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Baig 2016
Baig 2016
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Farah Naz Baig is a On a bright sunny day in April 2011, Khurram Tahir sat in a pensive mood in his new room
Lecturer at the at Abbott Nutrition in Pakistan. As a recently promoted brand manager for Pediasure, he
Department of Marketing, had to develop a promotional strategy for the brand. The Pakistani market had a population
Institute of Business
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size of 180 million people with population growth rate of 24.3 births/1,000 population. The
Administration, Karachi,
market for Pediasure was consumer-driven as many mothers identified their children’s
Pakistan.
eating problems and either took them to the doctor for a prescription or bought advertised
nutritional products on their own. Being a pharmaceutical company, Abbott’s promotion
was directed toward doctors, and things were no different when they launched this
particular nutritional supplement in 1996 as a pioneer in the untapped market. Khurram had
to identify whether he should continue the marketing plan toward the doctors’ route or
amend it to direct to consumer (DTC). In 2006, DTC direction was selected, but it resulted
in backlash from the doctors. “Mothers are the key decision makers. Therefore, it is
essential that we directly talk to them in order to build demand and tap the huge
opportunity”, Tahir considered. The key question was should he do it at the risk of losing the
support of the doctors.
Company introduction
Abbott Laboratories was an American health care products company founded by
physician, Dr Wallace Calvin Abbott in 1888. Abbott Pakistan was a part-global Abbott
corporation. Abbott started its operations in Pakistan as a marketing affiliate in 1948 and
was ranked in the top five MNCs operating in Pakistan in 2011. It had two pharmaceutical
manufacturing facilities located at Landhi and Korangi in Karachi. Abbott Pakistan had
leadership in the fields of pain management, anesthesia, medical nutrition and
anti-infectives. Their wide range of products were managed and marketed through “three
marketing arms”. It had therapeutic products ranging from Faverin to general health care
products such as Burnol (tube for burns) and Mospel (mosquito repellent lotion). Abbott
Nutrition department was developed as a separate department in 2006 with a separate
sales force for nutritional products. Initially, the nutritional products were promoted by the
same sales force. The company’s promise was to serve people in the “pursuit of healthy
lives”. The company’s mission was:
To deliver consistently superior products and services which contribute significantly to improve
Disclaimer: This case is written the quality of life of consumers.
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial Industry dynamics
decision-making. The author/s
may have disguised names; The Pakistani pharmaceutical industry was a highly profitable industry worth US$1.88 bn
financial and other
recognizable information to
with a growth rate of 19.2 per cent in 2011. The local and multinational market share split
protect confidentiality. was 57 versus 43 per cent, respectively. The industry was highly competitive and
DOI 10.1108/EEMCS-06-2015-0150 VOL. 6 NO. 2 2016, pp. 1-21, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
fragmented. Companies in the pharmaceutical industry ranged from large MNCs to small
companies with one-room operations. The pharmaceutical industry was highly regulated by
the Ministry of Health, Pakistan. Some of these pharmaceutical companies had a food and
nutrition department which marketed categories including food supplement, powdered
milk and healthy food drinks. The powdered milk, healthy drinks and food supplement was
approximately Rs 13 billion market. In the food supplement category, Abbott’s Nutrition
department offered brands such as Pediasure and Ensure and had a total share of 6.1 per
cent. The food supplement category was an underdeveloped category, as there were not
many brands available in the market; Abbott’s Pediasure was the only food supplement
available in Pakistan. Until 2006, the dynamics in the food supplement category were
different because the need was recognized by mothers, and the food supplement brand
was actively prescribed by the doctors. A mother’s biggest concern pertained to their
child’s growth and health. Kids aged between 2 and 6 years were either very choosy eaters
or had genuine eating problems which resulted in poor mental and physical growth as their
mother’s core objective was to ensure that their child got proper nutrition and had physical
and mental growth in accordance to kids in their particular age group. Mothers generally
developed the physical and mental growth reference based on their discussion with other
mothers. Also, in case of any eating problem with the child, Pakistani mother’s initially
consulted their friends and relatives and then consulted the doctor (Exhibit 1). This could
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be attributed to the fact that the eating problems were not considered to be a threat by
mothers. In case of persisting problems, doctors were consulted. The consultation with
doctors also varied with the strata; for instance, in the upper echelon, pediatricians were
consulted for problems related to children. However, mothers in the lower classes
consulted the general physicians, friends or elderly people in the family about such
problems. The choice of consultation depended on the gravity of the situation, and doctors
were consulted primarily for serious issues.
