Product Background and Introduction
Dr. Scholl’ is Grooming products specially created for feet. This product has incredibly comfortable insoles uniquely designed for man, women and children. It also offers Discreet solutions for common complaints such as shoe rubbing. The entire line is designed to attract all demographic who may have previously not found the line to fit their lifestyle. We believe that by targeting our market, we can successfully occupy this growing market of professional, fashion conscious man and women. In addition, we will be able to target those people who have certain medical conditions, like obesity, pregnancy, and diabetes, but still want to wear the latest fashions in foot wear. Using our existing high profile positioning in the foot care market will allow us to quickly grow market share in this very important demographic group. With excellent channels of distribution, and name recognition, this addition to the Dr. Scholl’ line should show immediate results to the revenues profits of the company. The introduction of Dr. Scholl’s insoles will provide all day comfort, absorb shock and impact on the heel, and protect the sensitive ball of the foot area using a discreet clear gel. The new products will allow man and women to enjoy the fashion and look they desire, without the discomfort
Situational Analysis
Johnson and Johnson’s Dr Scholl’s a division offers the best of foot care and comfort products available. The company has a loyal and solid customer base, and has seen constant growth over the past many decades. The company now is basically looking to penetrate the younger male and female market with its latest innovative product, Johnson and Johnson’s Dr. Scholl’s. This will enable the company to capture a segment of the population who in the past had no need to purchase Dr. Scholl’s foot care products.
Consumer Analysis – The Company will invest heavily on research and development in order to promote its new product line Johnson and Johnson Dr. Scholl’s. This research program is basically carried out to find out number of information about the consumer in relation to the new product. All consumers are divided into three categories:
§ Heaviest user
§ Moderate user
§ Least user
After dividing all the consumer into three broad category, our research team will find out the information like income level of each category of consumer, the media for example radio, TV, internet or news paper which is best suitable to reach every consumer of each category. To do this our research team will ask what benefits consumer are looking for with our product. What motivates them in the purchase process? Where the customer does actually purchases our product? How the product is purchased (impulse buys, internet, etc)? Understand the quantity a customer will purchase and even trends in consumer tastes.
Economic Analysis
As we are producing a new product we have to calculate the approximate total production costs and total returns received for the product. For these two major factors we have to analyze is that:
§ Cost of production: what is the cost that we have to pay for each product?
§ The level of price that the consumer can easily pay for the product.
The eventual return of a recession, and resulting unemployment would have an obvious effect on sales.
Competitive Analysis - Store brands or private labels are taking a larger share of the market, and pose a threat to existing market share. Other competitor’s offers competing products at a reduced price thus quality is of the utmost importance. ‘Because Johnson and Johnson’s Dr. Scholl’s is a relatively new brand, most consumer value groups are those open to change. J and J’s consumers include fulfilled, who look for value and durability; who have a taste for the finer things in life; Strivers, who seek to emulate higher class purchasing habits; and Experiencers, who are still forming patterns of behavior.’ Both our actual and potential competitors and those that directly or indirectly compete with us. We will try to understand their products, positioning, market shares, strengths and weaknesses.
SWOT Analysis (just for new products)
Strengths
§ Very strong customer loyalty and name brand recognition among repeat purchase
customers.
§ Product placement in high visibility areas in multiple types of retailers
§ Excellent and stable sales staff
§ Multiple advertising vehicles, and a substantial advertising budget
§ Established distribution channels
Weaknesses
§ Historically the products have been produced and marketed by other competitors.
§ Confusion due to multiple product offerings of Johnson and Johnson.
§ Products similar to those offered by competitors.
§ Higher price point compared to other company products.
Opportunities
§ New technology allowing for much greater comfort
§ Introduction of the brand to a new client base
Threats
§ Traditionally brand not appealing to the younger market
§ Non branded versions of the product taking market share
§ Price competition
§ Changes in styles of dress
§ Economic downturn resulting in decrease sales of dress shoes
Product Objectives
Dr. Scholl’ is applying science to meet unmet medical needs. The company is investing heavily in scientific research with the goal of creating treatment with important medical and commercial value. Science notwithstanding, Dr. Scholl has also made great strides in the area of style. The company has developed and maintained an acute awareness of current fashion trends. They are successfully marrying science and fashion and have incorporated that union into the new products.
