Ch. 7 - Business Marketing

The sellers of Proactive do not engage heavily in business marketing. As we already know, proactiv products are mostly used for consumption purposes only and so they are consumer products. Proactiv is not quite a business product. It is available in a in few stores and malls around the country in small packs, but they themselves are responsible for their own marketing and making the product accessible to consumers(retailing). The consumer demand for Proactiv far exceeds the demand in the business market. That is why it is hard to come across any Proactiv product in large quantities except online and at kiosks/vending machines.

 Customers buying the solution online is more profitable for the business, that is another reason why it is mainly accessible online. The products are sold on a subscription basis. Basically, a customer signs up for the service and every three months a refill is sent to your address and you are directly charged on your choice of payment. This way consumers/customers are more likely to re-buy the product rather than if they have to go and get it from a store somewhere. 

Ch. 11- Developing and Managing Products

Developing new products is important in sustaining a business and helping it stay relevant in the its market. Innovation helps extend target markets and also lock down customer loyalty because it helps meet both new and existing market requirements. As it is, all businesses revolve around innovation.

The makers of Proactiv have evolved from the original solution made over 20 years ago.  In addition to the other skin care products they make, Drs. Rodan and Fields have reformulated the 3-step system from the ground up. The new product is called Proactiv+, and according to the Dr's, the new product strategy will help them achieve their mission- healthy, beautiful skin for all. The new solution contains powerful complexion-conscious skincare benefits, allowing users to clear and prevent breakouts so that their skin can flourish. Proactiv+ uses exclusive Smart Target™ Technology designed to deliver 50% more acne-killing benzoyl peroxide directly into the pores. They say this helps kill acne-causing bacteria at the source and also helps prevent new blemishes from forming while also reducing irritation. This is a good example of innovation. The makers of the solution recognize the needs of the consumers and made sure they adjust/modify their product in order to accommodate all needs.

Right now Proacvtiv is somewhere between the growth and the maturity stage and they have been for a long time now. Product lines are being extended to appeal to other market segments. They engage in heavy and aggressive brand advertising/ promotions and are rapidly making the product more accessible to consumers and customers all over the world.

Ch. 8 - Segmenting and Targeting Markets

Proactiv is one of the world's leading acne and blemish control treatments and they serve a hefty portion of the acne treatment market all around the world, distributing to about 61 countries. Acne is one of the  most common skin diseases in the United States, affecting over 60 million people. When determining a target market, it is crucial to do  market segmentation. This helps the marketer  narrow down who they'll be selling to and what they'll be offering those individuals in order to meet their needs and wants. It is mentioned that 85 percent of young people between the ages of  12 and 24 suffer from acne and that 25 percent of all adults have active acne. Knowing this kind of information is key when market segmentation is being carried out. Other variables like geographic, demographic, psychographic, benefit and usage-rate segmentation are also used to divide the total market.

The makers and sellers of Proactiv have been successful in positioning the brand on a pedestal giving their competitors a run for their money. Again this is mainly due to their one of a kind marketing strategy which is the use of celebrities who are well known to young individuals. These celebrities are featured in commercials giving testimonials and endorsing the product. This I believe resonates with the young target market and ultimately influences their overall perception of the solution. So far this strategy has been working very well for the marketers of Proactiv.

Ch. 15- Marketing Communications

It is now apparent that Proactiv mainly promotes its products through infomercials from previous posts. Proactiv also uses other channels like billboard and magazine ads to promote sales. All these are means of mass communication directed towards large audiences at a time. The sellers of the solution do not generally use interpersonal communication with customers (with the exception of the online sales persons available on their website ready to help customers directly) and so because of this they take their adverts the extra mile just to put across certain messages they want their customers to receive. Their infomercials last from 30mins up to 1hour at a time and during that time, they bombard the masses with things like celebrity endorsers, satisfied customer testimonials, sales promotions, directions on how to use the products etc. This gives them a comparative advantage over other acne treatment brands and manages to shut down any "noise" that will likely distract the customers and ultimately cause them to seek other brands.

