Suggestions to enforce promotion stratergies of johnson johnson company in vietnam (2006 2008)

The second chapter introduces the Johnson & Johnson Company and its products and promotion strategies.. In this chapter, we will discuss fourtypes of promotion mix: advertising, sales pr

HCMC UNIVERSITY OF FOREIGN LANGUAGES AND INFORMA nON TECHNOLOGY

DEPARTMENT OF INTERNA nONAL BUSINESS ADMINISTRATION,

The time has come now that I have finished my paper after many

•

months of hard work with invaluable help, advice, and encouragement from

my teachers, family, friends, and Johnson & Johnson Company

First of all, I would like to acknowledge my sincere thanks to thesteering committee of HUFLIT that provided me and other students withgood environment to study during these four years (2001 - 2005) At thesame time, I would like to thank also all the teachers of HUFLIT, especially

Dr TRAN DUYEN BlNH, my advisor, whose instruction and guidance hasmade the compiling of this graduation paper possible

Secondly, my special thanks are also due to Johnson & JohnsonCompany for supplying me with many valuable information, data, materials,and experience in marketing activities, particularly in promotion field

Finally, I would like to take this opportunity to express my gratitude

to my family and friends for their constant support and encouragementduring the time I do my research It is no exaggeration to say that I couldhardly obtain this achievement without their enthusiastic help Once again, Iwant to express my thankfulness to all those who have given me a helpinghand in completing this thesis Thank you very much

Ho chi Minh City

May 29, 2005

Practicality

Promotion is one of major elements of the marketing-mix Without promotion, no company can survive in the fiercely competitive market because nobody knows its product In recent years, a lot of different health-care products have been offered to

Johnson&Johnson Company To compete with other health-care producers, the company should revise and adjust its promotion strategies The research paper focuses on enforcing the promotion strategies of the company, so that its practicality is justified in terms of applying marketing knowledge and skill that have been learnt to a specific case.

Content

The paper contains 3 chapters that are in a rather systematic arrangement Chapter I reviews briefly the main elements of promotion in the marketing mix The second chapter introduces the Johnson & Johnson Company and its products and promotion strategies Though the introduction to the company and its products looks rather long, it gives vivid pictures of the company's evolution and health-care products The chapter also provides the company's 5-year data of sales, promotion cost and net income The last chapter first considers the competitors of the Johnson&Johnson Company and their market shares in baby, adult and wow care products Then it gives some suggestions to enforce the company's promotion strategies such as free samples, trade discount, accumulating point, live-shows, conferences, outdoor posters, subsidiary opening, television program sponsor, more budget for adult and wow-care products, and co-ordination between marketing and production departments.

Suggested Grade: Excellent

Ad~

Dr TRAN DUYEN DINH

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This thesis consists of three chapters Chapter 1, "An Overview of

Promotion", deals with some definitions of promotion, the importance ofpromotion, and the promotion mix In this chapter, we will discuss fourtypes of promotion mix: advertising, sales promotion, personal selling, andpublic relations Chapter 2, "An Overview of Johnson & Johnson Company",

is divided into four parts The first part tells the history of Johnson &

Johnson Co and we will get an idea of how it was established and developed.The second part introduces some product lines of Johnson & Johnson Co.After that, we will touch on "Promotion Strategies of Johnson & JohnsonCompany in Viet Nam" Combining advertising, sales promotion, and publicrelations is the promotion strategy that Johnson & Johnson Co chooses toimplement "Analyzing the Effects of Promotion Strategies on the Johnson

& Johnson Company's Business Activities" is the last part in this chapter Ithelps you understand how promotion strategies can affect the enterprise'ssales revenue Finally, Chapter 3, "Suggestions to Enforce Promotion

Strategies of Johnson & Johnson Company in Viet Nam (2006-2008)",

refers to the competitors of Johnson & Johnson in Viet Nam and suggestssome ideas to enhance its promotion strategies

