Nutrition products and their health applications

Executive Summary

This document will review the marketing strategy of MXQ Lifewater and its path to establishing its market presence in the consumer staples and health supplement industry. MXQ Lifewater first solves a systemic problem within society related to healthy lifestyles and the need to live longer more productive lives . Currently around 30% of the United States population is characterized as obese or overweight. This percentage of obesity is projected to increase in the coming years due to a variety of circumstances, which include a sedentary lifestyle, adverse dietary habits, proliferation of fast food, and poor eating habits. According to an article published in the New York times, medical experts predict that nearly half of the United States population will be obese by 2030. These experts also found that nearly 25% of the population will be severely obese.

From a society perspective these obesity rates are very alarming. For one, they can cause extreme health complications related to high blood pressure, heart disease, and even cancer. This can in turn impact society through the loss of productivity within the workforce, higher medical expenditure costs, higher insurance costs, and higher premature death counts. Alarmingly, the United States is not alone as it relates to these adverse health statistics. The European union is also experience high obesity rates due in part to the factors mentioned above. This all can significantly impact economic development, productivity, and overall life satisfaction for society overall.

MXQ Lifewater, is a product designed to help alleviate and mitigate many of the chronic health issues that plague the developed world. MXQ LifeWater is a product that introduces radical breakthroughs in health beverages, supplements, and products. These breakthroughs leverage proprietary nano-sphere technology designed to create a unique and differentiated product offering within the market. Here, the company utilizes its nano-sphere technology to develop products with ingredients that are much are smaller on a molecular level than competitor product offerings. This allows the human body to more easily absorb these molecules into the bloodstream thereby enhancing overall performance. This technology is embedded in all of the company’s products which include energy drinks, anti-aging creams, muscle relief products and vitamin supplements.

Business Overview

MXQ Lifewater is a health and beverage company with was founded in Shenzhen, China by Dr. Xiaoqui Ma, Dr. Danial Zhang and Dr. Rob Davidson. Xiaoqui Ma, has an extensive track record of managing and running publicly listed investment companies. Through his investment expertise, Ma has generated significant alpha by outperforming the market indexes over an extended period of time. Dr. Zhang, is nutritionist who has earned significant recognition throughout the world for his leadership in the nutrition industry. In addition to his role with the company he is also the Vice President of Shenzhen University. Finally, Dr. Robinson is the CEO of the company and has an extensive background with startups within the California market. These individuals have combined their expertise to create a truly unique product offering that is difficult to replicate by competitors. For one the Nanosphere technology is patented and is proprietary to the company. It also has a very strong leadership team looking to leverage their expertise by creating a well-recognized consumers products company throughout the world. Finally, the company has a very unique distribution model due in part to its leadership team in both China and the United States, both of which are the largest markets for health-related products in the world. By having market expertise in the two largest markets in the world, the company is better positioned to capture market share in the future (Aaker, 2003)

Target Market

The target market for the company’s products are those in the middle to upper middle class. Here, research has shown, affluent consumers tend to purchase health related products with more regularity than their lower income counterparts. The developed market is undergoing a transition into healthier food and beverage options. Consumers are beginning to engage in more routine exercise as COVID-19 related restrictions have been lifted. The success of companies such as Peloton, 24-Hour Fitness, and Impossible Foods indicate that consumers are willing to pay premium prices for health-related products and services. The statistics also show this trend throughout many of the wealthier nations of the world. For example, the trend in plant-based diets according to Brandessence Market Research is projected to grow higher than that of the overall economy. The adoption of healthy food options throughout the developed world, a shift towards less restrictive COVID-19 policies, and a need for consumers to engage in physical activity all bode well for the company and its target market.

Here consumers between the ages of 25 and 64 with incomes above $66,000 are the ideal market for the company. In addition, these individuals may typically have a child or spouse, heavily value convenience, and have some form of established healthy habits. This target market is ideal for the company as they have the discretionary income to purchase premium products, they typically have a desire for quicker solutions given the demand on their lives, and they have habits that look to establish a healthy lifestyle.

As it relates to the target market, one critical Marco-economic concern is that of inflation. Here, accommodative monetary and fiscal policy as a result of the COVID-19 pandemic has generated exceptionally high inflation. It is critical for the company to have a target market that can absorb price increases without a corresponding decline in demand. Higher income households have a much higher chance of doing this and therefore provide an ideal target market for the company. The aim, as will be indicated in the marketing plan below, is generate customer loyalty and repeat purchases of key product offerings. In order for the marketing strategy to be successful the target market must perceive a value proposition higher than the product price after inflation. As a result, higher net worth individuals will make an ideal target market as they can absorb price increases, are looking for premium products, and are willing to stay loyal to the brand.

