In the first of an occasional series of marketing case studies, Sue Blanchard looks at how scientific research can lend product credibility and success and considers the challenges of cross-cultural marketing.
So much has been said about the importance of science to back new products. Easier said than done. The up-front research and marketing investment is enormous. Taking a product from one market to another is a huge strategic challenge and the question remains: Does scientific research from one country translate into another culture, especially when that country is the US?
One company testing the waters is New Jersey-based Quality of Life Labs. Following 14 years of clinical use in Japan, the company believed the timing was right to introduce branded ingredient AHCC (Active Hexose Correlated Compound) in the US, recently marketing it under a new name—ImmunoKinoko.
"Kinoko means mushroom in Japanese, so now our customers will have a better way to identify our immune-supporting medicinal mushroom supplement from Japan," says company president Steve Yamada. The company transferred its Asian marketing strategy which was focused on doctors to the US market via exposure in peer-reviewed journals and educational symposiums. This year, the company entered the retail market with finished product Kinoko, which it sells directly to consumers via the Internet.
"We spend a lot of time and money educating doctors and other health care professionals on the scientific research and clinical success of this product in Japan," says Yamada. For the past decade, the AHCC Research Association has produced an annual international symposium to answer health care professionals' need for scientific evidence of product safety and efficacy.
Although there were initial concerns that the US market might not readily accept research conducted in Japan, Integrated Marketing Group President Jeff Hilton says the educational efforts targeted at health care practitioners are paying off; international sales now top $200 million.
"Consumers are more ready to embrace this research than health care professionals or the media," says Hilton, who leads AHCC's US marketing and development strategies.
"A lot of US consumers realise that Asian countries have been in the forefront of traditional medicine and that body of knowledge has made its way into this country. There is a preference for products that have years of science behind them."
In a nine-year study (Journal of Hepatology 2002;37:78-86) of 222 post-operative liver-cancer patients, researchers at the University of Osaka, Japan, concluded that AHCC can improve the prognosis for postoperative hepatocellular carcinoma patients. The AHCC group had a significantly longer period with no disease recurrence and a higher survival rate compared with the control group. This is one of many studies that demonstrate a significant and positive influence on immune function.
Kinoko's market distinction lies in its long-standing history in Japan, scientific backing and widespread use in clinical settings with an indication-specific approach, says Hilton. These elements are tied to American trends whereby consumers are increasingly interested in enhancing their immune systems.
As a product, AHCC was compelling enough for members of the dietary supplements and functional foods industries to recognise it with the NutrAward for best new product of the year at the Nutracon conference last March. The recognition was based on the product's scientific merit, efficacy, safety, innovation, market potential and ability to advance the industry. As a patented ingredient, AHCC can be exclusively licensed to select manufacturers.
"Getting branding commitment from our partners is critical," says Hilton. "Although manufacturers aren't required to put the AHCC name on their product label, there's a definite advantage for them to do so. We promote AHCC as an ingredient, so it is to their benefit that it be visible on their label."
Kinoko is the intellectual property of Amino Up Chemical Co. of Japan, which developed the proprietary blend of hybridised medicinal mushrooms (including shitake) that are cultivated in Japan. The company also developed the specialised manufacturing process, holds the product patent and maintains an exclusive relationship with Quality of Life (which manufactures the finished product, Kinoko) and Maypro Industries (licensed to distribute the raw material, AHCC), both located in Rye, New York.
To nominate an ingredient or product for the NutrAward for best new product of 2002, please contact Karen Raterman at [email protected], +1 303-998-9194. Entries must be received by Jan. 15, 2003. The award will be presented at Nutracon, March 6-7 in Anaheim, California. More information is available at www.newhope.com.