Every time I stay in a hotel and find Neutrogena French-Milled soap, I cringe. When I was at Neutrogena we tightened our strategy, and built the market value of the brand from $15 Million to $88 Million in three years. Eight years later on the same strategy, Neutrogena sold out to Johnson & Johnson for $924 Million.
J&J stayed on strategy with Neutrogena for about a year then started wavering. Neutrogena was a brand famous for what it was not, rather than for what it was. The soap was clear. The shampoo was clear. Don’t get me wrong. Neutrogena is a big business for J&J, but it is no longer a clearly focused brand. A source at J&J estimated that the market value for Neutrogena today, if available would be about $1.2B, not a very big increase from the $924 paid over a decade ago.
What is good for the business (the annual volume) is often not good for the brand because it causes one to stray beyond the brand focus and add off-strategy line extensions. At its current volume, if it were still a focused brand, Neutrogena would be worth well over $2B
Hello Frank,
I’m not quite sure what French-milled soap is but if Neutrogena’s version isn’t at least transparent, shame on them! Growing up, there were two things I understood about Neutrogena. First, their connection to Norway (not France). Second, their transparent purity.
Now, I don’t think I have ever been a part of Neutrogena’s target market (I’m male and, unfortunately, my kids tell me I’m balding). But I do remember the first time I came to learn about the Neutrogena brand and that was from my sister, Elisabeth, about 30 years ago. I would have been in my early teens and she would have been finishing high school and entering college. Now, I’m hoping she won’t read this because I have to mention…she had major hair and skin issues! Elisabeth regularly colored her hair and the bathroom cabinet was always filled with an assortment of hair coloring treatments, various shampoo’s and conditioners.
One day, she came home with a couple of Neutrogena products; a transparent, colorless shampoo in a see-through bottle, as well as a bar of transparent soap. I was fascinated! I remember reading the packaging and developing the understanding that most shampoo’s and soaps contained loads of chemicals. Overtime, one’s hair and skin would build-up an (unhealthy) residue. But Neutrogena’s shampoo’s and soaps were pure. They would strip away the chemicals and return your hair and skin to it’s natural, healthy condition.
I don’t know if “so pure you can see through it” was a formal slogan at the time or whether it was an expectation that I formed in my own mind. But here I was, a thirteen year-old boy and the Neutrogena brand created an expectation that I thought was compelling and that I remember to this day.
Frank, I wonder why Neutrogena is straying: ignorance (they either don’t know or have forgotten the Killer Brand principles) or temptation (they know the Killer Brand principles, they just choose to ignore them in their quest to squeeze yet another dollar in sales from the Neutrogena brand name).
Ernst