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BUDGETING

Case Study: Bringing an Innovative Product to Market

Biolife just may have invented a better bandage. The question is how to spread the word -- without breaking the bank.
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THE PROBLEM: Biolife just may have invented a better Band-Aid. But what's the best way to let the world know?

When it comes to the hurdles that every start-up faces, five-year-old Biolife has already cleared a few. Its sole product, Quick Relief, or QR, a patented powder that stops bleeding within seconds, is unlike anything else out there and has impressed several hard-to-impress gatekeepers, including Wal-Mart, the nation's largest retailer, and CVS Stores, the drugstore chain. Both have already given QR valuable shelf space in several thousand stores. Plus, the head athletic trainer of the Los Angles Lakers has been seen using QR on national TV. But the hard part of CEO Doug Goodman's job is really just beginning: Now he needs to figure out the best way to convince the world to give QR a try.

Last summer, after attracting interest from CVS, Biolife's owners and senior managers, many of whom had spent years working for companies like Procter & Gamble and Pepsi, began a series of fierce debates. While everyone agreed that QR was a unique product with huge potential, they couldn't agree on the best way to market it. The five owners and seven managers, including Goodman, quickly split into two camps: One favored advertising, the other sampling. The 12 execs would pile into the conference room at the Sarasota, Fla., company and argue for hours. "There was a real polarity there," says Goodman of the series of tense meetings that stretched on for several months. Charlie Entenmann, who was Biolife's main financial backer and had built the successful Entenmann's baked goods company from a small family business, thought that advertising made more sense now that Biolife was entering the mass market. But Goodman believed that the company needed to build its credibility first if it truly hoped to go mass market.

Doing both really wasn't an option. Unlike P&G, where Goodman had spent 10 years as a brand manager, Biolife, which rang up $1.5 million in sales last year, didn't have unlimited resources. An experiment late last year of marketing on the cheap -- handing out coupons for $1 off a box of QR to 147,000 CVS customers -- had failed miserably. "People looked at the product and said they didn't trust it," says Goodman. "We had no credibility."

It was back in 1999 that Jim Patterson and John Alf Thompson had first developed QR. The two men were longtime research scientists who had formed Biolife hoping to discover a new way to purify water. They never solved that puzzle, but one day, while working in the lab, Patterson either pricked his finger accidentally or sliced it on purpose -- the story has changed several times, Goodman concedes -- leading to the discovery of QR, a patented combination of resin and salt, the two components Patterson had been experimenting with at the time.

As Goodman pressed his case during those meetings, he reminded the others in the room that Biolife had already been very successful at sampling. In 2002, the company had sent some samples of QR to Gary Vitti, the head trainer for the Lakers. After testing it for several weeks during the off-season, Vitti used QR one day during a regular-season game, prompting the on-air announcers to wonder why Vitti was sprinkling pepper on one of his players. QR was never mentioned by name, but it was the product's first appearance on TV, and it started to create some buzz for the company, at least among sports fans.

Wooing Vitti made sense, Goodman says, because the product is especially useful to the NBA, which allows only a 30-second time-out to stop a player from bleeding.

The problem was making sure that the sample didn't wind up in the trash. Vitti estimates that he gets around 100 requests a week from "different snake oil salesmen" hoping to get him to try out their magic potion on Shaq & Co. But there was something about QR that managed to catch his attention. At the time, he was using another product that neither he nor the players were particularly crazy about because it stung and left dark stains on the skin. "I gave this a try and I was really surprised," says Vitti. "This one popped out because it was so different."

In fact, Vitti liked the product so much that he now has a part-time job selling QR to other trainers at the professional and college level. Goodman estimates that as many as 75% of the teams in the National Hockey League and NBA use QR regularly.

Goodman reminded his colleagues that without "real missionaries" like Vitti, as well as several prominent doctors on the west coast of Florida, Biolife might not have had any sales at all. In 2002, the year QR was launched, Biolife had revenue of $150,000. Last year, after convincing more health care providers, including nurses at the MD Andersen Cancer Center in Texas, to try QR, Biolife's sales increased tenfold.

The Decision

By last fall, Entenmann and the others in the advertising camp had been convinced that sampling represented Biolife's best bet. The company began by training 16 pharmacists at CVS stores in the Tampa Bay area, figuring that people often ask pharmacists for medical advice. But after an initial bump in sales, interest in the product, which costs between $5 and $10 a box and comes in four different packages designed for different uses, such as Nosebleed QR, quickly died down.

Next, Biolife sent several of its own employees into a new CVS store in nearby Bradenton and handed out 400 samples in one day. Sales quickly surged and even after a few months, Biolife was still managing to sell 11 boxes a month at that store, compared with an average of one and a half boxes a month at the stores with trained pharmacists. But Goodman knew that there was no way that Biolife's 40-odd employees could duplicate those results at the 15,000 stores, including 3,000 Wal-Mart stores, that began selling QR in March.

More recently, the company has been looking into training off-duty emergency medical technicians, figuring that their experience with emergencies would bring tremendous credibility to the average consumer. Biolife has also been experimenting with different departments within a particular store. At several Wal-Mart locations, the company had started offering samples in the first-aid section but only received a lukewarm response. When they moved to the automotive and sporting goods sections, however, Goodman says the interest from shoppers was overwhelming.

The company has also experimented with its packaging by trying not to look like a typical medical product. On the Kids QR package, for example, Goodman's eight-year-old son, Bakie, is seen riding his bike and kicking a soccer ball. Actually, all of QR's boxes feature employees or investors. On a new package of Urgent QR, an extra-strength version of the product, Entenmann, 74, is shown rappelling down a mountain.

"We're learning how to get the most out of our marketing dollars, so we've been throwing around different things to see what sticks," Goodman says. Eventually, he hopes that ordinary consumers will be as enthusiastic about QR as Vitti has been. If that ever does happen, a box of QR just might replace the box of Band-Aids that most people have in the back of their medicine chests.

The Experts Weigh In

Should Biolife Emphasize Sampling or Advertising?

Biolife already has the distribution in place, which is a big accomplishment. But if the stuff doesn't move, it will be a huge problem. The company needs to put together a multitiered program: advertising in CVS's or Wal-Mart's Sunday circulars, signage in the stores, samples, and coupons. Because its margins are high, Biolife has the luxury to make the coupon for $1 or even $2 off. Every package it sells should include a coupon for the next purchase.

Stephen Shapiro, marketing professor,
Babson College

Everyone loves free samples and if Biolife has a good product, it makes sense to sample heavily. The problem is that as a small company, it needs to be smarter and more tactical to get its product into the hands of the right people at the right time. The fact that the product's in Wal-Mart is fantastic, but getting a shopper's attention is difficult. Biolife should consider piggybacking on a complementary or targeted product. Figure out who the heavy users are likely to be -- sports is obviously a natural -- and drill very deep in terms of high-user groups.

Art Averbook, president, Co-Op Promotions, and author,
All About Sampling and Demonstrations

A crucial element of any nationwide rollout is significant marketing dollars. Since Biolife doesn't appear to have them, it has to be creative. Media exposure like it got during that Lakers game is a huge plus, but it needs a lot more, particularly in front of women, who are still the primary shoppers in most families. It can really drive home the message that QR is a modern way to treat cuts and nosebleeds. There are probably a lot of parents who don't need much convincing that there's an easier way to treat a nosebleed than tilting a child's head back for five or 10 minutes.

Ben Solomon, BJS Consulting, Seattle

Last updated: Jun 1, 2004




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