}ohnson & }ohnson Baby Shampoo

Report by Muhammad Saad Afridi, Mohammad Osama Raheel, Sharmeen Baqai and Far:an
Sheikh
Johnson & Johnson manuIactures health care products and serves consumer, pharmaceutical and
proIessional markets. There are three key businesses oI this company;
Key Businesses of 1ohnson & 1ohnson:
Pharmaceutical Business: deals with medication related to skin ,cancer and nervous system and
sell products mainly to doctors.
ProIessional Business: deals mainly in surgical products like cords etc. These products are
usually sold to hospitals directly.
Consumer Business: produces mass products in adult, Ieminine hygiene and baby care.
This term report only targets the consumer division and the product selected is the baby shampoo
produced by Johnson and Johnson. The company has developed both long run and short run
strategic planning.
The mission statement oI consumer division is:
" We will be the landmark company in baby care range, adult skin care, adult toiletries, Ieminine
hygiene and oral care in Pakistan, by providing superior quality products than competition with
brands that are the strongest in their segments by staII who are world class."
Brand Image:
The overall Johnson`s Baby`s image is quite strong. Its core values are linked in its image oI
trust, pure, mild and gentle, knowledgeable about skin care, being the best, caring bout the well
being oI babies, and having a Iull line oI baby toiletries. The brand accomplished one oI its great
successes in developing a new class oI users with its baby care range by including the adult
usage Ior its shampoo and lotion.
Brand personality:
Johnson`s Baby is a reliable brand that caters to the consumers need Ior pure and gentle products
Ior babies and adults.It is a brand that blends emotional, rational and tangible/physicals appeal in
one product.
Brand Equity:
Johnson's Baby equity is strong as compared to other brands in baby care segment Ior knowing
the mom's and baby's needs and Ior its trust in making high quality products, gentleness and
making healthIul products.


arket Segmentation:
The market segmentation Ior Johnson`s baby is done on the basis oI consumer characteristic by
taking into account their demographic, psychographic and behavioral characteristics.
Demographic Segmentation:
i. Age and liIe cycle stage
Babies and young kids are the primary users groups oI the Johnson`s baby products. Population
structure and its growth rate become important Iactors Ior the companies` Iuture sales.
ii. Gender
The other important demographic variable Ior J&J is gender. Mother is the main target Ior
purchasing and using these products Ior their babies. The young girls are also targeted Ior the
product usage.
iii. The Demographic environment
Pakistan`s demographic environment oIIers a lot oI opportunities Ior baby products.
The birth rates are very high. This means that there are going to be a lot oI babies in Pakistan. It
certainly expands the target market.
The Iemale population oI Pakistan is greater than its male population.
The literacy rate and income levels are rising which would inIluence the purchase oI products
related to baby care.
The inIluence oI the dish has made consumers more aware oI the concept oI baby care and the
Indian ads oI J&J products add to the brand`s equity.
Psychographic Segmentation:
The variables aIIecting the target audiences psychographics and behavior are liIestyle,
personality, and attitude oI the mothers. Mother-child association has been the main theme Ior
communicating with the target market. The mother child bond is emphasized to appeal to the
mothers selI image oI being caring and wanting the best Ior her child. In-Iact, it is linked to a
mother`s selI identity needs. Mothers would want to conIorm to the general image oI being the
most caring mother and would buy personality-deIining products like Johnson`s baby. The core
values and the brand personality oI Johnson`s baby appeals to and conIorms to mothers ideal and
actual selI-concept.

