How to apply proactive correctly

Marketing

Marketing Principles/310, Section,

Summer 2014)

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ProActiv

Be specific, e.g. Ford Taurus, Apple iPad, Tide Detergent with Bleach, etc. It is important to know if you are preparing a marketing plan for a single product or an entire product line.

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Executive Summary

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Prepare this slide last and submit with your finished product at the end of the semester.

An executive summary should include:

Summary of key findings in t16he analysis of the current marketing situation

Briefly state your marketing mix recommendations for the coming year.

(See Appendix 1, pg 612 in the text 15th ed. or find the related appendix in the online version for example, but be sure to frame it as a Power Point, not prose)

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Table of Contents

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Market description

Segmentation (describe target market using segmentation characteristics) 5-6

Marketing targeting strategy 7

Value proposition 8

Factors influencing consumer behavior of the primary target market 9

Buyer decision process of the primary target market 10-11

Product review 12

Levels of product/service 12

Type of product/service 13

Product/service life cycle 14

Benefits/features analysis 15

Differentiation 16

Branding strategy 17

Competitive review 18

Competitive analysis 18

Market share 19

Competitive positions and roles 20

Strategic sweet spot 21

Positioning 22

Distribution review 23

Current supply chain members and roles 23

Value-delivery network analysis 24

Current type of distribution strategy 25

Strengths, Weaknesses, Opportunities, and Threats Analysis (SWOT) 26

Microenvironments 27

Macroenvironments 28

Prepare this slide twice: 1. When you are ready to submit Part 1, prepare your Table of Contents for Part 1

2. When you are ready to submit Part 2, prepare your final Table of Contents for both Part 1 and Part 2

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Section A Current Marketing Situation

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A.1.a. Market Description Description of market segments

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ProActiv primary target is between the ages of 24 and 65. They are female urban professionals with at least some college. This consumer has an active lifestyle. They are concerned about social and environmental issues. Mind and body wellness are important to them. They belong to a health club; take yoga, Pilate's or tai chi lessons. The effects of aging and the maintenance of a youthful appearance are a part of their life.

The secondary target market is females between the ages of 18 and 30, at both secondary and post-secondary education levels. Students and recent graduates, located in major urban markets are important for this target market because the majority of students are situated in the more populated areas of cities. This target market would be more inclined to utilize untraditional media for information, in the way of social media and online advertisements

The third market that is trying to be reached is professional single men between the ages of 20-45 with a gross household income of $45,000 to $85,000. These men are concerned with impressing not only the opposite sex, but their employers within the workplace. These professionals earn middle to upper class incomes and live in urban and suburban areas. They are trendsetters that want to be the first out of their friends to try new products.

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A.1.b. Market Description Current Marketing Targeting Strategy

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Paid media- ProActiv will shift their commercials from mainstream shows like Glee to more male- dominate shows like ESPN First Take. The commercials will demonstrate how young men were able to clear up their skin and get the girl that they had been chasing for a date, how happier the man is because his social life is thriving after his acne cleared up, and show professional athletes of all sports claiming that they suffered with acne and how it affected their livelihood, prior to using ProActiv. An example of this is when ProActiv previously sponsored the longtime acne sufferer, 21 year old NASCAR driver, Danny Efland to drive the ProActiv Chevy Impala during NASCAR Nationwide Series race at the Daytona International Speedway in Daytona, FL on Friday, July 2, 2010 (Unknown, 2010).

Earned media- ProActiv gains this from the work of mouth that celebrities offer when they are being interviewed and the interviewer inquires about how great their skin looks. They also achieve this from every day average people that get complimented on their complexion and the person mentions that they use ProActiv. More male actors and celebrities should be endorsing the product which will increase the machismo of the product.

