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Branding and Marketing Practices for Successful

Nutraceutical BusinessDilip Ghosh

With intensifying competition & increasing consumer sophistication, Brand Building is becominginevitably essential to ensure consumer trust & loyalty. While providing insights, this article alsoarticulates success factors for Branding & Marketing practices in nutraceutical business

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hy brands matter? Over the past Over-the-counter (OTC) pharmacologicaldecade or so there have been foods and beverages companies are movingWsporadic attacks against the idea of towards the extremes of the diethealth

brands and branding. However, the presence of continuum, adopting both category creation and

a large number of strong brands across different category substitution market entry strategies.categories, be it hospitals, dishwashing liquids, The ob ject ive of th is cross-ca tego rywashing machines, or nutraceuticals, has clear innovativeness is to deliver new brand and lineadvantages for society. Ingredients are the core extensions in lozenges, sprays, and capsulesof a nutraceutical product, yet it is not the targeted at colds and influenza, and iningredients but the brands themselves that drive analgesics; examples include GSK's Panadolvalue. For example, there may be 50100 Cold and Flu range, Wyeth's Anadin Maxbrands of vitamin C in US supermarkets/ Strength and Tramil capsules, and, morepharmacies, but Wal-Mart's 'Spring Valley' recently, Reckitt Benckiser's Lemsip Max andstore brand enjoys nearly four times the market Max Sinus capsules.share. In addition to food manufacturers, the

pharmaceutical industry has become interested This radical cross-category innovativeness alsoin this fast-moving field; prominent examples introduces a high element of risk for food andinclude Novartis Consumer Health, Glaxo beverage companies. For example, while plantSmithKline, Johnson & Johnson, and Abbott stanol esters and probiotic cultures haveLaboratories. One important motivation for successfully made the transition from spreadsthese such companies to invest in functional and yoghurts to dairy drinks, probiotic juicesfood is the shorter development times and lower such as Valio's Gefilus and Skane's ProVivaproduct development costs compared to Shots have been relatively less successful inpharmaceutical products. Also, owing to the select European markets.brand image of the companies, acceptance of

new products in the market should not be an Another growth strategy is to repositionissue. existing products to meet consumer needs. Themost successful example is Calcium Sandoz,

Choice which was switched to the OTC route from theAlthough too much choice can have its own ethical pharmaceutical route by Novartis Indiadisadvantages (e.g. selection paralysis), people in 2000. Also, in 2002, Ranbaxy hasfundamentally enjoy having the power to transitioned its adult health supplementchoose between comparable options. In the 'Revital' from prescription to the OTC category.absence of brands with a strong image, theconsumer will naturally prefer to buy the Consistent Qualitycheapest product. The current market is flooded When many brands compete in a category, there

with a large variety of products, but to survive in is simply no room for poor quality. Today'sthis competitive environment, brands must consumers will never choose a product orfulfill the promises made to the market, or service quality that is below an acceptable level.consumers will no longer support them with And, it is very hard to lure back customers whofuture purchases. This is natural selection at have switched to another product. A recent ACwork in a commercial sense. Nielsen survey of consumers in 13 Asia Pacific

countries including India showed that moreInnovation than 30% of customers do not believe the

Given the competitive nature of brands product-related claims made by companies.competing for customers, there are two main Thus, brands must ensure that quality control is

options available for brands who want to maintained at all times, which would lead toimprove their competitive position innovation incrementally improved quality in the long-in product and marketing. To pave the way to term.success, the following three key drivers need tobe explored: How to drive this to the next level?Developing customer-focused products that Any given market contains a multitude of

address specific needs of different customer distinct consumer segments with differentdemographics (Product Development) needs and desires and therefore a one-size-fits-?Differentiating products by focusing on all approach won't necessarily work. For

credibility building and/or lowering prices of successful branding and marketing ofproducts (Product Differentiation) nutraceuticals, market segmentation based on

?Increasing awareness of a product among sex, age, and physiological conditions;physicians and consumers through advertising innovations in branded activity ingredients,and education (Product Promotion) format, and supply chain; and category

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encroachment should be exercised. the case of functional foods and beverages,Reputation most consumer segments would be expected toReputations are earned, not given, and brands make trade-offs between the functional benefit,have to continually work to maintain the trust of price, and carrier attributes, given the complex

consumers by continuously meeting or and multi-faceted nature of consumer foodexceeding their promises. Consumers choose choice. However, more recent consumerbetween brands based on a range of variables, insights would suggest the importance ofincluding value for money, function, and, often, pursuing a strong technological orientation foremotional connection. In terms of building new product success in the case of medicinalconsumer trust and brand recognition, joint products such as OTC pharmacologicalventures and co-branding strategies with beverages. Innovators who are first to marketpharmaceutical or consumer healthcare new products targeted at specific usagecompanies potentially represent viable strategic occasions or specific market segments need toorientations for food and beverage companies ma in ta in a ba la nce d ma rke ti ng an dentering the market with medicinal products technological new product development

such as OTC pharmacological foods and (NPD) orientation in order to remain responsivebeverages. to consumers' diverse and changing needs.

Investing in consumer education Concept ideation and generation represent theIncreasing consumer sophistication is leading earliest stages in the NPD process and entail theto more opportunities for shelf space in generation of new product ideas from variousmainstream retailers. Thus, there is an eminent internal and external sources. Orthodoxthreat that a competitor will be hot on one's approaches to innovation are leading toheels, releasing a similar product within weeks. incremental innovations, which result in theAlso, many countries use widely differing product being poorly differentiated from the

approaches to nu traceu ti ca l labe ll ing other products in the market. However, whileregulation, making the creation of global 'radically innovative' new products offermarketing strategies difficult. In order to potentially greater rewards to both consumerssurvive, it is imperative that manufacturers re- and manufacturers, the level of risk increasesevaluate their marketing strategies to take into along the product development continuum. Inac co un t br and de ve lo pmen t, pr od uc t that sense, from both an operational and NPDauthentication, and consumer education. management perspective, concept ideation andCompanies must be prepared to invest in generation have also come to represent the mosteducating consumers before they can expect to critical stages in the NPD process for newsell to them; further, companies must be product success. Another major challenge is theinnovative in changing the point-of-sale incoming Health Claims Regulation in Europe

environment. which will both increase the cost of healthyproduct innovation and challenge current

Brand building is now essential to ensure innovation practices.consumer trust as well as interestCompetition is intensifying with growing sales. ReferencesHowever, with massive increases in media Aarikka-Stenroos L and Sandberg B. 2011.spend; marketing is an increasingly risky From ne w-produc t de ve lopme nt tobusiness. Brand building is now essential to commercialization through networks. Journalensure consumer trust as well as interest. of Business Research.Brand-building strategy development is more Bogue J. 2009.Cross category innovativeness

complicated than developing the products as a source of new product ideas: consumers'themselves as it requires an in-depth perception of over the counter pharmacologicalunderstanding of the complex motivations beverages. Food Quality and Preferencespurchasing decisions. Identifying your specific Capaldo A and Peruzzelli A. 2011. In search ofconsumer is the first and most important step. alliance-level relational capabilities: Balancing

innovation value creation and appropriability inCommentary R&D alliances. Scandinavian Journal ofThus far, there have been very few nutraceutical Management.or functional food brands that can be recognised Harman C. 2003. The global report onfor their strong brand image. One standout nutraceuticals. ABOUT Publishing Group,example is Yakult. It has been suggested that, in London.

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Mr. Dilip Ghosh, PhD, FACN, is director, Research and Development of Neptune Bio-Innovations Pty Ltd, andNutriconnect, Sydney, Australia.