Mike Danielson05.01.06
Today's consumers are better educated about nutraceuticals than ever before mostly because product manufacturers and ingredient suppliers have spent millions of dollars to make sure people look for specific logos on product labels. What is happening currently within the world of nutraceuticals is similar to what happened in the food industry when companies started co-branding with a little known ingredient called NutraSweet-the brand name for aspartame. As consumers started to ignore products made with sugar, they also avoided labels touting just "sugar free." They eventually changed their consumption behavior in favor of products featuring the NutraSweet logo because they knew what to expect.
It's simply not enough anymore for a product to be enriched with a generic ingredient. Indeed, many consumers today are willing to pay more for the benefits derived from proprietary technology often associated with a branded ingredient.
A branding campaign for a finished product is usually based on its proprietary technologies. Branded ingredients tend to be more expensive, which means there is less tolerance for losses. There are cases in which a finished consumer product manufacturer may take a proprietary ingredient and brand it under another name featuring that ingredient, but that's a more expensive undertaking.
At the end of the day, a product is either a commodity or it's not. Branding is certainly essential to a company that wants to protect those aspects of an ingredient that set it apart from its competitors. It is important to remember that branded products are not competing on price, so a marketing program must be designed to create and build a market to justify the higher product price.
Co-branding has emerged because proprietary, branded ingredients are expensive to develop and manufacture. Scientific research to verify safety and efficacy, and the ingredient supplier's purity and GMP standards, also contribute to the costs. With so many overhead costs to consider, it is sometimes easier to share the burden with a branding partner.
Soft-Gel Technologies' (Los Angeles, CA) director of marketing, Kenn Israel, agrees. "Many nutraceutical suppliers, manufacturers, marketers, and retailers have limited budgets for product promotion. Co-branding facilitates a larger and more synergistic market effect from the limited efforts of each participant," he said. "An emerging business model is for companies to work in both informal and formal alliances leveraging each other's brand/product messages to access and influence new markets or applications for their products. These alliances will eliminate some of the expensive initial steps of creating awareness of a product for an application, and they will minimize the potential brand risk that is taken on when a product message is extended or expanded beyond its initial base."
So why would a product manufacturer choose to use a proprietary ingredient over a generic one? When a proprietary ingredient supplier has a vested interest in the ingredient's success, it can demonstrate how it plans to support the brand, and the products containing the brand, in the consumer market.
In return, the product manufacturer gains exposure from this additional marketing layer, and gains the public's trust from the structure/function language that can be used on product packaging.
"Co-branding unifies market efforts, prevents wasted inefficient effort, and allows the various partners to focus on the customers they can influence most effectively," said Mr. Israel. "Assuring message discipline is perhaps the most important benefit of co-branding because it can help create a consistent product message throughout the supply chain."
Most branded ingredient companies have strict formulation guidelines for manufacturers to ensure efficacy. From the consumer's standpoint, they can feel confident that the product they are purchasing contains the proper ingredient dosage, and that the structure/function language on the label is accurate.
Co-branding is not new. However, over the past few years, it has certainly grown in importance to nutraceuticals companies that want to develop and maintain sales. Co-branding is also not cheap. Indeed, annual marketing budgets of a $500,000 to $2 million are not uncommon.
As is the case with all branding, how quickly you become a recognized brand can most often be measured by the rate at which you can get targeted media exposure. So the smaller the budget, the longer it takes to build a brand.
Success comes to companies that never waiver in marketing support, especially those that continue to support the brand even after it appears the brand has sufficient sales momentum. Remember, just as consumers and health professionals become aware of your product, another up-and-coming star will appear on the horizon every few months. If you let your branding campaign slide, or limit its layers, you might as well put out the welcome mat for your competition.
By the time a co-branded nutraceutical product hits store shelves these days, chances are excellent that people have heard about its proprietary ingredient from a variety of reliable sources, including doctors or even medical reporters on the evening news.
An effective co-branding marketing campaign should focus on five key areas:
Targeted special interest media such as Prevention Magazine and Vegetarian Times. This is your core audience because they tend to understand the value of blending traditional and homeopathic medicine.
Consumer health and medical media. The public has come to trust the medical doctors and reporters on TV who write columns in regional or national publications.
Tradeshows and ads reaching medical and healthcare professionals. This target is key because they represent a primary source of information among consumers. Your branding campaign should focus on the research supporting the product, specifically safety, efficacy and the brand's ability to support or supplement traditional prescription drugs.
Specialized health conferences and seminars. Reach out to the ultimate experts. If the branded ingredient or finished product targets hypertension, for example, its research might ideally be presented at the American Heart Association Annual Conference.
Retail and Point of Sale Displays. The importance of this layer cannot be emphasized enough.
Branding campaigns should seek to educate retailers about ingredient differences. Point of sale materials should clearly differentiate brands at a glance. Don't leave any communications avenue to chance because it is far too easy for misinformation to spread by word of mouth.NW
About the author: Mike Danielson joined Media Relations, Inc., Minneapolis, MN, in 1988, and has been a driving force behind the launch and growth of the agency's Health & Medical Division. In addition to helping clients build brands from the ground level and develop effective marketing campaigns, Mr. Danielson has also brokered book deals, negotiated celebrity endorsements, coordinated media and speaking tours, managed large direct response programs, and worked on campaigns involving some of the nation's largest retailers. He can be reached at miked@mediarelations.com.
