понедельник, 20 мая 2013 г.

Neutrogena Wave Ambassador in Russia - Svetlana Ivanova

The rising star of Russian cinema - Svetlana Ivanova - has been chosen to be the face of Neutrogena Wave's advertising campaign in Russia. She possesses a very natural kind of beauty and looks very good even without any makeup - which is exactly what our customers dream of.



Here we present a very rough draft of how the actual advertisement will look like:

воскресенье, 19 мая 2013 г.

Success in Russia - how we measure it and how we plan it


When bringing a new product to the market, we cannot just wait around for what is going to happen. Surely, we are counting on a huge success, but while we do not know what it is going to be, we need some tools to measure the outcomes.
We have decided to adopt the following indicators of Neutrogena's Wave performance on Russian market. They could be classified into two groups - financial indicators and general market penetration indicators.
The first group is:
1) Profit;
2) Revenue;
3) Market campaign cost/profit - to see how many dollars did one dollar invested in marketing campaign brought.
4) NPV.
The second group:
1) number of customers - in a few months we are planning to reach 15 mln customers, which is nearly the number of all women in the age of 16-30 in Russia;
2) customer satisfaction - this can never be measured completely, but we still can find some reviews for our product online or even conduct special surveys.
3) market share - for now Neutrogena's products account for 2.5% market share in Russia. This is quite depressing, and competitive rivalry is very intense. Nevertheless, we are very optimistic about Neutrogena Wave and we project that introduction of this fabulous cleanser will result in 15-20% market share for Neutrogena in Russia;
4) market penetration - it seems logical to us to start sales in key regions such as Moscow and St Petersburg and then gradually introduce the product in other parts of Russia. Finally, we are planning to be able to provide Neutrogena Wave to any woman in Russia, wherever she is - in Nakhodka or Severodvinsk.

We have also developed the timeline of our future success, which hopefully Neutrogena Wave would follow.We give it four months to bloom - starting in October 2013 and reaching the end goal in January 2014.
In October 2013 we will start sales in Moscow and St Petesburg, introducing the product in about 600 stores of different cosmetics retail chains. During the next three months we plan to increase the number of stores where Neutrogena Wave is going to be sold, until it is available in all stores of Rive Gauche, L'etoile, Ulybka Radugi, Douglas, etc.
                                                                                                                       



Positioning
After research in the area of positioning of Neutrogena Wave on other markets, we can to the conclusion that it will be mass market product in Russia as well.
If we consider positioning in the context of Emotional vs. Functional, taking into account that slogan of campaign is “even my friends noticed” in our advertising we will consider that Wave is more emotional product that functional one, because the customer should get an emotional satisfaction after using it.  
The company will give the following promise to the customer:
«The Neutrogena Wave® original vibrating power-cleanser is still shaking up the cleansing world with its gentle vibrations. It's guaranteed to leave skin feeling softer and smoother after just 1 use, and cleans 10x deeper to remove more oil, dirt, and makeup than traditional cleansing...»
Communication strategy
      According to emotional positioning of the product we will address the following message to the customer: “Even my friends noticed."
Further we would like to consider the demographic of the target customer. Our target customer are women from 16 to you years old living in urban area. According to the latest data available on the web-site of Rosstat, the quantity of target consumers is equal to 17 653 717. (Rosstat 2013). But quantity of potential customer is much higher, if we consider the category of women from 16 to 55 years old living in the urban area, and it is equal to 38 010 989. (Rosstat 2013)
Packaging
Regarding packaging we can say that we plan to remain the design which is used on other market. The only thing we would like to adjust is to translate the information of the pack into Russian. The internal content will remain the same as well and will consist of device, battery and pack of trial cleanser pads.














