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