Owned media- ProActiv has its own website and displays women and their life changing stories. Men should have a presence on the website and their success stories will be listed. The website also has websites for most countries in their native language. There is a toggle on the bottom right side of the website for consumers to pick the country that they are in and the website will load in their language. ProActiv also has millions in hits on YouTube and thousands of Facebook fans and Twitter followers that are worldwide. They are gaining promotional leverage from all their young hot celebrities that have millions of fans following them on their Facebook, Twitter, Google+, Pinterest, and other social media websites.

Shared media- ProActiv has an interactive link on their website and their social media sites like Facebook, YouTube, and Twitter for fans to express their experiences with the products, whether it is positive or negative. It gives the consumer a chance to tell their aspect of the product and the products effectiveness to either counteract or support the claims that are made by ProActiv. There will be a more gender unspecific viewpoints to draw in the male audience. ProActiv will increase their presence in social networks and blogs with main concepts of sports discussion.

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A.1.c. Market Description Value Proposition

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The company’s time-tested unique selling proposition has been its promise to deliver blemish-free skin with a product that is characterized by its ease of use and that does not dry out your countenance, unlike some competitors’ products devised to treat acne.

ProActiv has traditionally relied on celebrity endorsers claiming that they owe their clear skin to or maintain it with ProActiv. This helps pull younger prospects, including teens, especially as they are the ones who are likely to suffer most from an outbreak of acne. The product relies on the buzz created when youngsters who don’t have their own credit cards ask their parents to buy ProActiv.

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A.1.d. Market description Factors influencing consumer behavior

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Sociocultural Forces. One potential competitive advantage for ProActiv is that it is targeted toward s the upper middle class market as a prestige product that is exclusively researched, provides consistent results, and can be customized to their individual preferences. Targeting to this market keeps the company stable because they are less likely to be affected by the economic slowdown and can afford to keep purchasing the product.

Based on the characteristics of your primary target market, what are the major factors influencing their buying behavior?

Hints:

Use Chapter 5, Figure 5.2 for a framework.

Do not need to address each factor, but those factors you believe are part of the consumer’s ‘black box’ for this purchase.

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A.1.e. Market description Buyer decision process

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Consumer behavior can be defined as the buying behavior of final consumers-individuals and households who buy goods and services for personal consumption. Consumer behavior is strongly influenced by many uncontrollable factors namely cultural, social, personal and psychological. Marketers cannot control these factors, but it is a must to take them into consideration (Enderson, 2013).

People purchase the Facial Treatment Essence is normally based on the complex buying behavior. The price of this essence is expensive if compare with many other brands of its kind, thus it is quite risky to purchase. The consumer usually will get loads of information about this product from many sources before purchase.

The significant difference of this product is the unique ingredient called Pitera. Pitera is the secret to flawless skin which can only found in ProActiv products. It is a naturally-occurring liquid from the yeast fermentation process uses exclusive yeast which differs from other skin care brands that based on yeast from beer (Enderson, 2013).

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Continued

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Research suggests that a consumer passes through five stages of buyer decision process as shown in figure 1. Generally, consumers of ProActiv follow this theory. The first stage is problem recognition. At this stage, the consumer recognizes the need of a skin care product. The second stage is information search which is when the consumer tries to search for some alternatives skin care’s brands. Next stage is evaluation of alternatives. The consumer will evaluate the value of different brands, products and services. The following step is the purchase decision. The consumer makes a decision and selects ProActiv to solve the problem. On the post-purchase evaluation stage, the consumer will continue to use the same product if satisfied with the product. However, sometimes consumers may not follow the sequence of the buyer decision process or may not go through all the process in the real world.

A.2.a. Product Review Levels of product/service

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The persistence with three phases of cleansing, toning and refining is indicative of how the company has stuck with the same design for 17 years, despite some modification of the formula. An unchanged product has its attractions, as it tells a prospective buyer that the manufacturer got it right the first time. Although there are negative reviews about the product and its ordering process, ProActiv has its loyal repeat buyers who have helped the product remain a viable commercial proposition for nearly two decades.

