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

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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.

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

  1. 1. Nutrasource Diagnostics Inc. The Value of Product-Specific Data for Sales and Marketing Return on Investment Friday, March 7th, 2014 William Rowe, BA President & CEO wrowe@nutrasource.ca www.nutrasource.ca
  2. 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.ca Booth # 176
  3. 3. About Nutrasource and Our Product Commercialization Platform www.nutrasource.ca Booth # 176
  4. 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 2002 www.ifosprogram.com www.nutrasource.ca Booth # 176
  5. 5. Product Development: 2 Key Scenarios 1. Launching a new product 2. Re-launching/re-positioning an existing product www.ifosprogram.com www.nutrasource.ca Booth # 176
  6. 6. Answering the 5 Key Questions To help determine your product’s 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.ca Booth # 176
  7. 7. From Concept to Claim/Market www.ifosprogram.com www.nutrasource.ca Booth # 176
  8. 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 thread www.ifosprogram.com www.nutrasource.ca Booth # 176
  9. 9. Product Claims and Product-Specific Data www.nutrasource.ca Booth # 176
  10. 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 property www.ifosprogram.com www.nutrasource.ca Booth # 176
  11. 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 occurs www.ifosprogram.com www.nutrasource.ca Booth # 176
  12. 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 strategy www.ifosprogram.com www.nutrasource.ca Booth # 176
  13. 13. Product-Specific Data Product-specific data is data that provides unique and novel marketing, sales and regulatory information and positioning specific to your product’s formula, its characterization, its attributes, and its implied or direct health benefits www.ifosprogram.com www.nutrasource.ca Booth # 176
  14. 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 exponentially www.ifosprogram.com www.nutrasource.ca Booth # 176
  15. 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.ca Booth # 176
  16. 16. 3 Unique Case Studies: > Food > Raw material ingredient > Dietary supplement www.nutrasource.ca Booth # 176
  17. 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 working www.ifosprogram.com www.nutrasource.ca Booth # 176
  18. 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.ca Booth # 176
  19. 19. Case 1: The Result • Rogue competitor shutdown in 3 months • Company returned to industry leading status in category www.ifosprogram.com www.nutrasource.ca Booth # 176
  20. 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.ca Booth # 176
  21. 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.ca Booth # 176
  22. 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 IP www.ifosprogram.com www.nutrasource.ca Booth # 176
  23. 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.ca Booth # 176
  24. 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.ca Booth # 176
  25. 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 client www.ifosprogram.com www.nutrasource.ca Booth # 176
  26. 26. 4 Stages of Product Development: > Systematic Scientific Literature Reviews > Product Analytics > Clinical Trials > Health & Marketing Claims www.nutrasource.ca Booth # 176
  27. 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.ca Booth # 176
  28. 28. Strategies and Tactics: Product Analytics • • • • Contamination assessments Stability assessments Active ID and Concentration Characterization of formula and unique attributes www.ifosprogram.com www.nutrasource.ca Booth # 176
  29. 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.ca Booth # 176
  30. 30. Strategies and Tactics: Health/Marketing Claims • • • • • Marketing collateral IP strategy Certification strategy Government approval/compliance strategy Label messaging strategy www.ifosprogram.com www.nutrasource.ca Booth # 176
  31. 31. Return on Investment www.nutrasource.ca Booth # 176
  32. 32. Strategies and Tactics: ROI for New Product with Clinical Trial Dietary Supplement - Enhanced Competitive Positioning The Scenario $500 $150,000 New Positioning Revenue $350,000 Baseline Revenue Growth 5.5% Revenue Growth Increase 0.0% Change in Profitability 0.0% $300 Discount Rate Net Present Value Internal Rate of Return Payback 10% $54,939 45% 3.0 years Current Positioning $200 $100 $0 Year 0 $35,000 The Business Case New Positioning $400 Investments in $K Investments Net Profit and Revenue $K Baseline Revenue Year 1 $30 $20 Phase IIa Study $10 Phase I Study $0 Sources: Frost & Sullivan (2005); NHP Insider (March 2012) www.ifosprogram.com www.nutrasource.ca Year 2 Booth # 176 Year 3 Year 4 Year 5
  33. 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 today’s dollars and is determined by adding the discounted cash flows of the project over its lifetime www.ifosprogram.com www.nutrasource.ca Booth # 176
  34. 34. Strategies and Tactics: ROI for Existing Product with Clinical Trial Nutraceutical (OTC) Supplement - Enhanced Competitive Positioning The Scenario $4.0 $1,000,000 New Positioning Revenue $3,000,000 Baseline Revenue Growth 13.8% Revenue Growth Increase 0.0% Change in Profitability 0.0% $2.0 $1.0 Year 0 $400,000 The Business Case Discount Rate Net Present Value Internal Rate of Return Payback 10% $511,387 32% 5.8 years New Positioning Current Positioning $3.0 $0.0 Investments in $K Investments Net Profit and Revenue $M Baseline Revenue Year 1 $300 $200 Phase IV $100 Phase III $0 Sources: Frost & Sullivan (2005); NHP Insider (March 2012) www.ifosprogram.com www.nutrasource.ca Booth # 176 Year 2 Year 3 Year 4 Year 5
  35. 35. Strategies and Tactics: ROI for Existing Product with Clinical Trial • Such an investment would yield a 32% return and a 5.8 year payback generating a Net Present Value (NPV) of $511,387 • The NPV is a measure of how much profit the investment produces in today’s dollars and is determined by adding the discounted cash flows of the project over its lifetime www.ifosprogram.com www.nutrasource.ca Booth # 176
  36. 36. Additional Information About Nutrasource and Our Services www.nutrasource.ca Booth # 176
  37. 37. Our Memberships & Affiliations NDI is a proud and active member of: www.ifosprogram.com www.nutrasource.ca Booth # 176
  38. 38. Our Testing & Certification Programs • Nutrasource is also the developer and exclusive provider of testing and certification program for: • Fish oils – International Fish Oil Standards Program (IFOS™) “ IFOS played a significant role in Renew Life’s ability to grow in the omega-3 category in 2013 despite the category’s decline of approximately 10%. – Peter Agostino, Renew Life ” www.ifosprogram.com www.nutrasource.ca Booth # 176
  39. 39. Our Testing & Certification Programs • Nutrasource is also the developer and exclusive provider of testing and certification program for: • Krill oils – International Krill Oil Standards Program (IKOS™) • Sports & fitness supplements – International Fitness Ingredient Testing Program (IFIT™) www.ifosprogram.com www.nutrasource.ca Booth # 176
  40. 40. Diteba: Analytical and Bioanalytical Laboratory • Testing performed in accordance with the U.S. FDA 21CFR Part 210 & 211, Health Canada GMP guidelines and ICH guidelines • Licensed by Health Canada as a GMP drug establishment (#102117-A) and registered as a Drug Establishment with the FDA and licensed by Health Canada to handle controlled drugs and substances. www.ifosprogram.com www.nutrasource.ca Booth # 176
  41. 41. Have a product you’d like to launch or re-launch? We can help! Stop by the Nutrasource booth #176 for a one-on-one consultation with myself or a member of my team to discuss your product R&D and marketing strategy. www.ifosprogram.com www.nutrasource.ca Booth # 176
  42. 42. Thank you! William Rowe, BA President & CEO wrowe@nutrasource.ca Connect with Nutrasource: www.nutrasource.ca facebook.com/nutrasourcediagnostics @Nutrasource_NDI linkedin.com/company/nutrasource-diagnostics-inc. © Nutrasource Diagnostics Inc. www.ifosprogram.com www.nutrasource.ca Booth # 176

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