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Vistakon: 1 Day Acuvue Disposable Contact Lenses
“Well Gary, what do you think?,” asked Bernard Walsh former CEO of Vistakon and current
Company group chairman of Vistakon’s parent company Johnson & Johnson (J&J). Bernie Walsh had been president of Vistakon from 1987 to 1993. During his tenure, Vistakon had grown from a specialty manufacturer with $20 million in annual sales to a market leader in the contact lens industry with over $250 million in annual sales. Gary Kunkle had succeeded Walsh in 1993 and the two were meeting in early 1995 to review the performance of 1 Day Acuvue contact lenses in the western regional rollout. The world’s first daily disposable contact lens, 1 Day Acuvue was designed to be worn for one day and then discarded. A national launch decision needed to be made, but based on the test market and the western regional results, there were lingering concerns regarding product positioning, pricing, promotion, advertising and trade support.
Vistakon was an autonomous and highly entrepreneurial division in J&J’s renowned decentralized organization, and Gary Kunkle knew the decision was his to make. However, he also knew that J&J expected product excellence and market success. As Kunkle considered his options, he recalled a remark made by Walsh,
We need to be careful that we don’t allow our past success to undermine our future growth. Big companies tend to be too cautious. Now that Vistakon has a major existing business to protect, it runs the risk of becoming overly analytical and moving too slowly.

The Eye Care Industry
Approximately 146 million people in the United States required corrective lenses, with the number of lens wearers increasing slowly with the aging of the overall U.S. population. The need for corrective lenses created a market of approximately $15 billion in 1992. That expenditure consisted of an estimated $3.5 billion in fees for comprehensive eye examinations and $11.5 billion for optical supplies, exclusive of over-the-counter reading glasses and non-prescriptive sunglasses. The need for eye care arose from three major types of vision deficiencies. Nearsightedness, or myopia, and farsightedness, or hyperopia, were caused by deformities in the eye which made it difficult to focus incoming light waves upon the retina, the part of the eye responsible for sight. Vision correction refocused the light waves properly upon the retina, and was produced in “powers,” which measured the degree of magnification inherent in the vision correction. The third common condition, astigmatism, occurred when light rays met in two places in the eye, producing blurred, misshapen
Professor Alvin J. Silk, Doctoral Candidate Bruce Issacson and Research Associate Marie Bell prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Copyright © 1996 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
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images. Cylindrical lenses corrected for this condition. Eye care patients commonly required different powers for each eye irrespective of the reason for vision correction.
There were three types of vision correction options: spectacles (eyeglasses), contact lenses and corrective surgery. The latter option, using laser surgery to permanently correct vision deficiencies, was not widely available in the mid 1990s due to its recent FDA approval and high cost.
Spectacles were the traditional and most common form of vision correction with 80% of the U.S. vision corrected population choosing that option. The remaining 20% of the population wore contact lenses. Eyeglass wearers purchased new spectacles about every 3-5 years and on average paid $110$150 per pair. Additionally, eyeglass wearers often had various optional treatments applied to their lenses, such as scratch resistant, ultra-violet light, and anti-reflection coatings.
A contact lens was a plastic “eyeglass” (about the size of a person’s little fingernail), worn directly on the eye. The contact lens floated on a thin layer of tears on the surface of the cornea, the clear part of the eyeball in front of the iris. Contact lenses were made of either hard, rigid plastic or soft, flexible plastic. Standard hard lenses, which were introduced in the 1950s, were the least expensive form of contact lenses. Soft contact lenses, made from a porous, liquid-absorbing plastic, were generally more comfortable to wear than hard contact lenses. However, some vision deficiencies could not be addressed with soft lenses. Contact lens wearers tended to be in the 26-39 age group, and were younger than their spectacle wearing counterparts (Exhibit 1).
Contact lenses were purchased primarily because consumers perceived they improved the wearer’s appearance. Participation in sports where glasses could be broken and the desire for better overall vision without glasses frames, were also important reasons for contact lens purchase.
According to a study of 36,500 U.S. households, 87% of those who wore eyeglasses had never used contact lenses; 13% were “dropouts,” people who had previously worn contacts but had stopped. Of the contact lens population, 73% wore soft contact lenses, 6% wore hard contact lenses, and 21% wore other types of lenses including rigid gas permeable lenses. Over 80% of contact lenses wearers wore their lenses full-time (five or more times per week). Approximately 19% (3.9 million) of the entire soft contact lens market were part-time wearers who wore their lenses less than five days per week.
There were many reasons that spectacle wearers never tried contact lenses. Approximately 20% of this population had eye conditions which prevented them from wearing contacts. The other common reasons cited for never trying contacts were cost (25%), procrastination (12%), and fear of contacts lenses (10%).

Soft Contact Lenses
Soft contact lenses were prescribed either for daily wear or extended wear. Daily wear contacts were worn during the day and taken out for cleaning at night. By contrast, extended wear contacts were worn constantly for a one week period before removal. The maximum extended wear period approved by the Food and Drug Administration (FDA) was one week. Both extended wear and daily wear contact lenses were prescribed in one of three different “modalities” or replacement schedules: 1.

Eye care professionals (ECPs) recommended the replacement of conventional contact lenses every 9-18 months. The original soft contact lenses were conventional daily wear lenses that were taken out at night for cleaning, and once a week were subjected to a more extensive cleaning to reduce enzymes that built up on the inside of the lens. In 1981, the
Food and Drug Administration (FDA) approved conventional lenses for extended wear.
Conventional extended wear lenses were worn for one week before removal for cleaning.
After being removed and cleaned they were re-inserted.
Although ECPs recommended that conventional lenses be replaced after 9-18 months, many patients wore their lenses until they became unusable due to discomfort or a tear in

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the lens. While some patients wore their lenses for 9-24 months, the average patient replaced their lenses every 18 months. Conventional contact lenses sold for about $80 per pair. The conventional lens wearer also spent approximately $150 per year on cleaning and storage materials for the lenses.
2.

Frequent replacement lenses were replaced every one to six months. approximately $90-120 for a year’s supply.

They sold for

3.

Disposable lenses were replaced after one to two weeks, before extensive cleaning became necessary. Disposable daily wear lenses like Vistakon’s Surevue product were taken out at night for cleaning. Disposable extended wear lenses, like Acuvue, were worn continuously for the entire wear schedule and then discarded. Annual costs patients incurred for different eyecare options are compared in Table B presented below in connection with the discussion of 1 Day Acuvue.

