Vaseline Petroleum Jelly

Kurt Beloff
Donald Chase Brendan O’Hare

Matej Okorn
Yejin Shim

Company Overview

Chesebrough-Ponds incorporated (CPI) was formed in 1955 through the merger of Chesebrough Manufacturing Company and Ponds Extract Company.  In 1976, the company had – Six divisions. – Net sales of $747 million. – After-tax profits of $54 million.

– Regular. / 3.75 oz. .Product Overview  Five different jar sizes. – 1. – Medicated. – 1.00 oz.0 oz. / 12.50 oz.  Two forms. / 3.  Two different tube sizes.0 oz.75 oz. / 7.75 oz. 15.

. Distribution of VPJ – Distributed mainly through grocery. and mass merchandise stores. – Current distribution penetration is 92% for grocery stores and 96% for drug stores. – Direct competition is mainly from private label petroleum jellies which compete on price. Other specific uses are for chapped lips and sunburns. drug.The Market and Distribution   Market For Vaseline Petroleum Jelly (VPJ) – Heavy users are women aged 45+ (multifunctional skin care) and mothers (baby care).

Marketing For VPJ  VPJ sold by 130 person sales force – Believe product is mature and requires price promotion to stimulate trade interest. – Focus is on the “headquarter accounts” rather than individual outlets.  Three principal areas of VPJ marketing – Advertising – Consumer promotion – Trade promotion .

  .Marketing of VPJ (Cont.)  Advertising – Advertising has historically shown the versatility of VPJ as a skin care product for adults and children. – In 1976. there were 223 days with a promotion and 70% of trade sales were on promotion. Trade Promotion – Primary method of VPJ promotion. Consumer Promotion – VPJ brand management has spent relatively little money on consumer promotion.

Industry Analysis  Petroleum jelly is a household staple used by 90% of the population.  Product is known for its versatility.  Remainder of market consists of private label manufacturers. etc. skin care.  Vaseline is the industry leader with a 90% market share. . chapped lips. Uses include baby use.

Company SWOT Analysis  Strengths – Success of company – Large market share (90%) – Strong brand recognition (97%) – High distribution penetration – 70% of homemakers view VPJ as economical – No significant direct competitive petroleum jelly products that effect VPJ market share – Versatility of product .

)  Weaknesses – Low brand visibility. . – Lack of sustained budget for advertising   – Salespeople focused on “headquarter accounts” rather than individual retail outlets. 1977 plan to cut advertising budget by 50%. – Terms and timing of trade promotion   Trades get discounted price without requiring advertising.23% recall recent ads. advertising often cut to meet profit targets. In 1976. 70% of factory shipments sold on promotion 4th qtr.Company SWOT (Cont.

)  Opportunity – Consumer advertising rather than trade promotion will lead to pull rather than push demand. – Turn light users into heavy users. – Capitalize on Vaseline brand name to reinvent VPJ and diversity the product line. – Target VPJ to institutional users such as hospitals. – Eliminate multiple-brand promotions and dedicate advertising to VPJ exclusively.Company SWOT (Cont. .

. sunburn cream. – Direct competition in petroleum jelly market from new brands of existing companies. etc. – Specific-use products which compete against the versatility of VPJ (baby care. such as Johnson & Johnson.Company SWOT (Cont.) – Shift in trade promotion philosophy can lead to a deterioration of relationship with trades.)  Threats: – Uncontrollable economic conditions.

.  Develop effective marketing strategies with better allocation of budgetary resources to increase consumer sales and overall profits. we must compete against specific-use products. yet VPJ is expected to increase profits.  New CPI product launches in 1978 are to be funded by stable brands such as VPJ.Challenge  Although market share is 90% in petroleum jelly market.

). Reinforce and expand distribution of larger sizes in all trade channels.Options       Maintain status quo. . Increase retail prices to capture additional profits. Advertise to show additional VPJ uses (lubricant. Produce VPJ to institutional users. etc. shoe shining. Increase trade promotions.

)  Retrain sales force by focusing more on individual accounts. skin care. etc.g. baby care.)  Eliminate multi-brand promotions to focus marketing exclusively on VPJ.  Convert light users to heavy users.: sun burn lotion.Options (Cont. lip balm.  Diversify VPJ product line into usespecific segments (e. .

  . Retrain and refocus current VPJ sales force to capitalize on VPJ brand equity. Extend VPJ product line through introduction of new specific-use products.Recommendations  Effectively coordinate VPJ advertising and promotions to trade and consumers.

w/ Cons. Run trade and consumer promotions simultaneously to capitalize on synergy. Incremental Sales Due To Trade Promotion (Daily) 4000 3000 2000 1000 0 1972-1977 w/o Cons.Coordinate VPJ Promotions    Decrease exclusive trade-only promotions. . Prom. Require trades to market VPJ to consumers. Prom.

Extend VPJ Product Line  Introduce specific-use applications of VPJ – Reengineer VPJ with additional ingredients to target specific-uses  Skin care  Lip therapy  Baby care  Medicated .

 .Retrain Sales Force  Change perception of VPJ from a mature product that requires trade promotion to an exciting product with a new strategy aimed at increasing consumer sales. Change focus to include individual retail outlets and institutional buyers.

A reinvigorated sales force will help ensure the success of the new VPJ product lines while maintaining existing market share.Recommendation Rationale  Coordination of consumer and trade promotions will lead to stronger consumer sales through a focused marketing initiative.   . Our new product line will lead to new sales opportunities by capturing unprobed markets.

and – Refocused sales staff. .Conclusion  VPJ has been around for 100 years. – Product segmentation.  Vaseline will be around for the next 100 years.  With a new: – Marketing focus.

THE END! Vaseline Petroleum Jelly Leading ChesebroughPond For the Next 100 Years! .

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