Proactiv also use emails to reach out to their customers/users. Buyers get deals sent directly to their emails when they subscribe to receive products/services. It makes it easier for customers to access or know about deals/promotions and since we live in a technological age, it has become easier for companies to reach out to their customers no matter where they are located. However they are not quite as vibrant on social media (e.g. facebook, twitter, instagram etc.) as they can be. Social Media has become a giant channel for the marketing of goods and services and it should be utilized to the fullest. It allows companies access to their target market and opens doors to more exposure.

Ch. 10 - Product Concepts 

All proactiv products are consumer products, this simply means that the products are bought by consumers with the intention to satisfy their individual/personal needs and wants which is to  remove and also prevent acne breakouts from reoccurring. Usually a buyer of the product goes through an extensive search making comparisons with several other brands to see what will work best for them before they are willing to make a move and invest in the solution, because of this, Proactiv can also be classified as a shopping product. The 3-step acne system kit which includes a cleanser, toner and treatment by proactiv are product items among the wide range of product mix that the makers of proactiv offers its customers. Proactiv has soaps, facial masks, sunscreens, lotions, dark spot removers, deep cleansing brushes, moisturizers etc. In recent times the original Proactiv solution 3-step acne system went through a product modification. This new version is called Proactiv+. It does not contain parabens and it is intended to also act as a moisturizer. Another important aspect of product concept is packaging. The solution comes mostly in a white bottle (sometimes clear  depending on the contents) with turquoise and black writing. Its features are so unique that it could be recognized from anywhere. The bottle itself has informational labeling with descriptions on what the product is for, directions on how to apply it, ingredients and  other info that generally helps the consumer to make proper product selections.

Ch. 17 - Personal Selling and Sales Management 

It is quite uncommon for customers to come face-to-face with sales representatives of Proactiv solution during the buying process. As mentioned in previous posts, Proactiv is mainly sold online, via telephone order or at kiosks. A limited amount of the solution is also carried in certain stores around the country. All of these methods of purchase are carried out using self service. Personal selling is all about getting to know your customers which in turn allows you to perfectly customize an approach needed in getting the customer to buy a  product/service. A salesperson should also be able to show how the product can be beneficial to the consumer. The sellers of Proactiv have a rather unique and advanced way of conducting personal selling. The infomercials/advertising shown on T.V are very informative and actually give detailed explanations and demonstrations on how to use the solution. Also when a prospective or returning buyer logs on to their website, an online sales representative can be reached at anytime via a live chat. They are real life people behind computers attending to online shoppers needs by answering any questions or addressing concerns that the customers may have.  Customer service can also be reached at anytime of the day by dialing an 800 toll free number. These methods communicating with customers is now very common and as Technology is becoming more and more advanced, consumers are becoming heavily dependent on the net for shopping needs. It is very important for companies like Proactiv to follow course and take advantage of growing trends.

Ch. 16 - Advertising, Public Relations and Sales Promotion

So far the sellers of Proactiv have been very successful in implementing and executing their advertisement strategies. Guthy-Renker Corporation, the direct advertising company that introduced Proactiv to the world over 20 years ago mainly specialize in direct-response advertising using widespread television advertisements like infomercials and magazine and web commercials as well. This allows direct contact with their niche market resulting in immediate responses from the consumers of the solution. Back when they first introduced the solution, there wasn't much competition and even now that the acne treatment market has grown and competition multiplied, Proactiv has remained consistent in keeping their product desirable and fresh in the eyes of the public.

Guthy-Renker spends about $110 million to $120 million a year on advertising. A good share of that amount goes towards payment of celebrity endorsements. One could say that Proactiv have mastered the art of rigidly positioning their brand in the ever growing acne treatment market, mainly with the help of their celebrity endorsers. 