Exhibit 2 summarizes the penetration levels for different vision correction products in the
U.S. as of 1994. Conventional contact lenses dominated the market; 63% of soft lens wearers used conventional lenses, 16% of the market used lenses on a frequent replacement schedule, while disposable lenses represented 21% of the soft contact lens market.
A conventional contact lens wearer’s adherence to the prescribed cleaning and replacement schedule, referred to as compliance, was an ongoing issue in the industry. When prescribing and fitting contact lenses, ECPs stressed the importance of cleaning procedures and lens replacement.
Patients often did not strictly follow the advice of their ECPs, particularly when the lenses felt comfortable to the patient and looked clean to the untrained eye. However, looks could be deceiving.
Without the intensive weekly cleaning, protein deposits built up on the lenses, resulting in a variety of conditions including red eyes, ulcers, and a relatively common condition called giant papillary conjunctivitis. These problems made the lenses feel dry and uncomfortable in the patient’s eyes, prompting a visit to an ECP, who often recommended suspending use of contact lenses for a period of time. Indeed, industry research indicated that approximately 25% of those who discontinued wearing contacts did so due to eye allergies and infection, while another 25% did so due to discomfort while wearing the lenses. Other reasons given for patient defection from conventional contact lenses included: glasses were easier to wear (20%), a need for bifocals (10%), a loss or tear in the contact lens (5%), and cost of lenses (5%).
Disposable lenses were relatively new to the industry and adoption of them encouraged patients to visit ECPs more frequently. Traditionally, after doctors prescribed contacts, their patients did not return until there was a health problem or until the lenses were damaged or lost. With disposable contacts, the patient visited ECPs more frequently for eye exams or to pick up more lenses. On average, conventional soft contact lenses were purchased every 18 months, while users of disposables purchased a supply every three months. ECPs recommended visits every three months for patients wearing disposable lenses. However, adherence to recommended replacement schedules remained an issue, as ECPs were concerned that patients tried to “extend” the life of their disposable contacts and reduce expenses by wearing them longer than recommended. Since their introduction, disposable lenses had gained an increasing share of the “new fits” of contact lenses prescribed by
ECPs. Exhibit 3 shows the trends in market share for various types of soft lenses.

The Purchase Process
A consumer’s first step in buying eye wear was to visit an ECP who would prescribe the type of vision correction required. There were three major types of ECPs working in the vision correction field: ophthalmologists, optometrists, and opticians. Only ophthalmogists and optometrists were licensed to determine a patient's prescription with opticians licensed to fit and make glasses and dispense contact lenses. See Exhibit 4 for a more detailed description of the ECPs roles in the
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delivery of eye care. Many private optometry or ophthalmology practices employed opticians to make and sell eyeglasses. Similar to other medical offices, most practices also had receptionists who would greet patients, answer telephones, send reminders to patients, and schedule appointments.
Receptionists were usually the first person a caller spoke with upon contacting the office, and were often asked about available products and services.
To buy contact lenses, a patient first visited an optometrist or ophthalmologist, who checked the health of the patient’s eyes and determined whether a prescription was needed. The cost of the eye exam varied from $45 to $60. Typically, eye care prescriptions were considered to have expired after one year. Unless patients perceived a problem with their sight, however, they typically did not renew their prescriptions unless reminded by their ECP to return for another examination.
The decision to try contact lenses was usually made by the patient. However, the selection of the actual contact lens was a joint decision made by the patient and the ECP. Based on the shape of the eye and the expected wearing frequency, the ECP made a technical recommendation. The patient then weighed other factors such as cost and comfort in making a final decision. However, according to ECPs, patients accepted their recommendation more than one-third of the time.
Next, the patient was “fitted” by an optician or optometrist. Due to the unique shape of each person’s eye, contact lenses were made in specific sizes and curvatures, and were more or less comfortable for patients, depending on how well they corresponded to the shape and size of the eye.
During the fitting the ECP ensured that the contact lenses were comfortable and taught the patient to place the lens in the eye. In ophthalmologist practices, the ophthalmologist performed the eye exam, but often the patient was passed to an optician for fitting. In optometrist practices, the optometrist usually conducted both the exam and the fitting. After the fitting, the ECP recommended follow-up visits to ensure that the lenses remained comfortable over time. The fee for fitting varied greatly, but was generally $25-50. Sometimes, the exam and fitting charges were combined into a single fee.
Fitting fees were often waived for existing patients who were switching to a new contact lens.
Over half of eyecare patients paid the full cost of eye examinations, while 20% had insurance that paid the full cost of the examination. The most common type of insurance was Medicare, which paid for the services of an optometrist or ophthalmologist to diagnose or rule out eye disease.
Insurance coverage for eye wear was even lower, with three-quarters of patients having no insurance coverage. Exhibit 5 indicates the extent of insurance coverage for patients of different types of ECPs.
Once a patient had a prescription for eye wear, he/she could have that prescription filled either at the prescriber’s office or at a variety of retail outlets. Exhibit 6 shows the shares of the overall ophthalmic market held by various types of retail channels in 1991. Soon after the introduction of disposable lenses, an additional channel developed. Prior to the introduction of disposables, most patients were unaware of their eye care prescription. However, with the advent of disposables, patients became familiar with their prescriptions and often sought out the lowest possible price. A discounted channel of mail order houses developed selling discounted brand-name lenses which were delivered directly to the patient’s home. Despite the discounted lens price available at mail order houses, patients faced incremental charges for shipping, handling and membership fees through this channel. Some ECPs believed that mail order houses not only cannibalized their revenue from the sale of replacement contacts, but also contributed to poor eye care. Sensitive to health issues, many lens manufacturers sought to exclude their products from these outlets, as mail order houses did not check the accuracy of prescriptions or ensure that customers received regular eye check-ups.

