CLIENT: SCHERING-PLOUGH

PROJECT: MANAGEMENT MEETING SPEECH 

Thanks for the introduction, Spike. You know, I think you're right, Spike. It's time to get down to business and share with everyone the great programs we have in store for 1992 Suncare.

On behalf of the Suncare Marketing Team, I want to welcome each and everyone of you to our 1992 Suncare meeting. I think Spike Sample has reminded us it's time to turn our attention to 1992 Suncare.

Before we start, let's take a quick look at the agenda for the rest of the morning. First, we're going to review our year-to-date category performances. Then, we'll provide you with a strategic overview of what we're planning for 1992.

This will be followed by a look at our 1992 group promotion plans. And we'll finish the morning session by unveiling all the great brand specific programs we've got in place for next year.

Let's begin by looking at the Suncare category. Due to some heavy rains in our Florida and Southern California regions, the category growth has been a little slower than we. had expected. Compared to last year, the category year-to-date ending in June was flat. In particular, Florida showed a 25 percent decline in growth.

On the positive side, we did see some good weather in July and August. And, we believe this will lead to significantly improved market performance. Our projection at this point is to end the year up 3 percent...to $328 MM in our food and drug outlets.

Also, there were other noteworthy bright spots in the market. Chief among them was the strong showing of sunless tanning products, which is projected to be up a full 77 percent in 1991 to $30MM. Tanning products, specifically SPFs 0 -4, will continue to improve next year. We'll see some declines in the protection side of our business, which can be explained by the unseasonably bad weather we've had so far.

As a result of the large growth in the sunless tanning market, related products will increase from last year's 6.5 percent of the market to a full 9 percent in '91. Because of the large influx of sunless tanning products, we'll see other segments declining. However, SPFs will continue to account for almost 50 percent of category sales.

Now, let's take a look at media spending. There are two important things to remember here. First, we at HCP Suncare continue to put our money where our mouth is -- spending for HCP is up 32 percent to 8.2MM dollars. Increased expenditures are earmarked for Coppertone, Shade, and Water Babies. Bain de Soleil, one of the largest spenders in the category, has dramatically reduced its media support nearly 30 percent, to 5.5MM dollars. For years, P & G has tried to gain a foothold in the Suncare market. But, thanks to your efforts, they have not been successful. You should pass this important information on to your buyers.

With respect to market share, HCP is down marginally -- .4 point to 33.5 percent for all our brands. By comparison, both Bain de Soleil and Hawaiian Tropic essentially held share while Sundown declined to 4.4 percent, which was a 2.2 percent decrease. Presun continued its long-term market share decline in the Suncare category. Brands to watch out for continue to be Vaseline Intensive Care, which increased a full point to 5.7%, and Banana Boat, which picked up another point and now owns 4 percent of the market.

Among our own stable of brands, we saw some marginal share erosion in our baseline Coppertone business. This is almost entirely because of the large number of sunless tanning entries that entered the market in 1991. Water Babies, our children's brand, continued its tremendous growth, up .3 point to 4.3%. Shade also rose .1 point to 4.2%. Despite a large number of discontinued products, Tropical Blend held firm at 4.5%. And, last, Zinka lost .4 of a share point, largely the result of the discontinued glitter items we introduced in 1990. An analysis of our Suncare Business Unit gross shipments for the year-to-date showed we were below projection by 11% and 4% off last year's shipments.

As many of you know, the reason we're down from last year is not due to decreased sales, but a large cutback by retailers on warehouse inventories. Their aim was to reduce the large float that exists in the category. We're going to explain this further in just a few moments.

At the retail level, however, you can see that more product is reaching store shelves. If you look at retail inventories ending June 1991, you will see that HCP unit inventories are, in fact, up 5% to 24.8MM units, and the entire category is up 6% to 72.8MM units.

As the numbers indicate, our category inventory growth lagged, and as a result, HCP inventory share dipped by .4%, to 34.1%.

On one hand, I think we can congratulate ourselves in essentially holding inventory share despite 15 discontinued items in 1991. However, I think we also have to recognize that as we move forward with our space management program, we want to improve significantly on our 1991 showing. In particular, if you look at our performance by outlet, we have a wonderful opportunity to improve our business in the

food channel by regaining the loss of almost 2 inventory share points thanks to the performance of Banana Boat. Our drug inventory share continues to lag behind our market share.