Behaviorial Segmentation:
The attitude that mothers have towards care giving and parenting is important in segmenting the
baby-care market. These attitudes are Iormed on the basis oI the liIestyles oI the mothers and
become a part oI their personality. Traditionally mothers had simple attitudes towards
motherhood and care giving but recently we have witnessed that care giving has taken a new
shape. This has happened because mothers now have greater choices available and also because
their role and status in the society and at home has changed. Now along with the old traditional
moms, there is a growing number oI mothers who have to look aIter the house, the husband and
the baby. They are managing diIIerent roles at one time. Many women work and also look aIter
the house. This aIIects their liIestyle and attitude towards the products and brands that they use.
Target arket:
The market targeted Ior Johnson`s baby products and is divided into two broad categories
namely the primary market and the secondary market. The primary markets consist oI the
heaviest users oI the baby products, comprising oI the babies and women. The secondary
markets consist oI young girls and boys with sensitive skins or who desire to use mild product
because oI heavy usage Irequency.
Primary arket:
O Babies and mothers.
O ducated women belonging to upper and middle upper class
O InIluenced by reIerence groups and opinion leaders.
O Skin, hair and baby care are important issues Ior them
O Mothers who are concerned with there babies health and well being.
O Mothers who always want to do the right thing Ior their babies.
O Mothers having selI-concept oI being caring and particular about their babies.
O Women who aspire to look and Ieel young.
Secondary arket:
Young girls and boys between the age oI 16- 25 ( who want use mild products because oI high
usage Irequency)
Positioning:
Johnson`s baby shampoo is positioned as a mild and gentle product that has been clinically
proven. "Clinically Proven mildness" is written on very package to communicate that Johnson`s
baby is a reliable brand that has been in use Ior 100 years and is a part oI conIident parenthood.
It possesses strong existing equities as being trusted, research backed and the leading companies
in producing baby products.The baby shampoo has competitive edge over its competitors that its
shampoo is so mild that it does not bring tears to the eyes. The unique selling proposition oI
Johnson Baby is "Best Ior baby.. Best Ior you". The USP communicates to the target audience
that this is a brand that is pure and gentle Ior women and Ior babies. It cleans and moisturizes to
keep skin soIt and smooth without compromising on the quality. The positioning statement is as
Iollows:
Johnson`s baby is a premium brand in care-giving and personal care segment; that oIIer the
beneIit oI clinically proven mildness that best Ior baby and best Ior you; with a target market oI
babies and women (age 18 35) belonging to the middle upper and upper income segment.
arketing ix:
Product:
Johnson & Johnson baby care products are convenience goods. They are staple products, as they
require low customer involvement the strategic quality that J & J products oIIer is that they are
clinically proven. These products are mild so that they do not harm they baby`s sensitive skin.
Baby products can be more Irequently as compared to other products because oI the attribute oI
being very mild. Johnson`s baby products are trusted products that are thoroughly tested and
saIe. The product liIecycle has reached to the maturity stage and has still not reached to the
decline stage due to its strong brand preposition.
Price:
Johnson & Johnson charge a higher price as compared to its competitors as the quality oI their
products is better and Johnson`s baby has a very strong image in the market. The brand has a lot
equity due to which it is able to command a premium price.
In this way J&J uses psychological pricing approach through which the price is used to say
something about the product, its quality, and the image oI the brand.
J & J use a cost plus proIit based pricing. Their prices also depend on what their competitors are
pricing. They charge always higher then their competitors, as they want to remain premium over
them.The company usually increases the price around 5-10 beIore the start oI each product
season..g. The season Ior baby lotion is winters, Ior baby powder is summers.However, the
sales oI shampooes are more or less uniIorm throughout the year, with a slight decrease during
the winters.
Other than this, The pricing policy changes according to dollar Iluctuations because the company
imports the raw materials Irom abroad? The rupee dollar parity aIIects the cost oI the product
and as a result the product price is aIIected. For example, when the rupee devalues against the
dollar, the cost oI the input rises and thus, the price oI the product is increased.

Price structure:
The current price structure is as Iollows:
Product Sizes Retail Prices(Rs.)
Baby Shampoo 100ml,2ooml,300ml 90,150,210
Place:
J & J have an indirect channel Ior distribution and their products are distributed at the national
level. Their distribution agency is The Distributors Network Limited (D-N-L) Services. This
distribution agency mainly supplies to the retail outlets oI three metro cities, that is, Karachi,
Lahore and Islamabad.
However, in order to cater to more consumers, the company intends to break the national
distributor into three local distributors, one Ior each the three metro cities and carry out sub-
distribution system in smaller towns through the three distributors.
The product are place diIIerently depending on the type oI market. In both market A and B, J&J
baby shampoos are placed in the shampoo category along with other competing brands.In some
retail outlets, the J&J products have been placed in the kids corner in order to promote through
kids. however, there is no proper placing oI J&J products in market C.
Promotion:
Johnson & Johnson did make use oI adverting Ior its baby care range but it stopped it because oI
the reason that the pull created Ior Johnson baby would also increase the sale oI the Ioreign JB
products.There are no consumer promotions used by the company but trade promotion is greatly
used by the company because they want to gain the channel support in improving it distribution
system and to discourage sales oI smuggled products. Besides, Sales Force promotion is also
used by the company to motivate its Iield Iorce. The sales Iorce incentive is given in the Iorm oI
percentage oI sale

