the firm uses in the Medical Devices segment is to provide hospitals and other institutions with some free value added services such as product support that are intended to strengthen the relationship with the customer.
The Pharmaceutical segment uses advertising on television, radio, and print media for direct-to-consumer promotion and branding of prescription drugs. The direct-to-consumer promotion is intended to create consumer interest in the drug, which theoretically translates to requests to the physician for prescriptions of the drug. In contrast, the promotional methods that the Pharmaceutical segment uses for physicians and other healthcare providers is print advertising in professional journals and informational presentations by sales staff. This analysis includes the prices that competitors charge for similar products as well as the price point at which the target consumer becomes indifferent to purchasing the product. The firm, however, also incorporates some degree of a premium pricing strategy because it charges a higher price for many over-the-counter medications when compared to the generic price. This premium pricing approach is intended to maintain the image of the individual Johnson & Johnson products as premium brands.
As a result, the pricing strategy is related to the product strategy, which ensures that the product contains only the highest quality ingredients. In the Pharmaceutical and Medical Device business segments, the specific pricing strategy depends on the stage of the product life cycle. As the product matures in the marketplace and competitors introduce similar products, the company tends to lower the price. Government agencies that purchase many of the pharmaceutical and medical devices produced by the firm also have an effect on pricing. As a result, some nations including the U. S. cap the amount they are willing to pay for some products regardless of the benefits that the product will provide to patients, (Bly, 2003). They must come up with ways to keep their customers loyal by inventing new ways to improve their products.
Whatever the customer demands, the company will find a way to comply, ("Johnson & Johnson Products | Johnson & Johnson," n. d. As the world continues to change, so has the way Johnson & Johnson does their business. In 2013, 56 percent of the revenues JNJ receives come from outside the U. Almost everyone is familiar with baby oil; the benefits of the product have been handed down generation after generation. To maintain the best product, JNJ has to keep their prices low. With other baby oil brands available at stores such as 99c Only Stores, they must make sure the quality of their products is the reason their customers continue to buy their brand. Johnson & Johnson frequently offers special promotional discount coupons in various stores on products such as baby care, and pain relief such as Tylenol, (Beach & Johnson, 1958).
Channel & Logistics Review Johnson & Johnson products are available online and in store at a large variety of distributors and drug stores such as Walmart, Target, CVS, Walgreens, Amazon, Dollar General, and more. Johnson & Johnson had its biggest growth rate of 5. in 2013 than its prior year in 2012, when the company’s revenue increased from $67. billion to $71. billion. Based off the financial overview, we can see that the company does not have a very large growth rate for any of the past five years, (Bly, 2003). B $16. B $15. B Prof Margin % 14. Growth Rate 5. Within the last five years, Johnson & Johnson Co. Advertising can only do so much for a business. A Successful Marketing Campaign The BabyCenter campaign is an example of a successful marketing campaign at Johnson & Johnson. The BabyCenter campaign was intended to use social media to promote the firm's baby care products to mothers, which is a functional example of branded content marketing.
The BabyCenter is a stand-alone online media property that provides new mothers with various passive and interactive features. The website provides passive information that can be accesses in written or audio form. The first phase is to increase the general awareness of the target audience of new mothers about Johnson & Johnson baby care products, (Brooks, 2004). The second phase is to gain information about the perceptions of the target audience towards the value proposition found in baby care products and third phase is to gain competitive intelligence about the way the target audience reacts to the marketing of competing products. The campaign has been reasonably successful in achieving the marketing objectives, which has resulted in the continuation of the campaign since its initial launch in 2008. Several factors have supported the success of the BabyCenter campaign.
The campaign relies primarily on branded content as the core of the marketing approach, which blurs the distinction between advertising and information or entertainment. In addition, teenage girls were particularly concerned with facial spots or blemishes that a medicated skin care product could control, (Kerin, Hartley, & Rudelius, 2009). The company also did not have a presence in this market at the time of launching the new product line. In keeping with the firm's practice of acquiring brands to reduce the time involved with building brand equity, the company acquired the Clean and Clear name from Revlon. The brand name, however, was not well known among the target market of teenage girls. The "Girls Talking" campaign developed televisions and print media spots in which teenage girls were talking about their concerns over facial spots or blemishes.
The firm eventually cancelled the "Girls Talking" campaign in the United Kingdom and replaced it with the "Real Girls" campaign that was based on marketing research data obtained exclusively from members of the British target audience. The approach used by Johnson & Johnson to the execution of the "Girls Talking" marketing campaign in the United Kingdom demonstrates the proactive methods the company uses when implementing its marketing strategy. The firm investigated the failure to meet marketing objectives to identify the root cause of the problem. The firm then adjusted the promotional element of the marketing mix, which resulted in improved ability to meet the marketing objectives. Recommendation for a Future Campaign Johnson & Johnson should implement a "Trust" marketing campaign for Tylenol as well as the other brands produced by the McNeil division of its Consumer segment, (Kerin, Hartley, & Rudelius, 2009).
