Vicks Health Care Division Management
Essay Preview: Vicks Health Care Division Management
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In May 1980 Vicks Health Care Division management had decided that Scorpio should not be launched nationally unless the new products group could develop copy able to increase trial beyond 3%. Tom Green, the recently arrived product director for Scorpio, analyzed the advertising test results extensively and concluded that Vicks Versus 3s positioning lacked a unifying theme that explained the common link among cold, sinus, and allergy conditions. He also noted that the research data suggested that consumers were not confused about their conditions and that VV3 advertising had devoted most of its attention to confusion and very little to a strong, competitive “reason why.”A New Unifying ThemeThe higher test scores for “Symptom Montage” spurred Green to develop a revised copy strategy which might reflect the strengths of that commercial and its predecessor “Common Symptoms.” He was struck by a phrase on the back of the VV3 package: “Vicks Versus 3 provides a single answer for effective relief of head miseries—whether you have a cold, sinus, or nasal allergy problem.” To him, “head miseries” seemed a common, unifying theme across all conditions. Indeed, the concept had appeared intermittently in Scorpio copy strategies, although not in the last one embodied in VV3. Green also found in the Vicks trademark bank what seemed a highly appropriate name: Headway. A Headway pack was designed (see Exhibit 1) and the copy strategy revised “to communicate that new Headway provides a single answer for head miseries relief no matter what their cause.” To test the strategy, Vicks produced four commercials with the new theme and the Headway name and pack. Communication tests of the usual design were conducted in July and August on the four new commercials made up as animatics—a series of still pictures with soundtrack (see Exhibit 2 for scripts). As a control, “Symptom Montage,” which had been tested in finished form in March 1980, was also made up into an animatic. On purchase intention one of the new commercials scored significantly higher (80% level of statistical confidence)1 than the control, but two scored lower. On trial there were no significant differences.2 On specific attribute ratings there were a few significantly higher scores (e.g., for relief of “cold, sinus, allergy” and relief of “many different symptoms”). In interpreting the results the market research group emphasized the failure of the new commercials to achieve significantly better purchase intention and trial. The new products group felt, however, that these were not the only key criteria; further, results had shown the most fluctuation in the two tests of “Symptom Montage.” The results did show very high acceptance of “head miseries” as a concept: 97% of respondents agreed that they had experienced head miseries.
Test Market ExtensionIn August 1980 the new products team decided that the test results for the head miseries commercials warranted extending the test market and allowing time to develop the new strategy further. Robert Arnold, the new division president, agreed in principle with the proposal, but because a change to Headway would have necessitated new test areas and consequently been expensive, he insisted the test continue under the VV3 name. Arnold was able to convince corporate management to extend the test in two of the four cities: Paducah, Kentucky, from the moderate plan, and Peoria, Illinois, from the high plan. “Symptom Montage” had replaced “Three Sons” in all four cities in May and was continued in Paducah. “Speed Up,” with the VV3 name, was shot as a finished commercial and run in Peoria from September. This test extension would cost Vicks $400,000 for a full year, $250,000 for a half year. As the new products group considered the situation in late December, they were encouraged by the last few months improvement in VV3s share levels, rebuilding from the low summer levels when Vicks had cut marketing support. Media had been reintroduced on September 22, 1980, with the “Symptom Montage” commercial in Paducah and “Speed Up” in Peoria, both with the VV3 name. (See Table A.) Trial had also gone from 3% in March to 4% in November in both Paducah and Peoria.Table A VV3s Dollar Market Shares (%)Four Weeks Ending3/244/205/186/157/148/119/610/61`1/3Paducah4.72.43.03.52.01.51.84.24.1Peoria4.23.73.22.82.22.12.02.62.9Decision for National LaunchThe new products group were aware that even a successful national launch could cost Vicks up to $2 million in Year I losses, not counting sales force time. Scorpio was, however, the only opportunity for a new colds care product in 1981. The group would also have to make a choice between the VV3 and Headway positions and fully justify their recommendation. To date the VV3 test markets had cost Vicks $1 million, and the Scorpio project had cost an estimated total of $2 million. The group also knew that corporate management was somewhat dubious about Project Scorpio and would probably not be disappointed by its demise. To allow adequate manufacturing lead time, a proposal to launch Scorpio nationally in July 1981 would have to be prepared and submitted to Richardson-Merrell management by March 1981. Green calculated that the group had until the end of December 1980 to decide whether or not to continue with the remainder of the Year II test, and until February 1981 to decide whether to recommend going national with Scorpio.