It's simply not enough anymore for a product to be enriched with a generic ingredient. Indeed, many consumers today are willing to pay more for the benefits derived from proprietary technology often associated with a branded ingredient.
Why Co-branding has Become the Norm
A branding campaign for a finished product is usually based on its proprietary technologies. Branded ingredients tend to be more expensive, which means there is less tolerance for losses. There are cases in which a finished consumer product manufacturer may take a proprietary ingredient and brand it under another name featuring that ingredient, but that's a more expensive undertaking.
At the end of the day, a product is either a commodity or it's not. Branding is certainly essential to a company that wants to protect those aspects of an ingredient that set it apart from its competitors. It is important to remember that branded products are not competing on price, so a marketing program must be designed to create and build a market to justify the higher product price.
Co-branding has emerged because proprietary, branded ingredients are expensive to develop and manufacture. Scientific research to verify safety and efficacy, and the ingredient supplier's purity and GMP standards, also contribute to the costs. With so many overhead costs to consider, it is sometimes easier to share the burden with a branding partner.
Soft-Gel Technologies' (Los Angeles, CA) director of marketing, Kenn Israel, agrees. "Many nutraceutical suppliers, manufacturers, marketers, and retailers have limited budgets for product promotion. Co-branding facilitates a larger and more synergistic market effect from the limited efforts of each participant," he said. "An emerging business model is for companies to work in both informal and formal alliances leveraging each other's brand/product messages to access and influence new markets or applications for their products. These alliances will eliminate some of the expensive initial steps of creating awareness of a product for an application, and they will minimize the potential brand risk that is taken on when a product message is extended or expanded beyond its initial base."
So why would a product manufacturer choose to use a proprietary ingredient over a generic one? When a proprietary ingredient supplier has a vested interest in the ingredient's success, it can demonstrate how it plans to support the brand, and the products containing the brand, in the consumer market.
In return, the product manufacturer gains exposure from this additional marketing layer, and gains the public's trust from the structure/function language that can be used on product packaging.
"Co-branding unifies market efforts, prevents wasted inefficient effort, and allows the various partners to focus on the customers they can influence most effectively," said Mr. Israel. "Assuring message discipline is perhaps the most important benefit of co-branding because it can help create a consistent product message throughout the supply chain."
Most branded ingredient companies have strict formulation guidelines for manufacturers to ensure efficacy. From the consumer's standpoint, they can feel confident that the product they are purchasing contains the proper ingredient dosage, and that the structure/function language on the label is accurate.
Making the Co-branding Commitment
Co-branding is not new. However, over the past few years, it has certainly grown in importance to nutraceuticals companies that want to develop and maintain sales. Co-branding is also not cheap. Indeed, annual marketing budgets of a $500,000 to $2 million are not uncommon.
As is the case with all branding, how quickly you become a recognized brand can most often be measured by the rate at which you can get targeted media exposure. So the smaller the budget, the longer it takes to build a brand.
Success comes to companies that never waiver in marketing support, especially those that continue to support the brand even after it appears the brand has sufficient sales momentum. Remember, just as consumers and health professionals become aware of your product, another up-and-coming star will appear on the horizon every few months. If you let your branding campaign slide, or limit its layers, you might as well put out the welcome mat for your competition.
By the time a co-branded nutraceutical product hits store shelves these days, chances are excellent that people have heard about its proprietary ingredient from a variety of reliable sources, including doctors or even medical reporters on the evening news.
An effective co-branding marketing campaign should focus on five key areas:
Targeted special interest media such as Prevention Magazine and Vegetarian Times. This is your core audience because they tend to understand the value of blending traditional and homeopathic medicine.
Consumer health and medical media. The public has come to trust the medical doctors and reporters on TV who write columns in regional or national publications.
Tradeshows and ads reaching medical and healthcare professionals. This target is key because they represent a primary source of information among consumers. Your branding campaign should focus on the research supporting the product, specifically safety, efficacy and the brand's ability to support or supplement traditional prescription drugs.
Specialized health conferences and seminars. Reach out to the ultimate experts. If the branded ingredient or finished product targets hypertension, for example, its research might ideally be presented at the American Heart Association Annual Conference.
Retail and Point of Sale Displays. The importance of this layer cannot be emphasized enough.
Branding campaigns should seek to educate retailers about ingredient differences. Point of sale materials should clearly differentiate brands at a glance. Don't leave any communications avenue to chance because it is far too easy for misinformation to spread by word of mouth.NW
About the author: Mike Danielson joined Media Relations, Inc., Minneapolis, MN, in 1988, and has been a driving force behind the launch and growth of the agency's Health & Medical Division. In addition to helping clients build brands from the ground level and develop effective marketing campaigns, Mr. Danielson has also brokered book deals, negotiated celebrity endorsements, coordinated media and speaking tours, managed large direct response programs, and worked on campaigns involving some of the nation's largest retailers. He can be reached at miked@mediarelations.com.