In the past, most Proactiv infomercials consisted of the announcer repeating consistently the lines "call now" or "order now" or "limited time offer" or "free shipping if orders are made within the next 10 minutes" and offering other incentives to lure consumers. However in recent times, a slightly different approach has been taken. Those announcements have been limited and the price is less stressed on. More focus is shed on testimonials by both celebrities and other users of Proactiv, all who claim that the solution has worked for them and in some cases, have been life savers in terms of gaining back confidence and embracing blemish free skin. This allows consumers to connect a great deal with the product and feel more confident that the solution would work for them instead of feeling like they are rushed into buying the product. Overall this leads to them feeling like they have value for their purchase.

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Ch. 14 - Marketing Channels and Retailing

Retailing is the process of selling goods and services to consumers through different channels of distribution (i.e. a set of independent organizations that facilitate the transfer of ownership as products move for the producer to consumers). For over 16 years now, proactiv has been distributed by direct marketing firm, Guthy-Renker. They have been instrumental to the success proactiv has become. Mainly by  leveraging its unique style of marketing to bring a revolutionary new approach to acne treatment direct to consumers. They have acted as an intermediary between the producers of Proactiv and the users of the acne solution.  Its direct to consumer model allows consumers to purchase products at a guaranteed low monthly price with generous extended return policies. Guthy-Renker has offices in Santa Monica, CA, Palm Desert, CA; San Francisco, CA; London, England; Malmo, Sweden; Wiesbaden, Germany; Tokyo, Japan; Sydney, Australia; and Gurgaon, India, making proactiv available on an international level.

There are a few different ways to get proactiv, mainly through non-store retailing. The primary way of getting proactiv is through online retailing/e-tailing which allows consumers to shop the solution online. Another way of getting proactiv is through shop-at home television networks. Their shows display products, with the retail price and viewers can phone in their orders directly on a toll-free number with a credit card. These two options make make it convenient for customers to get proactiv without having to go to a brick and mortar location. 

Another popular way of getting the acne treatment solution is through kiosks (i.e vending machines and stalls in some malls). Proactiv itself doesn't actually have a brick and mortar store, but the product can be found in certain retail stores throughout the U.S. Recently I visited the kiosk located at the Manhattan Mall in Manhattan, New York and It is found on the first level of the mall. These kiosks are strategically placed in the malls and stores to attract the target market.This brings to mind distributors and retailers use of the right and effective retailing mix. A retailing mix is a combination of the six p's- product (product assortment); place (location); promotion (advertising and publicity); price; presentation (layout and atmosphere) and personnel (customer service and personal selling). The right mix usually influences the target markets perception of a product. It also sets apart one seller from an other in the eyes of the consumers because they are always looking for sellers to meet or exceed their expectations.

Ch. 6 - Consumer Decision Making 

When customers buy anything, a decision is made before they carry on to buy that particular product. Anything done by a customer leading up to a purchase is called consumer behavior. In the MKTG-Principles of Marketing textbook by Lamb/Hair/Daniel, Student Edition 8 Consumer Behavior is described as a process consumers use to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use. The textbook also mentions that understanding how consumers make purchase decisions can help marketing managers in many ways. I find this to be true because not only would it aid and guide marketing officers to make better decisions in enticing customers both old and new, It will also cause them to improve their marketing strategy to create a need, strengthen relationships with the customers and increase sales figures.

The consumer decision-making process has five steps which guides shoppers in their decision making.  This process doesn't just help with the actual purchasing of a product by a customer but also helps them deal the complex process of what happens before and after a purchase. The five steps are; need/problem recognition, information search, alternative evaluation,purchase and post-purchase evaluation.

                                

An important factor when going through the purchasing process is the evaluation of need/want. The difference between need and want is that need is something you have to have and a want is something you would like to have. Most people use these words interchangeably but they don't mean the same thing. Making this evaluation between the two helps consumers make sound and reasonable purchasing decisions. I'm sure Proactiv customers go through the same process when making purchases. Some people would consider acne treatment products a need because of how acne is viewed in some societies. In some other places it could be considered a want because not much emphasis is placed on acne and its treatment. Whatever the case may be it, the decision to buy is entirely dependent on the customer, what they are willing to buy and its accessibility.

