Liquid petroleum is low-value, mass-produced and has a wide variety of uses; there is huge potential for mass marketing. So why, one must ask, was and how a niche found – then the strategy revised?
The market name for this substance has been long known as Mineral Oil, used primarily for health and medical uses. But US pharmaceutical and fast-moving-consumer-goods manufacturer Johnson and Johnson bridged the gap between the initial R&D and the market-ready innovation by defining a baby-care niche: Johnson’s Baby Oil was born. This extended their ‘baby’ product range, which later also included ‘No more tears shampoo’. These products demonstrate the benefits and drawbacks of a ‘Focus’ strategy – as the consequential brand repositioning shows, operating in a niche has its limitations.
The branding of their baby oil and shampoo has highly effective in defining their niche: happy babies in above-the-line advertising, pink packaging and a trusted producer sends out all the right connotations; mothers know that these products will never harm their babies. As a result of this, Johnson and Johnson can differentiate themselves from the competition – which is the essence of what a brand should aim to do – that seduces a female-orientated target market to ignore generic competitors. This may have been key to success as Micheal Porter’s Five Forces demonstrates, Johnson and Johnson has less power than their customers – the supermarkets – who are also trying to sell their own-brand alternatives. Hence, branding to create a niche is a competition-driven objective.
However, while it was a competitive strategy, now-a-days the products are marketed to a wider, mass market – the ‘baby’ niche, which limited sales, has been ditched to pursue a new sales growth aim. This is essentially repositioning a brand. The baby oil and shampoo, it is argued, if soft and gentle enough even for babies, then surely new consumers can be attracted to use the product, which mirrors a form of market development. Predictably, more customers equates to more sales and therefore greater revenue; also, by increasing demand Johnson and Johnson can benefit from internal economies of scale to reduce average unit costs, which boosts profit margins. But this is easier said than done: very good marketing was needed to successful reposition their products. The critical decision, I believe, was in retaining the core values of their product by maintaining the association with babies – despite no longer being their target consumer – to use their reputation to transfer trust to new customers. Hence, overcoming any customer inertia. Ironically, therefore, the secret behind successful brand repositioning is not to change the branding to match the new consumer, but change the consumer’s perceived ‘needs’ to match the brand.
© Joshua Blatchford Author of Manifested Marketing 04/08/2010