Marketing Goals

The first and primary goal of the campaign is to establish brand awareness within the target market. As noted above, the company is a start-up which is heavily reliant on the capital of its three founders to establish a market for its unique product offering. This product offering, has very strong tailwinds that enable it to grow at rapid pace. The lowering of COVID-19 restrictions, the overall need for improvement in healthcare outcomes, the desire for consumers to lose weight, and the high adoption of health-related food options, all bode well for the company. Unfortunately, the overall market for health companies offering similar products is very saturated currently. For one, from an economic perspective, money is widely available due to accommodative monetary and fiscal initiatives from governments around the world. This has given businesses capital they may not have otherwise obtained were it not for the pandemic and the adverse circumstances that it caused. As such, competition is very high within the industry.

To mitigate this highly competitive marketing environment, the goal of the campaign is to establish a highly sought often brand with a unique and compelling value proposition based on the company’s proprietary product offerings. Through brand awareness the marketing goal also aims to accomplish two subgoals. The first is that of pricing power. Strong companies such as Apple, Nike, Coca-Cola and Disney are able to charge premium prices for their product offerings due in part to their strong marketing. The aim of the brand awareness goal is to establish a critical health brand that can also leverage its pricing power to charge higher prices without a corresponding decline in unit volume.

The second and equally important goal of the marketing plan is to acquire new customers. As noted earlier the company is newly created and has very little awareness in the market. It does however, have very strong products that fulfill a consumer demand. The marketing strategy is therefore designed to acquire loyal customers who will purchase the company’s products repeatedly. This benefits the company as it does not have to spend heavily on marketing initiatives for these clients, but instead must invest in loyalty programs to keep existing customers happy. Likewise these customers often contribute heavily to higher profit margins as they tend to purchase multiple products consistently with little to no incremental cost to the company (Anderson, 2003).

The third goal is related to both of the first two goals, and that is to take market share from incumbents. As discussed above, the product is a very unique offering to the market that no other competitor has. This is very compelling for consumers as the products are differentiated relative to competitors. With a differentiated product offering, it is much easier for the company to take market share from more antiquated and often commoditized product offerings. These commoditized product offerings, by definition, have little to no differentiation. As such they cannot compete based on product specifications as their offerings are the same. Instead they must often compete based on price which results in the lowest cost producer winning within the marketplace. Here, MXQ Lifewater does not have that problem as it not only has a premium product, but it is heavily differentiated relative to peers in the industry. As such, it should be able to leverage these differences to take market share from antiquated and commoditized competitors within the health supplements industry.

Marketing Strategies

The marketing strategy will be a direct to consumer launch. Digital channels will be heavily utilized throughout the marketing campaign with little influence placed on traditional method of marketing. The primary reason for this strategy is that the target market is heavily concentrated on online platforms and social media website. Therefore, these platforms provide the most likely chance of success considering how the target market interacts with products, how they purchase products, and how they come to learn about the product (Adjei, 2012).

A digital marketing strategy is unique in that it allows the brand to personally interact with the consumer on 1 to 1 basis through various social media platforms. This is in contrast to more traditional forms of marketing which rely on one-way communication. This digital marketing strategy provides a unique opportunity to establish and occupy a niche within the consumers mind through constant interaction with them. This also helps to establish other promoters of the product online without outlaying an additional funds within the marketing campaign. Here, the product has a very unique product offering that is differentiated relative to others in the industry. This uniqueness is preserved through patents and other legal protections on the proprietary manufacturing process. Due to the unique nature of the product, it provides a unique value proposition to consumers in the market. As such, a digital marketing strategy is warranted as it allows other consumers to promote the product on behalf of the company, it provides a low-cost marketing vehicle, and it helps establish much more intimate relationships with consumers.

Although digital distribution is the primary channel of exchange, it will not be the sole strategy of the company. For one, guerilla marketing tactics will be leverage by the company on an opportunistic basis. Here, sponsorship of local health events, billboards in high traffic areas, and other tactics can potentially be used by the company. Much like the social media channel, the criteria for investment involve statistics such as penetration rates with the target market, cost per impression, and other brand building criteria. Although these tactics will be a small portion of the overall marketing budget, they do serve an important function of supplementing the marketing efforts of the digital franchise (Allen, 1966).