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Johnson & Johnson's 2015 marketing plan analyzes the company's current strengths and weaknesses, as well as opportunities and threats. It identifies JNJ's dominance in the healthcare market as a strength but notes weaknesses like lawsuits over illegal promotion of Risperdal. The plan proposes three strategies: implementing a prescription savings program, engineering a drug to treat a disease caused by antipsychotics, and expanding into foreign markets through meetings with officials. The goal is to improve customer loyalty, gain market share internationally, and address issues like Risperdal to benefit JNJ's performance in 2017.
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- 1. Johnson & Johnson Marketing Plan for the Year Ending on December 31, 2015 Hannah Joy Stacy MKT 456 November 5th , 2015
- 2. I. Executive Summary This marketing plan includes a detailed analysis of the current conditions of Johnson and Johnson (JNJ). It also includes a SWOT analysis that address JNJ’s strengths in its representation of one third of the health care marketplace and has increasing market share value and future expansion. The plan discusses JNJ’s weaknesses which address the Risperdal cases and future opportunities including how to rectify the damage caused by the drug in a moral attempt to help the wounded patients. The threats currently posing JNJ include cheaper, generic versions of prescriptions and websites like GOODRX that provide significant medication discount coupons accepted at most major pharmacies. Concerning all of these factors, there are three marketing strategies at hand. The first is to implement a prescription savings program card that will provide a competitive discount for all JNJ engineered medication. The second strategy involves JNJ engineering a drug to treat EPS; a debilitating disease caused by years of anti-psychotic usage and one of the long term effects of drugs like Risperdal. The third strategy includes continuous expansion of third world countries by initiating meetings on location with foreign officials in gaining market entrance into the country. 2016 net revenues are projected in the plan and JNJ must be willing to take a temporary profit loss in gaining integrity, customer loyalty and expansion. Ultimately, all three efforts will prove beneficial for the 2017 fiscal year if implemented correctly.
- 3. II. Current Marketing Situation 1) Market Analysis Along with the company’s domestic presence and continuous growth, JNJ has accumulated global market presence by utilizing its competitive advantage by the construction of products to fit specific and environmental needs targeted to the individual consumer. JNJ’s net profit margin currently dominates one third of the global health marketplace and has become a leader in pharmaceutical and product engineering. JNJ’s global market presence now includes the BRIC markets with a recent emphasis on expanding a 27 year long business partnership with China. Utilizing its headquarters in Suzhou, JNJ has recently expanded its growth to reach other Eastern markets such as India and Russia. With open availability to conduct product, consumer and environmental research in international markets; JNJ has begun pharmaceutical engineering for infectious diseases found in such regions and has capitalized on disease prevention worldwide. 2) Product Analysis Currently, JNJ offers a broad product span that reaches needs of multiple health care categories and ranges from consumer and prescription products to medical devices. JNJ’s consumer products include brands such as Neutrogena, Johnson’s Baby Care, Band-Aid and Tylenol. Medical devices offered include surgical equipment and related products used to treat maladies from diabetes, to aesthetics ranging from cardiovascular to urological needs; as well as offering multiple brands of prescription medication prescribed in categories including; Cardiovascular and Metabolism,
- 4. Immunology, Infectious Diseases and Vaccines, Oncology and Neuroscience. The table below shows a sales diagram of the total revenues from the three different product categories offered by JNJ for the year 2014. The second table shows JNJ’s net income for the past five years. Net Income 2010 2011 2012 2013 2014 (B) Billions 61.64B 65.04B 67.28B 71.26B 74.33B 3) Competitor Analysis Despite JNJ’s dominance in the industry, its primary competitors include Colgate- Palmolive Co., Procter and Gamble, Novartis AG, Pfizer Inc., and other independent pharmaceutical and health care manufacturers. The top three manufacturers otherwise