Marketing Objectives
1. Sales increase by 25% in this coming year.
2. 75% awareness of the market by the end of 2009. The product is targeted to the age group most likely to be early adopters of new and innovative products. In addition, this group accounts for the majority of fashion footwear purchases.
3. 10% increase in new trial, brand new purchases by new customers who, once they try Dr. Scholl products will become repeat buyers.
6. These products will allow Johnson and Johnson’s to regain at least 5% of market share from the store brand and generic competitors in this market,
7. Increase our market share in new international market throughout the world by 8%.
8. Increase rate of sales by new and existing customers by 7-10%.
Marketing Strategies
1. Although there is much similar type of products already on the market, there are none geared exclusively to the male and female fashion shoe-wearing population.
2. The fact that the product will allow man and women to be comfortable while wearing the latest fashions will appeal to the desired demographic population.
3. The marketing of this product has a multitude of segments. The product is not only for those who are seeking just comfort and fashion, but also those who have foot problems. Those who have foot conditions such as diabetics and women who are pregnant will appreciate the comfort provided by this product.
4. The introduction of the complete line of products, accompanied by print, radio, TV, and internet advertising will generate a buzz that these are the must have foot products.
5. Strategic celebrity endorsements will be done, which would likely boost sales. A diverse range celebrity, from musicians to actresses to politicians, would be approached for a creative series of ads. By featuring these prominent women, Dr. Scholl would further enhance its market appeal and would convey to the buying public that its products are not only high quality, but also stylish and hip.
Target Market
Although Dr. Scholl’s has a substantial product mix that serves different needs, like work and sports, after analyzing the current situation products will be created for a very specific niche. Only a small percentage of the population is actually born with foot problems. However, man and women tend to suffer from problems due mostly to ill fitting shoes that are worn to stay in fashion, neglect and lack of awareness of proper care. These man and women need products that will help them be able to wear the shoes that they want comfortably. The inserts of this line satisfy all customers that have shoes that slip and rub heels and need improved shoe fit for better comfort.
To satisfy the all customers needs Dr Scholl’s needed to have an appropriate size to fit in different types of man’s and women’s shoes. The customer who will purchase these products are ones that may sacrifice shoe comfort for style and will need these inserts in order to get the most pain free usage of their shoes. Women, who wear stylish shoes, are on their feet all day, makes these segments measurable, meaningful, and marketable. In addition to this, sports persons and children also will be our special target group of customers.
Marketing Mix
Product
Johnson and Johnson have a large product width and product depth, and this product in particular focuses on foot problems and comfort, as well as shoes. The line of products specifically is created for every man and women.
These current products will satisfy the need of everyone who has to wear stylish and necessary
Shoes comfortably. The products are a shopping product so will need a more targeted promotion. The quality of each of these products is the highest in the market using Johnson and Johnson’s newest technologies and years of expertise. Overall customers will find the products have value since the quality and need fulfillment is worth the higher price. The brand is separated from the other Johnson and Johnson’s products by having its own section of the website, distinctive packaging, and promotional plan. The name XXX is trademarked and added to the registered name. Dr. Scholl’s will present(s) a line of foot care products designed for every man and women,” and allows them to “look and feel crazy good.” All products have The Johnson and Johnson’s Guarantee of a refund if not completely satisfied. Changes to packaging to be made in future as per the requirement and the preference of our valuable customer. Starting this year some new marketing research will be done in order help evaluate if new products should be added to this line to satisfy other foot needs or to satisfy a specific niche like pregnant or obese women.
Price
Dr. Scholl’s price is based on sound research that analyzed demand influences, factors like demographic, psychological, consumption, and an analysis of historical data to estimate price elasticity; supply influences, like covering the cost of production, promotion, distribution, plus profit; and environmental influences like our competitors prices. We will continually monitor pricing in these areas, not just annually, in order to see if changes need to be made. The decision is to continue to be the high, “odd priced” based on our superior product and brand. Since customers evaluate prices comparatively when buying a shopping item, we need to continue to promote our superiority and separate the product from its competitor physically by using other types of displays (details to follow in Promotion section).
