3M’s Innovative Lines Cut Into Band-Aids’ Market
Adhesive king Minnesota Mining & Manufacturing Co. is sticking it to giant Johnson & Johnson, edging higher in the bandage market with its strong, colorful and flexible strips.
Four years after launching its first consumer bandage, the maker of Post-it Notes and Scotch tape has risen to second place in the bandage market, with a 13.8% share, according to research firm Information Resources.
3M has added a new product to its line annually, coming out with the flexible, sweat-proof Nexcare Active strip in 1994, a colorful Brights version a year later and the soft Comfort strip in 1996.
Next came the waterproof Clean Seals in 1997 and tattoo strips in 1998.
New Brunswick, N.J.-based Johnson & Johnson, whose Band-Aid brand has been synonymous with adhesive bandages since 1921, has started to lose its stronghold. Even with a formidable 55% market share, Johnson & Johnson is not immune to the cuts and scrapes of competition.
3M’s inroads are another example of how an industry leader can become vulnerable when it fails to innovate. For every tale of American ingenuity, there is another of a company that sleeps through change.
For example, IBM Corp. twice had rude awakenings: first when the technology giant was slow to offer a personal computer alternative to its mainframes, and again when dealing with the threat of upstarts Compaq Computer Corp. and Dell Computer Corp.--today two of the biggest players in the industry.
“There’s a tendency for companies to get into a malaise, especially if they have a lot of market share,” said Gary Frazier, a professor at the Marshall School of Business at USC. “You have to keep an ear to the road, be constantly aware of what’s happening.”
3M has taken the innovation route. Seeing the health-care industry’s shift into home care, it decided to move into the consumer bandage market and draw on adhesive technology it developed for hospitals.
Its home bandages borrow the adhesive technology 3M uses in its hospital products--such as tapes that stick in moist conditions but come off with little resistance.
“It’s no surprise that they’ve been an innovator,” said analyst Michael Lachman of Hambrecht & Quist in San Francisco.
Other bandage companies have suffered the sting of competition. Although Johnson & Johnson released similar products earlier or at the same time as 3M--its Hot Colors line in 1992 and a sports strip in 1994--some consumers have started to switch. Curity by Kendall Futoro has slipped from second to fourth place in just three years.
“Our goal was to become the No. 2 national brand, and we’ve done that,” said Tim Worms, a 3M marketing supervisor.
Analysts say Johnson & Johnson must do more to build consumer awareness and maintain interest, after letting its Band-Aid advertising slack off.
“Johnson & Johnson can’t just kick back and be nonchalant,” said Brian Eisenbarth of investment firm Collins & Co. in San Francisco.
Indeed, Johnson & Johnson has aggressively fought back, spending $13.1 million in print and television advertising in 1997, compared with zero in the previous year, according to Competitive Media Reporting in New York. It now vastly outspends 3M, whose 1997 outlay was $2.2 million.
Many Johnson & Johnson products are now geared toward children, such as cartoon or glow-in-the-dark designs. The company has attempted to expand its line, this year launching Band-Aid foot cushions that cover calluses and blisters.
A spokesman said researchers are constantly looking at new ideas.
Johnson & Johnson officials said they are aware of the dangers of being complacent.
“When we look at the Band-Aid market, we always have to be looking toward what’s coming down the line next week, next year, the next 10 years,” spokesman John McKeegan said.
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Bandage Wrap-Up
Since entering the consumer bandage market four years ago, 3M has gained ground to become No. 2, but all companies trail leader Johnson & Johnson, which makes Band-Aids. Market share in the $420-million-plus industry for the 52-week period ending July 19:
Johnson & Johnson: 55.0%
3M: 13.8%
Private label: 13.6%
Kendall Futuro: 12.2%
Other: 5.4%
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Source: Information Resources