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Vistakon
Vistakon, Inc., headquartered in Jacksonville, Florida, was a subsidiary of Johnson & Johnson
(J&J), one of the world’s largest and most comprehensive health care companies. In 1993, J&J had sales of approximately $14 billion obtained through operations in three broad business segments: consumer ($5 billion), pharmaceutical ($4.4 billion), and professional ($5 billion). The professional segment encompassed products such as medical instruments and devices, ophthalmic products, surgical instruments, and products for wound management and infection prevention. Sales and operating profit by segment are shown in Exhibit 7.
In 1993, Vistakon was a high profile business in J&J’s professional segment. The development and highly successful launch of disposable contact lenses had catapulted Vistakon from a specialty manufacturer to a market leader in the contact lens industry, with sales growing from $20 million in 1987 to $290 million in 1993. (See Exhibit 8 for Vistakon’s sales history.) Concurrent with increased sales, Vistakon actively managed cost, increasing its gross profit from less than 60% in 1989 to over 75% in 1993. Marketing costs and distribution costs, initially 65%-70% of sales, were more than halved over the same period. Funding for research and development a major ingredient in
Vistakon’s success, remaining constant at 9%-10% of sales.
J&J played an important role in Vistakon’s success. Its decentralized organization structure provided an entrepreneurial environment in which to make decisions. At J&J, “corporate managers question company presidents but rarely does an executive in the Tower veto people on the ground.”1
Vistakon was able to make quick, effective decisions as its products rolled out, without waiting for corporate approval from headquarters. “Yet, because Vistakon was supported by capital-rich J&J, it could count on the resources needed to attack a mature market with a little-tried and costly product.”2 Industry analysts estimated that J&J had invested at least $75 million in Acuvue, including buying and developing propriety technology, building the plant, and absorbing operating losses until the business became profitable in 1991.
Vistakon was an exemplary model of a business unit’s success in J&J’s decentralized structure. In 1983, Vistakon was a $13 million producer of specialty contact lenses for people with astigmatism. The president of Vistakon at that time received a call from another J&J subsidiary,
Janssen Pharmaceutical based in Denmark, regarding a Copenhagen ophthalmologist who had devised a method of manufacturing contact lenses inexpensively. Vistakon quickly secured the rights to the technology, assembled a management team to oversee its further development, and began perfecting the manufacturing and packaging processes.
Over the next four years, Vistakon developed a unique proprietary manufacturing process called “stabilized soft molding” that produced the Acuvue lens. The stabilized soft molding allowed the contact lens material to be kept in a wet state throughout the entire production process. In traditional cast molding, the hydration process expanded the contact lens by 50-70%, grossly magnifying any imperfection; Vistakon’s soft molding process expanded the lens only minimally.
The revolutionary process assured a reproducible lens with improved optics and superior comfort to the patient. More importantly, the reliability of the process gave Vistakon the capability to manufacture large volumes of lenses at a cost that an industry observer estimated at $0.50 per lens3, making a $2.50 price per lens to ECPs feasible. In 1987, Acuvue became the first disposable extended wear contact lens to be approved by the Food and Drug Administration. Patients wore the lenses for a recommended period of one week, then threw them away, and inserted another pair.

1 Joseph Weber, “A Big Company that Works,” Business Week (May 4, 1992).
2 Ibid.
3 John T. Ward, “Acuvue Rings Up Big Sales,” Home News (April 15, 1990): F1.

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The challenge of manufacturing a disposable contact lens went beyond the development of a new production process. Instead of wearing a single pair of lenses for a 12 month period, a patient with one week extended wear disposable lenses would use approximately 104 lenses per year. A disposable product, therefore, required a production process capable of producing large volumes of high quality lenses with great reliability. Moreover, Vistakon’s management team realized that innovation in manufacturing would not be enough to achieve success in the contact lens market.
Innovation was also needed in sales and marketing.
Despite Vistakon’s innovative product and extensive sales and marketing planning, when
Acuvue was first test marketed in Florida in August, 1987, the results were disappointing. Bernie
Walsh remarked:
I view part of the purpose of test market as an opportunity to make mistakes.
I believe it’s better to have a major failure in a test market and understand what went wrong there before you launch. The results of the test market told us that we had an opportunity to improve our sales and marketing programs. We had gone into the test market with a price of $3.50 per lens. We met price resistance, so we dropped the price to $2.50 per lens. Doctors were concerned about the product, so we set out to educate them and started to address the consumer with an advertising program.
We moved very quickly. Within four months, we conducted the initial test market, read the results and launched a second test market in California. We made lots of intuitive decisions because our intuition said this product would be a success.

Acuvue’s Innovative Marketing Strategy
The sales and marketing strategy devised by Vistakon after the test market involved the close integration of sales, distribution, service, and marketing. The cornerstone of the strategy was building a value image for Acuvue among consumers based on a combination of consumer marketing, public relations, risk-free trial and doctor recommendations. The first step was to drive consumers to ECPs through a marketing campaign that reached directly to the consumer and stressed the benefits of disposable lenses over conventional lenses. The second step was to have the sales organization sell doctors on Acuvue’s superiority so that they would recommend them to the patients generated by the direct to consumer marketing campaign.
Vistakon believed that its revolutionary product required a revolutionary launch. Vistakon launched Acuvue with the largest consumer advertising program in industry history. Acuvue aired television commercials during the Olympics and the Super Bowl, with a message aimed directly at the contact lens wearer. Acuvue advertising emphasized the advantages of disposable lenses over conventional lenses and offered consumers an hereto unheard of opportunity; a risk free trial period with the new lenses. The total cost of the national launch was estimated at $8.3 million ($4.8 million in television, $2.1 million in direct media and $1.4 million in print advertising.)
Not content with simply generating awareness, Vistakon leveraged its information systems capabilities to create a data-base driven marketing system depicted in Exhibit 9. Based on a telephone call generated from the advertising or a reply card generated from print media, the consumer received promotional materials from Vistakon. Vistakon notified the local ECP of the patient’s interest in disposable lenses and the ECP sent a card to the patient inviting him/her for an appointment. When the patient called, the ECP notified Vistakon, who sent the patient a voucher for a free pair of lenses. This process was especially valuable not only in creating linkages between the customers and Vistakon, but also in establishing a close relationship between Vistakon and ECPs.
Once Vistakon succeeded in stimulating the patient to visit an ECP, it was vital to convert the patient to Acuvue through the ECPs recommendation. Initially, Vistakon found that ECPs were wary of Acuvue. Doctors believed that disposable lenses would result in patients making fewer visits to
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ECPs and were also concerned that there would be poor adherence to replacement schedules.
Vistakon found that achieving doctor support not only required building their confidence in the product but also overcoming their concerns regarding the profitability of disposable lenses. Given purchasing patterns of most eye wear patients, doctors had traditionally assessed patient profitability based on revenues realized from a new patient’s first visit. Initially, doctors perceived the gross profit percentage on disposables to be lower than that for conventional lenses and therefore were reluctant to recommend them. However, the Vistakon sales force sought to change doctor’s perception of patient economics by educating them about the value of retaining a customer over time versus a single visit. See Exhibits 10 and 11.
In early 1990, Vistakon became aware of an interesting market dynamic  some ECPs were recommending Acuvue as a daily wear lens. Following negative publicity regarding potential health risks associated with extended wear lenses, some doctors were recommending Acuvue with a replacement schedule whereby patients removed the lenses each night, cleaned and stored them, and then re-inserted them the next morning. The doctors recommended patients follow this procedure for two weeks and then dispose of the lenses before they required enzyme cleaning. Responding to this development, Vistakon sought and gained FDA approval for Acuvue as a disposable daily wear lens. Despite this approval, Vistakon proceeded to develop a new product specifically for the two week daily wear market and retained Acuvue’s original positioning of a one week extended wear lens that users “never have to clean.”
Vistakon nationally launched its two week disposable daily wear lens, Surevue, in February,
1991. It was thicker than Acuvue, which made it easier for patients to handle. Additionally, the increased thickness created more durability to facilitate daily cleaning without tearing. Surevue was positioned for daily wear and was prescribed to be taken out each evening for cleaning.

