The Vaseline® journey started in 1859, when a 22-year-old chemist from Brooklyn, New York, named Robert

A. Chesebrough, went to Pennsylvania to investigate an oil well. The oil industry was in its infancy, and Chesebrough, like many, was hoping to profit from it.
While Chesebrough was there, he discovered a gooey substance known as ‘rod wax’ that was causing the oil rig workers problems, as it stuck to the drilling rigs, causing them to seize up.
Chesebrough noticed that oil workers would smear their skin with the residue from their drills, as it appeared to aid the healing of cuts and burns. His curiosity led him to take some rod wax home with him and start experimenting with it. After months of testing, he managed to successfully extract usable petroleum jelly.
By 1870, Chesebrough was marketing his petroleum jelly product by the name of Vaseline, and within ten years, the product’s increased exposure and popularity meant that almost every household in America had a jar of Vaseline.
Chesebrough expanded his business to Canada, the UK and British colonies all over the world.
New mothers used it as an absorbent shield for nappy rash. Professionals working in extreme cold weather used it to relieve their dry chapped skin.
Even Commander Robert Peary took Vaseline with him when he became (as is generally accepted)
the first man to reach the North Pole, because it wouldn’t freeze.
By the late 1880s, Chesebrough was selling Vaseline petroleum jelly nationwide at the rate of one jar per minute and most medical professionals recognized it as the standard remedy for skin complaints.
By 1911, the company began opening operation plants and factories in Europe, Canada and Africa in order to facilitate the manufacture and distribution of the product. In 1955, Chesebrough Manufacturing Co. merged with Pond’s Extract Company to form Chesebrough, Ponds, Inc. Like Chesebrough, Pond’s had a passionate interest in and curiosity about skin.
During the 1960s, the company continued to expand, moving to places such as Argentina, Australia, Brazil and India.

Vaseline’s 100th anniversary was in 1970, and to mark the occasion a major new product, Vaseline Intensive Care Lotion, was launched in the USA (1968) and in the UK (1971), with huge success. The brand was later extended to include hand and nail moisturizers and deodorants for men and women.
In 1987, Unilever purchased Chesebrough-Pond’s, acquiring successful, internationally known brands such as Pond’s and Vaseline. Today, Vaseline products are available in over 60 countries around the world. Its rich heritage, healing qualities and efficacy have been passed on from generation to generation for over 130 years.
One way of expanding revenues is through established product categories in which a firm currently does not have a market presence. In 1980, Chesebrough-
Pond’s entered the market for lip care, a product category in which it did not have a market presence, with Vaseline Constant Care lip balm, and in 1985 they launched Vaseline brand petroleum jelly packaged in a 0.35-ounce plastic tube, directly applicable to the lip, under the brand name Vaseline Lip Therapy. Applying Vaseline petroleum jelly to dry or cracked lips, particularly during the winter season, is one of the many uses for which the product has long been promoted.
Besides facilitating entry into a new product market, it is conceivable that the Vaseline profit margins associated with the incremental innovation are considerably higher (see Table 1). While Vaseline brand petroleum jelly in a 13-ounce plastic jar retailed for about US$2.99 (US$0.23 per ounce of jelly), the same product packaged in a 0.35-ounce tube retailed for US$1.99 (US$5.69 per ounce of jelly).

Questions
1. If you were a representative of the Vaseline (Unilever) management, how would you justify the price difference? What extra customer value do you create by selling the jelly as lip therapy in small tubes?
2. How would you price the Vaseline Intensive Care lotion in the Philippines compared with the UK?

Transcribed Image Text:

Vaseline petrojay original LIP THERAPY Vaseline PETROLEUM JELLY ORIGINAL