Page

A Baby Care Products

B Adult Care Products

C Wow Care Products

2.3 PROMOTION STRATEGIES OF JOHNSON & JOHNSONCOMPANY IN VIET NAM

Johnson & Johnson Company's Income Statement 50

D Buyer Readiness Stage

G Push Strategy versus Pull Strategy

List of Figures

Page

Figure 1.1: Role of Promotion in the Marketing Mix 5

Figure 2.12: Carefree Intimate Feminine Wash 42Figure 2.13: Net Income of Johnson & Johnson Company from

Figure 2.14: Promotion Expense of Johnson & Johnson Company

Figure 3.1: The Market Share of Johnson & Johnson Company and

Figure 3.2: The Market Share of Johnson & Johnson Company and

Figure 3.3: The Market Share of Johnson & Johnson Company and

Figure 3.4: Relative Importance of Promotion Tools in Consumer versus

Figure 3.5: Push Strategy versus Pull Strategy 64

Johnson &Johnson is a famous company in health care products Ithas more than 200 operating companies all over the world and producesthousands of products in hundreds of categories, all designed to help youand your family lead healthy and happy lives Besides, Johnson &Johnson is the company that not only focuses on making profit but alsoimproves the health and welfare of people to help them live longer andhappier This company produces and sells products that meet a widerange of human care needs, including baby care products, women's healthproducts, skin and hair care products and so on And in most of themarkets where their products participate, they are market leaders.Johnson & Johnson pursues the goals outlined through aggressive plansfor expansion It makes innovation not only in the products but also ineverything it does

I'm really interested in carrying out this topic because I'm veryfond of children, and Johnson & Johnson is the company that helpsimprove people" s health in general and baby'Is health in particular Byusing Johnson & Johnson's products, babies will grow up healthily with abright future in a peaceful world Thus, I choose to do this thesis

The objective of this research is to provide some suggestions tomake promotion strategies of Johnson & Johnson Company more

effective Because of limited time and knowledge, the scope of thisgraduation paper is only in promotion field within Johnson & JohnsonCompany.

There are two kinds of approaches in the research: synthetic andanalytical methods These methods are applied to reading textbooks,articles, Johnson & Johnson's financial statements, reports and othersources

In Chapter 1, an overview of promotion refers to a general conceptabout promotion Chapter 2, "Promotion Strategies of Johnson &Johnson" introduces Johnson & Johnson Company and their promotionstrategies in Viet Nam And last but not least, Chapter 3 will suggestsome promotion strategies to make Johnson &Johnson more powerful inthe market

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. -CHAPTERl

AN OVERVIEW OF PROMOTION

1.1 THE DEFINITION OF PROMOTION

Nowadays, the survival of a company depends on not only productdevelopment, the organization structure and the financial managementbut also the enterprise's promotion strategy It has become the mostpopular strategy and cannot be absent in all companies First, anorganization has to inform a new product to the potential customers andtell them its attributes as well as the benefits they will have from using it.Then, it persuades the customers to buy its products and after a long timeusing such a product, it reminds them that this kind of product willcontinue to provide benefits So, we see that the role of promotion is toinform, persuade and remind the company's target market about itsproducts and its activities

There are many definitions of promotion Steven J Skinner (1994)stated that "Promotion refers to any communication activities used toinform, persuade and remind the target market about an organization'sgoods, services and ideas to its target and its activities." Iput it anotherway, promotion is communication by marketers that informs, persuadesand reminds potential buyers of a product in order to influence their

I Steven 1 Skinner, Marketing. 2 nd ed (Houghton Mifflin Company, 1994), p 115.

opinions or elicit a response However, Elizabeth Barnes (1997) definedpromotion as "Promotion exists to assist people in an organization inmaking contact with the people who are going to buy and use servicesthey are offering." Another definition stated that "Promotion iscommunicating information between seller and potential buyer or others

in the channel to influence attitudes and behavior." 2In my opinion,promotion is nothing more than some forms of communication throughwhich you communicate the benefits of your offering to the targetcustomers in such a way that the market recognizes that your offering isuniquely qualified to meet their needs In short, promotion is thepersuasive communication designed to sell a product to potentialcustomers or end-users

