J & J Philippines -Case

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J & J (PHILIPPINES), INC. —
JOHNSON'S FACE POWDER (A)1

Professor John Kennedy prepared this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality.
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basement floor in those operations. Many were reached by passage through large expanses of fast food operations, occupying space leased from the supermarket.
Department stores carried a broad range of merchandise categories and, in that sense were comparable to
North American department store operations of the 1960s and early 1970s, before the development of “category killer” specialty stores and price clubs. Each store or chain operated within a narrow range of price points, with some very noticeable price point differences across chains. Retail margins were in the range of 10% to 15%, with high price point stores taking even higher margins. Department stores and supermarkets usually bought directly from manufacturers.
Wholesalers sold to a range of smaller sized stores in both the larger and smaller urban areas. They generally bought at the same price as the large direct accounts, and worked on margins of 3% to 5% of their selling price. It should be noted that there was not always a clear distinction between retail and wholesale, in that some retailers acted as a wholesaler for some lines, and some wholesalers sold at retail as well. Van dealers sold to downscale corner variety stores and small market stalls. They sold in very small quantities (e.g. three to six pieces) and ex-truck and on a cash basis.
In 1989, approximately 65% of Johnson & Johnson sales were direct to retailers, 15% to
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