Johnson & Johnson

Marketing Plan for the Year Ending on December 31, 2015

Hannah Joy Stacy

MKT 456

November 5th, 2015

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.

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,

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

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

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

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

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

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

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

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

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

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

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.

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.