Consumer Behavior Case Study
August 4, 1999
Presented by:
Kurt Beloff
Donald Chase
Brendan O'Hare
Matej Okorn
Yejin Shim
Company Overview
Chesebrough-Ponds incorporated (CPI) was formed in 1955 through the merger of Chesebrough manufacturing company and Ponds Extract Company. In 1976, the company had six divisions with after-tax profits of $54 million on net sales of $747 million.
Product Overview
Robert Chesebrough first discovered Vaseline Petroleum Jelly (VPJ) in 1880 at his oil fields in Pennsylvania. It was the first product sold by the Chesebrough Manufacturing Company, which marketed the product by giving away free samples - an untested marketing practice at that time.
By 1977, VPJ was considered a household staple used by over 90% of the population. The product accounted for $22.5 million in CPI sales in 1976, a healthy increase over the $17.8 million in sales realized in 1977. However, sales growth in 1977 was projected to be flat, budgeted at $22.9 million for the year.
VPJ was sold in two basic forms: regular and carbolated. Regular VPJ was distributed primarily through grocery, drug, and mass merchandise stores; these accounted for 85% of VPJ ounce volume. Carbolated VPJ was a specialized first aid product, containing an active ingredient. Carbolated VPJ accounted for a stable 7% of VPJ dollar sales to consumers, although it was sold primarily through drugstores, was rarely discounted, and never advertised separately.
Vaseline Petroleum Jelly was sold in two basic containers, jars and tubes. Jars sizes were: 1.75 oz., 3.75 oz., 7.50 oz., 12.0 oz., and 15.0 oz.. The tubes sizes were 1.0 oz. and 3.75 oz. VPJ sales were mainly concentrated in the 1.75 oz., 3.75 oz. and 7.50 oz jar sizes, which combined for 81% of VPJ factory shipments by size.
The Market for Vaseline Petroleum Jelly
Consumer studies indicated that heavy users were women aged 45 years old or older who viewed petroleum