No acne product works uniformly on every user, every time. And a manufacturer will want to get it right most of the time. That said, ProActiv does not do anything differently, as compared with other competitive products, and uses benzoyl peroxide for acne treatment. How ProActiv differentiates itself from competitors is in its ease of application and its non-irritability.

User reviewers of ProActiv are split evenly between those who rave about the product and those who deny that it works. The apparent reason for such mixed reviews is benzoyl peroxide which suits some people and doesn’t suit others, who are allergic to it.

The company also offers a gentle version, with salicyclic peroxide, for those users who are allergic to benzoyl peroxide.

We also have to take into account those users who do not follow the manufacturer’s instructions religiously and so may not be deriving optimal benefit from using ProActiv. Such users might complain about the non-effectiveness of the product.

Additionally there are many types of acne some of which might not respond to ProActiv and could need the active intervention of a dermatologist and prescriptive drugs to treat them.

But if you don’t get your hopes up by taking the claims made in ProActiv infomercials literally, you could end up appreciative of any results you might see, rather than having unrealistic expectations and ending up disappointed.

It is not possible to get a guarantee from any acne treatment company that its product is sure to produce results for every user. However, ProActiv gives a guarantee of refund if you are unhappy with the product and return it to the company. Some user reviewers have complained about the company’s auto-ship policy. But if you understand the ordering process, you will find that you can cancel your order and ensure that such automatic shipping does not take place.

If you have tried other acne treatment products to no avail, you should try ProActiv. The large majority of users have found it to produce positive results, and it might work for you as well.

This begins your description of your product/service as it currently exists.

To complete this topic, skip ahead to Chapter 8, specifically Figure 8.1, Three levels of product. Describe your product/service in terms of each of these levels.

Hints:

Be sure you understand each of the three levels as this will be important in assessing and developing marketing strategy.

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A.2.b. Product Review Type of product/service

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Specialty Consumer product

Customer buying behavior- strong brand preference

Price-products are at the top of the price scale for their category in the industry. ProActiv mostly uses psychological pricing to see their products.

Distrubution- uses the intermediaries of direct marketing and selling to distribute their products. It is exclusively distributed. It can only be purchased online, over the phone, mall kiosk or from a vending machine

Promotion-new media will be to 65% traditional media and 35% new media.

Examples-toner, astringent, and masks

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A.2.c. Product review Product/service lifecycle

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Expanding product awareness and develop a market for the product

Introduction

Seek to build brand preference and incease market share

Growth

Defend market while sharing maximisng profits

Maturity

Adding new features

Reduced costs

Decline

A.2.d. Product Review Benefits/features analysis

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Targted Segment Customer Need Corresponding Benefits
Skin smooting exfoliator Clear pore clogging imprities Renew skin surface
Complexion Hydrator Moisturizer Even tones
Pore targeting treament Fight acne Protects skin’s surface
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A.2.e. Product Review Differentiation

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The Product differentiation in the positioning strategy of ProActive that sets it apart from its competitors is its distinct reputation for effective and noticeable results, also accentuated by the positive endorsements given by various celebrities. This is part of the strategy of positioning ProActive on product attributes, on the basis of its blemish fighting performance. What to have in the words of P.diddy "silky smooth, cocca-butter skin?" How? Just ask Katie Rodan and Kathy Fields. Celebrity endorsement have been a popular promotional tool for ProActive, as using someone known and trusted gives consumers the impression they are more trustworthy and adds weight to their testimonials. Why use celebrities? Celebrity endorsement have been a popular promotional tool for ProActive, as using someone known and trusted gives consumers the impression they are more trustworthy and adds weight to their testimonials. Along with this today's society has glorified and celebrities through the media and many people may look up to celebrities as idols or many be greatly influenced by what they purchase and in turn purchase similar things to be like them. An example of this would be using the teen sensation Justin Beiber in there testimonials using the influence of his targeted audience which largely consists of teen girls in which also fit’s ProActiv’s demographic. Other forms of promotion Other forms of promotion undertaken for ProActive include personal selling methods such as stalls in shopping centers and also through mass media advertising mainly through television. ProActive was founded by two Stanford university students while they were studying dermatology. The two dermatologists came about the idea while they were discussing how they want to improve skin tone, blemishes blackheads as well as whiteheads. Thus a 3 step system was designed to prevent acne and future breakouts on a daily basis.

