clearasil case

8/12/2019 Clearasil Case

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Clearasil CaseIn 2006, the stealth skincare brand Clearasil, along with its parent company Boots HealthcareInternational (BHI), w as purchased by R eckitt Benckiser, Inc. Since the acquisition, Reckitt Benckiserhas faced considerable challenges in increasing Clearasil's market share and growing the Clearasilbrand -- currently the #4 Young Skin Care (YSC) brand in the U.S. The management team at ReckittBenckiser has charged the Brand Team to reevaluate Clearasil's entire brand structure and improveperformance w ith the goal of ascending to the #3 position (overtaking Clean & Clear ) in the next fiveyears.The Brand Tea m's attention is focused on Clearasil's target consumers and po sitioning co mpon entsthat were identified early on as m ost challenging and critical to Clearasil's future success. Ho wever,to formulate the winning strategies needed to get to a #3 share position, the Brand Team understandsthere are three fundamental issues that need further refinement an d mana gement alignment:

Who should be C learasil's core consumer target moving forwa rd? What optimal/ownable positioning can withstand changing market conditions and takeClearasil to #3 m arket share spot in the next five years? How to bring the new Clearasil brand positioning to life through a few key go-to-market

strategies?BRAND HISTORYin the early 1950's, U.S. marketer Ivan Combe developed Clearasil after talking to teenagers andpharmacists about the need for an acne cream that worked. He asked chemists to create aformula that dried up acne and covered blemishes with a flesh-tinted cream. The cream wasnamed Clearasil to capitalize on every teenager's dream of having clear skin. The first Clearasilproducts a bar soap and a medicated ointment in a tube - were launched in the U.S. in 1959.:n 1961, Combe sold Clearasil to The Vick Chemical Company, which later became Richardson-Vicks. The Clearasil brand grew steadily through the 60's and 70's, launching across Europe,Canada and Japan. New medicated washes were added to the line and by 1982, Clearasil wasthe market leader in the U.S., Japan and German y.Proctor & Gamble acquired Clearasil in 1985 for $1.24 billion. Under the Proctor & Gambletenure, Clearasil sustained its leadership position as the #1 brand in acne treatment, andexpanded the brand in over 70 countries.During the early 90's, Proctor & Gamble strategized to grow the brand with a broadened scope ofproduct offerings for its teen target. In lieu of more treatment-focused products, Clearasilintroduced a new range of acne prevention products that acted against blocked pores, bacteriadevelopment, and excess oil production. This range included a face wash, dual action pads,medicated moisturizer, and a handy pen applicator that delivered powerful medication directlyonto a pimple without affecting over-drying the surrounding area.However, during the mid-to-late 90's, Clearasil sales declined due to a flattened market and theentrance of Neutrogena, a new mega brand into the YSC category.In 2000, Proctor & Gamble put 50-year-old Clearasil on the block for sale. While profitable,Clearasil accounted for only 2% of Proctor & Gamble's beauty care division sales, and executivesat Proctor & Gamble decided to focus resources on a range of their top-tier beauty brandsinstead. BHI acquired Clearasil that year for approximately $34 0 million.In 2006. BH I was purchased by Reckitt. Benckiser and now C learasil is a part of the RB portfolio.

