Other than the brand image established this far, the Aveeno brand line draws strength chiefly from the fact that parent company Johnson & Johnson (J & J) is long-established, having been founded in the United States in the 1880s (Johnson & Johnson 2009a 1). From that early start making sterile sutures, the company expanded to more than 250 companies operating in 57 nations globally and employing 119,400 people (Johnson & Johnson 2009b 1).
Aveeno also draws strength from synergies with the rest of the company product line to exude powerful claims to skin care therapy. First of all, J & J reckons itself the world’s ‘premier consumer health company’, the ‘world’s largest and most diverse medical devices and diagnostics company,’ the world’s third-largest biologics company and the sixth-largest pharmaceuticals company. Secondly, Aveeno benefits from the presence of company brands grouped into Consumer Health Care, Medical Devices & Diagnostics, and Pharmaceuticals (Johnson & Johnson 2009b 1).
This means that J & J will consistently strive to maintain the primacy of mind share in consumer and professional-medical markets. Within Consumer Health Care itself, J & J competes in skincare and many other fronts: Baby Care, Hair Care, Topical Dermatologicals, Oral Health Care, Women’s Health, Over-The-Counter Medicines and Nutritionals (Johnson & Johnson, 2009c, 1).
Taking a leaf from the product scope of parent J & J, the company has subdivided the core skincare line into facial care, body/bath products, lip care and sun care (Aveeno 2009a 1). Aveeno also seems convinced it can leverage the expertise of J & J in baby care. And the company feels comfortable extending these consumer care franchises into pharmaceuticals, initially with forays into anti-pruritic (symptomatic itch relief) and anti-infectives (cold sore preparations.
Table 1: The Aveeno USA Product Scope (Source: Aveeno, 2009a).
|CATEGORY||Product Line||CATEGORY||Product Line|
|FACIAL CARE|| ||BODY CARE|| |
|LIP CARE|| ||BABYCARE|| |
|SUN CARE|| |
Product diversification aside, Aveeno strives for consistency with company heritage by focusing (with varying success) on the product attribute of natural-source ingredients. Thus, the company logo adheres to the theme, “Active Naturals: The beauty and nature of science”. For example, the hair care line employs the theme “nourishes damaged hair back to life” and thereby positions Aveeno at the other extreme from “harsh” synthetics that are perceived to strip hair of its luster and life. Secondly, Aveeno headlines the claim “discover the science of Active Naturals”. As well, advertising for core brands makes profuse use of plant visuals.
Making the conceptual leap from claiming natural-source content, while certainly very appealing to the contemporary consumer who values herbal-source over synthetic additives (HT Capital Advisors LLC, 2007), to compelling consumer benefits has had mixed success. For instance, the corporate theme may incorporate attractive keywords but not in a way that conveys a selling proposition. In contrast, a previous Merrill Lynch theme “where the bulls run” and constant use of the bull her visual clearly communicated the consumer segment the financial advisor wanted and the benefit of aspiring to cash in on the next stock market bull run.
Owing partly to the inroads of competition on every front and the plain fact that there are many possibilities of natural healing from herbal sources, Aveeno has an extremely diverse product line. There are skincare brands for a broad range of natural-source ingredient/benefit combinations: “clarifying” for getting rid of acne and blemishes, the “positively radiant” and “continuous radiance” lines for an evening out skin tone and surfacing the user’s “naturally radiant” complexion, “daily moisturizing”, “ultra calming” to work on redness and irritation, the “skin relief” and “advanced care” lines positioned for especially dry and itchy skin, the “stress relief” line for natural calming, “positively ageless” to tone skin and diminish incipient wrinkles, even the “positively smooth” brand line of depilatory (Aveeno 2009b).
Offered in both regular and fragrance-free versions, the “Skin Relief Moisturizing Lotion” that is the subject of this strategy paper is part of a nine-product range in one sales-keeping unit (SKU) each (Aveeno 2009c) that are formulated for moisturizing while soothing very dry or irritated skin. These are: regular and fragrance-free moisturizing body wash, “soothing bath treatment” and the generically named “shower and bath oil” to combat skin irritation, an overnight cream, moisturizing cream and a “therapeutic” shaving gel for easily irritated skin.