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A.2.f. Product Review Branding strategy

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ProActiv is a professional level acne system, known for their high quality product and social responsibility. ProActiv is trusted by many professionals and everyday people. The brand has many faithful customers both old and young. They are most popular with females between the ages 15 to 35. ProActiv offers a high quality product sold at a value-based price.

Our variety-based positioning at Neutrogena allows the company to service a broad range of consumers and servicing consumer needs in the advancement of human skin health and total well being. “ProActiv offers some of the world’s most loved beauty and skin care lines, and manufactures and market products in over 68 countries” reaching concern parents with small children or acne prone teenagers, men and women struggling with adult acne

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A.3.a. Competitive Review Competitive Analysis

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Competitor Brand Features
3-Step System Clinique Clinique has the advantage of having a personal consultant that can assist consumers on-site in most department stores where they personally sell their product line.
Clear Difference Estee Lauder Offer the options of products that only require one or two steps (3-in-1 cleansers).
Complete Acne Therapy System Neutrogena Known for their high quality product and social responsibility.
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A.3.b. Competitive Review Market share

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Series 1 Proactiv Estee Lauder Neutrogena 800 659 356 Column1 Proactiv Estee Lauder Neutrogena Column2 Proactiv Estee Lauder Neutrogena

Millions

A.3.c. Competitive Review Competitive positions and roles

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ProActiv currently holds the top spot in skincare. Their skincare brand, ProActiv+, makes up 22% of the North American market share. Its affordable pricing and wide availability gives the brand strength in the Canadian cosmetic industry.

Estee Lauder is another competitor in skincare, however it does falls into the luxury segment. Neutrogena is the nicher, that can be found away from department stores, in stores like Walmart. Neutrogena products are sold at competitive prices while ProActiv is sold at value-based prices. Market shares for the top international skincare companies are as follows: ProActiv, Estee Lauder, and Neutorgena

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A.3.d. Competitive review Strategic Sweet Spot

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ProActiv is for any teen or adult who struggles with acne-prone skin, mild to moderate acne, adult acne and/or hormonal breakouts. ProActiv works for men and women of all ages, and will appeal especially to women in their twenties, thirties, forties and fifties who desire spa-quality skincare products. ProActiv takes advantage of new science to deliver more effectively on its original promise to clear acne, help prevent future breakouts and give you great skincare.

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A.3.e. Competitive review Positioning

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ProActiv is our most advanced solution to deliver clear, radiant, flawless-looking skin. ProActiv+ is the result of 10 years of research, extensive studies and input from thousands of ProActiv customers. Working with a team of expert chemists, Doctors Rodan and Fields have delivered a completely reengineered 3-Step System that fights acne faster and more effectively, and provides skincare benefits above and beyond what anyone would expect from an acne treatment.

ProActiv is the only acne treatment with Smart Target® Technology. Smart Target® Technology is an acne-targeting innovation that delivers 50 percent more of our prescription-grade acne-fighting medicine with laser-like precision directly to the pore, where the acne starts, and away from the skin's surface, for faster, more effective acne treatment with less irritation to the skin.

In addition, ProActiv has powerful acne-fighting medicine in every step for a comprehensive, dual-therapy solution that combines the most effective FDA acne-fighting ingredients to unplug pores and help prevent new breakouts from forming.

Finally, because acne is a lot more than just blemishes and breakouts, ProActiv has been formulated with advanced skincare ingredients to deliver solutions to many of the biggest problems of acne-prone skin, including uneven tone, unwanted pigmentation, excess oil and shine, redness and blotchiness, large-looking pores and a dull complexion.

