Route2Health: Crafting an Impactful Market Entry

Summary

Route2Health stands out as an innovative nutraceutical company committed to delivering high-quality multivitamins and dietary supplements that contribute to optimal well-being. With a dedication to advanced research and quality. Route2Health provides comprehensive preventive healthcare solutions tailored to optimize the health of individuals across all age groups.

The Challenge

In 2021, partnered with Akademos for a brand health tracker and a usage attitude study in efforts to understand the nutraceutical Pakistani market. With many well-established brands and popular product categories in the market, it was imperative that comprehensive research was carried out to create the foundational basis for Route2Health’s market entrance strategy.

Role of Akademos

Route2Health identified three pivotal research areas: understanding the market dynamics of the nutraceutical industry, analyzing consumer behavior, and gaining insights into retail dynamics. Extracting data from these domains aimed to furnish the company with a comprehensive understanding of nutraceutical market potential, the influencing factors behind market player fluctuations, determinants of consumer purchasing decisions, the interplay between retailers and nutraceutical sales, and effective strategies for incentivizing retailers. Equipped with this knowledge, the company could strategically enter the market, compete with existing players, and gradually cultivate a customer base.

Action Steps

Akademos addressed these needs by following a structured series of steps:

Surveys

To gather quantifiable data on different target markets, akademos conducted 1500 surveys across Karachi, Lahore and Islamabad. Respondents from each city selected were different in gender, occupational status, areas of residence, SEC grouping, education level and type of income earned. The categories included; students, stay at home moms, working professionals, health-conscious individuals, pregnant women, senior citizens.

Focus Group Discussions

To gain an understanding of consumer behavior, FGD’s were conducting across the three cities. Participants were chosen on the basis of age, monthly expenditure, city of residence, education level and employment status. These various bases were to account for all types of target markets that might be able and willing to engage in the nutraceuticals industry within Pakistan.

In-Depth Interviews

Conducted 30 IDI’s with pharmacists and retailers. In depth interviews conducted in 5 different areas per city in Karachi Lahore and Islamabad (total 10 IDIs per city) This was to help form a sales and retail strategy that most resonated with consumers

Project Hurdles

Challenges included initial reluctance from retailers to disclose margins during IDIs. Akademos overcame this by leveraging strong references. Additionally, low market awareness among consumers prompted 1,000 extra surveys, with rigorous quality checks ensuring accuracy.

Results

Over 1300 respondents shared insights on their most consumed multivitamins and the top 5 vitamin categories. Akademos recommends new market entrants focus on the top categories. A survey of 1500 individuals highlighted beauty supplements, bone and joint supplements, and immune support as the top three categories. A net promoter score conducted revealed a significant base of passive consumers, creating an opportunity for brand-building for Route2Health.

Retailer interviews in three cities unveiled diverse consumer journeys. In Lahore, consumers rely on retailer and doctor recommendations; in Karachi, customers often consult doctors or conduct online research; in Islamabad, consumers prioritize price, branding, and doctor recommendations, favoring foreign brands.

Packaging preferences showed 36% prioritize color. Consumers suggested new brands emulate the packaging style of imported products. Feedback on Route2Health’s packaging was positive, with participants appreciating the information and professional look. Karachi participants valued clear text, while Lahore participants found the branding to be the most premium.

Among 1300+ participants, tablets were the preferred form of nutraceuticals, with capsules trailing by 54%. Gummies were favored by SEC A individuals aged 18-29 and 40-44. Major pharmacies suggested gummies as substitutes for liquid for kids and seniors, with 25% of respondents preferring gummies for their children, 85% being female.

In retailer discussions, insights on the retail landscape emerged: Retailers identified the top 10 brands in their cities, with online purchasing favored, particularly through dawai.pk and pandamart. The robust online nutraceutical market suggests significant potential for new entrants.

Top pharmacies in each city were noted: Clinix in Lahore, D-Watson in Islamabad, and DVAGO in Karachi. Akademos provided relevant data for Route2Health’s retail plan.

Analysis of average prices among the top 7 brands showed a range, with foreign brands priced between PKR 4000-8000 and local brands offering more economical options. This data suggests an initial pricing strategy for the brand to compete effectively with local players.

Retailers shared recommendations on onboarding, training, and merchandising. Onboarding suggestions included product packaging and discounts. Retailers favored regular training sessions, preferring monthly brand interactions. Merchandising ideas ranged from gondola racks to displays inspired by foreign concepts.

Retailers endorsed offering margins or discounts to boost sales, with promotion suggestions including discounts, buy-one-get-one-free offers, free sampling, and promotional materials like flyers and banners.

Akademos Recommendations

To boost market share, Route2Health should focus on educating non-users about the benefits of nutraceuticals. Targeting popular categories like biotin, calcium, zinc, vitamin C, beta-carotene, and fish oil, with an emphasis on energy, immunity, and deficiency prevention, can be key. Gummies, preferred for kids and seniors, should be part of the product offering. Addressing the industry's low awareness (18.5% of users unaware of products/brands), the companyThe needs to concentrate efforts on popular categories and overall market awareness.

Enhancing market share involves emphasizing doctor validation, credible branding, and consumer guidance in marketing. While doctors are crucial in the short term, long-term growth can be achieved by leveraging social media influencers, nutritionists, athletes, and gym instructors. Key marketing channels include TV, Facebook, Instagram, and YouTube.

Addressing identified gaps, including the absence of brand loyalists (based on NPS scores), presents opportunities for quick market capture and loyalty creation. Key industry gaps, such as online retail and gummies, should be prioritized. Leveraging the Highnoon brand is advised. Targeting top pharmacies (D Watson, Clinix, FDDP, DVAGO) at a competitive initial price is essential. Initial extensive training activities (at least twice a month) are crucial for influencing future retail partnerships. Providing competitive margins, discounts, or matching local brands builds ideal relationships. Innovative, space-efficient product displays are recommended for consumer attention within the limited physical space in pharmacies.

Here’s What Route2Health Had to Say:

“We're delighted to share our stellar experience with Akademos. Their research services provided us with market and consumer insights that directly influenced our brand launch strategy. Their comprehensive approach, attention to detail, and actionable findings have proven to be a pivotal asset in shaping our business strategies. From the outset, Akademos demonstrated a high level of professionalism and dedication. Their team's ability to understand the intricacies of our industry and tailor the research to meet our specific needs make them our go-to research partner for future projects. Highly recommended!”

Conclusion

Akademos excels in assisting organizations in reaching their goals. This case study underscores the essential insights and strategies that contributed to our project’s success, showcasing our dedication to delivering results. We look forward to future opportunities to apply our expertise and drive positive outcomes.

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