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VIDEO CASE 7–1 CNS, Inc., and 3M: Breathe Right Nasal Strip
"When we first began marketing this product, what was so gratifying, particularly as a physician, were the literally thousands of letters and phone calls we would receive talking about how much better people slept at night. Almost all the letters began with 'thank you, thank you, thank you!' Just three thank you's. It was, 'I haven't gotten a good night's sleep like this in 10 years.'"
What is Dr. Dan Cohen, CEO of CNS, Inc., talking about? It's Breathe RightÒ nasal strips, the innovative adhesive pad with a small spring inside that, when attached to the nose, pulls the nasal passages open and makes it easier to breathe. Since its introduction, Breathe Right strips have been coveted by athletes hoping to improve their performance through increased oxygen flow, snorers (and, more often, snorers' spouses) hoping for a sound night's sleep, and allergy and cold sufferers looking for relief for their stuffed noses.
How This Weird-Looking Strip Came About
The Breathe Right strip was invented by Bruce Johnson, who suffered from chronic nasal congestion. At times he would put straws or paper clips up his nose at night to keep his nasal passages open. After tinkering in his workshop for years, he came up with a prototype design for the Breathe Right strip. He brought the prototype to CNS, which was in the sleep disorders diagnostic equipment business at the time. Dr. Cohen knew instantly the market for the strips would be huge. After the products received government approval and became successful in the market, CNS divested its other interests and went to work marketing the strips full time.
Being a small company, CNS did not have the budget to launch a large-scale marketing campaign. But it got the break it needed when Jerry Rice, the wide receiver for the San Francisco 49ers, wore one of the strips on national TV when the 49ers won the 1995 Superbowl. The entire nation became aware of the product overnight, and demand for the strips increased dramatically. An indication of this national awareness was discussion on TV talk shows and even appearances of the strip in cartoons.
Everybody Has a Nose: The Decision to Go International
The problems that the Breathe Right strips solve—snoring, congestion—are not unique to the North American population. Also, with the media being so global today, people around the world were seeing athletes wearing the strip and wondering how they could get their noses on some. CNS decided to take Breathe Right inter-national. But because it was still a relatively small company and had no experience in the global marketplace, it opted to take on a distribution partner that had extensive global outlets already in place as well as the ability to market the product abroad. 3M, makers of such products as Post-It™ notes and the leader in stick-to-skin products around the world, became the international distributor for Breathe Right strips.
David Reynolds-Gooch, International Business Manager at 3M, explains that the strips fit in well with 3M's existing adhesive line of first-aid products and are sold in channels with which 3M has extensive leverage: pharmacies, hyper-markets, and food markets. 3M agreed to take control of all the marketing and communication responsibilities in addition to the distribution in return for a percentage of the sales revenue of the strips. The strips are "co-branded" in the international markets: The packages say both Breathe Right and 3M.
Breathing Right Around the World
3M introduced the Breathe Right strip in Japan, then it was rolled out in Europe, and now can be found in more than 40 countries from Australia to South America. 3M used a similar approach to that used by CNS in North America: Create awareness during the introduction phase through public relations—sports related and otherwise. "The first year we had incredible PR success," remembers Reynolds-Gooch. "We believe we got about $20 million worth of free TV, radio, and print time around the world." This was done through such tactics as having the South African rugby team wear the strips while it won the World Cup of rugby and having pulmonologists and breathing experts describe the benefits of the product on talk shows in Japan, Australia, Europe, and Latin America.
CNS quickly discovered some major differences in marketing the product here and abroad. For instance, as Gary Tschautscher, Vice President of International Marketing at CNS explains, "In the United States and Canada, we positioned and distributed the strips as part of the cough/cold category of products. As we rolled it out globally, suddenly we realized in some countries that section in the store doesn't even exist. So where do you position your product?" Additionally, says Reynolds-Gooch, "There really aren't many large drug chains or pharmacy chains. The stores are independent in most countries by law. So what that means is you have to go through multiple layers of distribution, and ultimately we were able to influence the pharmacists because of the other products 3M distributes in the stores." Finally, there is no couponing in most countries in the world. That vehicle for inducing trial of a new product is not available, and hence a lot more in-store sampling is needed.
Breathe Right in the Twenty-First Century
Both CNS and 3M face some issues for the future as Breathe Right strips gain in popularity around the globe. While the athletic segment of the market gets most of the publicity, the snorers are the bulk of the market for the strips internationally. Reynolds-Gooch has identified creating heavy users—those who use the strip every night—as the most important marketing point for the future, ahead of people with seasonal colds or allergies.
Also, many of the markets that have been identified as "hot" new markets throughout the business community may not be appropriate for the Breathe Right strips. For example, Latin America and Asia (especially China) are emerging markets with steadily increasing income levels and large populations, but the average age in these countries is under 30, and people under 30 typically do not have snoring problems with the frequency that older people do.