1.2 THE IMPORTANCE OF PROMOTION

Promotion plays an important role in any kind of business Without

it, companies cannot survive in the market because nobody knows theirproducts No one can deny that a successful enterprise is the one havingeffective promotion strategies Thus, in order to develop their business,all companies have to look for suitable promotional strategies so that theycan promote their products to all consumers

2 William D Perreault, Jr., Ph.D and E Jerome McCarthy, Ph.D, Basic Marketing (Irwin Hill, 1999 ), p.382.

McGraw-As Figure 1.1 shows, promotion is an efficient tool in the marketing mix- product, place (distribution), promotion and price The promotion strategy or promotion mix, which the marketing manager determines, must be in accordance with the company's overall goals Then, the marketers combine the elements of the promotion mix into a coordinated plan Finally, the promotion plan becomes an integral part of the marketing strategy for reaching the target market.

Overall marketing objectives

Promotion can help companies communicate with their customers

in an effective and assertive way to make customers buy the company'sproduct Because to some people, image is everything and they arewilling to pay more money to buy something with a quality reputation or

a famous brand For example, a clothing manufacturer in the North ofEngland who makes suits for many major retailers can sell his productmore expensive by attaching a well-known brand name This means somecustomers would rather pay dearly for the image than modestly for thesame quality Through promotion, the consumers are provided theinformation of the product's characteristic, price and availability Oncecustomers are informed about the new product, the promotion's task aidsthem understand how the product works and the benefit it can provide.Then, it builds up the buyer's trust in the product and convinces him orher that the benefits outweigh the costs so that he or she will go out andbuy it Thus, promotion may increase sales in stimulating the demand forthe product by persuading that purchase of this product will lead tosatisfaction

Promotion is the thing that can help the managers succeed in doingbusiness because it not only helps them attract new customers but alsoretains the old ones You know, companies that do not pay enoughattention to customers will find their buyers indifferent to their products

For example, Duc Phat is a well-known company in Viet Nam So, theirpromotion's task is to increase trust and belief in the consumers However,they never fail to utilize strong promotion strategies to promote theirproducts in the market Therefore, Duc Phat becomes one of the mostfavorite bakeries in Viet Nam.

Convincing target customers that the goods and servIces canprovide a differential advantage over those of competition is the mainfunction of promotion A differential advantage is the company's uniquefeatures that you cannot find in other organizations such as rapid delivery,low prices, excellent service or high product quality For example,Colgate toothpaste promises to keep children from tooth decay is adifferential advantage of Colgate because it makes Colgate different fromtheir competitors such as PIS toothpaste Therefore, promotion is a vitaltool of marketing mix by informing consumers of a product's benefitsand thus positioning the product in the market place

In conclusion, it is very important to continually remind customersabout the existence of the product as well as the satisfaction thepurchasers are provided And promotion can help all companies do it veryeasily However, we should remember that promotion by itself could notsell a product or service if the need of the product or service is not there.Promotion cannot create need and will not push the customers to

purchase The function of promotion is to create awareness and conveyinformation.

1.3 PROMOTION MIX

Without question, promotion IS one of the most complicatedelements in the marketing Many business owners think of promotion asadvertising Certainly, it is not correct Advertising is only one of the fourfactors in promotion It is designed to communicate with the buyers andpersuade them to make a purchase There are four alternatives inpromotion: advertising, personal selling, sales promotion and publicity orpublic relations Promotion mix is defined as "The combination ofpromotion types used to reach a target audience and accomplish apromotion goal.,,3

The management believes that the proper promotion mix is the onethat will meet the needs of the target market and fulfill the organization'soverall goals Promotion mix is used because all organizations havelimited funds to spend on promotion and advertising Thus, eachcompany needs to decide which promotion tools will be suitable for them

in order to achieve its organization's objectives most effectively andefficiently A well-coordinated promotion mix will help the enterprise notonly reduce the promotion costs but also reinforce the effect of promotion

in the customer's demand

3Carolyn F Siegel, Marketing Foundations and Applications ( Irwin Mirror Press, 1996 ), p.380.