Colloidal oatmeal” is the core ingredient across the entire “Skin Relief” line. In addition, regular Moisturizing Lotion has menthol for symptomatic relief and sustained 24-hour” moisturizing action (Aveeno 2009d). For its part, the fragrance-free version contains shea butter and is positioned against those who are concerned that their moisturizer might “clog” their pores and thereby cause eruptions of acne or other skin irritations (Aveeno 2009e)
Perhaps the biggest stumbling block of Aveeno is that it is a parity brand. Certainly, the anti-inflammatory benefits of colloidal oatmeal are well-known (see, e.g., Alexandrescu, Vaillant, and Dasanu, 2006). Many spas offer oatmeal soaks and other strongly-advertised brands have oat-based extensions: Avon, Suave, Nature’s Gate, Nubian Heritage, Johnson’s itself, Curad, TIGI Bead Head Body, Skin Ther, Hugo, etc.
The fragrance-free moisturizing lotion is sold in a white, pump-top plastic bottle with blue accents and an oatmeal watermark. In turn, regular moisturizing lotion is offered in beige with blue accents. Both the 200ml standing tube of the latter extension and the pump-top are all too common in the health and beauty business. The beige color is consistent with a product formulated around natural oatmeal, oat oil, oat extract. However, it is the mostly-white SKU that contains shea butter.
Shea butter has caught the imagination of skin lotion users for some time now, owing to its moisturizing and emollient properties. For its part, Aveeno touts this extract from Shea tree nuts as providing Vitamins A and E and hence, nourishing the skin and, in common with all others in the product category, ‘…reinforce(s) the skin’s Moisture Barrier’. In positioning the fragrance-free lotion with Shea Butter for extra-dry, sensitive skin, Aveeno comes up against all rival offerings for drier-than-normal complexions.
As a company that must operate in consumer health care within varying cultures and under differing laws, J & J is careful to tread the fine line of ethical behavior. Hence, the group proclaims itself as putting the needs of people first, participating in disease prevention with ceaseless research and development, searching constantly for ‘safer and more effective alternatives, which they then strive to make as affordable and accessible as possible (Johnson & Johnson 2009d 1). Quality and safety are desired hallmarks for J & J products, with the additional dimensions of mildness and being hypoallergenic applying to the Aveeno line. Clearly, Aveeno is part of a conglomerate that is to be trusted.
Opportunities in the Skin Care Category
The domestic skincare market is sizeable. It is part of a broader soap and toiletries preparation industry with an estimated ex-factory value of $84.7 billion as of 2006 (U.S. Census Bureau 2009 1). At last count, retail value amounted to a little over $45 billion as of 2004. That translates to per-capita spending of slightly under $500 annually for the adult female American population. Growth has been sluggish, with the negligible 2003 growth rate of 0.8% apparently typical of performance in this decade (Briney 2005 42).
In Europe, Rudd (2005 1) demonstrates that skincare products are the most vibrant of the total toiletries and cosmetics industry. By way of example, French body care sales in mass-market outlets rose a buoyant 15.4% in 2004, despite the recession then plaguing Central Europe. The category also managed 4.4% growth in 2004 to $701.6 million (at the exchange rates prevailing then). In Spain, body care products as a group showed exactly the same growth rate as in France (up 15.4% to $196.4 million).
Nonetheless, opportunities remain in line extensions and new product formats fuelled by constant R & D. Given that skin lotion usage is highest during the summer months, manufacturers have looked with interest at hair preparations and color cosmetics that incorporate either UVA/UVB shielding ingredients or AHA to effortlessly exfoliate and ‘renew’ skin damaged by exposure outdoors. Aveeno already incorporates UV protection in a handful of brand extensions.
Threats in the Skin Care Category
In a highly competitive category where leaders are single-mindedly focused on skin lotion, there is the perennial threat of quick and massive retaliation for any aggressive advertising campaigns or price discounting Aveeno might embark on.