Acne is a global issue and with its market estimated to reach  $3.02 billion by 2016 according to research, it is quite obvious that consumers have a wide range of products to choose from for acne treatment. There are many acne treatment solutions in the market and most of them are affordable and sold at drug stores, however there has to be something great that pulls customers more towards the Proactiv brand. A research showed that Proactiv works just as well as other drug store acne treatment solutions, but what I believe draws consumers towards the brand is their smart marketing. Proactiv uses well-known celebrities to endorse their brand. This alone will have consumers thinking that if it works for celebrities, then it certainly is good enough for them. Another plus is how they divided the treatment into three easy-to-use steps. Consumers wouldn't have to figure out on their own what other steps they should take or what other products they could use on top of other regularly sold acne treatment solutions. Finding an effective regimen is sometimes hard so the three step acne system is a plus when it comes to customers making a choice. With this out of the way, customers can focus more on other important issues like affordability, whether they really need or want Proactiv and how they can get it. 

Chp. 5 - Developing a Global Vision

Being that acne is a global issue that affects people from all over the world, it is increasingly becoming possible to buy Proactiv solution in other countries. Proactiv can now be accessed in Canada, Asia Pacific and Europe. In terms of global marketing, each of these countries that sell the solution have their own separate website that is linked to the U.S's website. it is located at the bottom page of the site and once you select a country, it redirects you to another page. Each website is customized to match the country that the solution is being sold(e.g language, web setup, graphics etc). However, Guthy-Renker, the direct marketing company that is in charge of the proactiv brand does not directly sell certain proactiv products in any jurisdiction other than the United States of America because they may not be approved for sale in other jurisdictions. 

The sellers of Proactiv have done a great job in reacting to international marketing opportunities. The main reason it has been able to entice business from all over the world has been because of their famous adverts. The sellers of proactive use real celebrities to market and endorse their products both on TV and online. Guthy-Renker expanded into Web, social and mobile marketing. As of 2010, they hit 1.5 million views on its YouTube channel, 41,000 Facebook fans, and 8,700 Twitter followers. However in June of 2012, The advertising standards authority(ASA) in the Uk banned some of Proactiv's celebrity endorsed advertisements from being aired on tv in the Uk. This was after a woman filed a complaint stating that the adverts were misleading. She said the celebrities were likely to have used Proactiv's American brand, which contains an active ingredient not present in the UK version. Issues like these is the reason why it is imperative to have a good global vision. What may be acceptable or over looked in some parts of the world may not be allowed in other parts. It is also important to market a product differently in each geographic area to suit its target market. When global marketing is done the right way, it helps a company stay ahead of its competitors.

Ch. 4 - The Marketing Environment 

After reading this chapter from the marketing textbook, I got really excited knowing that there was a lot to talk about Proactiv and their marketing environment. Their target market is made up of both males and females not forgetting teens who suffer from acne breakouts. With  Acne being the most common skin disorder in the United States, affecting 40 to 50 million Americans of all ethnicity, it is quite obvious that the makers of proactiv had their work cut out for them in the beginning but seem to have done an excellent job in curbing acne and its negative effects. In my opinion, The best thing the makers of Proactiv did was handing over marketing issues to Guthy&Renker, an independent marketing company. They have done a very good job and are probably the reason why Proactiv is the success it is today.

When evaluating a marketing environment, it is vital to understand the targeted customers,their needs, what drives their decision to buy products/services and most importantly, competition. All these external factors are needed in order for a company to make smart decisions that would not just drive sales but also make their products relevant to those who buy it. Economic and social factors also play an important role in enabling consumers to buy products/services. Understanding these factors will help marketing managers integrate it effectively into their marketing plans.