- 5. known as the “dividend kings” include JNJ as the leader, Procter and Gamble as second and Colgate-Palmolive Co. as being third. The title “dividend king” is relatable to stockholders as being a company whose title has acquired over 50 years of consecutive dividend increases in the stock market. When assessing what makes JNJ the lead competition, several factors hindering Procter and Gamble and Colgate Palmolive are currency devaluations in key markets, slower consumer acceptance rates of new products, and margin pressures as a result of higher input costs. JNJ is generating higher acceptance rates and profit margins on new products and medical devices; primarily a direct result of brand loyalty from long standing product lines such as Band- Aid, Tylenol and Johnson’s Baby Care. Because of its industry prevalence, JNJ poses a greater opportunity of worldwide expansion and improvement. 4) Distribution Analysis JNJ’s Procurement Organization is globally recognized and has its own procurement mechanism that partners with line management to provide a greater supplier network for the company. With the attempt to leverage overall knowledge, infrastructure and spending, JNJ has implemented two key categories in their distributional system. JNJ’s Regional Indirect Procurement Centers of Excellence (COEs) are locations that focus on the marketing, HR and management efforts of the company; while JNJ utilizes Category Teams that provide exceptional quality products and services to buyers at low costs and offer innovative ideas and solutions, superb supply continuity and manage suppliers by providing a focus on environmental and social responsibility. Additionally, JNJ recognizes the importance of having a diverse supplier base that reflects JNJ consumers around the world. JNJ established the Supplier Diversity Program in 1998
- 6. which portaged JNJ distribution with a variety of potential small and large business owned by a diverse demographic including veteran, female and minority. With the recognition of JNJ products, such businesses have obtained highly profitable opportunities by their partnerships while JNJ is further promoting its diversity and growth. 5) Macro-environmental Analysis Competitive opportunities involving new opponents to compete against JNJ and its other pharmaceutical engineering competitors proves very difficult as JNJ shows steady longevity, top manufacturing capabilities and highly efficient distribution systems since 1886. The issue at hand in the upcoming expiration of a multitude of JNJ prescription patents. Once each prescription expires, generic manufacturers are quick to reverse engineer the drug and make it a bioequivalent comparison as required by FDA regulations. Additionally; 19 million Americans are without healthcare and have limited insurance options. Newest technologies include cheaper RX alternatives for the non- insured or co-paying consumer include websites such as GoodRX that offer coupons on already genetically engineered prescriptions and pose the greatest threat on the brand name pharmaceutical industry. III. SWOT (Strengths, Weakness, Opportunities, Threats) Analysis 1) Strengths Despite the current issue with brand name pharmaceuticals; the number of aging individuals is on the rise which creates a greater need for health care. As research progresses, health care concerns and diseases are also rising which ultimately prove
- 7. opportunistic for companies such as JNJ to find solutions and research pharmaceutical treatment options. Ultimately, JNJ should continue to utilize its competitive advantage by its ability to construct products to the consumer needs as a method in which to profit by molding pharmaceutical engineering solutions to the various and contemporary health conditions that arise. 2) Weaknesses In 2013, JNJ admitted to illegally promoting the drug “Risperdal” to consumers when it had never been FDA approved and was deemed unsafe by the administration. JNJ paid more than $2.2 billion in order to resolve the matter. JNJ officials had been giving prescribers and both elderly and adolescence mental health care facilities incentives to prescribe the drug to vulnerable patients. In addition to court costs, JNJ agreed to the Corporate Integrity Agreement with the department of Health and Human Services Officer of Inspector General to increase legal accountability and transparency to prevent future occurrences. 3) Opportunities In relevance to the criminal cases, profits for JNJ did not face any consequences as sales continued to rise due to a continuance of brand loyalty for all other products of the company; as well as its international focus on expansion while obtaining negative domestic attention. Here inlays the opportunity to begin research on a disease called “Extrapyramidal Symptoms (EPS)” which includes disease categories such as Dystonia and Tardive Dyskinesia. A psychiatric patient can acquire this incurable disease after years of taking anti-psychotic medication such as the drug Risperdal. Limited research
