Animal Health Marketing: Timing is Right to Launch New Products
We are now two months into 2010 but there are already concerns from industry leaders in the lack of new products. The recession has made companies a bit ‘gun-shy’ in launching new products as they reduce their investment in R&D. Instead we are seeing companies implement different product strategies including re-branding current products or simply increasing the price of their current products.
Typically you will see plenty of new products at trade shows in the first quarter of each year. Lets take a look at three major animal health shows that have already taken place this year. As you will see, there are some new products but overall there is a growing concern in the lack of new products we are seeing in the animal health industry.
- Equine Industry - 2010 WESA Market (Denver) - I walked the floor for three days and noticed very few new products for the equine industry. In visiting with one President/CEO he noted that he was more concerned about his current products than developing new ones. Due to the recession, his marketing budget has been dramatically reduced so the focus in 2010 was supporting his current products. Another very large equine company had no plans for any new products immediately. They also were more worried about their current products so their strategy for 2010 was to re-brand their current products. Farnam, one of the largest animal health companies in the country, only had two new products at the show, a shampoo product and a flea product.
Overall I was very disappointed in the lack of new products at the 2010 WESA Denver Market. Typically, you will see at least 8 to 10 new animal health products but they were clearly lacking at this show.
- Cattle Industry - 2010 NCBA Convention (San Antonio) - There were some new product introductions at the NCBA but you will notice several of the products were re-launches of current products.
Pfizer presents HD 50K for Angus, a genetic selection tool that is also the first commercially available Molecular Value Predictions (MVPs) derived from a high-density panel with more than 50,000 genetic markers. The suite of 14 genomic trait predictions, including the beef industry’s first DNA-based economic index, provides MVPs for some economically important traits not available as EPDs, such as average daily gain, dry matter intake, net feed intake and tenderness, as well as many traits that complement EPDs.
Novus International, enters the U.S. beef nutrition market with several feed products with wide range of health benefits.
Merial announced a return of the Corid powder for prevention and treatment of coccidiosis and a new 15-dose bottle of Cystorelin.
Intervet/Schering-Plough Animal Health launches, Resflor Gold, the only FDA-approved combination antibiotic to treat three major bacterial bovine respiratory pathogens. Nuflor Gold®, is an antibiotic for the treatment of bovine respiratory disease (BRD) associated with four major bovine respiratory pathogens.
Boehringer Ingelheim Vetmedica, Inc., continues in their reorganization of the former Fort Dodge cattle product line, including Pyramid 5 and Cydectin.
- Companion Animal Industry – 2010 North American Veterinary Conference (Orlando) – This event took place in January and is typically the first major trade show of the year. The following report from Brakke Consulting provides a great insight on the lack of new products seen at this show.
Like many of you, we’ve just returned from the NAVC meeting in Orlando that was held earlier this week. We were impressed with the positive attitudes and expectations for 2010 that were expressed by many of you.
While there were some new product launches, we remain concerned with the limited number and size of new product introductions at the show. Without new offerings it’s a challenge to find growth in some of the more mature product categories. While some additional growth may come from improved product compliance, the cost of obtaining this growth may be prohibitive.
New higher pricing seems to be one alternative being used by some companies to maintain top line growth. That is fine, as long as it does not drive the veterinarian or the pet owner to another product or source. How much is the pet owner willing to pay in a recessionary time? We don’t have that answer on each product in all categories but we’re seeing some information that suggests that we’re starting to reach the value limits.
There is Hope
Not all is lost as over the past month I have worked with two animal health companies helping them launch three new products. One of the companies launched a new canine paste product that is focused on breeders and newborn puppies. They hope to hit the market with this new product within the next 30 days. The other company, a swine feed manufacturer, is putting the finishing touches together on a new piglet product that includes cutting edge technology along with a patented Lactobacillus casei strain from ProbioFerm.
It can be tempting for senior executives to cut back on innovation during a recession but this short-term savings is made at the expense of the long-term health of the company. Although the future of the economy remains difficult to predict, an eventual upturn is assured, and companies must ensure that they maintain a strong innovation pipeline in order to capitalize on future demand.
Those companies that are prepared to innovate new products in a downturn are faced with a number of advantages. As many companies are focused on cost-cutting, there is less competition and less noise in the market. Assets can be acquired more cheaply, so the relative cost of developing a new product can be lower than during a boom period. We strongly encourage those in the animal health industry to invest into new products in 2010. With the right ideas, manufacturing relationships and ingredient acquisitions in place, a new product does not have to be a labor intensive or a costly process.
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Founded by Preston Munsch, cheetahLink is an online marketing and consulting firm that specializes in the animal health industry. The focus of cheetahLink is to increase sales, brand recognition, online visibility and website traffic through search engine optimization, website development, social media site marketing (Facebook, Twitter, LinkedIn, etc.) and other online marketing services. CheetahLink also provides consulting services for animal health companies including product development, business development, sales/distribution plans, contract manufacturing, and other services. Munsch has spent the past 10 years in the animal health industry specializing in product development, animal health marketing, branding, sales, distribution and advertising. Munsch has a Masters Degree in Business Administration along with a Bachelors Degree in Communication and Associates Degree in Graphic Design.
One of the reasons for sure for less products in the market is the increasing levels of requeriments and barriers to register a veterinary product, not only here in US but worldwide.
Carlos…Without question you are correct as the barriers to enter the veterinary marketplace have made it more challenging. The same can be said on the nutraceutical side even though it is not as difficult as the FDA side. On the nutraceutical side product registration and labeling requirements for each state can make it very difficult for medium to small sized businesses.
Great point and feedback Carlos!
Another good blog post. I think most industries are facing similar challenges in this economy.
These are interesting points in the comments. Healthcare, in general, probably even more than financial services, can have good reasons for strong regulations. That also, unfortunately, can mean more cumbersome, complex and probably, sometimes, contradictory requirements from different states/countries or entities.
Alas, there are no easy answers except a mix of common sense on the part of regulators, continued rigorous testing by companies, while keeping in mind that these days people/consumers can be as (sometimes more) likely to take adverse action if something happens to a pet as to a person they know.
Imran
The Novus International was not really new products into the U.S. market just a rebranding of their acquired Optimum line of organic trace minerals and other lines from the acquisition.
Dan…You are correct and we saw a lot of that at several shows, not just the NCBA. With all of the mergers and acquisitions product re-branding rather new products have been the focus. I appreciate your comment and look forward to future thoughts from you in the future.