Richardson-Vicks: relevant background information
- Leading worldwide marketer of health, personal and nutritional care related products.
- Brand recognition based on cold treatment market, VapoRub. (25% market share in US)
More than 50% of sales were from international operations, with standardized marketing strategy in all countries, focused on functional and chemical aspect of the product.
Skin care segment: Clearasil – leading acne product in US, Germany and Japan (Before 1975, was first-mover in approved treatment for acne in these countries.)
Nippon-Vicks: wholly owned subsidiary of Richardson-Vicks in Japan
- Initial growth was very accelerated.
- The firm was not associated with cold treatment as in the US, but with…show more content… Fierce competition, both local and foreign brands. Could also be distributed anywhere. The products were mainly cleansing bar soaps, creams, foams, all marketed for general skin care (not necessarily for acne specifically).
Analysis: poor positioning considering market characteristics and distribution systems
Clearasil’s introduction in Japan was initially successful, but mostly because it had the first mover advantage. Being the first product to be adversities solely for acne treatment, Clearasil initiated the market in Japan. However, as local and international competitors entered the market, Clearasil’s strategy showed to be inappropriate. Consequently its sales gradually decreased, never able to reach the initial levels.
One of the issues was the decision to register Clearasil as a drug, and the functional 3-way advertising of the product. Neither of them was suitable given the cultural acceptance of acne in Japan. Due to that, Clearasil was perceived as too strong, only to be used in extremes cases, which limited its target market.
Also, being registered as a drug limited the distribution system to only drugstores, and could be indicated by doctors or the drugstore staff since consumer patterns were directed by word-of-mouth. The decision to register Clearasil as drug in the Japanese market was not advantageous.
Another issue was Nippon-Vicks being associated with Colac (laxative product), which was not