- 8. has been conducted by physiatrists and the disease proves to be debilitating and often irreversible in most cases. With a primarily domestic advertising focus, JNJ could reprehend their former misuse of anti-psychotic medication with a remedy that would help life-long sufferers from behavior disorders that are now dealing with excruciating physical pain from EPS. Such unique identification and promise to resolve the disease with medication that does not contain debilitating side effects such as blurred vision of which all types of anti-spasmodic medication result in would prove greatly beneficial to those suffering and would additionally promote a better sense of customer integrity on behalf of JNJ. 4) Threats The biggest threat that currently faces JNJ is consumer accessibility of cheaper, generic-engineered prescriptions by use of available technology such as GoodRX for consumers without insurance or whose insurance does not cover all brand names prescriptions and for those who seek value over brand when purchasing their medication. Also, JNJ competitors are engineering similar forms of further advanced pharmaceuticals. Another potential threat for JNJ includes the previously mentioned Risperdal lawsuits. Risperdal was introduced to the market in 2003 and concerning JNJ’s illegal and aggressive marketing efforts in promoting the drug they paid a mere $2.2M that was split between the government and each of the 50 states. The concern is relatively new and television commercials are continuing to promote free legal help for Risperdal-effected patients. This is one of the two options for Risperdal sufferers. The patients that are unaware of drug manufactures and whose medical knowledge focuses on their doctors and pharmacists will began to notice symptoms such as tardive
- 9. dyskinesia; a form of EPS which is a permanent side effect known from taking Risperdal. These un-deserving patients will be prescribed even more medication to treat additional and debilitating symptoms that ultimately render their lives useless. Being the consumer conscious company that JNJ promotes itself, greater measures should be taken to assure the welfare of affected patients. 5) Issues Analysis - Is it possible for JNJ to offer prescription discounts for individuals without health care or to those who must pay higher co-pays? - Can JNJ engineer a medication to treat EPS with no side effects in order to rectify the damage caused by the Risperdal incident? - How can JNJ expand its products to more third world markets and enhance its European presence? IV. Objectives 1) Financial - To increase Net Income/Revenue to above 75,50B - To increase market share by 20% - To be willing to take an increase in profit in taking responsibility for Risperdal offenses 2) Marketing - Create a prescription savings program and other incentives for those who do not have health care or would prefer to buy generic due to the lower cost - Create and promote a medication that would be effective in treating EPS symptoms with no side effects and offer the medication to patients with documented tardive dyskinesia, dystonia or other forms of EPS at no cost in an attempt to reconcile the damage done by the illegally advertised drug Risperdal. - Discover health issues that are prevalent in countries without JNJ market presence and seek to treat those illnesses by ideally targeting government
- 10. official’s environmental health issues therefore allowing entrance into the country to treat the citizens. V. Strategy Strategy Statement for Johnson and Johnson Target Market: 1- Uninsured or value seeking health patients buying prescription 2- EPS patients 3- Foreign Officials in countries without JNJ market presence Positioning: 1- Promote TV ads and brochures that list all of the medications manufactured by JNJ and offer discounts and promotions on brand name prescriptions. Also check online RX discount websites and position the savings program as offering even lower costs than the websites. 2- Engineer a drug to treat EPS symptoms that has much less side effects than the drugs already on the market that all cause blurred vision; rendering the patient unable to function and can also increase muscle spasms and pain depending on the progression of the disease. 3- Make cordial arrangements with foreign officials in that specific country and question them about their own health care problems and those they see effecting their country. Also show graphs of how many countries are already using JNJ products. Product Line 1- Offer savings cards that will be accepted by all major pharmacies with the JNJ logo on the front 2- Attempt to make the EPS drug as an injection as the symptoms require immediate relief