Pricing
We would like to provide you with the calculation on cost of the product.
COGs cleanser pads (4,5 USD)
Custom code: 3401209000
Import tax: 15%; VAT: 18%; CoO: USA
Duty= 4,5*0,15=0.675
VAT= (4,5+0,675)*0,18=0,93
CCP&D= 4,5*0,05=0,225
Total Net: 6,325 USD or 196 RUB
So we get 196 RUB as net price of the product, as we are targeting mass with the average price of the cleanser around 177 RUB, and highest price around 250 RUB  we came up we the sale price around 245 RUB for cleanser pads pack.
COGs device (8 USD)
Custom code: 8509800000
Import tax: 5%; VAT: 18%; CoO: China
Duty= 8*0,05=0.04
VAT= (8+0,04)*0,18=1,45
CCP&D= 8*0,05=0,4
Total Net: 9.89 USD or 300 RUB
*All calculation were made according to the custom legislation of Custom Union (Russia, Kazakhstan, Belarus)
I would like to say a few words about the business model of Neutrogena with regard to Wave. As we can see company sells devices very cheap and plans to earn money on cleanser pads. We model is very similar to Nespresso model, when the company sells machine almost at the net price and earns money on coffee capsules for machine.
Launch of the product
We plan to start the campaign for promotion in the end of summer, with launch of active sales in the November, so the consumers already will be familiar with our product closer to New Year holidays. We plan to launch the special New Year campaign, because Wave is a perfect present for young women. In February we will start another campaign devoted to the Women's Day. Moreover it is perfect due to the fact that the skin requires special care after winter time. So Wave device will be perfect present. After the product will be enough promoted we hope the consumers will consider Wave as a solution for skin care, it will let us to maintain the sales during Summer time, when a special care is required due to the hot weather.


tamognia.ru
gsk.ru
neutrogena.com

Pricing strategy


Price is one of the main factors that influence the purchasing behavior. That is why it was important for us to determine the range of prices in the Russian cosmetics mass market. For this purpose we compared prices of different mass and luxury brands. The results are presented below.

Competitor
Price,
RUR
L'Oreal
220
Garnier
215
Vichy
580
Clinique
1000
La Roche-Posay
620
Lierac
820
Yves Rocher
350
Natura Siberica
140
Baikal Herbals
135
Clean and Clear
70
Clearasil
160
Himalaya Herbals
170
The Body Shop
380
SkinFood
460
Clarince
1180
Nivea
110
Sto reseptov krasoti
60
Chistaya linia
55

In the table you can see average prices of the competitive cleansers; average is because the deviation of 20-30 RUR is possible in both sides, depending on the average retailer. According to this findings, the average price of the mass cleanser is about 177,5 RUR, whereas of the luxury one – 880 RUR. We would keep this fact in mind when we will count the price for Neutrogena WAVE in Russia.
Furthermore, it is necessary to say the Neutrogena WAVE pricing strategy is the same for all markets, and there is a rationale for that. Neutrogena is considered to be the mass market brand, however, it is a bit higher than mass market. There is a strong association with high quality, dermatologists’ participation, pharmacies, etc. Therefore, it is unlikely for Neutrogena to establish low prices. Taking into account all the characteristics and perception of the brand, we decided that Neutrogena WAVE pricing strategy in Russia would be standardized.
You will be able to read about the Neutrogena WAVE price in Russia in the following posts.

Distribution


There is a time to decide which distribution channels Neutrogena has to use in order to promote the WAVE. Let us start from the following fact: when Neutrogena entered Russian market in 2006, many experts were surprised that the company, which always sold its products exclusively in pharmacies, decided to sell its products in Russia in the beauty store called Arbat Prestizh. Such an unpredictable decision was mainly explained by the fact that one year before the launch of Neutrogena, J&J (owner of Neutrogena) introduced the medical cosmetics brand RoC. What we mean is that J&J decided to diversify its distribution channels and to avoid competition of two brands. Anyway, it was planed that Neutrogena would compete both with medical cosmetics, such as Vichy and RoC, and with mass cosmetic brands. Furthermore, it was predicted that L’Oreal would be the main competitor of Neutrogena.
 Nowadays J&J uses various distribution channels in Russia to promote Neutrogena. However, it is necessary to point out that Norwegian formula series is sold both in drug stores and beauty stores, whereas cleansings and lotions for deep cleaning are offered predominantly in pharmacies.
 Let us consider the main tendencies of the cosmetics distribution on the Russian market. The analysis revealed that the role of pharmacies in the cosmetics distribution is increasing gradually. It was forecasted that pharmacies would leave by other distribution channels in the long-run. Nowadays Pharmacy 36,6 represents more than 25% of the Russian market, and more than 1/3 of the Moscow one. Furthermore, it was found that supermarkets and specialized beauty shops strengthen their positions on the markets, taking consumers away from beauty salons. In 2010-2011 the percentage of the largest supermarkets in distribution was 29% and of specialized beauty shops – 23,7%. Additionally, about 80% of sales in specialized beauty shops occurred in such magnates as Letoile, Rive Gauche, Ile de Beaute, Douglas Rivoli,  Podrughka, All!Good.
 Remembering the fact, that initially J&J didn’t want to use the same distribution channels for RoC and Neutrogena, we examined their market shares nowadays.