New Sales and Service Organization
Vistakon’s rapid growth stimulated the development of an extensive sales force. By 1994,
Vistakon had established 137 sales territories, each with a single sales rep, organized into 18 districts and four regions. Exhibit 12 outlines the range of activities performed by sales reps. The 18 district managers reported to four region managers who, in turn, reported to a national sales manager.
District managers spent most of their time supervising sales reps, traveling with them and providing necessary training. Vistakon also created a national accounts group to establish programs with large accounts that maintained central purchasing operations.
Vistakon’s business was typically conducted through one of three channels: distributors, retail outlets, and direct to ECPs. To ensure patient health, Vistakon had a policy of only selling through outlets that maintained a licensed ECP on site. Vistakon did not sell through mail-order houses, such as Lens Express, that did not provide licensed ECPs.
About 25% of Vistakon’s sales were handled by distributors who supplied ECPs who preferred to work through distributors for a variety of reasons. Another 28% of Vistakon’s sales were sold to retail chain stores such as Wal-Mart, Pearle Vision Center, LensCrafters, EyeWorld or Sears.
Inventory for these stores was typically shipped to the chain’s warehouse or distribution center, from which lenses were transported to individual stores as needed. Chain stores usually had large display areas where patients could select eyeglasses, and had optometrists available to perform examinations and provide patients with prescriptions for vision correction. Sales of Vistakon products varied greatly from store to store within a given chain according to the sales capabilities of the ECPs and the training provided by the rep. As one rep remarked:
It still gets down to the particular person in the store. If the doctor is workable, you can have a lot of success, but if not, you won’t. You can have two doctors down the street from each other and have totally different results.
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The final 47% of Vistakon’s sales were distributed directly from Vistakon to ECPs. The relationship between ECPs and eye care sales reps was considerably different from other health care professionals. For example, sales reps selling pharmaceuticals and medical products struggled to get
“face time” with doctors. By contrast, optometrists actively looked to lens manufacturer sales reps for support. The primary reason for this difference was the separation of revenues from prescribing versus dispensing in other healthcare sectors. In pharmaceuticals, although doctors prescribed medications, their fees were derived from the patient visitthey realized no direct gain from the sale of the drugs they prescribedtherefore, they were less interested in spending time with sales reps who took them away from revenue generating patients. By contrast, in eye care, doctors not only earned revenues from office visits but they were allowed to sell the patients necessary eye care. They earned revenues from those sales as well. Hence, ECPs had a vested interest in which products were sold. Early in its business planning, Vistakon realized that accurate order taking by phone and prompt product delivery were exceptionally important to ECPs. As a result, Vistakon established an
800 number, manned 12 hours per day, five days a week and backed up by an automated system that operated 24 hours per day, seven days a week. Other important components of Vistakon’s service were reliable and speedy delivery. Since the launch of Acuvue, there had never been a backorder for lenses. The “Doctor Controlled Direct Delivery System” gave ECPs the option of shipping replacement contact lenses directly to the patient or to the practitioner’s office.
Looking back on Acuvue’s highly successfully sales and marketing approach, Craig Scott,
Vice President of marketing at this time of the Acuvue launch, remarked,
What made Acuvue work was our hybrid sales and marketing strategy, combining a business-to-business approach with ECPs and pure consumer marketing with prospective patients. Before Acuvue, the patient had been left out of the equation. All sales and marketing efforts were focused on the ECP to “push” the product. We effectively both “pulled and pushed” and came out ahead. Our relationship with J&J gave us the financial resources to mount such a campaign— resources that were not available to many of our competitors.
Competition
As seen in Table A below, by 1993 Acuvue, with a 14.8% market share, was the leading individual brand of soft contact lens fitted in the US. The next largest brand, Optima Visibility, had a
4.6% share.
Table A xxx Market Shares of Leading Brands of Soft Contact Lenses: % Share of New
Fittings, 1989-1993
Brand

Type of Lens

Manufacturer

Acuvue
Surevue
SeeQuence
New Vues
Focus
Medalist
Ciba Visitint
Optima Toric
Optima Visibility
Totals

Disposable
Disposable
Disposable
Disposable

Vistakon
Vistakon
Bausch & Lomb
Ciba Vision
Ciba Vision
Bausch & Lomb
Ciba Vision
Bausch & Lomb
Bausch & Lomb

1989
6.7
n/a
0.8
0.4 n/a n/a
3.2
2.9
6.2
20.2

1990

1991

1992

1993

11.2 n/a 2.3
2.6
0.4 n/a 3.9
3.1
7.0
30.5

13.4
2.1
2.3
3.8
1.8
1.6
3.7
3.6
6.6
38.9

13.2
3.0
3.7
3.8
1.7
3.1
3.6
2.8
4.9
39.8

14.8
4.1
4.3
4.5
2.4
4.2
3.3
3.1
4.6
45.3

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The success of Acuvue drove Vistakon’s growth from a small player in the soft contact lens market in 1989 to a position challenging the traditionally dominant firms such as Bausch & Lomb and
Ciba in the soft contact lens segment. (See Exhibit 13). Industry analysts attributed Vistakon’s rising share of the disposable contact market to its first mover advantage. Bausch & Lomb introduced its
SeeQuence disposable lens in 1988, six months after Acuvue’s national launch. In 1989, Ciba Vision launched its disposable NewVue lenses. Many industry observers believed that firms such as Bausch
& Lomb had deliberately delayed development and introduction of disposable products because of their vested interest in the contact lens solutions market (i.e., the chemicals used to clean and maintain conventional soft lenses). In moving to disposables, they were potentially not only cannibalizing their reusable contact lens business but also undermining their highly profitable solutions business, where gross profit margins were estimated at 80%.

1 Day Acuvue
Despite Acuvue’s success, Bernie Walsh believed that continued innovation was necessary to maintain Vistakon’s leadership in the disposable lens market. Acuvue had benefited significantly from being first to market, but the competition had already introduced their own brands of disposable lenses. Walsh felt that to remain the leader in disposable lenses, Vistakon would need to continue to be the low cost lens producer. Since the time of the initial Acuvue launch, lens manufacturing costs had fallen by approximately 50 percent. In 1991, as Surevue was being rolled out nationally, Walsh established a multi-disciplinary product development team with a mandate to reduce manufacturing costs by one-half again. Faced with such an ambitious target, the team conducted an extensive worldwide search for relevant technologies and reported back that Vistakon could meet its target cost reduction, given substantial investment in new technology.
The development of a daily wear single-use, truly disposable contact lens seemed viable.
Customer research indicated that convenience and comfort were the two major drivers of contact lens purchases. As the human eye could not tolerate a single lens remaining in the eye for an extended period of time, the next best alternative was an inexpensive single use, daily wear, disposable lens.
Under such an “ideal” scenario, the user would always be able to wear a clean comfortable lens while avoiding the inconvenience and expense of cleaning and maintenance solutions. Within Vistakon, there was some concern as to whether the company should use its advances in technology to reduce the costs of existing products or to develop a new, one day, disposable lens. While some thought a one or two week replacement cycle was “short enough” to satisfy consumers and ECPs, others were attracted by the market opportunity that a daily disposable lens represented. Bernie Walsh described the latter viewpoint:
This product has tremendous market potential. There are about 25 million contact lens wearers in the United States. A 1% conversion would yield 250,000 daily wear disposable lens wearers. If we assume patients wear two new lenses per day, we will sell close to 200 million lenses per year. Last year there were only 250 million lenses sold world wide!
Vistakon ultimately decided to pursue the development of a daily wear, disposable contact lens. Bernie Walsh remarked:
The introduction of Acuvue changed the contact lens industry with a revolutionary idea: shorter is better. You don’t try to save a contact lens that’s dirty and uncomfortable. You throw it away and replace it with a fresh, sterile lens. We are a technology driven business. We could not become complacent with our success. We needed to take our technology to the next level. We produce highvolume, low-cost, high quality products. Take away our advantage in technology—
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Vistakon: 1 Day Acuvue Disposable Contact Lenses

