Back To Basics For Product Promotion Wednesday, Aug 27, 2003
A major animal health company is resorting to something radical in its product promotions - it wants purchasers to focus on the way the product does its job rather than any promotional gifts, which might be offered as incentives.
MERIAL's Product Manager Alastair Nelson says the deliberate move away from tying the sale of premium products to gift offers has been adopted to refocus attention on product efficacy.
"It is an initiative that should help highlight the vital role animal health plays in generating increased performance and profit from production animals," he said.
MERIAL's decision means that products such as EPRINEX(tm) and IVOMEC® Plus, which have been sold with promotional gifts in the past, will now be sold solely on their merits as proven, cost effective animal health solutions.
Evident in MERIAL's current advertising campaign, the change has come after many years of incentive programmes that have promoted drench products using high value promotional gifts as inducements to buy.
The change has come about for two reasons explained Alastair Nelson.
"The first relates to the important business decisions farmers make all the time about which animal health products to use. These have a huge impact on animal production and are second in importance only to those about nutrition, so we are keen to ensure such decisions are not obscured by the inducement of promotional gifts.
"As well as this, the cost of providing promotional gifts of ever increasing value is a practice that has become unsustainable. Our approach is it is better to focus on helping improve returns for customers through more effective animal health management than continue to offer higher value promotional gifts."
Other products including TRITON(tm), IVOMEC Maximizer(tm), EXTENDER® and JETAMEC® will continue to be sold without promotional gifts.
MERIAL believes it is not alone in its view that the escalating value and frequency of gift offers has detracted from the fundamental purpose of animal health products - effectiveness in the field.
"We have been conscious for some time that offers of promotional gifts have taken the focus away from using the best animal health products and this has encouraged less effective stock management," said Alastair Nelson.
"To achieve effective stock management, improved production and returns, the real "hero" must be the performance of the animal health product, not the gift item that is used to promote the sale."
MERIAL itself has played a role in the promotional give-aways game, having used the practice for a number of years. But in hindsight, the company says the offering of promotional gifts as incentives has taken the focus away from the quality and value of the animal health product, which was never its intention.
"We believe that farmers will see this change as an honest move to focus on what really matters - the results in the paddock with increased earnings. Around $500m - $600m is lost annually in production due to the impact of parasites and another $120m spent controlling parasites, so we are confident this will be the case."
The decision will also allow MERIAL to focus on helping improve returns for customers through more effective animal health management. Its view is, in the long term, using a high quality drench product will add far more value than a promotional gift will in the short term.
>From a farming perspective MERIAL believes there is no better time to make this decision - with prices down, value and returns from production have become much more critical. However, the company also realises it is a risk.
"Promotional products have become such a pervasive part of the promotional landscape we realise the uncertainty attached to changing our approach. However, our customer loyalty programmes are unchanged and we are confident that our products will deliver the results farmers want and they are able to be judged on the results they produce," Alastair Nelson concluded.