The case analysis report focuses on three major aspects; The Situation Analysis, Decision Analysis and Conclusions & Recommendations. The first part i.e. Situation Analysis would contain all the relevant information and all the decision factors that are present hence providing us with the actual problem statement plus the current condition of the Company, Collaborators, Customers and competitors. The second part of report i.e. The Decision Analysis would provide a carefully developed assessment of the industry, market and buyer behavior, the organization and the alternative courses of action. The last part consists of a set of recommendations of strategies and decisions that we think the company should have applied in the given situation.
Defining the problem
VISTAKON, an independent and entrepreneurial subsidiary of Johnson & Johnson (J&J), pioneered the production and marketing of disposable contact lenses with the 1987 launch of Acuvue; the first disposable extended wear lenses. By 1993, Acuvue was the leading brand of soft contact lenses in the US. In March 1994, Gary Kunkle (president of Vistakon) was presented with the test market results of a new/additional product i.e. 1 Day Acuvue (The world's first daily disposable lenses). There were a few dilemmas relating to the launch of this new variant, including pricing, positioning, promotion, advertisement and off course the decreased demand of previous products. They had to evaluate the risks associated with the launch of 1 Day Acuvue and then decide the strategies to overcome the problem statement.
How can we convince all the disposable lens wearer i.e. 21% of the soft lens wearer in the US market to switch to 1 Day Acuvue, with sales close to 200 million lenses per year, while considering the low budget for promotion (marketing & advertising), involvement of collaborators, price reduction and off course cannibalization of the existing product range?
Decision Factors and the relevant information
1.1981 Conventional Extended wear lens (18 months Reusable lens) 2.Soft lens Conventional daily wear (18 months reusable lens) 3.1987 Acuvue (1 week disposable lens)
4.1991 Surevue (2 weeks disposable lens)
5.1993 1 Day Acuvue (Daily disposable Lens)
Image in the Market
By 1993, Acuvue was the leading brand of contact lens in the US. Acuvue and Surevue captured 14.8% and 4.1% share respectively of new fittings of the soft contact lenses.
The new technology for 1 Day Acuvue resulted in a completely automated manufacturing process from molding through packing and inspection, the lenses were never touched by human hands. The investment in technology created a superior contact lens.
Vistakon was an autonomous and highly entrepreneurial division in J&J's renowned decentralized organization.
To produce High volume, Low cost, High quality products.
They had close collaboration with the Eye Care Professionals and the Doctors. The company used them to recommend the product to the consumers
Market size & Market segment
The US soft lens consumer market in 1994 was 21 million. Disposable lens wearers were 4.6 million, Frequent Replacement wearer 3.4 million, Conventional Lens wearer 13.3 million.
1.Daily wear patients who have active lifestyles or contact lens problems 2.Contact Lens Dropouts
3.Existing Conventional Daily wear patients.
Benefits that consumer is seeking
1.Dispose daily at night
2.Reduced lens care hassles
Motivation behind purchase; value drivers, benefits vs. cost 1.The first value driver is the basic function of the 1 Day Acuvue Lens i.e. consumers are able to dispose them on a daily basis hence reducing the Lens Care Hassles. 2.For non-frequent lens wearer segment, the benefits vs. cost are more, as the initial investment on...