Today, advertising becomes one of the most popular and biggestbusiness industries It is a medium especially for communicatinginformation about companies and products Companies that want tocommunicate the information about themselves and their products tocustomers pay for advertising whether it is an advertising that costsmillion dollars or only a simple advertising in a newspaper Every year,they spend billions of dollars on it Every day, we see and hear a greatdeal of advertising in newspapers, magazines and journals, or ontelevision, radio or outdoor advertising such as posters, bus sides and so

on Producers use it as a powerful tool to compete with other rivals orcompetitors

Kotler defined advertising as "Advertising is any form of personal presentation and promotion of ideas, goods or services by anidentified sponsor." 4 However, there are several other definitionsconcerning advertising:

non-The Oxford Dictionary of Business English (1993) stated that

"Advertising is the act of making a product, a service, a job vacancy, anevent, etc, publicly known." And according to Lamb (1992) "Advertising

is any form of impersonal, one way, mass communication that is paid for

'Philip Kotler and G Armstrong and Sak Onkvisit, Basic Concepts & Practice Marketin (James R.

Pinnells, 1998), p 406.

by the sponsor."s While the other definition explains "Advertising is personal persuasive marketing communication, mostly conveyed in themass media and paid for by an identified sponsor who controls themessage." 6To summarize, advertising is a "paid for" communicationused to develop attitudes, create awareness, transmit information in order

non-to gain a response from the target market and the sellers employadvertising to dispatch their persuasive information about their products,services or organizations

Advertising's types are determined by the company's promotionobjective Institutional advertising is used when the enterprise'spromotion plan aims to build up a good image for the company or theindustry while product advertising may be used to enhance the sales of aspecific good or service Unlike institutional advertising, productadvertising promotes the benefits of merchandises or services

The importance of advertising is shown by its huge cost that all thecompanies have to pay Of course, a company uses advertising to maketheir products known by the public At least 8% of the organization'srevenues are spent on advertising and sometimes greater For instance,Unilever Corporation spent 15% of its revenues (36 billion VND) in 2004

to advertise their products

S Charles W Lamb, Jr., Joseph F Hair and Carl Me Daniel, Principles of Marketing(USA: South

Western Publishing Co Cincinnati, Ohio, 1997), p.206

6Carolyn F Siegel, Marketing Foundations and Applications (Irwin Mirror Press, 1996), pAOS.

One of the main advantages of advertising is its ability tocommunicate to a large number of people at one time Cost per oneaudience, therefore, is actually very low Besides, advertising can help themanufacturers reduce production cost and improve their product quality.

It means the consumers will have a better quality product with a lowerprice Because when the advertisers contact with potential buyers morefrequently, they will have more opportunities to understand their needsand wants so that they can produce the goods that the customers desire

By manufacturing desirable products, companies increase consumer'sdemand making production cost per one product decreases

By informing the changes of products immediately to the buyers,advertising can aid producers increase the product's price, achieve moremarket share and reduce distribution costs In addition, advertising makesthe customer's buying decision easier by providing new and usefulinformation of the products in the market so that they can save timelooking for new commodities Moreover, advertising is impersonal, soeveryone receives the same message It can be repeated many times toreach several customers in different regions Through advertising, thecompanies give the purchasers an impression of big, powerful andsuccessful organization

Yet, it has some drawbacks or disadvantages Advertising is public,

so it may not be as persuasive as personal selling It is not a two-way

communication, thus, the audiences can ignore or pay no attention to themessage it wants to convey Also, it is very expensive to produce anddistribute an advertising Though the cost per one audience in advertising

is very low, the total cost of advertising is typically very high Therefore,only financially strong company is able to afford advertisement

To conclude, advertising can be described by the words AIDA:getting attention, holding interest, creating desire and finally leading toaction

B) Sales Promotion

Sales promotion is another factor in promotion mix designedmainly to stimulate consumer demand for a product either by loweringthe price or by adding extra value According to The American MarketingAssociation, sales promotion is "Those marketing activities, other thanpersonal selling, advertising and publicity that stimulate the customerpurchasing and dealer effectiveness such as display, show andexpositions, demonstration and various non recurrent selling efforts not inthe ordinary routine." Another definition stated "Sales promotion is anactivity or material that offers customers, wholesalers or retailers a directconclusion for purchasing a product."

