Chapter 7-CNS
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Chapter 7
CNS Breathe Right Strips
Going Global
Female Voice:
We believe Breathe Right has great potential.
Male Voice:
Our product has appeal in many different markets.
Male Voice:
We look for where the biggest prize will be.
Commercial:
Husband:
Wife:
Faster than a decongestion. More powerful than a stuffy nose. It’s
Breathe Right Nasal Strips. Come on, honey, my allergies keep me up every
night. How is this going to help?
The same way it helps my snoring every night.
Narrator:
Until you try it for yourself, it’s hard to believe the instant nasal congestion
relief that comes from Breathe Right Strips. Nasal congestion limits airflow.
But Breathe Rights patented reflex action gently lifts open nasal passages to
help you get more air. Breathe better, sleep better with Breathe Right.
[End of commercial]
Marti Morfitt:
Inventor of the Breathe Right Strip, Bruce Johnson, who had severe allergies
and difficulty sleeping, had invented the Breathe Right Nasal Strip. Our
chairman, who is by training a neurologist but by calling an entrepreneur, fell
in love with the product dropped everything. And he and a marketer and the
inventor spent three years turning this product into a business.
Dan Cohen:
The inventor brought it into us under the guise of, "Could you test it?" But
he was really looking for somebody to license it. It was one of those nice,
life insights when you look at something and you know, hey, this is huge.
When we first began marketing the Breathe Right Strip, what was so
gratifying, particularly as a physician, were literally the thousands of letters
and phone calls we received, talking about how much better people slept at
night. It was interesting, almost all the letters began, "Thank you. Thank
you. Thank you." So just three thank you’s (chuckles) and it was, "I haven’t
gotten a good night sleep like this in ten years."
Marti Morfitt:
The first few years were really all about testing, clinical testing, ensuring that
the product worked, developing a basis for claims, getting FDA approval for
that, and then taking it to market.
Chapter 7-CNS
Narrator:
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The Breathe Right Strip opens the nasal passage, making it easier to breath
through your nose. Pro football players discovered a way to enhance their
game. The National Football League’s Herschel Walker was the first to use
the strip in front of a national TV audience. San Francisco 49er superstar,
wide receiver Jerry Rice was next.
Nick Naumann: Jerry Rice, he utilizing the strips really was a big PR generator for us. It got a
lot of pick up, both domestically and internationally. And one of the things
we immediately did was contact his agent to sign him to become an endorser
so we could use him in advertising, promotion and consumer trade
promotion.
Narrator:
With a significant amount of NFL players using the strips, CNS took
advantage of the free publicity.
Marti Morfitt:
The company, at the time, had done a very effective job of getting press kits
in the hands of news commentators and sports commentators and the sports
press. So when the people on television were asking, "What is that funny
looking thing on his nose?" the press reporters all had the answers and how it
translated into an effective consumer product for the masses.
Jerry Rice:
…I’m looking forward to a great season. I think we have a team that can
really go back to the Super Bowl.
Narrator:
Breathe Right Strips are used by athletes hoping to play their best, snorers
hoping for a good night sleep, and allergies, sinus and cold sufferers looking
for a drug-free relief from nasal congestion. All over the world, users have
the same reaction.
Kevin McKenna: I have to say that every time you have the opportunity to put a nasal strip on
someone who has never used it before, no matter what the country, no matter
what the culture or the language, the response is always the same and it’s in
perfect English, "Wow." People are really saying that translation is that
Breathe Right Nasal Strips really work.
Narrator:
How does CNS decide which countries to enter with their Breathe Right
Strip?
Kevin McKenna: Well, the key criteria that we look at, there are many, but those that we focus
on are the size of the over-the-counter market, looking at the per capita
spending by consumers in that market, and in addition, the future prospects
for growth.
Commercial: [In Korean?]
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Kevin McKenna: We also look at the availability of local partners. A demonstrated presence in
the markets, an ability to execute in terms of sales, marketing, distribution,
and also part of the entrepreneurial spirit that we think should be reflective of
who we are here at CNS. And I’d say the local partner is really the key
criteria. You have to believe in the product.
Marti Morfitt:
The single most important criteria we look at is our ability to find a great
distributor partner. CNS will never, in the next three to five years, be large
enough to have people on the ground with great expertise in all countries.
We, therefore, are very reliant on great distributor partners.
