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Neutrogena

Neutrogena: Brand Profile

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Neutrogena is one of the biggest brands in the personal care portfolio of Johnson & Johnson, and the company's highest spending advertiser, far ahead of stablemates such as Tylenol or Listerine. It is the #1 general skincare brand in the US, available in a wide variety of products, ranging from cleansers and moisturizers to haircare products, cosmetics and anti-aging creams. Recently it has established a strong presence in acne treatments with its SkinID range and innovative Light Therapy face mask. Customers outside the US may be most familiar with Neutrogena's "Norwegian Formula" hand and body moisturising products, but in fact this is a well-established American business which started as a maker of mild glycerine soaps before diversifying into haircare products in 1980. It is partnered within the J&J portfolio by three other flagship brands: Aveeno, Clean & Clear and RoC.

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Competitors

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Brand & Activities

Neutrogena is the top general skincare range in the US, successfully combining a collection of mass-market products with more specialized dermatological treatments. The brand has successfully countered the rapid expansion of Olay and Dove in skincare, cleansing and haircare, and has been able to maintain a position in cosmetics where Olay was forced to admit defeat, while also expanding its range of dermatological products. Neutrogena's main weakness is its profile outside North America, where it is considerably less well-known and is present in a much small selection of premium skincare and haircare segments.

The Neutrogena range has expanded dramatically since the end of the 1990s, matching a similar series of extensions by Olay, Nivea and other rivals. Sales broke through the $1bn barrier for the first time in 2005. In its biggest market, the US, the brand now extends to numerous segments. The main range of general face and body cleansers and moisturizers, is supported by specialised acne treatments and anti-ageing products; as well as haircare, suncare (including self-tanning products) and men's skincare products (since 2002). In addition, a cosmetics range was introduced in 1999 and now comprises foundation, eye makeup, blusher, lipstick and nailcare products.

In total the brand embraces more than 250 separate lines. Sub-brands include therapeutic shampoo T/Gel; full haircare range Clean; Visibly Firm, Visibly Young and other anti-aging products; and Norwegian Formula hand and body creams. Neutrogena Advanced Solutions comprises a range of more specialised acne-fighting and age-reversing products, including the group's first powered product, introduced in 2005. The MicroDermabrasion System uses a vibrating tool to remove dead skin cells; it was followed in 2007 by Neutrogena Wave, a vibrating power cleanser for the face. In 2008, the company introduced skin ID, a personalised acne treatment based on each individual's skin type and lifestyle. In suncare, the group has scored considerable success with Neutogena Wet Skin, a sunblock specially designed to adhere to wet skin. A more recent addition to the portfolio is Neutrogena Light Therapy, an unsual face mask medical device for home use that uses light frequency to clear acne. Johnson & Johnson acquired the technology with the purchase of start-up La Lumiere in 2015. Launched the following year, it was named as Mass Beauty Launch of the Year by several beauty magazines.

Neutrogena is marketed in more than 70 countries, each of which offers a subset of the full product range. The brand is less well-established in Europe than the US, especially in continental Europe, compared to Nivea and L'Oreal Plenitude, but has grown rapidly since the late 1990s. It is marketed in Japan under license by Shiseido through subsidiary company Prier Co, and was introduced in China for the first time in 2004.

Neutrogena relies heavily in its marketing on endorsements from professional dermatology experts, and has established an advisory board to endorse and consult on new products. It was one of the first beauty care products to seek professional endorsements back in the 1960s, and continues to use the "Dermatologist Recommended" slogan to promote its range. Reinforcing its commitment to pioneering products, scientists from Neutrogena and sister unit Aveeno jointly developed advanced sunscreen technology in 2006 to give longer-lasting protection against UVA rays. These were introduced in selected Neutrogena products under the Helioplex name. The brand has assembled a sizeable portfolio of actresses, models and musicians who serve as brand ambassadors. They include Jennifer Garner, Nicole Kidman, Kerry Washington and Olivia Holt.

Johnson & Johnson's combined global skincare sales were $3.9bn in 2016, split more or less evenly between the US and international.

Background

The company now known as Neutrogena Corporation was created in 1930 in Los Angeles, California, by chemist Emanuel Stolaroff, originally under the name Natone Products. This business specialized in preparations for beauty salons, mostly serving the film industry, but by the early 1940s, Stolaroff was also manufacturing and distributing cosmetics to a wider retail market. In 1954, while on a business trip to Europe, he came across an unusually mild glycerine soap developed by Belgian cosmetic chemist Edmond Fromont. Unlike any other product then available, the product rinsed quickly and easily from the skin, leaving no soap residue. Better still, the skin returned to its normal pH level within 11 minutes of washing, just one minute more than if it had been washed with only plain water.

Stolaroff felt there was a market for such a cleanser in the US and acquired import rights. He named it Neutrogena (after its pH-neutral qualities) and positioned the product as a premium item, calling it a "facial cleansing bar" rather than a soap and pricing it at $1 (more than five times more expensive than most soaps). Distribution was targeted at department stores and upscale drugstores. Sales had risen to $80,000 a year by 1957, and Natone began US production of the product two years later, boosting sales to $1m by 1960. With Neutrogena now its best-selling product, Natone changed its name to The Neutrogena Corporation in 1962.

During the late 1950s, Harvard graduate Lloyd Cotsen married Stolaroff's daughter and went to work for the company. He masterminded an aggressive marketing campaign to forge closer ties with American dermatologists, establishing a separate sales force to tour the country offering free samples to be tested and passed on to patients. The campaign was enormously successful, and substantially boosted sales. As a result, Cotsen was named president of the company in 1967, taking over the day-to-day running of the business, although his father-in-law remained chairman & CEO. The company went public in 1973.

The Neutrogena saga took a tragic twist in 1979 when a masked intruder broke into Cotsen's house while he was away on a business trip, murdering Mrs Cotsen and one of their four children. Police believed a rival from the Belgian company that had originally developed Neutrogena had committed the killing as a result of a row over trademark rights, but the suspect died before police were able to question him. Cotsen was appointed CEO in 1980, and threw himself into his work, extending the brand into other segments. That year the company introduced its first haircare products, Neutrogena Shampoo for consumers and T/Gel Shampoo, initially promoted exclusively to dermatologists.

Emanuel Stolaroff died in 1982, leaving Cotsen with a controlling 38% shareholding in the business. The brand was introduced in the UK in 1983, initially only under the Norwegian Formula range, followed by the first shampoos in 1988. It was subsequently introduced to selected countries in mainland Europe over the next few years (although not France, where the brand was only launched for the first time in 2003). By the mid-1990s, worldwide sales were around $260m annually. The company was acquired by Johnson & Johnson in 1994 for $906m.

Last full revision 3rd November 2017

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