Sales promotion can support advertising by increasing trialpurchases, and repeat purchases It is also used to encourage brandswitching and to build brand-loyalty

There are three types of sales promotion:

• Consumer promotion: Sales promotion designed to stimulate

consumer purchasing

• Trade promotion: Sales promotion designed to gain reseller support

and to improve reseller selling efforts

• Sales-force promotion: Sales promotion designed to motivate the

sales-force and make sales-force selling efforts more effective.Sales promotion can arouse the interest in purchasing a good or aservice, for example the BOGOF promotion or Buy One Get One Free.Suppose you go to the market to buy a shampoo The promoter suggeststhat if you buy one shampoo, you will be given an extra shampoo free ofcost You will decide to buy it immediately because you can save money

on one shampoo Furthermore, shampoo is a consumer product andyou've got to use it everyday, so you can keep the extra shampoo to beused later Applying this approach will increase sales revenue

All businesspeople want to increase the sale of goods they produce.Thus, several ways are adopted for that purpose Everyday, we see andhear many slogans: "If you buy our products, you'll have an opportunity

to win a tour to Singapore," "25% extra in a pack of detergent," "Scratchthe card and win a prize," etc Also, you may see many small gifts: apencil, a towel, a lunch box and so on offered free with some products.Exchanging old product for a new one with a reduced price is another

kind of sales promotion We notice that there are many other schemessuch as "winter sale," "summer sale," "trade fair," "discount up to 50%,"etc, so that they can attract customers to buy a certain product All ofthem are incentives provided by producers or manufacturers to increasesales revenue by motivating them to purchase more.

Advertising is known as a means of communication to informpotential customers about the incentives offered for sales promotion Butsales promotion differs from advertising in terms of its approach andtechnique As it is applied in short-term and exert non-recurrent methods

in order to boost up sales of a particular commodity in different ways,sales promotion is not performed throughout the year It is found in themarket on some occasions: during festival, Christmas seasons, yearending, etc

Besides, sales promotion helps companies introduce new products bydistributing free samples The consumers after using these free samplesmight like them and buy them for later consumption Another reason whymanufacturers employ sales promotion is that it not only helps themattract new customers but also holds the old ones Studies are shown thatwhile moving in the supermarket, people tend to be attracted towards theproduct that offers discount, gift, prize, etc They are tools used toencourage customers to buy the goods So, it can keep their existing

Today, businesspeople have to face with many competitors as thereare many new and improved products appear in the market They hardlyovercome their rivals unless they use an effective sales promo~ionmeasure It helps them keep the market share of their products Thus, wecan say that companies may meet and overcome the challenge ofcompetition by utilizing sales promotion.

Sales promotion is a useful tool because it is not only gaining theconsumers' attention but also supplying information leading to a purchase.Thus, producers or manufacturers adopt different measures like reward,sample, gift, bonus or other incentives to stimulate customer's demand.There are many tools in sales promotion:

1) Free Sample: When you go to the supermarket, you mayreceive free samples of washing powder, coffee powder,shampoo, etc They are distributed to you while you make apurchase of some items or even you do not buy anythingfrom the market The purpose of this is attracting customers

to try out a new product or popularizing the product andthereby creating new buyers However, some samples aredistributed to only selected person, not for everyone Forexample, doctors or physicians receive medicine freesamples from pharmaceutical companies

product for a new one at a price less than the original price

of the good Let's say you might exchange your black andwhite television for a color television or you will be given acompletely brand-new cassette by paying more money andsending them your old one It is a useful tool whenorganizations want to draw customer's attention to theirproduct improvement

price lower than its original price This tool is adopted toboost up sales in off-season and occasionally, whileintroducing a new commodity to the market