The SWOT Summary
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Finding and Leveraging Competitive Advantage
Orthodox strategic thinking – based on the above SWOT and the Five Forces framework (Porter 1991 pp. 97-99) – would focus on leveraging the not-inconsiderable strengths of J & J/Aveeno to enlarge the share of the category. There is room to entice non-users into beginning to apply skin lotion more frequently, particularly as the population profile continues to age and makes wrinkling, dryness and sagging more widespread.
Such a frontal attack on brand share gains would seem to call for a marketing mix heavy on mass-media advertising, product sampling, testimonials by end-users, dermatologists or user surveys (though perhaps more credible and scientific than what has been done so far in Aveeno 2009a 1). Target marketing could balance outdoor/sports and cosmetic benefits so as to co-opt the male market as well. The distribution mix could well make more aggressive use of online sales since nearly three-fourths of the U.S. population already have Internet access (Miniwatts Marketing Group 2009 1).
Within the Aveeno brand line, there is the scope of course for cross-selling, such as that contemplated between Skin Relief Body Moisturizer and the Intensive Dry Skin range. Given an already-wide product range, Aveeno should not hesitate to make the most use of abundant cross-merchandising, bundling and cross-selling opportunities.
Since Eucerin looms large in the domestic market, the optimal competitive strategy would appear to embrace:
- At least matching rival-brand spending in mass media and online advertising, dollar for dollar.
- Neutralizing the likely popularity of Eucerin amongst dermatologist-endorsers by asking very prominent dermatologists to endorse a complete product regimen centered on Aveeno Skin Relief Body Moisturizer. Alternatively, Aveeno must rise above competitive clutter by hiring a celebrity endorser.
- A line extension revolving on vitamins A, C, E and ingredients like coenzyme Q10 or ceramides should be seriously considered so that the brand continues the company transition to a semi-ethical positioning.
- Aveeno advertising should therefore take a very authoritative, clinical tone.
Marketing Strategy and the ‘Blue Ocean’ Concept
Kim and Mauborgne’s Blue Ocean Strategy is a challenge to avoid the profit-draining ‘red ocean’ of bloody competition by forging exclusive market space where competing brands cannot go or are irrelevant. The authors contend that the chances of success and competitive advantage in the long term lie in avoiding the head-on confrontation implicit in the Porter model (1998):
- DO NOT compete in the existing market space. INSTEAD, you should create uncontested market space.
- DO NOT beat the competition. INSTEAD, you should make the competition irrelevant.
- DO NOT exploit existing demand. INSTEAD, you should create and capture new demand.
- DO NOT make the value/cost trade-off. INSTEAD, you should break the value/cost trade-off.
- DO NOT align the whole system of a company’s activities with its strategic choice of differentiation or low cost. INSTEAD, you should align the whole system of a company’s activities in pursuit of both differentiation and low cost.’ (Kim and Mauborgne 2005, pp. 49, 82, 102, 117, 143, and 172)
Granted, the company has already achieved significant R & D breakthroughs in broadening its product offerings. Innovation is certainly one way to reconstruct market boundaries, reach beyond existing demand, and thereby create a blue ocean that is all one’s own.
In the product enhancement arena, four ways to do so involve strengthening the Aveeno product formulation with high-absorbency nano-molecule penetrators, alpha hydroxy acid (AHA), and ingredients to minimize cellulite. Early interest by rival companies suggests that the anti-cellulite benefit is a compelling one. The segment may also be ripe for an aggressive, premium-image brand to take leadership.
Mature women, even those slightly overweight, are also prone to cellulite and are therefore particularly inhibited about skimpy attire in summer. The personal care products manufacturers have responded with, as mentioned previously, ‘firming gels’ and anti-cellulite patches. The embryonic nature of the latter product segment notwithstanding, there are encouraging indicators in a slew of activity across the Atlantic as early as 2004.
Thus, L’Oreal Paris already introduced with typical French élan Body Expertise PerfectSlim patch, which releases anti-cellulite active ingredients like caffeine for up to eight hours. Sensing an opportunity, me-too brands quickly came to market in Spain from the likes of Vitesse (Reductor X-Press), Comodynes (Body Reductor) and Isdin (Celulit Patches Reductores).