Supplementing examination with worker experiences could direct your EVP towards a more important objective for both the business and your workforce. The "Trust" marketing campaign would focus on communicating how people trust Tylenol, Motrin, and other McNeill products to treat minor medical problems such as headaches or allergies, (Rainey, n. d. The campaign is targeted to the consumer whereas this strategy would use measures such as changes in the level of consumer trust to assess whether the campaign approach is successful. The promotional component of the "Trust" campaign would rely on producing advertising in which well-known spokes people or celebrity state how they trust Tylenol or another product in a situation that would require the medication. The company focuses on the well-being and health of a person. This is why Johnson and Johnson companies offer a wide range of healthcare products.
Globalization has also helped Johnson and Johnson companies in ensuring that many people in different parts of the world benefit from their companies. In terms of governance, the republic of Ghana is the seventh best-governed democratic country in Africa. Its economy is the sixth largest in Africa in terms of purchasing power equivalence, (Ruskin-Brown, 2005). Women are more than men. Johnson and Johnson’s products incorporate skin products that are highly purchased by women. This means that skin products from the company will also be highly purchased. Johnson and Johnson company still continues to offer a diverse range of products to consumers. Its focus on customer satisfaction and product differentiation have enabled it to lead in the market. The main issue of the second objective, although the advertising will increase the amount of exposure of the company, there is still competition with cheaper brands of the same product that Johnson & Johnson is advertising, (Smith, 2010).
There will always be a cheaper alternative or substitute so in the end it all comes down to customer loyalty. Product’s Marketing Strategy Positioning Brand management is about building relationships with consumers and not taking advantage of those relationships. Positioning is in the mind of the consumer and can be described as how that consumer considers the product. Johnson & Johnson has positioned their baby products as being” the best for your baby”, indicating that their products are the most reliable with their products having been around for over 125 years. Johnson & Johnson is very customer orientated and makes sure that their customers are always satisfied. Johnson & Johnson uses market penetration. Their products were relatively cheap and affordable to begin with. Low prices are what attracts consumers to try new products, (Carter, 2002).
As the brand grows and customers become more aware, they can then increase the price or find cost-cutting ways to gain more revenue. Through surveys, the company can figure out what geographical locations need or prefer what product. The remuneration system utilized by Johnson and Johnson incorporates three key pay focuses, (Haire, 2013). These three focuses are experience level, position, and consumer loyalty. As Johnson and Johnson utilize the conventional employment based remuneration display, the pay procedure is circulated among the occupations of the association. Each position will get pay equivalent to the market standard of the occupation. The Global marketing-based producer of Tylenol and Band-Aids said its net benefits tumbled to $4. bn from $4. bn. Balanced profit per share, which bar certain things, of $1. topped Wall Street estimates of $1. The pay structure is made out of the set of working responsibilities for each occupation in the association.
This remuneration structure perceives noteworthy elements for each occupation position. Each occupation position is assessed and positioned as per their employment position. The remuneration structure keeps up the organization's association and pays separations among each occupation position that goes from the top officials down to the passage level workforce at the base of the stepping stool, (Butje, 2005). To ensure Johnson & Johnson is in rivalry with the employment advertising, outside overviews will be utilized. billion advertisement expenditure in the 2014 annual report. Let us pretend that Johnson & Johnson divide its advertising cost into three divisions with two sub markets for each one with a total of six main markets the company for an equal $866 million each. That leaves $866 million to advertise products in the baby care market. The average price of Johnson & Johnson’s baby oil is $5.
Johnson & Johnson sells their products to wholesalers at a 500% markup Break-Even Analysis: (Price – Variable Cost) x Quantity = Fixed Costs Price: $5. For a company like Johnson and Johnson to thrive and become competitive, it needs benefits and desired compensations for its employees. Supposedly, if the basic marketable needs are not set in place then it will be hard to maintain the workforce. Johnson and Johnson are no exceptions to competing in the pharmaceutical and consumer packaged goods. Johnson and Johnson must maintain administrative employees and hold their skilled personnel. These papers make recommendations benefits and compensation packages for Johnson and Johnson Company. Marketing Technology as a Service, 265-306. doi:10. app1 Beach, F. Johnson, L. Sales and Marketing Management: Text and Cases. New York: McGraw-Hill. Burke, J. F. Resnick, B. P. doi. org/10.
j375v14n01_08 Estrup, C. Application of input-output techniques to chemical marketing problems. Industrial Marketing Management, 1(2), 187-194. doi. org/10. Johnson & Johnson Products | Johnson & Johnson. n. d. L. n. d. Marketing strategies and methods: conceptualizing and designing the new-product marketing campaign. Product Innovation, 353-393. x. Strategic Marketing. n. d. Problems in Marketing: Applying Key Concepts and Techniques, 89-130.
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