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PRODUCT PORTFOLIO, TARGET CONSUMERS POSITIONING EVOLUTIONBHI acquired Clearasil with twelve products on the market. They reportedly spent 50M globallypositioning Clearasil as a teen brand (according to PR release from Brand Republic dated September10, 2002). One global ad campaign used humor to support this repositioning, with a teenage boyfalling off his skateboard in front of a group of teenage girls. The tag read, Clearasil can't help youwith some em barrassments, but it can help tackle the three main causes of spots.In 2003, Clearasil added the Total Control platform to reach outside the teen dem ographic and takeaim at 18-24 year-old females. D esigned to maintain clear skin and tackle skincare problems on adaily basis, these seven new products, including Foaming Cleansing Cloths and a D aily MattifyingMoisturizer, featured more soph isticated packaging, a refined Clearasil logo that streamlined the arcshape, and lighter blue background.To offer consumers a maximum strength premium line, Clearasil introduced the Ultra platform inJanuary 2004. Promising clearer skin in three days with a money back guaranteed if not satisfied,Clearasil Ultra was introduced with two ne w treatmen t creams available in both the traditional tintedformat, and a vanishing format that blends into skin.BHI continually looked for opportunities to expand the Clearasil franchise. This time, Clearasiltargeted 18-24 year-old males to tap into the growing men's grooming m arket and retain teen malesas they grew older. In July 2004, BH I introduced the Clearasil for Men line which cons isted of a bodywash, an energizing face wash, a shave gel and shave balm. All products contained acne-preventionproperties (e.g. salicylic acid) to tie back to Clearasil's heritage as an efficacious acne skin carebrand.Total Control was discontinued in 2005 due to po or sales performance. To replace it, two new lines,Clearasil Daily Oil Control (0C) with green tea and peppermint, and Clearasil Daily Blackhead Control(BHC) w ith natural sea salt, were launched in January 2 006 right before Reckitt Benckiser took overBHI in February, 2006). New color schem es were also introduced for Oil Control (in Green) &Blackhead Con trol (in Purple) to attract more females. By the time Reckitt Benckiser took overClearasil, the Clearasil portfolio was reduced to four sub -lines: base line (packaged in Blue), Ultra, O ilControl & B lackhead Co ntrol. At that juncture. Clearasil's base line products w ere also repositionedunder the banner, Daily Cleanse. Clearasil leveraged use of the term daily across the Cleanse, OilControl and Blackhe ad Control product platforms to d iffuse the impression that Clearasil productswere too harsh for daily use.In 2007. Reckitt Benckiser updated Clearasil's look and feel. The base line graphics were changed toa darker, more prominent blue, and base l ine name was changed from Clearasil D ai ly Cleanse toClearasil Deep Clean se . In the same year, Clearasil launched under the base line - Clearasil D eepCleansing Scrub, and under the Ultra line - Ultra Acne System Solutions (a kit regimen) and UltraAcne C learing Gel Wash.In 2008, Reckitt Benckiser repositioned Clearasil's base line by renaming it Clearasil StayClear,introducing three new products in the l ine -- Skin Perfecting W ash, D aily Facial Scrub, O i l Free GelWash --, as we ll as new formulas, logos, graphics and packaging for existing products. This marks thethird new base line product name and packaging graphics in three years. The repositioning ofClearasil StayClear, and its tag Clearer Skin, All Day, Every Day, were intended to connect withconsumers seeking a product to maintain healthy looking skin and prevent breakouts. Clearasil Ultraalso revised its claim from Clearer Skin in 3 Days to Starts Working Instantly, to align withconsumers who want to deal with breakouts right when they begin to surface. The new packagingalso reflects this proposition with cues designed to app eal to both sexes, skew ing slightly mo re male.Due to poor sales performance, Clearasil Blackhead Control and Oil Control were discontinued as ofsecond quarter 2008. At present, Clearasil's product portfolio is streamlined to only the StayClear(base line) & Ultra two platforms (see E xhibit 4).

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Target Consumers: TeensPositioning: Treatmentfocused

Expanded target to include 18 -24 females; ExpandedPositioning to include DailyMaintenance

Strongest efficacy claim in themarket (Clearer skin in 3 days w/Money back guarantee

Expanded Target to include24 m ales

Daily name leveraged acrossBase Line, Oil Control &Blackhead Control to diffuseClearasil inherited harsh image

Dai ly name changed to DeepCleanse to reemphasizeefficacy

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Launched Deep Cleansing Scrub underBase Line; Launched Ultra Kit & Ultra Gel 18Wash Updated entire line packaging -9

Launched 2 Wash Products & 1 Daily FacialScrub under StayClear'l Discontinued c\ 3

Blackhead Control & Oil Control; Updated Spthe packaging again for both Ultra &StayClear