- 11. 3- Bring “goody” bags filled with common JNJ products and pass them out to all government officials to try and use at home. Price 1- Require a minimum purchase to obtain the savings card or a monthly fee 2- Ideally, the drug JNJ should engineer should be distributed to all documented EPS sufferers at no cost. 3- Research the currency of that country and adjust prices accordingly. For government officials, offer initial products as a gift for entrance into the country to treat lower class citizens. Distribution Outlets 1- Offer the registration process online or by mail which would require the initial payment upon registering 2- Attempt to distribute EPS medication to as many in-patient facilities as possible, promote it just as fiercely as JNJ did with Risperdal in an attempt to gain and improve brand integrity. 3- Utilize JNJ employee connections to set up meetings in official’s home countries. Salesforce 1- Send representatives to doctors and pharmacies to discuss savings program 2- Utilize HR employees to publicly discuss apology and what JNJ plans to do to rectify the situation. 3- Send JNJ representatives fluent in language of foreign country Service 1- 24-hour customer service line available to all card holders 2- Detailed description of new EPS drug mailed to all patients
- 12. 3- JNJ employees ready to re-locate to new markets and willing to work with foreign diseases Advertising 1- Emphasis on social media platforms as the majority of Americans without health care utilize them the most. Will promote the savings program and design an app where customers can search the different JNJ medications to see if theirs is covered under the savings program. 2- Promote the new drug to legal firms that currently represent Risperdal patients as well as in patient facilities and physiatrists worldwide 3- Design ads that are culturally acceptable in foreign country once entry has been permitted. Sales Promotion 1- Offer a special discount for the first 500 customers that register for the savings program 2- Emphasize to physicians that the new EPS drug has less debilitating side effects 3- Create partnerships with foreign countries and agree to sale products in reputable stores Research and Development 1- Research and target the demographic without healthcare 2- Collect case studies of individual, out-patients dealing with EPS and how to treat those functioning in society with the disease 3- Assure that the country’s governmental officials are not of a selfish nature and strive to keep all outside help, benefits and technological advances to themselves. Marketing Research 1- Make constant improvements to savings program app and advertisements on social media platforms
- 13. 2- Perform studies of in-patients and out-patients and the specific type of drug that must be engineered to bring hospitalized individuals back into society and be successful. 3- Study the trends, cultures, and nature of the country and how JNJ presence would benefit both the company and its new markets. VI. Action Programs In order to achieve these three different strategies, JNJ must be willing to consider ethical values at the cost of losing profit but gaining future business as a result. For the savings program, it is necessary for JNJ to realize that both generic drugs and more efficient competitor drugs pose a great threat for future business and must implement this savings program not only to help the un-insured, but to acquire brand loyalty in the quest for value. As for the EPS drug; once it has been constructed by at least May 2016, JNJ must recognize the damage caused by Risperdal and utilize compassion in rectifying the damage it caused to patients. For the third strategy, JNJ clearly dominates the international health care market; however, there is always room for expansion. VII. Projected Basic Income Statement Total Revenues for 2016 $72,000,000,000 Total Revenues for 2017 $80B,000,000,000 If JNJ should decide to implement these strategies, there will be a minor financial drop in total revenues at the cost of the savings program losses, delivering the EPS medication to wounded patients at no cost, and the money that is put into expanding markets. Although the amount for 2016 is a significant drop from 2015, the loss will have been well worth the advantages and new customers obtained. VIII. Controls
- 14. In order for this marketing plan to be implemented, certain controls must be addressed. It is necessary to adhere to both the SWOT analysis and the marketing strategy when considering the future of JNJ. Ultimately, implementing the three strategies will prove worth any financial loss as sales should project higher the following year and the company will have increased and expanded customer loyalty and sales.
- 15. Sources: "Factors Affecting Johnson and Johnson." Factors Affecting Johnson and Johnson. Web. 6 Nov. 2015. "Justice News." Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil Investigations. Web. 6 Nov. 2015. "Johnson & Johnson Strategic Framework." Johnson & Johnson Strategic Framework. Web. 6 Nov. 2015. "Our Performance." 2014 Data Summary Report. Web. 6 Nov. 2015. "Our Approach." Our Approach. Web. 6 Nov. 2015. jnj.com "Our Health Care Products." J&J Health Care Products and Services. Web. 6 Nov. 2015.