our ability to produce a great product at a favorable costs—and you take away our competitive advantage. The time had come to take that technology to its next logical step—daily wear disposable lenses.
Over the next two years, Vistakon invested over $200 million in manufacturing technology from all over the world to produce a new product which was ultimately named, 1 Day Acuvue. The final manufacturing process was based on the process originally used to make Acuvue, but major improvements greatly decreased the amount of time needed for production and inspection. The new technology resulted in a completely automated manufacturing processfrom molding through packaging and inspection, the lenses were never touched by human hands. The investment in technology created a superior contact lens. Exhibit 14 depicts the evolution of soft contact lenses from the original (pre 1981) conventional daily wear lenses through the development of Acuvue and
Surevue products. In an extended, 12 site clinical trial among daily disposable, frequent replacement and conventional daily wearers, Vistakon found that the 1 Day Acuvue product resulted in few ocular complications, reduction of unscheduled visits and higher levels of patient satisfaction.
Specifically the clinical trial found: (1) 1 Day Acuvue users experienced six times fewer ocular complications than either frequent replacement or conventional daily wear lenses; (2) frequent replacement lense wearers had 37 percent more unscheduled visits and conventional daily wear lense users had 58 percent more unscheduled visits than 1 Day Acuvue customers; and (3) 95% of patients rated 1 Day Acuvue’s overall comfort an 8, 9, or 10 on a 10 point scale, with 80% of patients indicating that they were more comfortable than their existing lenses.
The name 1 Day Acuvue was selected for a number of reasons. First, it built on the existing
Acuvue equity. Second, Vistakon anticipated that as a result of advertising 1 Day Acuvue, there would be growth in the overall Acuvue brand franchise. Finally, Vistakon hoped that consumers would come to associate the one-day modality with Acuvue.

Planned Launch Strategy
Vistakon’s positioning strategy for 1 Day Acuvue is summarized in Exhibit 15 and called for targeting three types of eye care consumers. First, there were patients who experienced medical problems with conventional daily wear lenses (e.g., heavy deposits on lens or a dry eye condition) or who pursued active lifestyles (e.g., athletes, frequent travelers). For such individuals, disposability was expected to be particularly appealing, making them prime prospects for conversion to 1 Day
Acuvue.
A second target population were contact lens “drop outs” or ex-users of conventional daily wear lenses. The benefits offered by 1 Day Acuvue with respect to comfort, convenience, and visual acuity, supported by clinical research, would be particularly salient to consumers who had previously become dissatisfied with some other type of soft contact lens and discontinued wearing them. The third target group was existing conventional daily wear users who might be attracted by the convenience of disposability and become interested in upgrading their existing reusable lens wear. Vistakon planned to introduce 1 Day Acuvue with a two step customer acquisition strategy, similar to the “hybrid” approach employed in the original Acuvue launch: utilize consumer advertising and promotion to stimulate potential customers to visit an ECP and then influence the
ECP to recommend a trial fitting and subsequent adoption of 1 Day Acuvue to their patients. An important additional component of the strategy was to encourage ECPs to offer 1 Week Acuvue or 2
Week Surevue to those patients who, for one reason or another, were not interested in 1 Day Acuvue.
Exhibit 16 outlines the planned customer acquisition strategy.
1 Day Acuvue was packaged in boxes of 30 lenses and patients could order up to 12 boxes at one time. As patients often required a different power in each eye, each 30-pack represented a one
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month supply of everyday wear lenses for one eye. Vistakon planned to price 1 Day Acuvue at $18 per 30 pack, plus a $5.95 shipping charge.
While the price of 1 Day Acuvue to the patient would ultimately depend on the markup taken by the ECP, Vistakon’s suggested retail price for 1 Day Acuvue was $25 per 30-pack or $.83 per lens. Patients required two lenses per day, so the daily cost of using 1 Day Acuvue was approximately $1.67 per day. As seen in Table B below, 1 Day Acuvue would be Vistakon’s highest price contact lens, with an annual cost to the consumer of about $140 more than regular Acuvue.
Table B xxx Customer Cost of Eyecare Alternatives

Exam
Fee
Eyeglasses
Conventional
Contacts
Surevue
Acuvue
1 Day Acuvue

Typical
Fitting
Fee

$50

n/a

50
50
50
50

$37.50
37.50
37.50
37.50

Product
Purchase
Price
$140
40/lens
4.50/lens
4.50/lens
.83/lens

Materials
Cost
n/a
$150
n/a n/a n/a

Avg.
Total
Expense st 1 Yr.
$190
317.50
321.50
551.50
690.50

Wear
Schedule

Modality

n/a

n/a

Daily
Daily
1 Week
Daily

9-18 mos.
2 Weeks
1 Week
Daily

Vistakon believed that 1 Day Acuvue’s success would be highly dependent on how the ECP presented the price to the customer. In particular, Vistakon suggested that when discussing price with patients, ECPs should emphasize “cost per day” of 1 Day Acuvue rather than the total annual cost of using the product. Reframing a large, aggregate, annual expense as a series of small ongoing outlays, sometimes referred to as a “pennies a day” strategy, was a practice marketers sometimes adopted to facilitate comparisons of “value in use” between a new or novel product or service with a familiar or commonplace product or service whose worth was already accepted.4
Prior to going to market, Vistakon developed a starter kit for ECPs. The kit contained 30 trial lenses in the 23 powers in which 1 Day Acuvue was produced. The kit also contained a display unit, brochures for patients, a video explaining Acuvue, order forms, and other materials. Doctors could also obtain posters announcing 1 Day Acuvue, post cards to mail to patients, and certificates offering a five day free trial of 10 free lenses. Sales reps were also prepared to train professionals and their staffs about the benefits of the new product.
ECPs who ordered the kit received a credit at Vistakon for 15 30-pack boxes and each new patient ordering 1 Day Acuvue earned the prescribing ECP a credit for two more boxes. Doctors could order additional trial lenses, without incurring shipping charges, and have them credited to his/her balance. The kit was priced at $500, but the first $500 in product ordered by doctors who had purchased the kit was free. In essence, Vistakon was asking doctors to prepay the first $500 in product inventory; an amount equal to four patients purchasing a 90 day supply of lenses.
Patients using 1 Day Acuvue on a daily basis required two new lenses for each day of use.
Providing patients with these lenses required substantial amounts of inventory. However, ECPs were not accustomed to carrying large inventories. Consequently, Vistakon decided to ship 1 Day
Acuvue lenses directly to patients, providing two-day delivery service. To protect the relationship between the ECP and the patient, Vistakon planned to list the return address on the package as the

4 See: John T. Gourville, “Pennies-a-Day: Increasing Consumer Compliance Through Temporal Re-Framing.”

Working Paper 96-019, Harvard Business School, October, 1996.

