Product details

The health supplement market has started to boom in China since the 1980s. During the last two and a half decades, the health supplement market has experienced two ups and downs. Many famous brands come and go. It is a huge market with great potential but it is also full of challenge. It is easy to enter the market and a brand can grow quickly, however, it is difficult to sustain the brand for the long term. A brand named Nao Bai Jin (a melatonin product) has received much attention because of its quick and dramatic success, as well as its unique marketing strategy. Mr Shi Yuzhu, the founder of Nao Bai Jin, has innovatively adopted a soft advertising strategy, promoting the product through a series of soft advertorials that looked like scientific news reports. The soft advertising strategy turned out to be very effective in the early stage, and the sales of Nao Bai Jin hit 1.2 billion renminbi in less than three years. However, the advertising campaign now showed signs of wear-out and annual sales dropped sharply. It was said in the industry that most brands would die within five years time. It has been eight years up to 2005 since Nao Bai Jin was marketed in the Chinese market. Will Nao Bai Jin continue to grow? Or is it time for the company to consider cashing in the brand? This case presents the development of Nao Bai Jin, its use of different advertising strategies, its competition environment and its challenge. The case can be studied to help students become aware of the evolvement of advertising strategy as the product grows. The case challenges students to determine an overall investment policy and associated branding / advertising strategy for an early market leader that now faces unstable market conditions and increasing competition. A teaching note supplement ''505-107-9'' is available to accompany the teaching note.