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The Value of Product-Specific Data for Marketing and Sales ROI

Dec 01, 2014

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As regulatory requirements for foods and health products tighten across the world and product categories become increasingly competitive, more companies than ever are investing in research and development (R&D) to help their products stay novel, comply with regulations and stand out in the marketplace. Product-specific data is the common and trending theme that meets these objectives. In order to generate this data successfully and within budget, companies must ensure they are maximizing their return on investment (ROI) as it relates to product sales and marketing. This lecture will provide you with valuable information about the value of product-specific data for marketing and sales, and discuss specific strategies your company can use to maximize your return on this investment.

  • 1. Nutrasource Diagnostics Inc. The Value of Product-Specific Data for Sales and Marketing Return on InvestmentFriday, March 7th, 2014 William Rowe, BA President & CEO [email protected] www.nutrasource.ca

2. Outline About Nutrasource and our product commercialization platform Product claims and product-specific data 3 unique case studies: food, raw material ingredient, dietary supplement 4 stages of development: Systematic scientific literature reviews Product analytics Human clinical trials Health/product/marketing claims Return on investment Additional Nutrasource information www.ifosprogram.com www.nutrasource.caBooth # 176 3. About Nutrasource and Our Product Commercialization Platformwww.nutrasource.caBooth # 176 4. About Nutrasource Nutrasource Diagnostics Inc. (NDI) is a full service R&D department for the consumer health products industry from farm to pharm. Delivering commercialization since 2002www.ifosprogram.com www.nutrasource.caBooth # 176 5. Product Development: 2 Key Scenarios 1. Launching a new product 2. Re-launching/re-positioning an existing productwww.ifosprogram.com www.nutrasource.caBooth # 176 6. Answering the 5 Key Questions To help determine your products sales, marketing, regulatory and R&D strategy, we ask the 5 key questions: 1. Where is it made? 2. How is it made? 3. What is it? 4. What would you like to say and what can you say about it? 5. What country would you like to sell it in? www.ifosprogram.com www.nutrasource.caBooth # 176 7. From Concept to Claim/Marketwww.ifosprogram.com www.nutrasource.caBooth # 176 8. Start with the End in Mind Reverse the concept to claim pathway with the product claims as your starting point to ensure all research, development, regulatory, intellectual property and marketing are positioned with this common threadwww.ifosprogram.com www.nutrasource.caBooth # 176 9. Product Claims and Product-Specific Datawww.nutrasource.caBooth # 176 10. Product Claim: Part 1 Remember your product claim (health claim, nutrient content claim, structure-function claim) drives your marketing, your collateral, and your intellectual propertywww.ifosprogram.com www.nutrasource.caBooth # 176 11. Product Claim: Part 2 Remember your product claim is the intersect point where science, legal and marketing converge and this is where ROI on new product launches and product re-positioning occurswww.ifosprogram.com www.nutrasource.caBooth # 176 12. Product Claim: Part 3 Remember it is time to stop thinking about these aspects of product development as individual silos of activity but as one continuous commercialization strategywww.ifosprogram.com www.nutrasource.caBooth # 176 13. Product-Specific Data Product-specific data is data that provides unique and novel marketing, sales and regulatory information and positioning specific to your products formula, its characterization, its attributes, and its implied or direct health benefits www.ifosprogram.com www.nutrasource.caBooth # 176 14. Why is it important? Strengthen company name and product brand Establish integrity and credibility Create research rights and intellectual property Product claims substantiation Increase sales exponentiallywww.ifosprogram.com www.nutrasource.caBooth # 176 15. General Observations Companies are providing very similar marketing messages within categories Companies do not see the ROI on clinical trials or similar larger budget research and development Companies see the FDA, EFSA and Health Canada as an adversary instead of an ally Companies fight the tightening of the regulatory environment instead of using it for marketing leverage www.ifosprogram.com www.nutrasource.caBooth # 176 16. 