Source:DSM Group ISO: 9001:2008
 As we see on the graphs, RoC experienced the decrease in sales in Russian pharmacies during the last two years, whereas Neutrogena raised them. Despite the fact that two brands are allocated to different market segments - luxury and the mass one - we decided to concentrate mainly on the beauty shops and to sell 75% of Neutrogena WAVE in them, whereas only 25% - in pharmacies. Such a decision was backed up not only by the situation with RoC and Neutrogena, but also by the high popularity of droggeries among Russians. Furthermore, we will start distributing the WAVE in urban areas of Russia, including Moscow, St.Petersburg and the central part of the country, considering these locations the most promising and the most lucrative ones. After a while we will penetrate further.
  Analyzing the most popular beauty shops and pharmacies among Russian consumers, we decided to offer Neutrogena WAVE to the clients in the following ones:
Pharmacies:
  • 36,6
  • Pharmakor
  • Zdorovie ludi
  • Pervaya Pomosh’
  • Ozerki
Beauty shops:
  • Rive Gauche
  • Letoile
  • Douglas
  • Podrughka
  • All! Good
  • Spektr
  • Ulibka Radugi

 Sources:
http://elit-galand.ru/rusmarket - Russian market of cosmetics and perfumery
http://www.dsm.ru/content/file/dsm_11.pdf - Pharmaceutical market of Russia 2011. Group DSM

Advertising & Promotion: Overview of Strategy, Tools & Timing


General Advertising Strategy 
       We can think of different ways to present Neutrogena Wave in Russia. On the one hand, we could follow the general trend of Neutrogena Wave in other countries and just copy their actions there. However, since the market is specific, we can also offer different strategies. Since the management in Neutrogena is decentralized, we can hope that Russian department will have some right of vote in developing advertising campaign for Russia.
We suggest that in general we stick to the overall marketing strategy of Neutrogena Wave. However, in some part of our advertising campaign we could implement tools which will help us navigate the customers and address to their specific needs. For instance, we could develop an advertising campaign which is aimed towards a specific problem (e.g. acne). So, some ads will represent our product as a cleansing device which helps to get rid of problems with skin, but some part of ads will specify that exactly the acne problem will be solved. So far, this result was proven by the specialist and this is a considerable competitive advantage. As an example, we could issue banners or use more innovative instruments like a computer watch which reminds you of the problem and a solution for it. 
Further, to attract the customers and persuade them that they need your product it is important to support relations with your customers. You can use various techniques to establish good public relationships.
Tools
 Online communication
We suggest that Neutrogena develops a separate website in Russian or a microsite where customers can get the full information or even ask some questions online and get the answers from a consultant.
We could also organize some quizzes and competitions as it was done on other markets. A prize could be, for instance, a discount coupon for refilling pads.
Also there we could place some voting polls on this website to learn the needs and preferences of customers so that they felt our interest in them and got involved.
We can also organize a Facebook/VKontakte community to support two-ways communication with our customers.
We can also put our banners on the web and develop a contextual advertising.
Print Ads
We can print banners and ads to put them in fashion magazines and magazines for young women and teenagers. Also we need to make banners for outdoor advertising. Moreover, we can print promotion stickers and distribute them in shops for school goods and in beauty salons.
Promotional videos
Since the TV ads are pretty expensive, we could launch viral videos featuring Neutrogena Wave. We can use YouTube as a channel. These videos can show our satisfied customers telling about the products or some instructions how to improve the skin with the help of Neutrogena Wave. In connection to this, on the website we could also launch a competition for the best video advertising Neutrogena made by our customers. This would help us to see how our customers perceive the product and get them involved.
Consumer exhibitions
In the distribution locations we could organize small exhibitions and trainings and invite consultants to explain the customers how they should care about their face skin and in connection to this what the product is and what it does. This can be a short-term action, like a product launch event.
Special stands with Neutrogena Wave may be installed so that the product was separated from other products and was perceived as something special.
Celebrity endorsements
As it has been done in other markets we can invite celebrities to advertise the product. This will personalize the product and bring positive associations. We believe that since our product is new on the market and oriented at both teenagers and young women, we should find a person who is popular and promising but not overappearing in media. Some celebrities, like Vera Brezhneva, for instance, associate with too many things and ads with her will not differentiate our product from others. We suggest Svetlana Ivanova. She is a young and promising movie star in Russia; many women would like to look like her. Moreover, she perfectly suits our target audience.
Charity Programs
Probably, at a later point, we could also join some charity programs in Russia. However, at a launch stage, this could only weaken our position by taking the funds away and not bring the expected result due to the low brand awareness. 
Timing
We expect that our campaign brings positive results in a pretty short term perspective of approximately 3 months. As for the sequence of events, we consider the following preliminary schedule:

1st stage: 

• Launch of a website/microsite/Facebook community

• Print ads (celebrities)
• Trainings
• Product exhibitions

2nd stage:

• Viral videos

• Special Stands

• Quizzes/Competitions

3rd stage:

• Diversfying the ads: general and specific

• Charity Programs

• Active paricpation in the life of the market/country

Response targets
We expect to achieve the following targets as a result of our advertising & promotion campaign:
1) Customers learn about product and brand.