4) Scratch and Win Offer: It is very helpful to induce

consumers to buy a particular commodity In this scheme, abuyer scratches a specific marked area on the package of theproduct and the benefits they are received according to themessage written there So, consumers will have chances toget some items free, a price-off, or even sometimes visitdifferent places on special tour held by the manufacturers

5) Trading Stamps: In this offer, customers receive a tradingstamp as making a purchase of a certain good They arerequired to collect these stamps of sufficient value within aparticular period to obtain some gifts or some benefits It isworked out because companies want consumers to buy theirproducts more frequently

6) Fairs and Exhibitions: Business people organize fairs andexhibitions to introduce, demonstrate new products andexplain the usefulness and characteristic of the goods In thisincentive, commodities are shown or displayed anddemonstrated to their prospects, and sales are oftenconducted at a reasonable discount in fairs and exhibitions

7) Money Back Offer: This technique is usually employed tointroduce new product to the market In this offer,

enterprises assure that money will be returned to customers

if the commodity does not give them satisfaction It meanscompanies intend to create the customers' confidence in thequality of the products

The business world today is full of competition An organizationwill go bankrupt if its product cannot sell in the market, so all promotionactivities are undertaken to stimulate demand and increase sales Whileadvertising makes consumers buying a product, sales promotion helpthem purchasing it immediately Further, stronger and quickerconsumers' response can be obtained by sales promotion However, it is ashort-term measure and you hardly find its effects in long time period

C)Personal Selling

Another communication tool in promotion mix is personal selling.Personal selling is face-to-face communication with potential buyers toinform, persuade them to make a purchase of an organization's product.Put it another way, personal selling involves direct spokencommunication between sellers and potential customers It means boththe buyer and seller have their own specific objective to accomplish Forinstance, the salesperson may want to maximize revenue and profitwhereas the buyer wishes to minimize the product price or assure theproduct's quality Besides, advertising used to create awareness aboutgoods and services while personal selling designed to construct customer

interest for a merchandise or service and obtain desire For example,advertising might provide customer knowledge and information about theproducts, but the salesperson is the one who actually encourages thepurchaser to decide which brand is the best choice In this approach,person-to-person communication IS required rather than masscommunication In other words, a sales-man has to deliver the messageface-to-face to the intended target audience rather than through someimpersonal medium (e.g newspaper, magazine, journal, etc.).

Personal selling is performed by the company's sales-force whomakes oral presentation with one or more purchasers for the purpose ofmaking sales Broadly speaking, all business people use personal selling

to promote themselves and their ideas It is considered as the mostpowerful tool in promotion mix especially when the buyers have a need

to buy a product but not yet decide which brand they will choose Asmentioned above, advertising is a one-way, non-personal communication

In contrast, personal selling refers to two-way, personal communicationbetween salespeople and individual customers They perform theirconversation through telephone, video conferences, face-to-face or byother means

Personal selling is more effective than advertising in complexsituations Salesperson may probe customers to understand more about

them, so adjustment can be made in the product to fit the consumers'needs and he or she might negotiate terms of sales directly with thepurchasers Frankly speaking, without the efforts of salespeople, wewould not enjoy the standard of living we have today.

The role of personal selling varies from company to company.Some firms have no salespeople at all, but personal selling plays a majorrole in most firms The sales-force in these companies does their jobsdirectly with customers Today, companies want to recruit well-educated,well-trained salesperson whose works is building and maintaining long-term relationships with customers by listening to their buyers, assessingand satisfying the consumer needs In reality, to many purchasers, thesalesperson is the company However, in consumer product companiessuch as Unilever, Procter and Gamble, final consumers rarely meet sales-people Because their task is helping wholesalers and retailers work theirjobs more effectively in selling the company's products

Nowadays, salespeople have to pay more attention to market andcustomer orientation Traditional theory makes the salesperson think thathis or her work is selling and does not have to worry about the company'sprofit or the customer's satisfaction However, the current view holds thatsalespeople should care more about how to produce and increase

customer satisfaction as well as company profit They need to be able tomeasure market potential and develop marketing strategies.

