Case Study: McNeil Consumer Healthcare Scores With Tylenol Rapid Release Gel

McNeil Consumer Healthcare had been working hard for years to deliver new products and line extensions, but their size and incrementality were on the decline. Management decided to take a different approach. The company turned to the process of innovation productivity to create a major win in the marketplace for a new Tylenol product.

Before relying on the traditional method for new product development, McNeil took a step back to get a much better understanding of the competitive landscape from a strategic perspective.

Understand the Competitive Frame

With the help of HRCP, McNeil used a quantified competitive frame to determine how the market was organized from a consumer perspective. This work revealed a specific set of competitors, in a specific usage occasion, that a new product would need to be more effective than in order to source incremental volume. It also illustrated the specific set of benefits on which a new product would need to be superior in order to steal that volume.

Create a Precise Strategic Positioning

From the learning generated by the competitive frame of reference, McNeil set out to create a product and positioning that could deliver the critical set of benefits more effectively than the competition. The positioning for the product took the form of the strategic statement:

“To (Target), (new product X) is the Brand that delivers (Benefit) because of (Attributes) and has (Personality).”

The target became crystal clear through a deep and thorough understanding of users of specific competitive products as identified in the competitive frame of reference. The critical benefits and attributes necessary to source volume from those competitors – discovered and validated by the competitive frame – became an explicit part of the positioning statement and gave important direction to the R&D organization. The personality needed be consistent with the Tylenol equity.

Create the Business Proposition

Before significant product development began, the business proposition was simulated using the competitive frame of reference. Given pricing, gross margin, distribution and launch spending assumptions, it was determined that, for the new product to be successful in terms of short and long term profit, it would need to be at least a 1.2 effectiveness, or 20% more effective than the specific competitive set from which the product was intended to source volume.

Translated into action standards for marketing, R&D and market research, the implication was that the new product would need to be preferred 60% to 40% vs. the competition in order to be successful. Because the competitive frame analysis illustrated specifically which benefits were necessary to drive preference, creativity could be unleashed against achieving the desired benefits in a new way or by matching or surpassing the driving product attributes.

Develop Product and Proposition

Marketing and R&D collaborated to ensure that the positioning and benefits necessary to source volume from the competitive set would achieve the 60% to 40% preference identified by the business proposition. This was an iterative process, with much learning along the way. For instance, as a result of clear, consumer-based action standards against specific benefits set early in the process (that is, at the business proposition phase), expensive technology was scrapped in favor of older technology that was proven deliver against the benefits, at a much lower cost.

Results

The Tylenol Rapid Release Gel, launched in 2006, was the most successful launch in two decades for the Tylenol brand. Lauded by many industry and trade organizations, and awarded Launch of the Year by IRI, the product was three times the size of prior Tylenol launches in terms of incremental revenue and profit. Three years later, Rapid Release Gels remain the top-selling product for the Tylenol brand.