2) Customers have positive attitude towards our product and brand.

3) Customers understand what they need it for.

4) Customers associate the solution to their problem with our product.

5) Word-of-Mouth Effect starts.

6) The brand awareness increases.

7) Our sales and market share increase.

We can judge the success of our advertising campaign by:

1) the amount of feedback comments left on the website

2) the amount of visits to our website/Facebook-VKontakte community

3) the amount of people participating in our quizzes/competitions

4) performing a survey periodically on customer brand awareness/attitude towards the product
Budget
 The budget has been accounted for an advertising campaign in Saint-Petersburg only.

Type of product/service
Price, rub per 1 unit/1 period of time
Amount needed
Total Cost
Website Launch
6000
1
6000
Microsite Launch
6000
1
6000
Online Banners
4000
100
400000
Contextual Advertising
1,00
50 000
50000
Ads in magazines
130 000
5
650000
Banners on the billboards
40000
15
600000
Promotion stickers
7000
1
7000
Trainings in Beauty Shops
40000
5
200000
Celebrity Endorsement
1000000
1
1000000
Total Cost of Advertising Campaign
2919000

Analysis of Neutrogena competitors


In order to define the current position of Neutrogena on the Russian market we conducted the analysis of Neutrogena’s competitors. The main competitors include: L’Oreal, Garnier, Green Mama, Vichy, Clinique, La Roche-Posay, Clarins, Lierac, Yves Rocher, Natura Siberica, Clearasil, Himalaya Herbals, Body Shop, SkinFood, Clean and Clear, Nivea, Baikal Herbals, Chistaya Linia and Sto reseptov krasoti. The competitive landscape of Russian cosmetics markets is presented below. Two dimensions – price and distribution - were taken into account. Our aim was to reveal the price of competitive products and variety of their distribution channels. It was noticed that only Clearasil has similar distribution characteristics with Neutrogena.


 The majority of competitors’ series possess only ordinary gel and foaming skin cleansers, scrubs and masks. There are two exceptions – L’Oreal Pure Zone Pure Chrono Clear and Garnier Pure Active Exfo-Brusher Wash. They are supposed to provide deeper skin cleaning; therefore, we could consider them  to be main competitors of Neutrogena.
Both products aimed to deeply clean the skin, to remove dead skin and fade marks. They are different in terms of chemical composition; however, salicylic acid remains to be the main element in both products. Furthermore, they have different number of fibres. L’Oreal Pure Zone Chrono Clear has 500 fibres, whereas Garnier Pure Active Exfo-Brusher Wash  - only 170 ones.
We have examined a variety of reviews on different Russian and foreign blogs and forums and revealed that consumers mention similar advantages and disadvantages of both products, which are presented below.

Advantages:
  • Soft brush
  • Neutral or nice smell
  • Easy to use
  • Massage effect
  • Removes and prevent blackheads
  • Removes dead skin cells
  •  Reduces surface sebum levels

Disadvantages:
  •  No significant acne reduce
  • Tight and dry skin after use
  • Necessity to carefully clean the brush after use due to hygienic concerns (bacteria spread)

 Doubts:
  • No visible effect
  •  Poor quality-price ratio
  • Fake-products ( Russian women are afraid of fake L’Oreal and Garnier products because of the previous experience)

 Than we asked ourselves whether Neutrogena Wave possesses all the advantages that main competitors have. The answer was YES.
Does Neutrogena WAVE have any of the listed disadvantages? The answer was NO.
Would consumers experience the same doubts while taking the purchase decision? NO. 
Therefore, we concluded that Neutrogena WAVE would bring all those benefits to consumers which they don’t meet now.