We believe that the price of the product must cover costs of production, promotion, and distribution, plus a profit. In addition, when our product is priced on the basis of costs plus a fair profit, there is an implicit assumption that this sum represents the economic value of the product in the market place. For example, suppose a firm estimated production and sales to be 75,000 units at total costs of $300,000. Suppose our desired profit before tax is 20%, then the selling price would be (300,000+0.20*300,000)/75,000=$4.80.
Place/Distribution
An efficient channel is one that delivers the product when and where it is wanted at a minimum total cost. To meet this goal Johnson and Johnson’s uses direct and indirect channel and sells its products directly to pass to retailers using an intensive distribution to have as much coverage as possible. This expansive distribution channel has been traditionally managed by relationship building. This strategy will continue and be evaluated by the Sales Department. In the beginning, products will be place in mass merchandiser stores like supermarkets, drug stores and warehouse stores and in the future we will be adding other mass merchandisers like the shoe section of department stores. Also, in order to reach one of the other specific segments of our target market, like nurses or waitresses, who stand on their feet all day, and pregnant women, whose feet tend to swell, Dr. Scholl’ will begin to be available via special store displays in specialty stores that sell uniforms, like Dr. Uniforms, and clothing for pregnancy, like Motherhood Maternity.
To differentiate Johnson and Johnson’s Dr. Scholl’s from other brands the products will be available at retailers on regular shelf space, when available, and more prominently using special displays that will include a tie-in to current and future promotions that will be described below. Again, it is very important for Johnson and Johnson’s Dr. Scholl’s to be positioned for its superiority, to capitalize on the Johnson and Johnson’s Dr. Scholl’s brand equity, and to place the product so that direct comparisons between store brands or competition are minimized. Selling over the Internet has many benefits including that the complete line can be offered 24 hours a day, 365 days a year and will increase sales, consequently the Johnson and Johnson’s Dr. Scholl’s product line is also available for electronic exchange at many websites.
Promotion
The specific strategic goals for the promotion of Johnson and Johnson’s Dr. Scholl’s include:
§ Create awareness which is important for new products and brands to stimulate trial purchases.
§ Build positive images to promote value by adding meaning.
§ Build on successes from last year and implement new strategies to meet overall strategies of marketing plan.
§ Communicate consistent messages to places where out target market with see them.
§ Since product is in introduction stage our promotional campaign will be aimed at a wider audience, have messages focused on brand benefits, with an emphasis on advertising.
§ Magazines – chosen based on demographic selectivity and pass along readership at doctor’s offices for current and new print add
§ New sales promotions specifically targeted to increase trial of new buyers or inducing purchasing of the products and to combat competition from private label and others, will be instituted this coming year.
§ A free guide to foot fashion and comfort, which includes expert commentary from America's favorite Shoe Maven, Meghan Cleary will still be offered on the website and “will feed your sole.” Research will begin to see if it will be cost effective to expand this initial guide to a series of articles or booklets.
Budget
The estimated overall budget that has been allocated for fulfillment of the 2008-2009 Marketing Plans is $5 million, which was calculated using a hybrid of percent of sales and the task approach. Following figure shows how this total cost of $5 million is distributed in several headings.
Research $30,000
Advertising $3,191,500
Sales Promotions $1,730,500
Public Relations $48,000
Total $7 million
Pros and Cons of the alternatives
Pros
§ Johnson and Johnson can charge a higher price to customer using market skimming strategy.
§ Might attract new customer segments.
§ Could improve brand awareness: our company is on the leading edge of technology.
§ Company’s overall sales will go up due to new product line.
Cons
- Markets were totally unknown and had to be developed.
- Potential customers were only vaguely known.
- Applications had to be developed from experimentation.
- Sell prices and costs were unknown.
- Demand was only a vague estimate of potential.
- A great deal of capital had to be raised to even build and test a prototype.
- Might cannibalize sales of previous product version
· Could be perceived as unnecessary or annoying by consumers
· Would require expensive redesign of base product
References
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