Dynamic Marketing Communiqué

130 YEARS : Why Johnson & Johnson’s credo is a good blueprint for success [Monday Marketing Marvels]

March 23, 2020

“At Johnson & Johnson, we believe good health is the foundation of vibrant lives,

thriving communities, and forward progress.”

When it comes to the most popular health and wellness brands, one company that has the largest global reach is Johnson & Johnson.

For over 130 years, the company has continuously served families and healthcare professionals all over the world, providing quality products that promote health and well-being.

Their global success can also be attributed to their focus on putting the needs of their customers first.

The company was founded by brothers Robert, James, and Edward Johnson in New Brunswick, New Jersey in 1886.

From the start, Johnson & Johnson was a company that catered to healthcare and medical professionals. Their first products were antiseptics that helped prevent the occurrence of infections during surgery.

They continued expanding their range of products over the next few decades, releasing the first commercially available first aid kits, maternity kits, dental floss, sanitary protection, and bandages. These products addressed various health needs from healing wounds, skin health, dental health, and child care.

A lot of these products became the household names we know today!

There’s a good chance that you’ve heard or used some of their brands like Band-Aid, Neutrogena, Tylenol, Listerine, and Benadryl.

Along with releasing popular products, Johnson & Johnson is also a company that prides itself on practicing ethical sales and marketing because they want to provide the best service to their customers.

Their marketing strategy has helped them thrive in the competitive global health marketplace.

Their campaigns have a strong focus on health care, with an emphasis on spreading awareness to various health issues. They are also committed to building up their brand in the long-term, which helps build high shareholder value. This builds strong customer loyalty, as evidenced by the enduring popularity of their products.

Research and development is also key in their marketing, as they create products that address the unique needs of their customers, greatly expanding their range to cover different health and lifestyle trends.

Similar to how they develop their products, Johnson & Johnson also knows how to utilize modern marketing platforms. In today’s digital space, the company adopted a social media-first approach, which helps increase brand awareness to a larger number of people.

Brand storytelling is also central to their campaigns, which establishes a more emotional and personal connection with the brands and their products. This creates a positive image that appeals to families, which is a very large part of their global customer base.

This focus on quality customer care and service is part of their company credo, which was established in 1943. This is a guide that lays out how the company performs its decision-making process and challenges them to put the needs of the people first.

This emphasizes each of their responsibilities, which are the following:

  • Responsibility towards our employees – “We are responsible to our employees who work with us throughout the world. We must provide an inclusive work environment where each person must be considered as an individual.”
  • Responsibility to our community – “We are responsible to the communities in which we live and work and to the world community as well. We must help people be healthier by supporting better access and care in more places around the world.”
  • Responsibility to our stockholders – “Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas.”

This has helped them achieve continued success for multiple decades, helping them grow as a reputable company with brands that medical professionals and families trust.

This also helped them maintain strong sales numbers, earning over USD 82.05 billion in 2019.

  • 2018 – USD 81.58 billion
  • 2017 – USD 76.45 billion
  • 2016 – USD 71.89 billion

Johnson & Johnson’s Earning Power: Valens Research vs. As-reported numbers

Johnson & Johnson makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a phenomenal earning power generator.

So, how well has Johnson & Johnson been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results much higher than what traditional databases show.

The blue bars in the chart above represent Johnson & Johnson’s earning power (Uniform Return On Assets). These numbers have been positive, going over 16% for the past 16 years.

The global ROA average is just 6%

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you’d just see the 7% orange bar for the 2018 as-reported ROA (return on assets, a measure of earning power), instead of the 22% adjusted ROA.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Their returns have been well above the market.

The numbers show that they are doing well and making a profit.

Sustained success and growth are some of the biggest challenges many companies face in the long-term.

Without the right vision and policies in place, many of them fail to reach their potential or lose momentum.

Johnson & Johnson was able to experience a long period of success due to the strict adherence to their company credo that ensures they remain committed to providing quality products to customers around the globe.

Their marketing strategy also helped develop a strong connection with their customers, being a great example of how to spread awareness and build your brand in the long-term to establish brand loyalty.

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com