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MARKETING COMMUNICATIONHistorically, teens have alw ays been Clearasil's target consum er. In 1957, Clearasil ma de advertisinghistory as the second brand to sponsor the popular teenage dance and m usic TV show A mericanBandstand with the Jet-a-way Sweepstakes, a contest promising to whisk 15 boys and 15 girls on atwo-week cross-country adventure. Some 20,000 runner-ups would receive record albums containingthe most popu lar tracks of the day. When Am erican Bandstand host D ick Clark claimed C learasilwould, drink up oil, help dry blemishes, and help you to look better, teens responded in droves, salesskyrocketed, and Clearasil quickly ascended to lead the category in acne treatme nt.In 2004 the executives at BHI realized that more than half of teens spent a considerable amount oftime online (according to Pew/Internet & American Life Project), and launched an online snowboardsimulation game that used geo-targeting and content managem ent tools that allowed players to see aspecific version of the gam e based on their location.In 2005 and 2006, the core brand message Clearasil gives clear skin for the important mom ents inlife focused more on everyday scenarios, and corresponding ads depicted teens in transitionalmome nts, such as a first interview, or an older brother giving skin care advice to h is younger brother.In 2007. Clearasil gives clear skin for the important moments in life gave way to a more spirited,inspirational comm unication Clearasil May Cause Confidence, which conveyed the message,Clearasil gives you clear skin so you have the con fidence to make a bold, irreverent, unthinkablemove. Focused equally on males and females aged 11-24, the idea was to modernize the brand withan expand able concept that would appeal to both younger and older users, and stretch across targetsand products w ithout mimicking clichs often employed by the com petition. Three edgier TV spotswere developed under the May Cause Confidence campaign that took a more daring, playfulapproach in elevating the brand message bey ond a generic product benefit, to focus on the endbenefit of confidence. The spots stood apart from the typical smiling, all-Ame rican approach em ployedby the ma jor competition. and succeeded in gene rating considerable media buzz. Unfortunately, thiscampa ign did not drive significant in-market sa les lifts.The May Cause Confidence campaign continued in 2008 with two spots supporting the launch ofnew S tayClear products. One depicted a young female wh o was so confident because of her clear.smooth an d soft skin, she greeted her friends and strangers with a chee k rub. A new spot for ClearasilUltra also aired in the second half of 2008 (all May Cause Confidence spots are included in thefolder).The marketing support behind the May Cause Confidence campaign consists of primarily TV, brandwebsite update and market entry sampling given its limited budget level (Reckitt Benckisermanagement decided to retrieve marketing spend on Print previously employed by BHI). WhileClearasil main competition focused on appealing to consumers through integrated 360 degreemarketing.

THE YOUNG SKIN CARE MARKETThe Young Skin Care (YSC) category is comprised mainly five product segments: Washes (40'70of category share), Scrubs (22%), Treatments (14%), Pads (10%) and Kits (10%). Neutrogenahas leadership positions in all four segments, except Kits, where Acne Flee holds the numberone spot.The total U.S. YSC market in 2008 is estimated at $1.13 billion (estimate based on Nielsenscanning and panel data) in retail sales (including Proactive)). The category is fragmented with

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All Other16%

Clearasil8%

Stridex2%

OxyNoxzema 3%

3%

Neutrogena22%

Acne Free4%

Biore4%

Clean & Clear1 6% Proactiv22%

one direct-to-consumer brand Proactiv (22% dollar share), and mainly eight national retailbrands - Johnson & Johnson's Neutrogena (23% dollar share), Clean & Clear (16%), Clearasil(8%), Biore (4% ), Acne Free (3.5%), Noxzema (3%), Oxy (2.6%) and Stridex (1.5%). Thecategory has not expanded since Proactiv launched in 1994. In 2008, chiefly driven byNeutrogena's break-through innovation, the Wave T M & Clean & Clear's Blackhead Eraser T M , thecategory again grew to 3 .5% (growth estimate based on Nielsen scanning and panel da ta).

Exhibit 5 The Young Skin Care Market

The YSC market is expected to become more competitive with expansive new business models,new segm ent entries and various brands that attempt to carve out a ma rket niche through variousproduct positionings.Proactiv centers around a three-step system of products, appealing to 16-35 year old males andfemales who suffer from severe acne. Neutrogena's strategy is to own the dermatologistrecommen dation with both acne an d general skin care products for females aged 14-40. A ttractedby Proactiv's lucrative direct-to-consumer model, Neutrogena launched skiniD T M in May 2008 asthe first personalized acne solution system to directly compete with Proactiv. Clean & Clear istightly focused on younger females aged 12-24. Their position as a girl's best friend promisesbeautiful skin that's clean & clear and und er control.

Clearasil 's emp hasis has chang ed over the years. It started out with teen-focused treatment onlyproduct portfolio, and today offers a wide range of prod ucts both for rapid pimple treatment an dfor everyday prevention, catering to teens aged 11-17 and young adults aged 18-24 (see Exhibit2). Clearasil is the only brand in the U.S. that sources its sales equally from male and femaleconsumers. E xhibit 6 sum marizes current compe tit ive posit ionings a nd a dvertising expenditures.CONFIDENTIAL


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CONSUMER ATTITUDE AND USAGEA Usage a nd Attitude study conducted in September 2006 u ncovered the key points below:Skin conditions

Pimples/zits are the most common skin condition experienced by consumers, primarilyyoung peop le aged 11 17. Oily skin and blackheads are more l ikely to be experienced by18 24 year-olds. The key needs driving usage of skincare products among teens (11-17) are effective acneproducts that demonstrate speed. Young adults (18-24) are more likely to extend to dailyuse products h ence increased usage occasions.