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A.4.a. Distribution review Current supply chain members and roles

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Producer Producer Producer

Wholesaler

Retailer Retailer

Consumer Consumer Consumer

Using direct channels ProActiv sells directly to the consumer

Using indirect channels ProActiv uses different to bring its product to the final buyers.

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A.4.b. Distribution Review Value delivery network analysis

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The multichannel distributions has been a success with more than 5 million active customers and annual sales of about 800 million dollars world wide.

The company’s multichannel distribution consists of infomercials, home shopping television, specialty beauty retailer, company-owned boutiques, salon spas, and online shopping.

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A.4.c. Distribution Review Current type of distribution strategy

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ProActiv uses the intermediaries of direct marketing and selling to distribute their products. ProActiv is exclusively distributed because you cannot purchase it from stores. It can only be purchased online, over the phone, mall kiosk or from a vending machine. ProActiv products are not on the same shelves in the stores which prevents consumers from comparing them side-by-side, which gives it distinctiveness from its competitors. The vending machines are strategically located in the larger (mostly international) airports and malls. The location within the airport is after the security check points. This can be an advantage because travelers are not checked for the amount of fluid on their person but a disadvantage is that a person trying to purchase ProActiv and doesn’t have a flight will not be able to access the products. However, it is unlikely for someone to pay for parking at an airport just to purchase ProActiv. For more people to have access to ProActiv products, the vending machines can be advantageously placed in some of the less prominent shopping malls and smaller airports (Lucas, 2009).

The focal point to make changes in the distribution marketing strategy should increase the male market base and share and are dependent on the locations that ProActiv is marketed and the images that it portrays as the face of the company. The ProActiv advertisement images will incorporate more male models and clients to give the product a more masculine appeal. The website currently only displays pictures of females. The advertisements will be seen in more male-dominated periodicals. The free newspapers, Wall Street Journal, business journals, men’s fitness, sports, and car magazines, as well as billboards on and around public transportation increases the chances of more men seeing the product. ProActiv should switch advertising commercials from the time slots of show like Glee to NBA basketball games and NFL football games. Images of professional male athletes will keep the men’s attention.

ProActiv experimented with selling its products to a general-merchandise retailer through the Costco warehouse club. The distribution channel is different. The way it works it that there is a sample size kit in the display in Costco, and then you are given a code to redeem the rest of the 120 day supply kit online. There are no extra charges once going through the online site because the- shipping was included with the original purchase amount.

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Title Slide – no need for additional content

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Part B SWOT Analysis

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B.1. SWOT microenvironments

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This SWOT analysis provides an assessment of ProActiv’s strengths, weaknesses, opportunities, and threats to ProActiv expanding its market share to males. The strengths and weaknesses are internal to the company and the opportunities and threats are external to the company.

Strengths

The strengths are that ProActiv is a famous brand name that is recognized worldwide for the effectiveness of its acne treatment and skin care products. It is manufactured by the reputable strong product line of Guthy-Renker. Guthy-Renker is internationally recognized and manufactures products in 68 countries. ProActiv has a strong financial position because its sales were $830 million last year. ProActiv has selective market coverage for distribution of their product and has a variety of promotion and advertising methods. They sell their products through vending machines and kiosks in airports and malls in additional to the internet. They advertise through direct mail, posters, signs, infomercials (30 minute), commercials (30 seconds,1 minute, and 2 minutes), and ads in mainly teenager and women’s magazines (future plans to expand to top three men’s magazines). ProActiv pays millions of dollars in celebrity advertisements which gains the trust of consumers when they assume that the celebrity is constantly using the product to produce the flawless skin that they see them with while they are on television or in movies. ProActiv also offers a 24/7 support line available by phone, online or live chat for purchasing and advice in using their product.