To obtain data regarding the buying and usage habits in the powdered, healthy drinks and
food supplement category, AC Nielsen and IMEX were subscribed. AC Nielsen monitored
all the brands recommended by the pharmacies or brands promoted on television, while
IMEX monitored all the products that doctors actively prescribed. To accurately measure
the consumer demand of Pediasure, Abbot decided to do their own market research in
which 313 stores were visited. The stores division was 107 category A stores and 206
category B stores. The store interception survey asked parents about the following
characteristics (please refer to Exhibit 1 for the research results):
recommendation (doctors, friends, relatives, neighbors);
price effect on purchase decision;
company name’s effect on purchase decision;
nutritional value (calories or number of nutrients); and
TV ads they may have seen.
Competition
The market for powdered milk and food supplement was divided into categories based on
price and consumer age group (Table I).
Competitors of Pediasure also included brands in the healthy food category. The healthy
food drinks catered to kids aged between 5 and 15 years. This category included brands
such as Complan (containing 29 vital ingredients), Horlicks (containing 23-26 vital
ingredients), Nestle Milo and Bournvita. The healthy food drink brands not only fulfilled
flavor-enhancing purpose when added to milk but also provided energy. In the Pakistani
market, Nestle Milo was available in both the powdered and ready-to-drink format.
Complan, Horlicks and Bournvita were available only in powdered format. Flavors including
chocolate, strawberry and vanilla were widely available in the healthy food drinks category.
Low price (Rs 150-350) Lactogen, Nestle Milo Nido (Rs 12 bn value share), Lactogen (Rs
1 bn value share) Stages 3 and 4
Medium price (Rs 350-550) Meiji, Morinaga Meiji (Rs 1.25 bn value share)
High price (Rs 550-600) Med Johnson, Abbott, Nutrina, Cow & Abbott: Pediasure
Gate
Horlicks was a product of Glaxo SmithKline which was a reputed MNC operating in
Pakistan. It was a malted hot drink and mostly used as a supplement for vitamin D which
aided in calcium absorption. It had 12 essential minerals and vitamins and was available in
five different flavours (Horlicks traditional, Horlicks light, Horlicks light chocolate and
Horlicks cappuccino). Its micronutrients improved bone growth, strengthened muscle
tissues, enhanced brain functions and improved immunity. The additional nutrients resulted
in a significant improvement in growth and development. The brand promotion was done
through television commercials directed toward mothers and kids aged between 6 and 10
years. The primary target audience were kids aged between 7 and 12 years, usually shown
in advertisements enjoying a cup of Horlicks. Mothers were also shown alongside the
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children, encouraging the product usage. The core message was “Horlicks makes kids
taller, stronger and sharper”. Products such as junior Horlicks, meant for kids under the age
of three, had mothers as the core target audience. The ads were aired during cooking
shows, dramas/soaps and also on Cartoon Network and other kids’ channels. A few on
ground promotional activities were also conducted by the brand, for instance, the Horlicks
Wiz kids and an inter-school literary and cultural competition was held in Karachi, Lahore
and Islamabad. The idea behind the event was to bring the bright students from South Asia
together with one platform.
Complan was owned by the H. J. Heinz Company. Complan – known as “complete food”
was a milk-based nutritional health beverage fortified with 34 vital nutrients in balanced
proportion including 100 per cent milk protein to help in better child growth. Complan was
available in seven flavours: chocolate, kesar badam, pista badam, strawberry, mango,
caramel and natural. The promotion focus was more at the retail level and eye-level shelf
displays inside the stores.
Cadbury Bournvita was among the oldest brands in the malt food category with a rich
heritage and had always been known to provide the best nutrition to aid growth and all
round development. Launched in 1948, throughout its history, Cadbury Bournvita had
continuously re-invented itself in terms of product, packaging, promotion and distribution.