As you know, a market and customer orientation will be moreeffective than a sales orientation in the long run Beyond, persuading newcustomers and making sales, the sales-force must help enterprises createlong-term and profitable relationship with the buyers by paying closeattention to customer needs and expectations

There are some advantages and disadvantages in personal selling.One of the biggest advantage of personal selling is allowing salespeople

to explain and demonstrate a product thoroughly as well as producingsatisfied customers Through exchanging ideas or communicating withconsumers, the sales-people can know exactly the buyers' needs andwants so they can sell them the products they really desire Furthermore,the selling relationship between the salesman and the buyer may tum into

a personal friendship Effective salespeople are the ones who know how

to build long-term relationship with their customers to make sure thatthey will continue to buy their products Salespeople make the buyerslisten to them even though they will then refuse to buy it In doing so, thesales-force may supply some information about the company's productssuch as its attributes, its benefit, etc, to the purchasers Thus, most smalland medium enterprises use personal selling to have a competitive

advantage over their larger competitors who just focus on advertising,sales promotion or public relations The power of personal selling isevident in a salesperson's ability to close a sale So, few businesses wouldsurvive without the help of personal selling.

However, personal selling is one of the most expensive tools inpromotion mix Therefore, it is often carried out in industrial companieswho sell the high-price products such as airplanes, automobiles, trainsand so on Moreover, the personal selling's flexibility can become adrawback Because the product's message communicated to thecustomers might be different from individual salesperson to the others,thereby consumers will not receive consistent information about theproduct

To sum up, personal selling is a face-to-face communication tomake the buyers buy an organization's product by informing, persuading,and convincing them Personal selling uses several tools: salespresentations, sales meetings, incentive programs and so on

D) Public Relations

A final promotion mix element discussed in Chapter 1 is publicrelation Public relations identify, establish and maintain mutuallybeneficial relationships between the organization and the various publics

on which its success or failure depends Therefore, an organization often

spends lots of money to execute public relations so that it cancommunicate with its customers, suppliers, stockholders, governmentofficials, employees and the community where it operates There aremany definitions concerning public relations The first one, "PublicRelation is a non-paid form of non-personal communication about anorganization or its products that is transmitted through a mass medium inthe forms of news story." The second one states that "Public Relationsmeans building good relations with the company's various publics byobtaining favorable publicity, building a good corporate image, andhandling or heading off unfavorable rumors, stories, and events."? But myfavorite definition is "Public Relation is the activities of creating andmanaging information aimed at one or more target audiences in the hope

of influencing opinions and decisions by communicating a favorableimage of the product and promoting goodwill of the company." To sum

up, Public Relations is any unpaid form of non-personal presentation ofideas, goods or services However, Public Relations is a much broaderconcept that includes publicity as well as many other activities

In general, Public Relations can help the marketers not only tomaintain a positive image but also to inform the public about theenterprise's goals and objectives, introduce new products and support thesales-force selling effort There are many forms in Public Relations such

7 Philip Kotler and Gary Armstrong, Principles of Marketing (Prentice-Hall, Inc, 1999), p.468.

as a news story, editorial or product announcement Companies usePublic Relations because it helps their news stories being more authenticand believable than advertising especially when the firm has really newmessage publicity It is also employed to promote products, people,places, ideas, activities, organizations and even nations For example,Johnson & Johnson exerts Public Relations in form of musical show tointroduce its new facial wash- Clean and Clear Nations have used PublicRelations to attract more tourists, foreign investment and internationalsupport Besides, Public Relations can have a strong impact on publicawareness at a much lower cost than advertising The company does notpay for the space or time in the media But it pays for a staff to developand circulate information If the company develops an interesting story, itwill be written by different media that will give the same effect asadvertising, which would cost millions of dollars Public Relations resultscan sometimes be spectacular Moreover, the customers who do not payattention to advertising, sales promotion or personal selling will beattracted by public relations So, it can increase the company marketshare.