At this point, I'd like to turn our attention to strategies for 1992. I would like to address an important project that will affect every one of you. It's called Operation Big Sun. I'm sure you're all asking yourselves...what is Operation Big Sun? Basically, it's the code name for our collective efforts in Healthcare Products. It's designed to dramatically change the way we sell, promote, and even produce Suncare products.

In a global sense, the purpose of Operation Big Sun is to deal head-on with an issue that's faced the Suncare industry for decades, and that is: How do we build and meet consumer demand in the Suncare category without incurring excess end-of-season inventories.

Given this, our strategic goal for Operation Big Sun is quite simple: to leverage our leadership position and improve the growth and profitability of the Suncare category for both manufacturers and retailers.

Let me give you an example of the problem the industry has faced. If you look at industry sell-thru between 1984 and 1988, you can see the sell-thru percentage has averaged only 67%. And, the problem is getting worse. In each of the last two years -- 1989 and 1990 -- industry sell-thru has dropped even further, falling to 64%.

If you look at the problem from another vantage point, you'll see that in 1990, the industry sold-thru 400MM dollars worth of goods at the retail level. This includes food, drugs and mass outlets. At the same time, float, or what's left over at the end-of-season, hit a staggering 230MM dollars worth of goods.

That's 230MM dollars worth of goods that we as manufacturers had to either scrap or rework and 230MM dollars worth of goods that our retailers had to either rebill or return.

Clearly, this is a major industry-wide problem. It's a concern our retailers have also recognized. And, as a category leader, you can be assured we are going to fix it.

How did we get into this situation? Well, there are many reasons, but there are two in particular I'd like to speak about today. One is line proliferation and the other is inadequate manufacturer programs to drive sell-thru.

First, the subject of line proliferation. Let's take a look at the current season. So far, you can see there were 800 SKUs available for sale in the category. At the same time, the top 25SKUs in the category accounted for a full 50% of all Suncare sales. Clearly, there are too many SKUs in the category.

Second, inadequate promotional programs. What do we mean by this? Until now, all manufacturers were essentially doing the same thing, the same way, at the same time. We all dropped PSRs on Memorial Day and the Fourth of July. While this has proven effective, it has not gone far enough, and that is, to expand the category on a long-term basis.

As we enter the 1992 Suncare season, our commitment to the trade is to take a leadership role in guiding the industry to more profitable category management. Specifically, our goal for the industry is to reach 85% sell-thru by 1994.

Here's our action plan for achieving this goal. First, we're going to halt line proliferation through improved space management. Second, we're going to introduce new products that build the category. And, third, we will introduce an expanded promotional calendar that's going to increase sell-thru.

Now, let's talk about space management. As many of you know, we began our space management program in 1991 by

taking several steps. First, we dropped 15 slow-selling SKUs for the current season and only added 4 new ones.

Then, we introduced space management programs that you carried out in the field to increase facings for our top

sellers. And, finally, we marshaled all our advertising support behind our growth opportunities -- Coppertone Sport, Water Babies, and Shade. So, what's happened?

Well, if you looked at our retail inventories ending in June and then analyzed our ten best sellers, you can see we made a positive start this past season. In both food and drug outlets, our top ten SKUs increased 8% in each outlet, reaching 8.6MM units. This bodes well for us as we enter the latter part of the season, where top seller traditionally go out-of-stock. In addition, we'll also have a good base to grow upon as we enter next year. Of course, with results like these, we're going to continue our space management program in '92. Plans call for discontinuing 6 more slow-selling SKUs, while at the same time, launching 6 new items to replace those we'll drop. And, like last season, we're going to continue providing you with selling programs designed to let you regain the inventory share loss we experienced in 1991.

Just in case we haven't made the point clear, the key to effective space management is obtaining retailer commitment to expand the facings of our top ten sellers. That's the key to the program's success. That's the key to making this category more profitable both for us and retailers. And that's the message you must take back and re-enforce to your accounts.

Further helping you increase our share of retail brings us to the second part of our 1992 program -- new products. Next year, we'll launch 6 new items we think will truly build the category. And while I don't want to steal the thunder from what the Brand Managers are going to tell you, rest assured we're going to build upon the very successful Year 1 launch of Coppertone Sport. As Chris will tell you later, Coppertone Sport 15 was the best selling new SKU in the Suncare category in 1991. It just goes to show what good sales execution and aggressive advertising support can do.