Perception of Neutrogena brand by Russian women


In order to understand the attitude of Russian consumers towards Neutrogena, we examined several blogs and forums. The research revealed that the overall perception of Neutrogena products by Russian consumers is considered to be strong positive. They know about dermatologists’ participation in the creation of the product formula. Furthermore, they value quality of the product. Many of them having tried one Neutrogena product, planed to try other ones. That was interesting to notice that some consumers were familiar with the product before Neutrogena was launched in Russia (“When I was offered to try Neutrogena, I agreed with pleasure, because I have known this brand long before it appeared in Russia”)

 Russian consumers are familiar with all products of Neutrogena presented in Russia and even outside Russia. The main series of Neutrogena in Russia today is Norwegian formula, is aimed to provide care for dry and sensitive skin, which is highly required in Russia due to the climate conditions. Nevertheless, cleansers and lotions for deep cleaning and oil removal of other Neutrogena’s series are presented on the market as well.

What do Russian women wait from cleansers?
·                  Reasonable price-quality ratio
·                  Satisfaction of needs (acne, the youth of the skin)
·                  Hypoallergenic ( consumers with more sensitive skin types)
·                  Quality of ingredients
·                  Dermatologist recommended products (sense of confidence and trust)
·                  Stock availability (easy purchases)
·                  Promotions (free samples, etc)

What can prevent Russian Consumers from buying Neutrogena?
·                    Brand unawareness (medium probability)
·                    Previous negative experience with the brand (low probability)
·                    Financial instability (low to medium probability)   

  
Sources (all in Russian):
                                        

Promotion on Other Markets

Before developing our own marketing campaign for Neutrogena Wave in Russia, we decided to investigate what they do in other markets. The product has been launched in the USA, the UK, Canada, Australia and some regions of Middle East. Here we give a detailed overview of the tools used to promote Neutrogena Wave there.
J&J supports its new product with a significant marketing campaign. It includes both so called “standard” elements and innovative methods.

As for standard elements:


  • Heavyweight television advertising
  • Standard online ads
  • Print ads
  • A microsite. It featured product information, eductional material and promotional mechanic to enter prize draw promoted in-store and loose insert in pack.
  • Web banners
  •  Promotional stickers
  • Discount coupons: are supplied with the Neutrogena Wave allowing consumers to receive money-off of the pads the device uses.
  • Brand ambassadors
As we see it, these instruments are widely used by the competitors and are a kind of a “must-have”. However, the company aims at making Neutrogena Wave different and memorable. To achieve this, they have also used some unusual and more creative ways to promote the brand in general and Neutrogena Wave in particular. The examples you can find below:


J&J has launched a website to promote Neutrogena Wave in advance of its main launch. The site aims to drive sign up to J&J’s Neutrogena Young Skin CRM program which offers a variety of skin and fashion tips. Consumers who join the programme will be entered into a prize draw to win a trip to New York and $1000 spending money. Runners-up prizes include £150 TopShop shopping vouchers. 




 The company has organized a donation campaign of $1 for every Wave Sonic Power-Cleaner sold up to $200, 000 to GlobalGiving, which is an internet-based network that connects donors directly to the causes they care most about. Quizzes were organized on Neutrogena Facebook page. followers can choose which charities should receive the money:  they can support a disaster relief, environmental or educational cause. Each sphere is headed by Neutrogena brand ambassadors Vanessa Hudgens, Hayden Panettiere and Miranda Cogrove.
 In addition to the donation campaign, brand ambassadors call the customers to buy Promotion Bags designed by them personally. Miranda’s (center) is a heart constructed of pencils – made to benefit educational courses. Vanessa’s (right) 
 In the Middle East, as part of the online campaign, Johnson & Johnson wanted to approach people by using social mainstreams like Facebook. The Facebook application was a competition, and can be considered as a race. Johnson & Johnson had to choose 300 girls from Lebanon, Kuwait and United Arab Emirates. These girls were called as "Ambassadors". Each Ambassador had to race by inviting friends to help build the longest wave. The Ambassador who will have the 1st hundred followers will be the winner. The application was divided into 2 parts:

1.      The Ambassadors were invited to the application so they can register themselves in a limited time. 
2.      The Ambassadors will invite their friends to the application then the friends would come to the application fill up the registration form and choose the ambassador to follow.

- A focused ad campaign that was driven by a contest to send the winners to a Vanessa Hudgens’s concert in Los Angeles and have them receive a complete makeover using Neurogena products. The purpose of the campaign was to promote Neutrgena’s line of acne products for teens with its Pink Grapefruit Acne Wash headlining the list. This is achieved through the association and recommendation of the brand’s celebrity spokesperson, Vanessa Hudgens.

We believe that these innovative methods have allowed Neutrogena to strengthen its brand and promote their new product. They have not only introduced Neutrogena Wave, but also involved a customer and made him/her participate. We think, this is a very wise decision since customers see that the company cares about them and wants to be closer, which creates positive associations and positive presupposition towards the promoted product.