REVENUE STRATEGY - J&J

How is J&J enhancing revenue of its consumer health division?

Acquisition
1. J&J acquired Pfizer’s consumer health unit last year for $16.6 billion and their shared mission is: to keep their storied brands up to date by constantly tweaking the ingredients, redesigning the packaging, and finding whole new uses for the contents. (Pfizer had won the right to pitch Listerine as much more than a breath freshener simply by running some inexpensive clinical trials.)
2. It gained a foothold in the skin-care market by buying pimple-potion purveyor Clean & Clear and RoC, a French maker of anti-wrinkle creams, followed by soapmakers Neutrogena and Aveeno.
3. It preserves the independence of operations it acquires.

Focus on new products and new uses for old products
4. It put together small teams of up to a dozen scientists and charged each with tackling a cosmetic challenge, like an acne team, a pigmentation team etc, which gather input from marketing and development folks and partner with small, forward-thinking companies.
5. Its new system is helping aging brands such as Neutrogena expand in unexpected directions including an at-home version of something called microdermabrasian - a skin-smoothing procedure that can cost up to $200 at health spas.
6. It produced 400 new products last year, and the acquisition of Pfizer pushed it to the top of 22 consumer categories.
7. It keeps investing technology and innovation into baby potions to perpetuate revenues.
8. Its Pfizer scientists have mastered a formula for generating revenue from minor breakthroughs, which don’t cost a fortune, like the melt-in-your-mouth film for Listerine PockectPaks, which has become a new drug delivery platform that may be expanded to other over-the-counter drugs.
9. It is putting its new Helioplex, a broader and longer-lasting sunscreen, into several products, including Neutrogena's sunscreens and anti-aging lotions.
10. It drives demand for products by adding new claims about them – like Listerine can prevent gingivitis
11. Its unit managers are constantly weighed against internally designed “composites” made up of competitors in each of J&J's three major industries, consumer, pharmaceuticals, and medical devices. The goal is to outpace the composite on a top- and bottom-line basis.

Marketing experiments
12. It built buzz for Rembrandt toothpaste as the whitener of choice for the hip and youthful, by hosting makeover parties, book readings, and concerts. Just before Valentine's Day, its Rembrandt team placed an ad on YouTube that featured a young couple kissing passionately for 30 seconds. It was so racy that the video site relegated it to its adult section prompting viewers to click on the ad 180,000 times.
13. In 2006, it opened a satellite office in New York staffed by designers who spend their days devising fresh ways to serve up decades-old products, from how they're packaged to how they're displayed on store shelves.
14. It sponsors more than 700 baby centers in China to teach Chinese parents the art of therapeutic touch
15. It expanded a consumer research center in India in 2004, and has just broken ground on a similar center in Shanghai to garner insights on how to tailor products to local markets
16. It is using Pfizer to plug some holes in its geographic reach, for example, in Mexico

Acquisitions + new products + new uses of old products + marketing buzz + an eye on the competition = REVENUE.

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