Competitors:
The main competitors Ior Johnson & Johnson Baby Shampoo manuIactured in Pakistan include,
(1) Johnson & Johnson imported and duty paid, (2) Smuggled Johnson and Johnson. These
products started coming through the gray channel during the companies` absence Irom the
market. These products are usually distributed Irom a central location like Bolton Market. Also
there is one country Irom where these products come. Mostly these products come Irom Dubai
(being produced in UK). Also there is a variety oI J&J products, which come Irom the gray
which are produced in Thailand. The products produced in Thailand are cheaper as compared to
the ones produced in the UK.
O 'olume: Smuggled Johnson`s baby products have a 1.5 times the volume compared to the
locally produced products.
O Price: the smuggled J&J are priced around 10 to 25 higher than the local J&J.
O #etailer margin The retailers margin on the smuggled products is greater than those oIIered
by the local J&J. the retailer margin on smuggled products is around 25-35 as compared to
10 to 11 on the local J&J products.

ther competitors of 1ohnson & 1ohnson in the baby shampoo category include
Disney Baby Shampoo priced at #s. 160/-, Suave priced at #s 190/-, B & B Kids #s 190/-
. Himalaya Herbals #s 150/- ild Kids #s. 220/-, Baby ild #s 315/- , Zwitsal
#s 200/-, aster Kids #s 135.

Disney oIIers Baby Cologne, Body Cream, Baby Bath, Milk Bath, and Baby Shampoo that
compete directly with the oIIering oI Johnson and Johnson`s. In Iact, according to the sales
representative, J & J`s monopoly in the baby-care market is history. Children, now preIer
interactive, Iun, and innovative products, which have their Iavorite super heroes and cartoons
pictured on the product. In this regard J & J worldwide and especially J & J Pakistan have Iailed
to cater to the needs oI the target market. ncouragingly Ior the company, however, is the trust
and conIidence built over the past so many years. This conIidence pays J & J dividends in terms
oI mothers` brand image and loyalty towards J & J. According to the same sales representative,
Ior mothers buying J & J baby shampoo is a habitual behavior. When they are shopping alone,
they usually buy J & J`s oIIering unless convinced by their children to choose Iancy, cartoon-
imprinted products oIIered by the competitors.
The arketing Environment
The marketing environment surrounds and impacts upon the organization. There are three key
perspectives on the marketing environment, namely the 'macro-environment,' the 'micro-
environment' and the 'internal environment'.


icro Environment at 1ohnson & 1ohnson
This environment inIluences the organization directly. It includes suppliers that deal directly or
indirectly, consumers and customers, and other local stakeholders. Micro tends to suggest small,
but this can be misleading. In this context, micro describes the relationship between Iirms and
the driving Iorces that control this relationship. It is a more local relationship, and the Iirm may
exercise a degree oI inIluence.
J & J have an indirect channel Ior distribution and their products are distributed at the national
level. Their distribution agency %e Distributors Aetwork Limited (D-N-L) Services,

Johnson & Johnson has two types oI distribution channels, which are as Iollows:
CHANNEL ONE
Johnson & Johnson Iirst transIers its products to distributors who pass it on to the wholesalers,
then wholesalers transport the baby care range to the retail outlets.

CHANNEL TWO
In this channel ohnson & ohnson transIers its products to the distributors who pass the
products directly to the retail outlets.

#etail
outlets
Distribu-
tors
Iohnson
1ohnson

Wholesaler

Iohnson
1ohnson
#etail

utlets


Distributor
The acro Environment:
Johnson and Johnson has recently had to Iace a lawsuit against it`s baby shampoo SBU by the consumers.
Allegedly the baby shampoo contains meLhylene chlorlde whlch ls banned by Lhe lood and urug
AdmlnlsLraLlon for use ln cosmeLlcs
Thus globalization, Iree Ilow oI smuggled goods, knowledgeable consumers, and ever increasing legal
remedies sought by consumers make up the environment within which J & J competes.