The Cadbury lineage and rich brand heritage had helped the brand maintain its leadership
position and image over the past 60 years. Cadbury offered two flavours: Cadbury
Bournvita, with its popular chocolate taste, and Cadbury Bournvita 5 Star Magic, leveraging
the rich chocolate and caramel flavor of Cadbury 5 Star. It focused on milk flavor
enhancement and provision of vital nutrients. The marketing emphasis was on retail
presence and frontal displays. There was no television advertising done for this brand.
Red concentrates such as Roof-Afza and Jam-e-Shireen, were the two most famous local
brands available in the market for the more than 30 years. The usages for the red
concentrated were many. They were used as cold drinks to be served to guests (substitute
of fizzy drinks), served as milk flavor enhancers and as sweeteners for ice creams. They
were initially targeted toward the families which gave it the image of an old brand, but both
brands were repositioned and were targeted toward the youth market. Initially, the
campaigns of the concentrates compared red concentrates with the fizzy drinks and
indicated the health benefits. Later on, the focus was more on user imagery showing young
adults and kids having fun while enjoying the drink. Jam-e-Shireen developed an animated
cartoon series for the kids indicating the health benefits of the brand. The core functional
Pediasure
In the international market, Pediasure started as a hospital brand aimed at sick children
who could not consume solid food. Later on, it was positioned as a nutritional supplement
aimed at children who were picky eaters or/and faced feeding difficulties. The dietary
supplement was intended to deliver nutrients that may otherwise not be consumed in
satisfactory quantities. Supplements, as generally understood, encompassed vitamins,
minerals, fiber, fatty acids or amino acids, among other substances. US authorities defined
dietary supplements as foods, while elsewhere they may be classified as drugs or other
products. There were more than 50,000 dietary supplements available. More than half of
the US adult population (53-55 per cent) consumed dietary supplements. Pediasure was an
important nutritional supplement because it provided nutrients in balanced quantities that
might not be consumed otherwise. The brand was trusted by mothers in more than 80
countries around the world and was meant for the age group of 2-10 years (not for infants),
a special age group because of a child’s physical and mental development that happens
during this phase. Pediasure provided balanced nutrition of proteins, carbohydrates, fats
and vitamins. The kids who did not consume the right level of nutrients usually suffered from
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problems such as low immunity, low weight, less energy and overall lethargy. Some of the
kids having such problems could be classified as picky eaters. Some of the characteristics
of picky eaters were:
ate very little;
ate only a limited number of foods;
unwilling to try new foods;
refused to eat vegetables and/or foods from some other food groups;
showed strong food likes and dislikes; and
child’s behavior disrupted mealtimes.
Pediasure was different from other brands available in the market because it was not a
flavor enhancer but provided the nutrition of a complete meal. It not only helped kids in
physical and mental growth but also improved the level of immunity and reduced the
incidence of infection. It had undergone various clinical trials internationally and scientists
had proven its efficacy in undernourished children. Pediasure contained 25 essential
vitamins, mineral and a healthy combination of protein, carbohydrates and fat. The
procedure required the powder to be mixed in warm water, five scoops for one cup with the
scoop being provided in the tin. On average, it was recommended that a child should
consume five boxes of it monthly, but most parents did not follow this and ended up using
around three boxes.
Pediasure was launched in Pakistan in 1996 at the price of Rs 375 per tin. The product was
imported from Singapore initially and then subsequently from Holland. The fluctuation in the
exchange rate led to huge price fluctuations for the brand. The promotional activities were
mostly directed toward the doctors at brand-sponsored conferences and seminars and
free samples and there were approximately 2,500 sales people promoting various Abbott’s
brand; however, there were 50 sales people who handled Ensure, Pediasure, Pedialyte and
Isomil. The Field Force was not divided as per the specialty of the doctors but on the basis
of products. The sales people usually spent three to four minutes with the doctors.