3 Unique Case Studies: > Food > Raw material ingredient > Dietary supplementwww.nutrasource.caBooth # 176 17. Case 1: Seafood Situation Company provided fresh seafood meals to the cruise line industry A rogue employee set up down the street began taking market share up to ~30% Regular marketing using terms like fresh, natural, delicious Traditional marketing was not workingwww.ifosprogram.com www.nutrasource.caBooth # 176 18. Case 1: Product-Specific Data Difference Stability testing to demonstrate novel production process gave an additional 3 days shelf life over competitor Regulatory and nutritional analysis assessment to provide insight to more aggressive claims around EPA and DHA levels in seafood dishes Define reported adverse events profile from FDA in the public record to show low frequency of issues and strong lack of illness track record (over 1 billion meals served and only 10 reported events to the FDA) www.ifosprogram.com www.nutrasource.caBooth # 176 19. Case 1: The Result Rogue competitor shutdown in 3 months Company returned to industry leading status in categorywww.ifosprogram.com www.nutrasource.caBooth # 176 20. Case 2: Moving Right Along Company with an insoluble oat hull fibre wanting novel fibre claim applicable across multiple food categories for the US and Canada Precedent had not been set for one submission covering this many applications in various cereals, breads and pastas www.ifosprogram.com www.nutrasource.caBooth # 176 21. Case 2: Product-Specific Data Difference Create systematic literature review on scientific rationale for metabolic controlled diets Design a free range human study with assessment of 9 product arms following subjects for 5 months Use Radio Opaque rings to track stool volume and transit time www.ifosprogram.com www.nutrasource.caBooth # 176 22. Case 2: The Result Most widely applicable novel fibre claim ever approved in North America Company can transfer related claims up to the end user on the supply chain for food and dietary supplement applications IP around process technology allows company to retain IP and tie claim back into IPwww.ifosprogram.com www.nutrasource.caBooth # 176 23. Case 3: Breast is Best Company required an implied breast cancer prevention claim Breast Cancer claims in Canada are a Schedule A disease claim typically reserved for large scale pharmaceutical development What to do next? www.ifosprogram.com www.nutrasource.caBooth # 176 24. Case 3: Product-Specific Data Difference Systematic literature review to confirm theoretical formula optimization and biomarker identification based on published literature Health Claim strategy around brand name and actual claims relating to estrogen metabolite levels and ratios Clinical trial in pre and post menopausal women specific to health claim strategy and regulatory filing www.ifosprogram.com www.nutrasource.caBooth # 176 25. Case 3: The Result The only Natural Health Product ever licensed in Canada with implied breast cancer prevention health claims A publication in an oncology journal Immeasurable ROI according to the clientwww.ifosprogram.com www.nutrasource.caBooth # 176 26. 4 Stages of Product Development: > Systematic Scientific Literature Reviews > Product Analytics > Clinical Trials > Health & Marketing Claimswww.nutrasource.caBooth # 176 27. Strategies and Tactics: Systematic Scientific Literature Reviews Assessment biomarkers of interest for your formula and claims Theoretical formula optimization from a claims perspective Jurisdictional assessments of level of aggressiveness around the claim Assessing the research gap of where you are vs. where you need to be for claims substantiation www.ifosprogram.com www.nutrasource.caBooth # 176 28. Strategies and Tactics: Product Analytics Contamination assessments Stability assessments Active ID and Concentration Characterization of formula and unique attributeswww.ifosprogram.com www.nutrasource.caBooth # 176 29. Strategies and Tactics: Human Clinical Trials Efficacy assessments Safety assessments Publication strategy Biomarker strategy Study design to answer as much as possible!!!www.ifosprogram.com www.nutrasource.caBooth # 176 30. Strategies and Tactics: Health/Marketing Claims Marketing collateral IP strategy Certification strategy Government approval/compliance strategy Label messaging strategywww.ifosprogram.com www.nutrasource.caBooth # 176 31. Return on Investmentwww.nutrasource.caBooth # 176 32. Strategies and Tactics: ROI for New Product with Clinical Trial Dietary Supplement - Enhanced Competitive Positioning The Scenario$500 $150,000New Positioning Revenue$350,000Baseline Revenue Growth5.5%Revenue Growth Increase0.0%Change in Profitability0.0%$300Discount Rate Net Present Value Internal Rate of Return Payback10% $54,939 45% 3.0 yearsCurrent Positioning$200 $100$0 Year 0$35,000 The Business CaseNew Positioning$400Investments in $KInvestmentsNet Profit and Revenue $KBaseline RevenueYear 1$30 $20 Phase IIa Study$10Phase I Study $0Sources: Frost & Sullivan (2005); NHP Insider (March 2012)www.ifosprogram.com www.nutrasource.caYear 2Booth # 176Year 3Year 4Year 5 33. Strategies and Tactics: ROI for New Product with Clinical Trial Such an investment would yield a 45% return and a 3 year payback generating a Net Present Value (NPV) of $54,939 The NPV is a measure of how much profit the investment produces in todays dollars and is determined by adding the discounted cash flows of the project over its lifetimewww.ifosprogram.com www.nutrasource.caBooth # 176 34. Strategies and Tactics: ROI for Existing Product with Clinical Trial Nutraceutical (OTC) Supplement - Enhanced Competitive Positioning The Scenario$4.0 $1,000,000New Positioning Revenue$3,000,000Baseline Revenue Growth13.8%Revenue Growth Increase0.0%Change in Profitability0.0%$2.0 $1.0 Year 0$400,000 The Business CaseDiscount Rate Net Present Value Internal Rate of Return Payback10% $511,387 32% 5.8 yearsNew Positioning Current Positioning$3.0$0.0Investments in $KInvestmentsNet Profit and Revenue $MBaseline RevenueYear 1$300 $200 Phase IV$100Phase III$0Sources: Frost & Sullivan (2005); NHP Insider (Mar