Proactiv is an easy 3-step cleansing system designed to help clear up acne and prevent future breakouts. The product is readily made accessible to consumers without the need of a prescription from a doctor and is sold online, by telephone, or through kiosk located in shopping malls throughout the country. The kit is retailed for $20-$50 together with other products that complement the 3-step treatment system making it affordable compared to other brands that works just as well as Proactiv. Part of Proactiv's marketing strategy in promoting their products is using celebrities for advertisement. The reason why most people would trust to buy products especially those used on the body and face is through testimonials from previous users. What better way is their to promote a product than the use of celebrities as spokespeople and endorsers, especially those that have the same problems as the rest of us. This brief summary above makes for a very effective marketing mix(four P's; Product, Price, Promotion and Place) which when done the right way provides for mutually satisfying exchanges with the target market.

Ch. 3 - Ethics & Social Responsibility 

Most good companies are built upon sound business practices and in order for businesses to help create order and promote prosperity in our societies, they should be involved in strong ethical business practices. However it is always easier said than done because you just cannot develop them overnight as many factors determine the nature of ethical decisions. Ethics is defined as the moral principles or values that govern the conduct or behavior of a person or group. Knowing this, it is just not important for businesses to be built upon good ethics but also it is imperative for the business to hire ethical people to run it. Another option that has become popular of late is the introduction of code of ethics in some business settings. These written codes are used as guidelines to help marketing managers and employees in general to make better decisions.

Social Responsibility (aka. Corporate Social Responsibility) is an ethical framework which suggests that businesses should voluntarily have concern for the welfare of the societies in which they operate in. Meaning a balance should be sustained between the businesses interests and activities that directly advance social objectives in a good way. The pyramid of CSR has four main components. It has economic performance, which is for a business to be profitable, as the foundation of the three other responsibilities which are Legal(obey the law), Ethical(do what's right and avoid harm) and Philanthropic(be a good corporate citizen and contribute resources to the community). A new theory in social responsibility which also drives corporate success is Sustainability which is the idea that companies that are socially responsible will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time. This is mainly true because companies that are involved in social responsibility are more likely to attract loyalty from customers and the public at large who have similar concerns as them.

The founders of Proactiv Solution have another business venture by partnering with independent business owners and giving them the opportunity to earn income based on sales of their products under the name of Rodan + Fields Dermatologists. They are very active in empowering independent business owners by giving them competitive pay and good benefits. Rodan and Fields also came up with The Prescription For Change™ (PFC) Foundation. The PFC Foundation supports students in need on their journey to becoming a "prescription for change" in their communities by fostering belief in themselves. This is a good example for Corporate Social Responsibility because not only do they have individuals helping to boost their sales in exchange for compensation, they are also helping to contribute resources to the community which satisfies both the company and society's interests. Rodan and Fields PFC Foundation are also involved in partnerships with non-profit organisations like Attitudes & Attire and buildOn, one provides the tools to raise self esteem, promote ethics and build the confidence necessary for women in need to develop successful life and job skills; the others goals are to break the cycle of poverty, illiteracy and low expectation through youth services and education.

sources: www.rodanandfields.com, MKTG, Pronciples of Marketing by Lamb Hair and McDaniel

Chp. 2 - Strategic Planning for Competitive Advantage 
 

 

 

For any business to become successful, there must be strategic plans put in place first or else it'll be hard for the business to accomplish its intended goals. A strategic plan should cover all bases and aspects of the business and if it is executed accordingly, it'll help the business leader better allocate time and resources in an effective and efficient way. This is in line with the definition of Strategic Planning in the text book MKTG-Principles of Marketing, student edition 8 by Lamb, Hair and McDaniel which states "Strategic Planning is the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities". Since this is a marketing blog, the main focus would be on Proactiv and their marketing plan which I believe has helped them evolve into the giant success they are today. Elements of a marketing plan include- A Mission Statement; Situation or SWOT analysis; Objectives; Marketing Strategy (Target Market Strategy and Marketing Mix) and Implementation, Evaluation, Control

 

After Dr's Katie Rodan and Kathy Fields agreed to work together to create a preventive treatment for acne, they came up with business ideas but once developed, their product was rejected by several distributors. Guthy-Renker finally agreed to market it in 1995. Guthy-Renker is an independent direct marketing company and are Known for making award-winning productions and marketing campaigns featuring some of today’s leading celebrities. It has become quite common where inventors make their products and bring on direct marketing companies who have more knowledge of the marketplace, to take on responsibility and deal with marketing strategies.