Other developments highlight the range of specialty ingredients already available to the industry:
- Direct topical treatment in a concentrated ‘serum’ employing a combination of cellulite-draining mandarin zest, fruit essences (AHA, to smoothen skin) and caffeine (to ‘restore’ contours). An example is Garnier’s Bodytonic Rollerball Anti-cellulite Serum.
- The ‘regimen’ type of product entry is exemplified by urging women to first use a peeling product (AHAs and citrus extracts), followed by an anti-cellulite horse chestnut (chiefly to ‘drain away‘ those persistent collagen pockets that give skin its ‘orange-peel’ appearance), caffeine to for the ‘contouring’ benefit, and end with pampering ‘body milk’ for intensive moisturization. Diadermine by Henkel’s is an example of a brand sold as a set.
- Co-enzyme Q10 and isoproteins return as topical lotions to promote firmness, elasticity and minimize cellulite (e.g. Nivea’s Le Soin Intensif Anti Peau d’Orange). Combined with guarana for its high caffeine content, cocoa butter, tamanu oil and algae extract, co-enzyme Q10 also happens to be a vital active ingredient in Tesco’s Skin Wisdom body care line. Skin Wisdom stretch marks and cellulite.
- Retinol, a vitamin A derivative with proven wrinkle-effacement ((Kafi et al. 2007) and therefore anti-aging benefit, is absorbed through dermal layers, improves skin regeneration, and stimulates collagen production. An example is Retinol Anti-Cellulite Modelling Plus by RoC.
- In turn, a combination of ceramides (for skin regeneration), vitamin E and antioxidants can be promoted for ‘contouring’ and reducing cellulite, as in Boots’ No7 line that now includes Fabulously Firming Cream and Super Slim Anti-Cellulite Contouring Balm.
- Plant proteins and spray-on ‘tightening polymers’ have taken skin firming one step further to hold out the promise of a non-surgical bust lift (e.g. YSL Beaute’s Total Fitness slimming gel and Spray Buste Ultra-Lifting, and the Estee Lauder Body Performance Line with Toning Bust Serum).
- A formulation combining wheat protein, algae, green coffee, bitter orange and guarana has been marketed for slimming and lifting sagging buttocks (e.g. the Italian brand Collistar Lifting Glutei.
- Employing Peruvian creeper to ‘forestall fat formation’, agrimony for its astringent and ‘microcirculation’ effect, and moisturizing phospholipids have also been tried. An example is Clarins’ Total Lift Minceur.
- For more mature skin, Lancome has added a body lotion to its Absolue line. Absolute Replenishing Body Cream is said to be intensely moisturizing and firming as well as anti-aging. Wild yam extract stimulates lipid production, soya extract and brown algae boost collagen and elastin formation to firm the skin, and “vitamin CG” and capryloyl salicylic acid even skin tone and prevent age spots.
- To try and latch onto mechanical exfoliant benefits, mainstream brands have also used scrubs in an attempt to create a spa in the bathroom. Crabtree & Evelyn’s La Source is a spa sub-brand that has recently been joined by Sea Salt Body Polishing Scrub, a nutrient-rich product featuring marine extracts. E’spa’s Detoxifying Salt Scrub mixes sea salts with nourishing and invigorating essential oils.
- Spas are also in on the action when it comes to hand care. Elemis just launched Intensive Hand Repair, which promises anti-aging, skin lightening and anti-oxidant activity to produce satin-smooth, silky hands and conditioned nails.
- Naturally, the industry hopes that this frenetic launch activity can revive body care sales. However, while value-added products such as slimming and anti-aging formulas may shore up sales to some extent, it remains to be seen whether breakthroughs like anti-aging can give a lift to unit sales once again.
Alexandrescu, D. T., Vaillant, J. G. & Dasanu, C. A. Effect of treatment With a colloidal oatmeal lotion on the acneform eruption induced by epidermal growth factor receptor and multiple tyrosine-kinase inhibitors. Clinical and Experimental Dermatology, 32, 1: 71 – 74, 2006.
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