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Case from journal
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Reference no. JIACS17-01-05
Subject category: Marketing
Published by: Allied Business Academies
Published in: "Journal of the International Academy for Case Studies", 2011

Abstract

Phil and Mark Maddox formed a small company, Nature's Health Connection (NHC), to market a skin cream that was being sold through Phil's pharmacy. NHC own the small company that makes the skin cream with the distinguishing ingredient of emu oil. In 2000, an FDA approved ingredient was added to the cream to create Australian Dream(R) Arthritis Relieving Cream (AD). Over the last ten years, managing the company has been difficult and at times nerve racking. However, growth has been steady due to learning from mistakes, a little luck, and the sheer determination of the brothers. The brothers have an excellent personal relationship and compliment each other's strengths. Their initial strategy was to market AD to independent pharmacies in the southeast United States. The product has a high price relative to its competitors, but provides an attractive profit margin for the pharmacies. Advertising has been limited to in-store displays and local newspaper ads. The product has a loyal customer base and appears to be recession proof, but sales have not grown much recently. A year ago, Walgreens began stocking AD in some of its stores across the country. Once this happened, AD was quickly picked up by a few other large chain stores. The capital investment required to meet the sales quotas of the chain stores has almost caused Phil to throw in the towel. Going national requires costly changes in advertising strategy that seem insurmountable. However, Phil and Mark are adapting quickly. NHC's growth has caught the attention of a business broker who represents a group of venture capitalists that might want to buy NHC or to provide needed capital for NHC to go national. The big questions facing NHC is: How to do it? Should they go it alone? Bring in investors? Sell NHC now, or wait for the company establishes itself as a national brand?

Teaching and learning

This item is suitable for postgraduate courses.
Industry:
Size:
Small

About

Abstract

Phil and Mark Maddox formed a small company, Nature's Health Connection (NHC), to market a skin cream that was being sold through Phil's pharmacy. NHC own the small company that makes the skin cream with the distinguishing ingredient of emu oil. In 2000, an FDA approved ingredient was added to the cream to create Australian Dream(R) Arthritis Relieving Cream (AD). Over the last ten years, managing the company has been difficult and at times nerve racking. However, growth has been steady due to learning from mistakes, a little luck, and the sheer determination of the brothers. The brothers have an excellent personal relationship and compliment each other's strengths. Their initial strategy was to market AD to independent pharmacies in the southeast United States. The product has a high price relative to its competitors, but provides an attractive profit margin for the pharmacies. Advertising has been limited to in-store displays and local newspaper ads. The product has a loyal customer base and appears to be recession proof, but sales have not grown much recently. A year ago, Walgreens began stocking AD in some of its stores across the country. Once this happened, AD was quickly picked up by a few other large chain stores. The capital investment required to meet the sales quotas of the chain stores has almost caused Phil to throw in the towel. Going national requires costly changes in advertising strategy that seem insurmountable. However, Phil and Mark are adapting quickly. NHC's growth has caught the attention of a business broker who represents a group of venture capitalists that might want to buy NHC or to provide needed capital for NHC to go national. The big questions facing NHC is: How to do it? Should they go it alone? Bring in investors? Sell NHC now, or wait for the company establishes itself as a national brand?

Teaching and learning

This item is suitable for postgraduate courses.

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Industry:
Size:
Small

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