Nick Naumann: Some of the surprising things, as we decided to go global, was little things
that we assumed. One was UPC, the Universal Product Code on packaging
isn’t universal. The UPC codes are only used in the U.S. and Canada. The
other thing that was we thought that we could go in with a similar packaging
look for the coloration and things. But you do really need to look at the local
sensitivities. Like our packaging in the U.S. is dark colors, referring to night.
Where, when we went to Europe and tested that packaging with consumers, it
actually had a negative feel. They felt that it was kind of a closed-in feeling,
and they wanted more of a lighter, airy package because this was a product
that helped for better breathing. Definitely one thing we found is very
important is to do a lot of consumer research, whether it be secondary or
primary research, to really help you understand the sensitivities in each
market. Throughout Europe, we don’t have one set price. It really varies by
market based on all the unique things in those markets. You have to take a
look at the cost of doing business in that market. How many levels of
distribution are there in the chain of distribution? The agreement you have
with distributors, what the typical commission is, the retail price. So there
are many things you have to look at for price in each market.
Narrator:
The company’s partner in Italy, Blu-Farm Group, used its local knowledge
and direct selling skills to partner with Italian pharmacists and teach them
how to build sales of Breathe Right Strips in their stores.
Kevin McKenna: Our distributor, Blu-Farm, in Italy just does a tremendous job of sales
execution at the local store level. When you go into a pharmacy, the first
thing you see, even before you touch the door, is oftentimes wonderful
window displays, touting the benefits of Breathe Right Nasal Strips. You’ll
go into the store and find point-of-sale material, which is increasingly
important outside of the United States, as products come from behind the
counter up to the front where the consumers are shopping. And Blu-Farm, I
think, really drives the business through that attention to detail and trying to
capture the consumers as they walk into that store.
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Narrator:
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The word of a well-known athlete, in this case an Italian motocross racer, has
added to product awareness all across Europe.
Kevin McKenna: Motorcycling racing is very popular outside of the United States. And in
Italy, there happens to be a driver named Valentino Rossi. Valentino is a
user of Breathe Right Nasal Strips. He’s used them in most of his races,
however on two occasions, for whatever reason, he chose not to put the strip
on before the race. He happened to have lost both of those races. So I would
challenge you to try and find the world champion Valentino Rossi and
motocross not wearing a nasal strip as he’s competing in his races around the
world.
Commercial:
Narrator:
Broke nose keeping you awake? Try Breathe Right Nasal Strips. Breathe
Right Nasal Strips lift open nasal passages with a simple, spring-like action to
instantly relieve nasal congestion, allowing you to breathe right all night.
[End of commercial]
Commercial: [In Spanish]
Kevin McKenna: For a promotion in some markets, the Ministry of Health has to review
everything we do because we are a consumer medical product. In most
markets, we try to do television advertising because that is the broadest base
and drives awareness. But it is also expensive. So in markets where the sales
don’t really justify advertising on TV yet, we will do in-store promotion, print
advertising and some radio.
Commercial:
Narrator:
Is snoring a problem in your bedroom? Try Breathe Right Nasal Strips. Call
now for your free Breathe Right Snore Stopper kit, which includes six nasal
strips, a coupon, plus information on snoring. Snoring is often the result of
chronic nasal congestion, which may be due to allergies and sinus problems.
Breathe Right Strips gently lift open nasal passages so you breathe easier
through your nose. Call now for your free Breathe Right Snore Stopper kit.
Sleep peacefully with this free offer. Breathe Right, right now.
[End of commercial]
Nick Naumann: The funny things that have happened in the PR aspect of the business. In
Japan, we had their version of David Letterman utilize our product and
actually put it on people in his audience on the show and to see their reaction.
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Japanese Show: [In Japanese]
Nick Naumann: Another example would be in Japan that all of a sudden we had one of the hot
rap singers in Japan from a group called Dragon Ash start wearing our strips,
which we found out through his agent, was because he had nasal congestion
but then he started thinking, "Well, these are kind of cool and make a
statement and differentiate me."
Marti Morfitt:
[End of video]
We believe Breathe Right has great potential, both domestically and around
the world. That growth will come both from further expansion of Breathe
Right Nasal Strips and from the extension of the brand to other drug-free,
better breathing products. Internationally, we believe this business can be as
large as our domestic business. So our plan, internationally, is that we begin
with strips and then everything we develop in the U.S. becomes a pipeline
opportunity for expanding international.
