Download VIACTIV Business Challenge

VIACTIV Business Challenge
Team 2
Liana Camacho
Alissa Hsu Lynch
Javier Vazquez
Max Wolf
Marcelo Yarmaian
Background:
 Calcium supplementation is key to reduce risk of osteoporosis.
 VIACTIV® is a brand of Calcium Soft Chew Supplements.
o Soft chews represent 10% of the market (Pills: 80%), VIACTIV®: 60% share.
o Calcium market is declining
 VIACTIV® is positioned as an enjoyable alternative to pills that helps women to feel
good from inside out.
o Key calcium supplement drivers: makes me feel good about myself when I take it,
brand, format & taste.
Problem Statement:
 Sales declining steeply (>50% decline in 5 years )
 VIACTIV® position in soft chews has been threatened since the introduction of Caltrate
 Brand is restricted on resources:
o BME is restricted (Caltrate invests x11 vs Viactiv in mass media).
o Limited resources for product innovation
Alternative Solutions Considered
OPTIONS
Current Model
Within J&J resources

New Model
With more resources

Recommendation:
 Part 1: Fine-tune current model within current resources
 Part 2: Exploring New Business Models

Fine-tune current model within
current resources
Fine-tune current model within current resources
Viactiv Consumer:
- women, self aware, healthy lifestyle, enjoys life, not regimented, treats her self/indulges, 45+
Strategic approach:
- Differentiate with superior proposition (taste, efficacy, emotional connection)
- Focus on HHP growth
- Highly targeted communication/no mass media
Enhance Positioning:
-Strategic angle:
1) Best Taste
2) More Efficacy (improved absorption due to unique vitamin D and K nutrients)
3) Strongest Emotional Connection
- Real benefit:
- Emotionally: I feel I am doing the best to treat my self well & healthy – every day (life-improving)
- Rationally: building my bone strength in efficient & great tasting way
- RTBs:
- More bone building nutrients than any other chew (storey: Calcium, Vit. D, Vit. K together ensure
maximum absorption of calcium in the bone)
- Endorsed by XYZ (celebrity or model/actress, strong women – equity stake to pay her) to deliver RTB
in credible way
Improve Product Taste:
-Some taste improvement (if possible): flavor, flavor name, packaging look/feel
Raise Retail Price:
- Increase price to 20% above Caltrate (only once product and positioning has been improved), 60% above PL
Fine-tune current model within current resources
Change communication strategy from mass media to highly targeted channels:
- Principles:
Celebrity endorsement -> awareness, relevance, credibility
Focus on 3 viral/WOM channels to build awareness & trial
- Channel 1: Endorsement/PR on efficacy and taste (incl. blogging, search, social etc.)
- Word of Mouth campaign (efficacy message, highly targeted)
-Channel 2: Sampling at passion-points (tasting is believing)
- fashion shows
- up-scale concerts
- flower-shows
- Pilates /yoga-classes, gyms
- new-born in hospital sampling
- Cross sample with SPLENDA: put chew samples into SPLENDA boxes
- Channel 3: Healthcare providers -> efficacy
- together with SPLENDA
- reach orthopedists together with J&J medical division
- reach gynecologists
- Link channels via digital (search, bloggers, social networks, babycenter.com)
Distribution Channel:
- Focus more on food & drug (trade-spend)
- Try to maintain maximum distribution
Options
Assumptions
Test
Residual Risks
Risk Mitigation
Plan
Fine tune
positioning
• New positioning works
better.
• Test positioning,
storey, &
endorsement
options via moodboards
• Other competitors
moving towards
same positioning
• Speed to market to
be first.
• Continue evolving.
Improve taste
• Taste can be
meaningfully
improved and will
increase usage
• Quick PD
assessment on ease
of improving taste
(“kitchen
samples”).
• Taste tests.
• Caltrate improves
taste too.
• Own best taste first
and continue
improving it.
• Switch to phase 2
Increase price
• Proposition is price
inelastic (once product
& positioning has
been improved)
• Test price-increase
once we have
improved product
& positioning
• Caltrate & PL
further reduce
price -> gap
increases
• Caltrate increases
price
• Factor competitive
price moves into
assessment of
option
Leverage
sampling and
WOM to drive
House Hold
Penetration
• Sampling & WOM is
more cost effective in
driving HHP than
mass-media
• Run small scale
WOM campaign &
sampling events ->
measure efficacy
• Identify high
affinity events via
digital analytics
• Competition can
copy quickly if it
works.
• Focus on most
effective vehicle
and “own” it.
• No success with
improving taste
Exploring New Business Models
Alternative #1: Licensing & Joint Ventures
Rationale
-
High Brand Awareness: 83%
Brand Image Strengths (vs. category): Tastes Great; Not Mediciney; Is a Treat; Easy to Chew
License the Viactiv Trademark
-
Viactiv as a bone strengthening ingredient
- Food & Beverage: liquid breakfasts, milk for growing kids/adolescents (chocolate?)
Partner with premium treats to strengthen their health appeal
- Premium Chocolates
- Cookies
- Baked Goods
Joint Venture Opportunities
-
Explore Internal J&J Options: partner with drug that may diminish bone density, heart & breast health as
a side effect (i.e. Orthotricyclin) and/or a drug linked to these health areas
Alternative #2: Solely “Direct To Consumer”
QVC/Home Shopping Network
- Infomercial to educate
- Credible spokesperson to endorse products (HCP and/or celebrity)
- Test with New Premium Platform
- Unique to channels
- This will help determine if we meet acceptable hurdle rates
- Leverage learning from Neutrogena for QVC
E*Commerce/Social Websites
- Drugstore.com
- Amazon.com
- Facebook.com
- Benefit: ability to focus BME’s
J&J owned site
Exploring New Business Models:
Assumptions & Risks
Options
Assumption
Assumption Test
Option Risk
Risk Mitigation
DTC: shopping
networks
• QVC will accept
becoming a
distribution channel
• Share unique
proposition
• Higher priced
product does not
meet hurdle rates
• Identify alternate
channels
DTC: e*commerce
(third party or J&J
site)
• e*commerce is
viable for Viactiv
• Execute a scalable
digital initiative with
one e-tailer
• Loss of space at
FDM; J&J’s lack of
expertise
• Transition channels
after on-line proves
successful
License Viactiv TM
• Licensing is a growth
opportunity &
brands are
interested
• Concept testing with
potential brands (ex.
Haagan Daz; Godiva;
Carnation;
PediaSure)
• Loss of
Marketing/Product
Control
• Negotiate equity
approval in contract;
develop licensing
manual
Joint Ventures
(internal)
• Partnerships are
viable and profitable
• Approach internal
& external
stakeholders to
explore
opportunities
• HCP’s reject
proposition to
recommend product
combinations;
negative PR linked
to side effects
• Clinicals re: benefits
for patients; meet
with advisory
boards; educate
HCP’s
Executive Summary
• Short term recommendation: Fine-tune model with current resources
a. Pursue “Best” differentiation strategy (taste/efficacy/emotional
connection)
b. Improve product taste
c. Increase price
d. Shift communication from mass media to highly targeted media
e. Shift trade spending to Food & Drug
• Long term recommendation: Test and roll out new business models
(begin testing as soon as ST strategy is executed)
a. Map out and develop joint ventures / licensing agreements with
strategic partners
b. Design and test new distribution models: DTC / QVC
Thanks!