The same as personal selling, public relations are not used in smallbusiness because of its high cost For instance, small and mediumenterprises can contribute their money to nonprofit organizations, or

sponsor community events in order to make good image for theircompany instead of performing public relations In fact, a well-organizedpublic relations can generate favorable publicity It refers to thegeneration of good news about a person, product or service that appears

in broadcast or print media One of the disadvantages of Public Relations

is timing and accuracy The time that a publicity appeared in the pressmay not coincide with the time that the marketer wants It might be tooearly or too late in order to make an impact Further, inaccurateinformation can discourage the marketer because it is not reported in suchthe way he or she wishes it to be Thus, a firm's public relationsdepartment must be prepared to react without delay when inaccurateinformation occurs

In short, Public Relations are considered as an effective contributor

to promotion mix by promoting products, building a good companyimage and handling or heading off unfavorable rumors, stories and events

CHAPTER 2

AN OVERVIEW OF JOHNSON & JOHNSON COMPANY

The history of Johnson & Johnson Corporation begins with thediscoveries of Sir Joseph Lister, a famous English surgeon, who foundout germs flying about in the air as a source of infection in the operatingroom He called them "the invisible assassins" Doctors and medicalscience were beginning to understand the importance of and the need forgreater protection in the wound area of the patients However, in the 19th

century, many people still did not understand and they could not imaginethat there were many unseen and deadly organisms living around in ourenvironment They are very doubtful and even contemptuous of Lister'swork

One man who believed in Lister's theory of antisepsis was RobertWood Johnson For many years later, Robert Wood Johnson tried to tumLister's teaching into practical application He wanted to develop ready-made, ready-to-use, sterile surgical dressings, which can be used bywounded patients without the risk of infection

Robert Wood Johnson

Before Lister's discoveries, there were as many as ninety percentpatients died in the post-operation stage in some hospitals Manysurgeons at that time could not believe the extremely high death rate wascaused by the lack of hygiene and cleanliness

Lister used a solution or a spray of carbolic acid in the operatingroom This method required cumbersome equipment and suited only tothe largest hospital

Robert Wood Johnson thought there ought to be a better way Hejoined with his two brothers, Jame Wood and Edward Mead Johnson, toestablish a small company in 1886 with only 14 employees

The first improved product was a soft, absorbent cotton and gauzedressing that could be mass produced and shipped in quantity to hospitalsand every physician and druggist

By 1890, Johnson & Johnson attempted to produce not only anantiseptic product but also a sterile one In 1892, the companysuccessfully met the requirements for a sterile product by first using dry-heat and then steam and pressure onto the surgical dressings.

In 1899 , Johnson & Johnson cooperated with several leadingAmerican surgeons to develop and introduce the zinc oxide adhesiveplaster This new development meant relief to patients because it couldeliminate irritation to delicate skin

Later in 1987, the company developed another major contribution

to surgery, an improved sterilizing technique for catgut sutures

Among many dedicated people contributing to these developmentswas Fred B.Kilmer, the Company's scientific director for 45 yearsbeginning in 1888 He was a highly respected writer on scientific andmedical subjects

By the time Robert W Johnson died in 1910, the company hasbecome a leader in the health care field James W Johnson succeeded hisbrother and was president until 1932

International growth began in 1919 with the establishment of anaffiliate in Canada In 1924, Johnson & Johnson created its first overseaaffiliate, Johnson & Johnson Ltd., in Great Britain

In 1921, with a view to diversifY the products, the Companydeveloped one of the best-known and most widely used of all Johnson &Johnson products-BAND-AID Brand Adhesive Bandages, including anew product Johnson's Baby Cream.

Figure 2.1: BAND-AID

The young man, Robert Wood Johnson, who carried his father'sname brought a vigorous new approach and philosophy of business to theorganization He gave decentralization to many divisions and affiliates bywhich they could have the autonomy and the opportunity to make theirown future

In 1943, General Johnson wrote a Credo which states that theCompany's first responsibility is to the people who use its products andservices; the second responsibility is to its employees; the third to thecommunity and environment; and the fourth to the stockholders