Reacquaint yourself with Proactiv, the subject of Case 11.2. Proactiv has relied almost exclusively on internal or organic growth since it launched in the late 1990s. Do you think Proactiv’s approach to growth has been appropriate? Has the company erred by not being more adventurous in its use of the various growth strategies?

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CASE 11.2 Proactiv: How Three Critical Marketing Decisions Shaped a New Venture's Future Web: www.proactiv.com Twitter: proactiv Facebook: Proactiv Bruce R. Barringer, Oklahoma State University R. Duane Ireland, Texas A&M University Introduction In 1995, two dermatologists, Dr. Katie Rodan and Dr. Kathy Fields, developed what they believed was a medical breakthrough in fighting acne. Their mission: to help millions of people rid themselves of acne and acne- related problems. They named their product Proactiv Solutions. This name was chosen because the product could heal existing blemishes and proactively help prevent new ones from forming. Today, Proactiv is the number one selling acne product in the United States, even though it's not available in most stores. It's sold primarily through infomercials, the company's Web site, a subscription service called the "Proactiv Solution Clear Skin Club," and in select upscale boutiques and kiosks. The way Proactiv reached the point it currently occupies is an interesting story. Early in its life, Proactiv was shaped by three critical marketing decisions, from which the com any has not wavered, even to this day. This case recounts these decisions and discusses how the decisions shaped this entrepreneurial venture's future. How It Started Katie Rodan and Kathy Fields met while they were working summer jobs at a cardiovascular research lab in Los Angeles. The lab was developing a drug to treat post-heart attack patients. Both Rodan and Fields enjoyed the exciting pace of the work as well as the camaraderie they shared with the lab's researchers and doctors. After earning their college degrees, they both went to medical school and became dermatologists. They stayed in touch and often shared with one another how surprised they were at the number of acne patients they were seeing. At the time, the medical research said that only 3 percent of the adult population had acne, but Rodan and Fields became convinced that the number was higher. They were each seeing acne patients on a daily basis, and they weren't just seeing teenagers. They were seeing women in their 20s, 30s, 40s, and even in their 50s who were suffering from acne and acne-related problems. Rodan and Fields decided to form a partnership to investigate the acne issue further. They started by talking to their patients, asking them a wide range of acne-related questions. What they found was that the vast majority of their patients hated the acne products on the market. The most common complaints were that the products were very drying and they were very irritating. Worst of all, patients told Rodan and Fields, the available products did not work. At this point, the two physicians started thinking there might be an opportunity for them to create a better product. Rodan and Fields spent the next couple of years thoroughly investigating the acne products on the market. After testing many of the products on their patients, they made what they believed was a shocking discovery. All of the products on the market were designed to spot-treat a pimple-none were designed to stop the pimple from forming in the first place. This just didn't make sense to the two dermatologists-from both a practical and a medical standpoint. By the time you see a pimple, whatever treatment you administer, it's too little too late. In their judgment, not taking steps to prevent acne from developing was akin to not brushing your teeth and going to the dentist to fill cavities. Why