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doctor’s office, so that the lenses appeared to be coming from the ECP. To place an order, the doctor would call Vistakon’s customer service center and give the patient’s name, address, lens prescription, quantity ordered, number of days per week the patient expected to wear the lenses, and telephone number. Orders received by 4:00 p.m. would be shipped the same day. Subsequent orders were shipped only at the doctor’s request.
From Vistakon’s perspective, this new distribution system had several advantages. First it kept 1 Day Acuvue out of unauthorized channels such as Lens Express. Second, as the product was being shipped directly from Vistakon, it minimized the opportunity for the ECP to substitute another brand or product if inventories were low or if competitors were offering a special promotion. Third, the program captured customer data which Vistakon believed could be a valuable asset for direct mail programs with eye care practitioners to encourage patient retention and compliance.

Test Market
One Day Acuvue was test marketed in Omaha, Nebraska and Las Vegas, Nevada beginning in July 1993. These markets were selected as representative of the United States with respect to eye care customer demographics and classes of trade. Moreover, both markets were geographically isolated which facilitated control of program inputs and reliable measurement of results. During the test market, 1 Day Acuvue was priced to the ECPs at $18.00 per 30 pack plus a $5.95 shipping charge.
The test markets received television and print advertising at exposure levels equivalent to national expenditures of $9.7 million and $2.2 million, respectively. Intensive sales rep coverage was applied in the test market, but no use was made of special consumer promotion. The print advertising used in the test market is shown in Exhibit 17.
While overall test market results were positive, Vistakon did uncover some problems.
Vistakon found that only about 20% of ECPs were emphasizing cost per day when presenting 1 Day
Acuvue and indeed approximately one-third were telling patients that 1 Day Acuvue was more expensive than other forms of contact lenses. Additionally, despite the advantages of the shipping system, a number of ECPs were reluctant to provide patient data to Vistakon for fear that the company would eventually market directly to their patients. From a patient perspective, the test market research indicated that the primary deterrent to purchase and continued use of 1 Day Acuvue was cost.

Western Regional Launch
Given these concerns, Vistakon decided to proceed with a regional launch of the 1 Day product in the 16 western U.S. states beginning in August, 1994. To increase the consumer pull,
Vistakon launched a $2.2 million regional marketing campaign ($1 million print advertising, $0.6 million in direct mail, and $0.6 million in television advertising) in which Vistakon offered a $50 rebate to patients that purchased 1 Day Acuvue lenses. Additionally Vistakon restructured its pricing policy to ECPs. Rather than $18 per 30 pack of lenses and $5.95 in shipping charges, Vistakon dropped its shipping charges and set its price at $.65 per lens for orders of more than four 30 packs of lenses and $.80 per lens for orders of less than four 30 packs of lenses.
In January 1995, Vistakon conducted an attitude and usage study in the western region to determine both customer and ECP perception of 1 Day Acuvue. The study found that patients received information about 1 Day Acuvue primarily from their ECPs with approximately 60% first hearing about the product from a doctor, a staff member, or literature available in the EPC office; another 16% from a magazine or newspaper ad; 14% from a television; 5% from word of mouth; and
5% from mailings.

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Based on the perceptions of ECPs5,Vistakon found that almost 70% of patients could be fitted for 1 Day Acuvue, with the other 30% being patients who either required a curvature or power that was not available or had a problem wearing contact lenses in general. In the western regional launch, an ECP discussed 1 Day with Acuvue with an average of 40 patients per month. After an ECP discussed 1 Day Acuvue with a patient, almost 60% of patients opted for the five day free trial. Of those patients that tried 1 Day Acuvue, 40% subsequently purchased 1 Day Acuvue, while 53% bought another Vistakon contact lens product. Moreover, after a 1 Day Acuvue discussion with an
ECP, even if the patient did not take advantage of the free trial, 38% of those patients bought either
Acuvue or Surevue contact lenses.
Fully 88% of 1 Day Acuvue patients were contact lenses wearers before they purchased 1 Day
Acuvue, although the majority of patients had used contacts in conjunction with eyeglasses. The brands 1 Day Acuvue patients had used previously were other Vistakon (42%), Bausch and Lomb
(16%), Ciba (7%), and other unidentified alternatives (35%). Exhibits 18 to 22 provide further information from consumer research conducted in connection with the western regional rollout.
Product cost remained the most significant factor in the failure to convert patients to 1 Day
Acuvue, with 86% of ECP citing it as the major reasons that their patients did not convert from the trial fits. The test market showed a marked improvement in ECP delivery of the cost message to patients, with only 6% of ECPs telling patients that 1 Day Acuvue was expensive compared to 33% in the test market.

Next Steps
Although Gary Kunkle and Bernard Walsh were both optimistic about 1 Day Acuvue, they did have some concerns. A primary question in their mind was whether the customer acquisition strategy would be effective: was the right consumer being drawn to the ECPs office and once there, were sufficient numbers being converted to a Vistakon product? As Walsh pointed out, the new product had the potential to disrupt Vistakon’s existing business,
If you don’t obsolesce or cannibalize your products for better business, the competition is going to do it. . . If we proceed, we’ll be launching a business that we think is going to be hugely successful, but we’re selling lenses to ECPs for $0.65 instead of $2.50.
As Kunkie and Walsh assessed the situation they noted several areas that required further analysis. First of all, Vistakon needed to prioritize clearly its target market for 1 Day Acuvue. After the results of the test market and the western region, some members of the development team advocated that 1 Day Acuvue should be positioned for full time daily wear. Others suggested the preferred strategy would be to target part-time users of contact lenses who wore them only on certain events, such as for social occasions or athletic participation. The latter group argued Vistakon would encounter less price resistance with these part-time users who due to their frequency of use, would be more willing to pay a higher unit price than regular daily wear customers.
Pricing was a second concern. Although 1 Day Acuvue was 25% more expensive to the consumer than Acuvue or Surevue, it did have significant product benefits to justify its price premium. If price was the major barrier to conversion to 1 Day Acuvue, Vistakon wondered whether they had indeed reached a ceiling on the price consumers were willing to pay, or alternatively,

5 Market research data cited in this paragraph is based on reported ECP perceptions and should be considered

directional in nature.

