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VIACTIV Business Challenge

VIACTIV Business Challenge. Team 2 Liana Camacho Alissa Hsu Lynch Javier Vazquez Max Wolf Marcelo Yarmaian. Background : Calcium supplementation is key to reduce risk of osteoporosis. VIACTIV ® is a brand of Calcium Soft Chew Supplements.

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VIACTIV Business Challenge

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  1. VIACTIV Business Challenge Team 2 Liana Camacho Alissa Hsu Lynch Javier Vazquez Max Wolf Marcelo Yarmaian

  2. Background: • Calcium supplementation is key to reduce risk of osteoporosis. • VIACTIV® is a brand of Calcium Soft Chew Supplements. • Soft chews represent 10% of the market (Pills: 80%), VIACTIV®: 60% share. • Calcium market is declining • VIACTIV® is positioned as an enjoyable alternative to pills that helps women to feel good from inside out. • Key calcium supplement drivers: makes me feel good about myself when I take it, brand, format & taste. • Problem Statement: • Sales declining steeply (>50% decline in 5 years ) • VIACTIV® position in soft chews has been threatened since the introduction of Caltrate • Brand is restricted on resources: • BME is restricted (Caltrate invests x11 vsViactiv in mass media). • Limited resources for product innovation

  3. Alternative Solutions Considered    • Recommendation: • Part 1: Fine-tune current model within current resources • Part 2: Exploring New Business Models

  4. Fine-tune current model within current resources

  5. Fine-tune current model within current resources • Viactiv Consumer: • women, self aware, healthy lifestyle, enjoys life, not regimented, treats her self/indulges, 45+ • Strategic approach: • - Differentiate with superior proposition (taste, efficacy, emotional connection) • Focus on HHP growth • Highly targeted communication/no mass media • Enhance Positioning: • Strategic angle: • Best Taste • More Efficacy (improved absorption due to unique vitamin D and K nutrients) • Strongest Emotional Connection • Real benefit: • Emotionally: I feel I am doing the best to treat my self well & healthy – every day (life-improving) • Rationally: building my bone strength in efficient & great tasting way • RTBs: • More bone building nutrients than any other chew (storey: Calcium, Vit. D, Vit. K together ensure maximum absorption of calcium in the bone) • Endorsed by XYZ (celebrity or model/actress, strong women – equity stake to pay her) to deliver RTB in credible way • Improve Product Taste: • Some taste improvement (if possible): flavor, flavor name, packaging look/feel • Raise Retail Price: • - Increase price to 20% above Caltrate (only once product and positioning has been improved), 60% above PL

  6. Fine-tune current model within current resources • Change communication strategy from mass media to highly targeted channels: • Principles: • Celebrity endorsement -> awareness, relevance, credibility • Focus on 3 viral/WOM channels to build awareness & trial • Channel 1: Endorsement/PR on efficacy and taste (incl. blogging, search, social etc.) • Word of Mouth campaign (efficacy message, highly targeted) • Channel 2: Sampling at passion-points (tasting is believing) • fashion shows • up-scale concerts • flower-shows • Pilates /yoga-classes, gyms • new-born in hospital sampling • Cross sample with SPLENDA: put chew samples into SPLENDA boxes • Channel 3: Healthcare providers -> efficacy • together with SPLENDA • reach orthopedists together with J&J medical division • reach gynecologists • Link channels via digital (search, bloggers, social networks, babycenter.com) • Distribution Channel: • Focus more on food & drug (trade-spend) • Try to maintain maximum distribution

  7. Exploring New Business Models

  8. Alternative #1: Licensing & Joint Ventures Rationale • High Brand Awareness: 83% • Brand Image Strengths (vs. category): Tastes Great; Not Mediciney; Is a Treat; Easy to Chew License the Viactiv Trademark • Viactiv as a bone strengthening ingredient • Food & Beverage: liquid breakfasts, milk for growing kids/adolescents (chocolate?) • Partner with premium treats to strengthen their health appeal • Premium Chocolates • Cookies • Baked Goods Joint Venture Opportunities • Explore Internal J&J Options: partner with drug that may diminish bone density, heart & breast health as a side effect (i.e. Orthotricyclin) and/or a drug linked to these health areas

  9. Alternative #2: Solely “Direct To Consumer” QVC/Home Shopping Network • Infomercial to educate • Credible spokesperson to endorse products (HCP and/or celebrity) • Test with New Premium Platform • Unique to channels • This will help determine if we meet acceptable hurdle rates • Leverage learning from Neutrogena for QVC E*Commerce/Social Websites • Drugstore.com • Amazon.com • Facebook.com • Benefit: ability to focus BME’s J&J owned site

  10. Exploring New Business Models: Assumptions & Risks

  11. Executive Summary • Short term recommendation: Fine-tune model with current resources • Pursue “Best” differentiation strategy (taste/efficacy/emotional connection) • Improve product taste • Increase price • Shift communication from mass media to highly targeted media • Shift trade spending to Food & Drug • Long term recommendation: Test and roll out new business models (begin testing as soon as ST strategy is executed) • Map out and develop joint ventures / licensing agreements with strategic partners • Design and test new distribution models: DTC / QVC

  12. Thanks!

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