 

Celebrity endorsements play a huge part in Proactiv's marketing strategy and making its products more attractive to its users giving them a competitive advantage. While a clinical study showed that Proactiv reduces comedones, inflamed lesions and facial oiliness, an 80-person consumer report concluded that Proactiv is equally effective as cheaper drugstore products. This however, hasn't stopped them from spending between $12-$15 million on celebrity endorsements each year and also spending $200 million a year air-time for commercials. Celebrity endorsers include the likes of Lindsay Lohan, Justin Beiber, Adam Levine, Julianne Hough, Zendaya Coleman, Jessica Simpson and Jurnee Smollett-Bell etc.

With over 60 million Americans having active acne, Proactiv serves a hefty target market and have maintained a marketing mix(the four P's) that provides them with mutually satisfying exchanges with their target market.

Product- the producers of Proactiv have continuously been innovative with heir products .Not only do they have various products for all kinds of skin-care purposes, the directions of applying the products are made easy to understand, there's money back guaranty incase a customer decides the product is not for them and discontinues the use of it.

Place (distribution)- Proactiv is mainly made available via the internet or by placing a toll-free call which saves its customers time from having to go to a physical store to buy it also saving them embarrassment since acne is considered a "social taboo". Products is also available in automated vending machines in some parts of the U.S and shipping is delivered swiftly from date of purchase.

Promotion- as mentioned before, celebrity endorsements play a crucial part in promotions and in addition to that, many stories of real life users are used in commercials. They mostly show before and after pictures of the users once again reminding and persuading existing and potential customers of the effectiveness of the treatment.

Pricing- Great deals are made on the products on a regular basis. They show how much the products would regularly cost compared to how much it is being sold for at that particular time. This I believe boosts sales while leaving the customers feeling like they have value for their exchange.

 

 

 

"Now I can go into any meeting, any situation, and not worry about my skin." Jodi, 33

"I am just thrilled. I didn't expect my skin to look this clear." Jillian, 30

Sources: Wikipedia, www.proactiv.com, www.guthy-renker,com
 

Chapter 1 - Proactiv (An Overview)

Proactiv solution is a brand of acne treatment and skin-care products developed by two dermatologists Drs. Katie Rodan and Kathy Fields in 1995 and is distributed by Guthy-Rekner a direct marketing company. Proactiv's original and primary product is a three-step acne treatment kit. The kit includes a cleanser, toner and repairing treatment that contain benzoyl peroxide and glycolic acid as their active ingredient. After 20 years of successful business and after selling other varieties of the product in Gentle formula and Extra Strength, Proactiv has now reformulated a new 3-step acne treatment system by the name of  Proactiv+ to help achieve their mission - "healthy, beautiful skin for all". This treatment clears acne and prevents future breakouts.The new formula has complexion-conscious skincare benefits by using exclusive Smart Target™ Technology designed to deliver 50% more acne-killing benzoyl peroxide directly into the pore-where acne starts . Proactiv has other skin-care products sold under its brand name such as face masks, body washes, deep cleansing brushes, dark spot serums and X Out™ a one-step Wash-In Treatment designed for teens. Proactiv is sold on a subscript basis and as of 2007, worldwide sales of Proactiv were $850 million annually, 70 percent of which were in the US. Proactiv can be purchased outside of retail stores, as of 2010, 60 percent of Proactiv orders were placed online.It is also sold through a toll-free telephone number, in mall outlets, in vending machines and in certain boutiques.

"With Proactiv+, our goal is to give

everyone the clear skin we all deserve plus

the healthy, glowing, radiant complexion

we all want."- Drs. Rodan and Fields