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whether Vistakon needed to do a better job of ensuring that ECPs understood the positioning and customer targeting strategy. The test market experience had underscored the importance of raising
ECP’s appreciation of the potential income stream to be realized not only from 1 Day Acuvue but also from attracting additional 1 Week Acuvue and Surevue customers.
A third issue concerned the size of the marketing budget and its allocation to advertising and promotion. Craig Scott’s marketing team believed that they needed to continue to follow Acuvue’s previous hybrid marketing strategy. The challenge was to achieve the right balance. Consumer
“pull” advertising was very expensive and conflicted with the eye care professional's established way of doing business. Vistakon’s sales and marketing expenses were already significantly higher than a consumer business, and both Bernard and Gary realized that Vistakon couldn’t hope to maintain profitability with excessively high advertising costs.
As Gary Kunkle and Bernard Walsh examined the situation, they reviewed their options.
Should they proceed with a progressive regional launch or should they go national and solve problems as they presented themselves? Both men were in agreement on one issue,
“The market potential for 1 Day Acuvue is huge. We need to roll out aggressively to maximize the first mover advantage arising from our investment in plant capacity. Moreover, if our strategy works we not only pioneer the daily wear disposable lens, but also expand the market for our other disposable products. If we’re confident that our strategy works, we can look beyond it and see whether we need to adjust our marketing mix to either get more consumer pull or ECP push.

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Exhibit 1 xxx Age Distribution of Spectacle and Contact Lens Wearers

Age

Spectacles Only
(%)

Less than 12 years
12-13 years
14-17 years
18-25 years
26-39 years
40-54 years
55 years plus

4
2
3
4
18
29
40
100

Contact Lens
(%)
0
1
9
17
48
20
5
100

U.S. Population
%
17.8
2.8
5.4
11.6
23.4
18.1
20.9
100.0

Source: Company records.

Exhibit 2 xxx Penetration of Different Vision Correction Products: U.S. Market, 1994

Source: Patient Population Study, 1994

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Exhibit 3 xxx Market Share of Different Types of Soft Contact Lenses: 1989-93 (% Shares of Total
New Fits of Soft Contact Lenses)
1989

1990

1991

1992

1993

8.0

21.6
4.0
74.4
100.0

23.5
6.1
70.4
100.0

27.7
9.8
62.5
100.0

Lens Replacement Cycle: a DCL (2 weeks or less)
Frequent Replacement (1-6 months)
Conventional (6 months or more)
Total

92.0
100.0

16.1
0.4
83.4
100.0

Modality:
Daily Wear
Extended Wear
Total

72.3
27.7
100.0

74.5
25.5
100.0

74.0
26.0
100.0

77.4
22.6
100.0

78.6
21.4
100.0

Total Number of New Soft Contact
Lens Fits (millions)

6.866

6.642

6.674

6.650

6.994

Source: Company records. a DCL = Disposable Contact Lenses

Exhibit 4 xxx Types of Eye Care Practitioners
Ophthalmologists earned undergraduate college degrees, then attended medical school for four years, followed by several years of specialized training in eye care. There were approximately 12,000 ophthalmologists in the
United States who were licensed to perform surgery and complex medical procedures on the eye.
Ophthalmologists performed about 32% of the estimated 75 million primary eye examinations performed in the
United States each year, with the balance given by optometrists.
Optometrists held undergraduate college degrees and subsequently attended optometry school for four years.
Optometrists held the degree of O.D., Doctor of Optometry, but the profession struggled to be seen as legitimate medical professionals rather than simply purveyors of eye wear. Optometrists were licensed to determine a patientís proper lens prescription (the required power for each lens for each eye), fit contact lenses, check the health of the eye, and prescribe limited eye medications for problems such as infections. More serious eye problems were referred to an ophthalmologist. About 70% of the 27,000 optometrists were in private practice, another 18% were employed by retail chains and optical ìsuperstores,î with the balance employed by ophthalmologists, HMOs, hospitals and clinics.
Opticians were licensed to make and fit glasses as well as dispense contacts but they could not write prescriptions for eye care. Most opticians did not have college degrees, but earned an opticianís certificate through a one year program of course work and field training. In most states, opticians could earn an additional certificate that entitled them to fit contacts, although only optometrists or ophthalmologists could check eye health and prescribe medication.

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Exhibit 5 xxx Sources of Payment for Eye Examinations
Payment Source

Ophthalmologist
Patients

Optometrist
Patients

(%)

%

23.2
33.3
43.5
100.0

Insurance Only
Insurance and Patient
Patient Only

16.9
21.5
61.6
100.0

Source: Adapted from “Caring for the Eyes of America,” American Optometric
Association, 1992.

Exhibit 6 xxx Share of Ophthalmic Market, 1991 by Type of Retail Channel

Source: Adapted from “Caring for the Eyes of America,” American Optometric Association, 1992.

Exhibit 7 xxx Operating Results for Johnson & Johnson’s Business Segments ($ millions)
1992
Sales
Consumer
Pharmaceutical
Professional
Total

4,780
4,340
4,633
13,753

1993
Operating Profit
501
1,364
598
2,463

Sales
4,824
4,490
4,824
14,138

Operating Profit
521
1,406
655
2,582

Source: Annual Reports, 1992, 1993.

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Exhibit 8 xxx Vistakon—U.S. Sales History 1983-1993

250

200

150
Vistakon Sales
$ Millions
100

50

0
1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

Source: Adapted from Florida Times Union, Mar. 4, 1990, p. F2. 1990-1993 are Florida Times Union’s estimates.

Exhibit 9 xxx Launch of Acuvue Disposal Contact LensesDatabase Driven Integrated Marketing
Consum er sees ad for Acuvue. M ails in reply card.

1
2

Consum er receives prom otional m aterial from Vistakon

Vistakon
4

Consum er receives card from local optom etrist
5
Consum er calls optom etrist for appointm ent

6
8

Consum er receives voucher from Vistakon entitling him /her to free lenses

3

10

7

Consum er attends appointm ent, Orders lenses 9

Eye Care
Specialist

11
Consum er orders second pair

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Exhibit 10 xxx Perceived Product Profitability of Eye Wear Options
New Patient—Initial Visit
Spectacles
Revenue:
Initial purchase
Cost of goods sold
Gross Margin
Gross Margin %

Conventional

$100
25
75
75%

Disposables

$80
10
70
88%

$100
60
40
40%

Exhibit 11 xxx Revised View of Patient Profitability to ECPs of Alternative
Eyewear Continuing Care Options: Value of Contact Lenses (Retail Chains)
Spectacles
New Patient—Initial Visit
Revenue:
Professional fee
Initial eyewear purchase
Cost of goods sold
Contribution
Remainder Year 1
Revenue:
Purchases of eyewear
Cost:
No fee visits1
Cost of goods sold
Contribution
Year 2
Revenue:
Purchases of eyewear
Professional fees
Cost:
a
No fee visits
Cost of goods sold
Contribution
TOTAL CONTRIBUTION

Conventional

Disposables

$ 60
100
25
$ 135

$ 60
80
10
$130

$ ---

$---

$ 300

60
-$(60)

15
180
$ 105

$ 80
60

$ 400
87

60
10
70
$140

15
240
$ 232
$ 464

$

-0

$ ---

-$ 0
$135

$

87
100
60
$ 127

Source: Company records. a No fee Visits: assumes two ìno chargeî problem visits/year for conventional lens users and .5 problem visits/year for disposable users. Opportunity cost of visit to ECPs is assumed to be
$30/visit

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Exhibit 12 xxx Duties of Vistakon Sales Reps
Vistakonís sales reps provided a broad base of services to their accounts. These activities included:
Training Sessions:

Sales reps conducted training sessions for the office staff so that receptionists, opticians or others could recommend Vistakon products to callers.