The relationship between level of concern, frequency and severity of skin condition iscomplexo Severity correlates with frequency suffering frequently counts as severeo Concern, how ever, does not correlate with either severity or frequencyBy the critical age of 15, ha lf of the total consum ers have entered the facial skin caremarket.

Exhibit 7 Skin conditions experienced by age

Pimples/ zits

Oily skin

Blackheads

Whiteheads

Acne

Incidence of suffering frompimples, zits and acne is

higher among the younger agegroups. Older respondents

claim to suffer from o ily skin.

11to15 (179)E16-24 (282)

25-34 (220)E 35+ (354)

11-24 (416)Pimples 34%

Oily Skin 54%Blackheads 50%Whiteheads 40%

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Treatment vs. Prevention There is evidence to support market segmentation on the basis of treatment vs.prevention, however approximately half of the market seek to BO TH treat and prevent skinconditions as the objective of the facial skin care regime. These are the people mostinvolved in the market.

There is no evidence of a prevention / treatment spectrum as consumers are more worriedabout the ir skin condition -- treaters are no t necessarily more 'active' than preventers. Preventers, about a quarter of the market, seek to maintain, deep cleanse, and controltheir skin. They are more likely to experience milder skin conditions and less frequently. Treaters also account for about a quarter of the market. They e xperience more severe skinconditions more frequently and aim to get rid ot' and zap pimp les.

Consumers Psychographic Segments In YSC market, consumers typically fall into two psychographic segments people whotend to have higher anxiety about breakouts and people who are likely to have lower

anxiety. Higher anxiety consumers seek im

mediacy & maxim efficacy. When they get a pimple,they want to get rid of it as fast as they can.

Lower anx iety consumers bel ieve dai ly skin maintenance is the way to avoid pimples. Theywan t the product to be efficacious but not drying out their skin.

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In-market Sales Drivers Efficacy and quality are key drivers in the YSC market. Consumers are looking for trustedbrands that really work and are mo st effective at dealing with pimples . Brands suitable for everyday use, are gentle on skin, and that work all day long are alsodriving consumer purchase choices.

In 2008, Clearasil again scored highest on total brand awareness. In terms of Brand Strength,Clearasil is perceived to be a brand for teens with particular equity in pimple and treatment. Inreality, however, according to TNS Usage Panel (2007), while Clearasil still leads teen males inbrand share of category usage occasions, Neutrogena leads in teen females (see Exhibit 7). Themost recent Brand Equity Tracker (ending Jun 2008) confirmed that affinity, trust and modernityre more important to consum ers, and are areas that Clearasi l should focus on (see Exhibit 8).

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StayClear vs. Ultra Compared to StayClear, Ultra is associated with stronger attributes, but both Ultra andStayClear are fundamentally Clearasil and as such positioned closer to each other than tocompetitors (Thus far, the Clearasil team has been trying to target Ultra for higher anxietyconsumers and StayClear for lower anxiety ones. The efforts have yet met any significantsuccess).

Both StayClear and Ultra users seek to 'control pimples' as a main objective of their facialskin care regime. Ultra users are more likely to 'fight', 'get rid of and zap' pimples throughtheir skin care products.

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CONCLUSIONThe Clearasi l Brand Team has to decide:

Who should be Clearasil's core consumer target Teens (11-17) only, Young Adults (18-24)only or both Teens and Young A dults? Aside from what is best from strategic standpoint, thereis marketing spending co nsiderations that bore on this decision. Clearasil will not have samelevel of marketing support as its main competitions namely Neutrogena, Proactiv and Clean &Clear in the near future.

What positioning is optimal/ownable and could take Clearasil to #3 market share spot as themarke t continues to evolve in the next five years. How to bring this new Clearasil brand positioning to life through a few key go-to-marketstrategies.

If your team were the C learasil Brand Team, w hat would be your a nswers to above challenges?

Clean Clear. Neutrogena, Acne Free, Proactiv, Biore, Noxzema, Oxy, Stridex. Neutrogena V Jave 1 1 . Clean & Cleari3iapkhead =raseri m .skiniD T M are registered trademarks of their respective owners.

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