University of Southeastern Philippines

College of Business Administration

J & J (Philippines), Inc. Johnson’s Face Powder (A)1

Submitted by:

Elviña, Alliah
Gregana, Lovely Glendyl
Icdang, Raimond Dwight
Maños, Grace Ann
Limbaga, Rodelyn
Tapic, Antoniette Joy

Submitted to:

DAN PROTACIO P. PACOY

September 30, 2019

I. Conduct PESTLE

External Environment Evaluation

POLITICAL

Government Regulations

Due to the production of J & J face powder, the company should comply with the
requirements needed under the provisions and regulations mandated by the Department of
Trade and Industry with regards to the labeling, safeness, and standard of the product. The
same should be done also under the provisions and regulations mandated by the Department
of Environment and Natural Resources to minimize the pollution that may produce from the
company's plants due to chemicals used in the production.

Political Instability (Threat)

A change in political stability or political stability itself affects the company as it builds a
company's confidence to the potential investors and customers. It provides a favorable
business environment if maintained. The company has to make marketing strategies to sustain
the standard of investors and customers and the same effect also on industries.

ECONOMICAL

GDP

GDP of J&J Company has been a disadvantage for the firm because the economic
performance of the ASEAN countries shows that the Philippines is already behind in terms of
Growth rate which is from 6% (1989) down to their estimated rate in 1990 which is 2.7%. This
shows that poor performance of the country was related to the power shortage which results in
Johnson & Johnson reduction in their industrial outputs. With the given GDP, the company may
lose its opportunity to introduce their product as their target customer would lessen their
expenses where customers would prioritize to purchase products which sustain their everyday
necessities

Interest Rates (Threat)

If the interest rate increases, the company's cost of production would also increase as
their debts increase which may urge the company to reduce its production. Due to this, the
profitability of a company will be affected.

Inflation (Threat)

In the year 1990, there was an inflation rate of 12.2%, it indicates that the Philippines
CPI was high and that means people were choosing basic commodities since the prices are high.

SOCIAL

Age Distribution (Threat)

In 1990 Philippine population was 61 million and an estimated 2.3% population growth
per year, 42% of the population is living in urban areas and about half of that portion lived in a
dozen cities. The target market of the firm would be the urban female that ranges from ages
15-24 years old. It shows that a total of only 20.3% of the whole population is within the target
market. This indicates that the company has a short-range distribution market.

Product design (Threat)

It is clearly stated that the target market of the J & J face powder in compact form is
females ages 15-24 years old. We all know that there are also men who use face powder but
because of the design of the packaging, they may hesitate to purchase the product. The J&J
Company will have strong control over the firm because supermarkets are very supportive in
terms of introducing new products that are available at a market price under 50 pesos but
because of their design, it indicates that it could lower their sales than their known products. In
terms of industry, the J&J Company has an advantage for they will be the one that has an
influence in selling their products in the supermarkets and to their target market which is
female that has an age range of 15-24 years old.

Social patterns and changing consumer needs (Threat)

The product line of Johnson & Johnson in 1956 started as a manufacturer and
distributor of baby products and grew over the years with their new products. As Johnson &
Johnson Inc., grew the demands of their consumers grew too, the innovation lead them to
make a product that is suitable for the needs and preferences of their target market. Besides,
the firm would probably innovate new product/s that will be liked by their target market and
possibly attract new potential customers. Thus, in terms of the industry, they need to pay
attention to their market research because it will help them in determining what target market
they will be catering to.

TECHNOLOGICAL

Innovation

J&J Face Powder Compact and Refill has been an advantage because despite being an
American company, the company has encouraged the development of local innovations. 4
(four) particular Filipino innovations have been launch and became staples in Filipino
household; baby care, skincare, and feminine needs of the Filipino consumer. Also, it will be a
strength for the industry where this company belongs because it gives a big impact on the
industry from its main product to innovating new for them to connect and relate with the
trend.

Advertisement

J&J Face Powder allocated a budget for its advertisement. Although it was already given
that J&J Company is exerting effort and money to have an advertisement, this is an advantage
also for the firm. Advertising this product would notify or give the target market an idea of
what is new with the company.
Power Shortage (Threat)

Despite strengths, the only threat that the company faced in the year 1989 is the severe
power shortage, resulting in brownouts that created substantial reductions in industrial output.
This has an impact in terms of production and productivity since the production of face powder
requires machinery to operate it. And in case the firm uses a generator, then it would be costly
in their part.

II. How was J&J Face Powder designed?

The company aims to cater to the needs of the teens and young adults through the
development of its Johnson & Johnson Face Compact and Refill. It was packed in a plastic
compact so that it could be used outside the home. Thus, the product serves the young Filipino
people that want to put distance between their childhoods and to maintain the balance
between comfort and security on others. The market research confirmed that there is an
interest in both female teens and young adults. Consequently, the company finds the following
results; the teen and young adults used it as a skin freshener, pressured mothers in opposing
their daughters in using "cosmetic" powder in compact, young adults would put baby powder in
their handkerchief or refilling their cosmetic compacts with Johnson's baby powder and lastly,
there was no face powder that has been sold in the supermarkets.

It is designed to be an easy access for the consumers and to the supermarket. The
distribution in the supermarkets will be strength for the company where the traditional
cosmetic firm has no control over it.

III. Should J&J push with the launch? Why?

IV. If J&J pushes for the launch, how many compacts and refills should they initially
manufacture?

References:

https://www.cosmeticsdesign-europe.com/Article/2017/02/15/Recyclable-cosmetics-
packaging-a-central-industry-focus

https://www.ellenmacarthurfoundation.org/news/spring-2019-report

file:///C:/Users/user/Creative%20Cloud%20Files/Downloads/13625-Article%20Text-58801-1-
10-20150523.pdf

https://www.jnj.com.ph/about-jnj/company-history/healthcare-innovation