Sales Assistance:

Reps asked the doctors for permission to observe fittings and eye exams, and provided suggestions regarding how to present products in the best possible manner.

Promotions:

Reps attended open houses or sale events held by retailers. The reps often helped in answering patient questions at these events.
Many of the events involved prizes or giveaways so a sales rep might find himself or herself handing out balloons or scooping popcorn.

Marketing Support:

Reps worked with doctors to review their marketing practices. Often reps helped the doctors organize open houses, conduct mailings or manage other marketing events. Vistakon often paid 50% of the event cost if its products were featured.

Exhibit 13 xxx U.S. Market Share of Suppliers of Soft Contact Lenses: 1989-1993
Total Number of New Soft Lens Fits (millions)
Market Share: (%)
Vistakon
Bausch & Lomb
Ciba
Wesley-Jessen
Ocular Sciences/American Hyrdron
Pilkington/Barnes Hind
Cooper Vision
All Others
Total

1989
6.866

1990
6.642

1991
6.674

1992
6.650

1993
6.994

8.4
20.1
21.6
16.9

12.5
20.0
21.2
13.1

16.6
19.7
22.1
12.6

16.7
20.6
21.5
12.1

18.9
23.0
21.2
11.0

10.2
13.3
3.7
5.8
100.0

10.3
12.4
3.9
6.5
100.0

7.8
10.6
3.7
6.8
100.0

12.0
9.3
3.0
4.8
100.0

10.4
8.3
3.1
4.1
100.0

Source: Company records.

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Exhibit 14 xxx Evolution of Soft Contact Lenses

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Exhibit 15 xxx Recommended Patient Targeting for 1 Day Acuvue
•

Upgrade Daily Wear Patients Who Have Active Lifestyles or Contact Lens Problems
•
•

Participants in sports/outdoor activities

•

Patients who work in specialized environments

•

Patients who indicate an interest in refractive surgery

•

Patients who report dry eye symptoms

•
•

Frequent travelers

Heavy depositors

Expand Your Contact Lens Practice by Presenting 1 DAY ACUVUE to Contact Lens
Dropouts
•
•

Discomfort

•

Poor visual acuity

•

Solution sensitivity

•
•

Lens care hassles

Minor complications

Upgrade Existing Conventional Daily Wear Patients
•

All the benefits of disposability for patients who prefer daily wear

•

Easy upgrade to one or two week replacement with SUREVUE or ACUVUE if no interest in 1-DAY ACUVUE

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Exhibit 16 xxx Recommended ECP Customer Acquisition Strategy

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Exhibit 17 xxx Print Advertising of 1 Day Acuvue—Test Market

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Exhibit 18 xxx Demographic Profile of 1 Day Acuvue Patients from Western Regional Rollout
% of 1 Day
Acuvue Patients
(152)
Income
$40,000 or less
$41,000 - $60,000
$61,000 - $80,000
$81,000 or more
Not reported
Total
Median Income

% of 1 Day Acuvue
Patients
(152)
Education
College
Some College
High school or less
Unspecified
Total

22
22
15
34
7
100%
$63,423

Age
Under 18
18-35
36-45
46 or older
Not reported
Total
Median Age

9
43
32
16
-100%
36

Business Travel
Traveled on business
No business travel
Total
Mean # of trips
Mean # of plane trips

Gender
Male
Female
Total
Marital Status
Married
Single
Total

63
19
18
-100%

53
47
100%
11
8

40
60
100%
55
45
100%

Source: Company records.

Exhibit 19 xxx Type of Vision Correction Used Before 1 Day Acuvue
% 1 Day Acuvue
Patients
Current contact lens wearers:
Both contact lenses and eye glasses
Contact lenses only
Current eyeglass only wearers:
Previous contact lens wearers (dropouts)
Never wore contact before
Total

64%
6
70%
18
12
30%
100%

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Exhibit 20 xxx Prior Type of Lens and Modality Worn Before 1 Day Acuvue
1 Day Acuvue Patients
(%)
(n=152)
Wear Schedule of Contact Lens Worn Previously:
Didn’t wear contacts
Hard contact lenses/Rigid gas permeable lenses
Soft daily wear
Soft extended wear
Total
Replacement Modality of Soft Lenses Worn Previously

12
7
57
24
100%

A. Daily Wear
Disposable, 1-2 week
Frequent replacement, 1-3 month
Conventional soft
Total daily wear

17
6
34
57%

B. Extended Wear
Disposable, 1-2 week
Conventional soft
Total extended wear
Total previous soft lense wearers

17
7
24
81%

Exhibit 21 xxx Number of Days per week Previous Soft Lenses and 1 Day Acuvue are Worn, and
Industry Wear Frequency Norms by Lens Type
Frequency of Wearing

Western Region
% 1 Day Patients
Previous
Lens

1 Day
Acuvue

Industyr Norms (%)
Conventional

5.1
7.9

Disposable

Less than one day/special occasion
1-2 days

1.3
15.0

-24.7

3-4 days

13.7

21.0

8.3

3.8

6.2

5-6 days

30.0

28.4

14.0

13.7

15.6

7 days

9.5
4.2

Freq.
Replacement

3.6
1.4

40.0

Mean # of days

25.9

64.0

69.5

73.2

100.0%
5.1

100.0%
4.4

100.0% n/a 100.0% n/a 100.0% n/a Source: Company Records

Exhibit 22 xxx Patient Compliance for 1 Day Acuvue vs. Other Replacement Modalities
Comparative Compliances

% 2 Week Daily Wear a % Conventional Daily Wear

Better

61

85

Same

35

15

Worse

2

--

Total

2

--

100%

Unspecified

100%

Source: Company Records a To be read: 61% of ECP believed that there was better compliance with 1 Day Acuvue’s than two week daily wear, 35% believed compliance was the same and 2% believed there was worse compliance with 1 Day Acuvue than two week daily wear. 26
This document is authorized for use only in Marketing Management by Dhar, University of Chicago from May 2016 to November 2016.