Characteristics affecting consumer behavior:
Baby shampoos are diIIerentiate themselves Irom other conventional shampoos in three basic
ways; they are milder (gentle cleansing), they have a tear Iree Iormula and lastly they promise to
make hair as soIt as possible.
Factors aIIecting consumer behavior oI baby shampoo are as Iollows:
O Price: cost oI a single wash.
O Scent: Baby shampoos come with diIIerent scents and consumers are sensitive in how
they or their child should smell like.
O oam: Consumers like shampoos which make more Ioam in less time.
O Packaging: Consumers preIer easy to handle SKUs with easier application. Also, baby
shampoo bottles are now designed to attract children to reduce their Iear and reluctance,
and encourage them to take baths and shampoo their hair regularly.
O Softness: The more soIt and gentle hair will Ieel be aIter shampooing, the more satisIied
consumers will be.
O Comfort: Skins oI children especially newborns are very sensitive so it is a primary
concern that the shampoo does not itch or cause discomIort.
O Tear-free: This is an essential characteristic which is a must in order Ior shampoo to be
baby-Iriendly.

Buying decision behavior:
The primary target market oI Johnson`s baby shampoo are the parents/guardian oI kidsranging
Irom ages 0-8 years, whose hair does not require strong cleansing, have sensitive skin, and who
are not mature enough to stop the Ioam getting into their eyes.
However, Iew adults also preIer baby shampoos Ior themselves as they think strong chemicals in
conventional shampoos may damage their hair when used every day. Few consumers are not
sensitive to which shampoo they use and use the same shampoo they buy Ior their kids, which
saves their time and money.
Baby shampoo in general is a low involvement product and there is less perceived diIIerence
among brands .This induces a habitual buying behavior Ior most oI the consumers. However as
Disnep`s skulin` and Imperial Leather`s Cussons` has stepped into the market with their
Iunky packaging, they have succeeded in cultivating a variety-seeking behavior by grabbing
children`s attention. Johnsons and Johnsons in a damage control move has also introduced SKUs
with Iunky packaging and are in competition with other brands.
However, Johnson`s baby shampoo has a large base oI brand loyalists in Pakistan who have been
using Johnson`s baby shampoo Ior quite a lot oI time and are less likely to switch to other
brands. None oI the class C stores I visited had baby shampoos other than oI Johnson and
Johnson`s. Only class A and some class B stores keep other brands.
@he 8uyer Dec|s|on rocess
1he buyer declslon process wlll help us ldenLlfy exacLly whaL sLeps lead Lhe consumer lnLo buylng a
!ohnson's 8aby's producL 1he markeLers can Lhen help lmprove Lhelr brand's conslderaLlon ln Lhelr
respecLlve markeL nlche so as Lo boosL sales
need 8ecognlLlon
1he need recognlLlon for !ohnson's 8aby's producLs would usually arlse from an lnLernal sLlmulus of
parenLal love 1he moLher ouL of concern for her chlld acknowledges Lhe need for baby care producLs
She wanLs her chlld Lo be clean happy and look good Powever Lhe need may be relnforced by an
exLernal sLlmulus such as adverLlsemenL 1he adverLs dellberaLely pro[ecL Lhe baby belng [oyful when
uslng such baby care producLs so as Lo lmpress upon Lhe moLhers Lhe usefulness of Lhe producLs 1hus
Lhe condlLlonlng process can be a compelllng facLor MoLhers are mosL llkely Lo look for Lhose producLs
whlch show senslLlvlLy and concern Lowards Lhelr chlldren and make Lhem feel LhaL Lhelr bables are
lmporLanL
lnformaLlon Search
lf Lhe need for Lhe producL arlses from one of Lhe !ohnson's baby's adverLs assumlng Lhe adverL ls
convlnclng enough Lhe consumer mlghL noL feel Lhe need of searchlng for lnformaLlon and would buy
lnsLanLly 1hls wlll also be because of Lhe brand lmage of !ohnson !ohnson Powever slnce adverLs for
our producL are rare Lhe need wlll largely be arlslng from lnLernal sLlmull or from wordofmouLh
Concerned moLhers ofLen dlscuss maLLers relaLlng Lo Lhelr bables wlLh oLher moLhers 1herefore
personal sources (relaLlves frlends eLc) wlll be mosL effecLlve when lL comes Lo baby producLs A
consumer may also use experlenLlal sources (examlnlng Lhe producL) Lo learn more abouL Lhe cholces
avallable
LvaluaLlon of AlLernaLlves
uurlng Lhe lnformaLlon search process Lhe consumer may come across four alLernaLlves Lhe local
!ohnson !ohnson producLs Lhe smuggled ones MoLhercare and lCl SofL 1ouch She would Lhen
evaluaLe Lhe four on her seL crlLerla for dolng so 8aby cares are senslLlve producLs slnce lL may affecL
Lhe healLh of Lhe baby 1hus moLhers wlll Lake lnLo conslderaLlon Lhe brand repuLaLlon