However, when something was introduced or there was brand-related news to share, the
call could get prolonged to 10 min. The number of visits required by the sales person to
make the doctor become proactive depended on the number of competitors and the
scientific strength of the brand and the sales force would visit both general physicians and
pediatricians. The core reason behind the promotion of Pediasure through the doctors was
habit usually led to certain deficiencies in the body hampering the mental and physical
growth). The 30-s communication showed a mother talking about the problem of picky
eating followed by the doctor elaborating the problem and the repercussions which
included poor immunity, mental and physical growth problems. During the last few
seconds doctors endorsed Pediasure as the desired solution because it was the
complete meal supplement that would resolve all three problems discussed earlier. The
media budget was dependent on the sale of the brand which dwindled as a result of the
fluctuating exchange rates. For Ali, the campaign was an achievement because it was
well received by the consumers. The dipstick result showed that the campaign
generated awareness and increased sales. Things, however, were not so positive at the
doctors’ end. There was a backlash from the doctors who questioned the fact that why
should they have to promote the brand when the consumers were already well aware
about it. Ali realized that the negative reaction from the doctor might be unhealthy for
the brand in the long run and hurt the overall brand portfolio. The doctors were actively
prescribing other brands of Abbott, such as Ensure and Pedialyte, although these
brands were the over-the-counter options available at the retail stores. The campaign
was called off in 2008.
In 2009, worldwide, Identification Management of Feeding Difficulties (IMFeD) platform
related to the feeding difficulties was launched for Abbott. Ali launched the same platform
for the Pakistani market in 2010. This campaign, however, was only launched for the
doctors. There was no TVC support. The IMFed campaign was only promoted to doctors.
Dr Glenn Berall, Chief of Pediatrics and Medical Program Director at North York General
Hospital in Toronto and Director of the Feeding Disorders Clinic, at Bloor view Kids Rehab
said:
Until now, we have not had a systematic approach to identifying and managing children with
these issues. IMFeD is a practical, easy tool for doctors to use when caregivers alert them to a
potential feeding difficulty, which could be quite serious over the long term
(http://cityparent.com/posts/343-new-diagnostic-tool-helps-manage-feeding-difficulties).
Any problem that negatively affected the process by which parents or caregivers provide
food or supply nourishment to their young children is considered to be a feeding difficulty.
The IMFeD tool enabled pediatricians to classify common feeding difficulty conditions into
the following categories and access established guidelines for treatment and management
of the specific condition:
Distribution
Abbot’s distributional network catered to nine of Pakistan’s biggest cities (which were
Karachi, Lahore, Islamabad, Rawalpindi, Peshawar, Multan, Faisalabad, Gujranwala and
Sialkot) with developed markets where consumer behavior had evolved and was reflective
of a modern mindset. Abbott had three-level channels which included 57 distributors all
over Pakistan who were providing Abbott products to consumers via wholesalers and
retailers. The numeric distribution was 5,000 stores. The distributors focused on modern
trade (local), general and medical stores. Premier agency was appointed as the national
distributor. A special shelf space was created for nutrition products, and all Abbott’s
products were kept together. The total penetration for Pediasure out of Abbott’s distribution
was 12 per cent, predominantly upper classes of SEC A and B, with available capability of
sending on demand if needed at a lower tier area.
Abbott’s main distributors were:
Pharmanet – Karachi;
Premier Agency – Karachi;
Qarni Cooperation – Hyderabad;
Baber Medicine Co. – Lahore;
DS Pharma – Islamabad; and
Nadeem Traders – Peshawar.
healthy foothold in the urban areas. Later on, the company changed its focus and
emphasized strong brand creation. Television advertising and on-ground activations were
used as promotional tools to communicate with mothers. Abbott India had further tried to
improve its competitive edge with its competitive pricing. This was evident by the fact that
they had plans to set up manufacturing plants for Ensure and Pediasure. Abbott had also
planned to open a research centre in Bangalore.
Pediasure in India was available in two variants of chocolate and vanilla. Three different
sizes of 200 grams (Rs 235), 400 grams (Rs 425) and 900 grams (Rs 815) were available.
Although Pediasure provided various variants, it was more expensive compared to
Horlicks, Bournvita and Nido. Despite its high price, Pediasure received positive feedback
from mothers who had found an alternative dosage for their children. Instead of going for
five scoops in one cup of water, the alternative was to use two scoops in milk which allowed
the child to consume two glasses each day without much cost. Whether the alternative
method provided the intended nutrition was another question.
The dilemma
The major issue that Pediasure faced was that of brand usage. From 2006 till 2008,
Pediasure was advertised on TV. However, with the increasing budget constraints due to
high import costs, the marketing team had to look at other ways to promote its brand
(Exhibit 4). Internationally, they had already launched the IMFeD campaign at the ATL level.