Weaknesses

The weaknesses are that ProActiv is not found in stores. Their product lines are limited in the number/ variety of products that they offer. If a consumer does not use it properly and follow the steps accurately, it hinders the effectiveness of the product. Most men do not want to take the time to do three different steps when they are washing their faces. ProActiv has some reviews that their customer service is not good when consumers are trying to cancel the automatic delivery of its product. It also has a tarnished reputation for the process it takes to get its money back guarantee refunded to the customer. Most of ProActiv’s ads and promotions are geared towards women and do not leverage the other market available. There are no men pictured on their website and they currently only advertise in young ladies, teen, and women’s magazines. ProActiv is also priced higher than the majority of its competitors and are rarely ever discounted

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B.2. SWOT macroenvironments

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Opportunities

The opportunities that ProActiv has are that it can increase its global positioning. Its manufacturer Guthy-Renker operates in 68 countries which gives ProActiv the capability to be offered in the same amount with its manufacturer that already has established its brand within those countries. ProActiv can expand its customer base by focusing on men and teenagers more. ProActiv doesn’t currently advertise in any men’s magazines. Advertising in the top three men’s magazines along with incorporating more men models on their website and infomercials, will likely increase their market share. It currently advertises in teen magazines that are mostly young adult teenagers. It can draw in 12-17 year old children who want clearer skin to improve their image and make them more appealing to the opposite sex. ProActiv can bundle their products to make it a more attractive package. ProActiv’s manufacturer, Guthy-Renker offers sunblock lotion and multivitamins that assists in controlling the variables that cause acne. ProActiv should start selling the 3-step solution in packages with the sunblock lotion and/ or multivitamins to enhance their original product solution. Since ProActiv has integrated vending machines into its distribution channels, placing the vending machines in premium hotels and smaller airports may improve sales because it makes the product more accessible to consumers that were rushed in the airport and don’t have the time to go to the local mall.

Threats

Intense competition is one of the many threats that ProActiv faces. There are several skin care products that are made “for men” on the market under popular company’s licensing like: Johnson & Johnson- Neutrogena Men’s Skin and Clean and Clear lines, Nature’s Cure, Menscience, Clinique, Anthony Logistics for Men, Nivea for Men, aMENity, and SkinCeuticals. Most of the competition is moderately priced in comparison to ProActiv. With the economy still recovering, consumers may be more tempted to purchase one of the many cheaper products instead of ProActiv. Some of the competitors have fewer steps to achieve a clear complexion. ProActiv has a three step process while most others only have a one or two step process. It makes it easier and quicker to clean your face. Although ProActiv has a customer support hotline, other competitors offer a true personalized experience like Clinique. The consumer can do into a department store and have the Clinique representative evaluate their skin and assist them in selecting which products would suit them best.

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This concludes Part 1

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Be sure to go back and develop your Table of Contents

Be sure to edit your work, follow the tips for effective Power Point Presentations

Be sure to include your endnotes and bibliography

Check your work against the grading rubric

Upload your Part 1 to your assignment folder by the due date listed in the course schedule.

Remember your analysis so that you can make recommendations in part 2 grounded in the current situation and how it can be improved.

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Sources

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Sources

Corporation, G.-R. (2014). ProActiv. Retrieved from ProActiv Solutions: http://www.ProActiv.com/

Enderson, D. (2013). How Safe is ProActiv? Retrieved from eHow health: http://www.ehow.com/facts_5859825_safe-ProActiv_.html

Espinoza, G. (2010, July 15). People Magazine. Saving Face, pp. 1-2. Retrieved June 25, 2014, from http://www.people.com/people/article/0,,20137526,00.html

Glen. (2010, July 18). ProActiv Dishonest Marketing Strategy. Retrieved June 12, 2014, from Acne Research: http://www.acneresearch.org/ProActiv-dishonest-marketing-strategy/

Goodlett, E. (2013). Information on ProActiv. Retrieved June 12, 2014, from eHow style: http://www.ehow.com/about_6623105_information-ProActiv.html