And before I forget, we at Schering-Plough HealthCare

Products will once again have the largest marketing support in the category by allocating over 32MM dollars in promotional and advertising support across all our businesses. This includes TV support for Coppertone, Water Babies, and Shade.

Well, that brings us to the last part of our program -- an expanded promotional season. For 1992, we're rolling out a new promotional program that will continue to support our traditional peaks of Memorial Day and Fourth of July, but also recognizes the season's full potential, which really begins in April and extends through Labor Day. In the past, we offered no national events in the early, or the pre-Easter period. We did drop PSRs on Memorial Day and Fourth of July FSI in the peak season. And, for the end-of-season period after July 4th, we had no national events.

That's all going to change in 1992. We're going to have national promotions throughout the year -- early season, peak season, and end-of-season. To tell you more about these is Lisa Mataro.

 

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CLIENT: ETHICON (SUTURES DIVISION OF JOHNSON & JOHNSON)

PROJECT: MOTIVATIONAL SPEECH FOR ETHICON WAS USED TO KICK-OFF AN ANNUAL SALES MEETING, THE THEME OF WHICH WAS THE EMPOWERMENT OF THE INDIVIDUAL

What is an individual? According to the dictionary, it's "the sum of the characteristics or qualities that sets one person apart from others." Whether we plan it or not, each one of us is an individual. There never has been, nor will there ever be, anyone quite like you. Yet, while each one of us is an individual, how many of us are truly known for our individualism? These are people who, in a seemingly unexplainable way, turn out different. They possess some innate quality we respect, even envy.

Individuals are not heroes in a grand or historical sense, but they're certainly heroic. It can be your child's schoolteacher, who has the rare talent to make her students enjoy learning. It can be a lawyer who holds juries spellbound by the inner strength of his oratory. It can be a salesperson, who exudes so much confidence, dedication and knowledge, clients are moved by the compelling force of his appeal.

It was an individual, Thomas Jefferson, who took the hopes and dreams of an oppressed people and coalesced them into the single most powerful document ever written. Just think of it...here was a single human being with the power to galvanize the emotions of thousands of people into a unifying quest for freedom.

Sadly, the very essence that created and nurtured this country -- the thing that marked it for greatness -- is now being drained out of us. That is our individualism. In its place is a collection of interchangeable facades that people simply adorn. They're as superficial as a change of clothing. Today, for example, creativity is measured by the flair of someone's tie rather than the flair of his mind.

Today's society has fostered collectivism and discouraged individualism. As a result, the personal individualism that makes each one of us unique has become dormant...it's beginning to atrophy like a muscle that's withered and rotted from disuse. To the complacent, being an individual today has become too strenuous. So, many choose to go out and buy their individualism -- a certain, a lifestyle...a lie. To paraphrase an advertising slogan, those who become all that they can be will be the first to tell you it's hard work. When you disclose your true individuality, you run the risk of being ostracized by conformists, of which there are many. But, think of the rewards. To some, the star for which they reach is fame, and they make it. For others, it's fortune. Individuality gives them the tools to achieve that dream, too. For most others, the rich reward for being an individual is fulfillment. Unfettered by a need to conform, the individual invariably succeeds.

Individualism is the triumph of the human spirit. It's the ability to look in the mirror and say, "I am the master of my fate; I am the captain of my soul."

The wondrous thing about individualism is that it's not something you have to go out and find. It's something you have to go inside and find. Strip away all the protective defenses you've built up over the years...the ones that now imprison your special qualities. Then analyze yourself in the cold light of objectivity. Recognize your faults, yes, but don't dwell on them, for they'll surely hold you back.

Look at your strengths as irresistible forces. Then, commit yourself to the task of becoming the individual you were born to be. The stamina you need to stay the course comes from courage and passion, and they come from your heart. Those we recognize for their individuality...the schoolteacher, the lawyer...the salesperson...they all possess commitment, courage and passion.

In the end, it's really a simple, yet powerful concept.

To know you posses the magical and awesome ability to be in complete control of your life. To go out into a cruel and uncaring world and flourish. And when you decide to commit your life to that purpose that's when you know you've taken the road less traveled.

 

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