Tahir wondered whether the IMFed campaign if launched in the Pakistani market with DTC
media, such as billboards and television, would make the brand message get lost in the
clutter. He had various questions in his mind, including won’t the price-conscious
consumer consider Pediasure as a substitute for the competitive brands and that too
substitute available at a higher price? Another issue faced by the brand was related to
awareness of its unique selling proposition (USP). Recommended dosages for competitor
brands were flexible, whereas that of Pediasure were relatively stringent to obtain optimal
results. “What should I do?” Tahir wondered. “Take the direct to consumers” route, but at
the cost of upsetting the doctor?’ The dwindling sales due to the exchange rate led
Khurram to think about approaching the mother’s route once again, but he just needed to
convince the management. It would impact the doctors like before, but increasing
awareness about its USP was important so that it is not considered as a substitute. He had
the Indian case in mind, whereby the sales increased threefold when the brand directly
communicated with the key decision maker, i.e. mother. The work did not end here for
Keywords: A combination approach: Doctor in the ad, to show authority and add to the credibility of
ATL and BTL, the brand. This would be the core reason to believe because it is the only brand
Nutritional supplement, recommended by the pediatricians. Secondly, showing mothers would increase the
Push and pull marketing relevance.
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If you are concerned that your child has a feeding problem, please complete this form by checking the boxes and review it with the doctor.
My child
My child
-Constantly tries to get out of the high chair or to leave the table
My child
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My child
-Cries at the sight of food or feeding device (e.g., bole, spoon, or high chair)
-Started refusing food aer a frightening feeding experience such as choking or voming
1. Does your child have any of the following symptoms? (check all the boxes that apply)
b. Weight loss
c. Voming
d. Diarrhea
e. Blood in stool
f. Food allergies
g. Eczema or hives
h. Asthma
i. Frequent infecons
j. Delayed development
2. Check the box next to the descripon that most sounds like your child
a. My child
Gets hungry, readily begins eang but then pulls back and refuses to connue
b. My child eats a limited number of foods refuses foods because of smell, taste, texture, temperature and/or appearance
(continued)
Date _________________________________
Child’s head circumference __________ (cm) for children Idenficaon and management of feeding difficules
If yes, how many weeks into the pregnancy was the child born? ________________________________
Did either of the child’s parents experience delayed puberty or slow growth as a child? Yes No
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Vegetables? Yes No
-Meats or meat alternaves (e.g. tofu, soy bean curd, nuts, beans)? Yes No
Yes No
Unskilled worker E E E E E D D
Petty traders E E E E E D D
Skilled worker D D D D D D C2
Non-executive staff D D D D D D C2
Supervisor level D D C2 C2 C2 C1 C1
Small shopkeeper/businessman D D C2 C2 C2 C1 C1
Lower/middle executive officer C1 C1 C1 B B B B
Self-employed/employed professionals C1 C1 C1 B B B B
Medium businessman C1 C1 C1 B B B B
Senior executive/officer B B B A A A A
Large businessman/factory owner A A A A A A A
Exhibit 4
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Table EII Year-wise advertising budget and cumulative growth indices for abbott nutrition
Year Budget CAGI (%) Strategy
2006 New advertisements 30% 35.00 For the first time, the consumers were directly approached. This was
considered to be a better approach to increase growth and revenue
2007 Advertising ⫽ 30% 34.70 Launched “Gain Plus Smart Choice” (year 2007-2008)–confused
brand positioning. Cannibalization because it focused on growth,
while Pediasure focused on picky eaters
2008 Advertising ⫽ 20% 36.20 New General Manager, decline in the sales force efforts (relaxed
because of the tremendous results in the previous years)
2009 0% (no advertising) 33.50 Lost support from the doctors who believed that once consumers
started getting informed about Pediasure through the ads, the
number of visits has reduced and or their role has been minimized
2010 0% (no advertising) 34.40 Plan to strengthen doctors’ route
Exhibit 5
2006 122,698,000
2007 134,346,000
2008 139,691,000
2009 175,410,000
2010 218,945,000
Corresponding author
Farah Naz Baig can be contacted at: fbaig@iba.edu.pk