1 What advantages does CNS gain by having 3M as its international licensing partner? What are the advantages for 3M?

2 What criteria might CNS and 3M use in selecting countries to enter? Using these criteria, which five or six countries would you enter?

3 Which marketing mix variables do you think CNS should concentrate on the most to succeed in a global arena? Why?

Case?

CASE 5-1 CNS, INC., AND 3M: BREATHE RIGHT NASAL STRIP "When we first began marketing this product, what was so gratifying, particularly as a physician, were the liter- CNS divested its other interests and went to work mar- keting the strips full time, ally thousands of letters and phone calls we would re- ceive talking about how much better people slept at Being a small company, CNS did not have the budget night. Almost all the letters began ith ' thank you, tha h a large-scale marketing campaign. But it got thank you!' Just three thank you's. It reak it needed when Jerry Rice, the wide receiver gotten a good night's sleep like this in 10 years.'" for the San Francisco 49ers, wore one of the strips What is Dr. Dan Cohen, CEO OF CNS, Inc., talking tional TV when the 49ers won the 1995 Superbowl. The entire nation became about? It's Breathe Right@ nasal strips, the inno lation became aware of the product overnight, and adhesive pad with a small spring inside that, when at- demand for the strips increased dramatically. An indica- d to the nose, pulls the na es open and tion of this national awareness was discussion on TV makes it easier to breathe. Since its introduction in the talk shows and even appearances of the strip in cartoons. States, Breathe Right strips have been coveted by athletes hoping to improve their performance through EVERYBODY HAS A NOSE: THE increased oxygen flow, snorers (and, more often, snor- ers' spouses) hoping for a sound night's sleep, and al- DECISION TO GO INTERNATIONAL ergy and cold sufferers looking for relief for their stuffed noses. The problems that the Breathe Right@ strips solve- noring, congestion-are not unique to the U.S. popula- tion. Also, with the media being so global to deano it's opal today, people HOW THIS WEIRD-LOOKING STRIP around the world were seeing U.S. athletes wearing the CAME ABOUT strip and wondering how they could get their noses on ome. CNS decided to take Breathe Right@ interna- The Breathe Right@ strip was invented by Bruce John- tional. But because it was still a relatively small com- any and had no experience in the global marketplace, it son, who suffered from chronic nasal congestion. At times he would put straws or paper clips up his nose at opted to take on a distribution partner that had extensive n. After tinkering in in place as well as the ability to night to keep his nasal passages open. As aproto his workshop for years, he came up with a prototype Post-It TM notes 3M, makers of such products er in stick-to-skin prod- design for the Breathe Right@ strip. He brought the pro- ucts around the world, became the international distri totype to CNS, which was in the sleep disorders diag tor for Breathe Right@ strips. nostic equipment business at the time. Dr. Cohen kne David Reynolds-Gooch, International Business Man- instantly the market for the strips would be huge. After ager at 3M, explains that the strips fit in well with 3M's products received F (FDA) approval and became successful in the market, existing adhesive line of first-aid products and are sold in channels with which 3M has extensive leverage: NORKKKKKK LOOK, I BOUGHT SOME OF THIS FEELS RIDICULOUS. ELLY? STRIPS. THEY'RE SPOSE SNONKEKK YOU'RE TO OPEN YOUR NOSE UP THAT'S OK. AND KEEP YOU AS LONG AS FROM T WORKS. AGAIN. SNORING pharmacies, hypermarkets, and food markets. 3M agreed law. So what that means is you have to go through multi- onsibagga of all the marketing and communication responsibilities in addition to the distribution i ple layers of distribution, and ultimately we were able to for a percentage of the sales revenue of the strips. The influence the pharmacists because of the other products strips are "co-branded" in the international markets: The ly, there is no coupon- packages say both Breathe Right@ and 3M. ing in most countries in the world. That vehicle for in- ducing trial of a new product is not available, and hence a lot more in-store sampling is needed. BREATHING RIGHT AROUND THE WORLD SM introduced the Breathe Right@ strip in Japan, then it was rolled out in Europe, and now can be found in more than 40 countries from Australia to South America. 3M used a similar approach to that used by CNS in the United States: Create awareness during the introduc phase through public relations-sports related and other- wise. "The first year we had incredible PR suc members Reynolds-Gooch. "We believe we got about $14 million worth of fre worth of free TV, radio, and print time around the world." This was done through such tactics as having the South African rugby team wear the strips while it won the World Cup of rugby and having pulmo- nologists and breathing experts describe the benefits of roduct on talk shows in Japan, Australia, Europe, and Latin America. CNS quickly discovered some major differences in keting the product here and abroad. For instance, as Gary Tschautscher, Vice President of International Mar- keting at CNS explains, "In the United States, we posi- tioned and distributed the strips as part of the cough/cold category of products. As we rolled it out internationally, suddenly we realized in some countries that 2801 WXME - 3M 305 the store doesn't even exist. So where do you position your product?" Additionally, says Reynolds-Gooch, "There really aren't many large drug chains or pharmacy chains. The stores are independent in most countries by 3M $919 4 BREATHE RIGHTO IN THE TWENTY-FIRST CENTURY tries is under 30, and people under 30 typically do not have snoring problems with the frequency that older people do. Both CNS and 3M face some issues for the future as Breathe Right strips gain in popularity arou Questions he athletic segment of the market gets most of the publicity, the snorers are the bulk of the market for the 1 What are the advantages and disadvantages of C strips internationally. Reynolds-Gooch has identifi its Breathe Right@ strip into international markets? creating heavy users-those who use the strip every What advantages does CNS gain by having 3M as its inter- night-as the most important marketing point for the fu- national licensing partner? What are the advantages for 3M? sonal colds or allergies. 3 What criteria might CNS and 3M use in selecting countries ture, anddoor Also, many of the markets that have been identified as enter Using these criteria, which five or six countries hot" new markets throughout the business community may not be appropriate for the Breathe Right strips. For 4 Which market segment would you target in entering the in- example, Latin America and Asia (especially China) are ternational markets-snorers, athletes, people with chronic emerging markets with steadily increasing income levels congestion and allergies, or a new segment? 5 Which marketing mix variables and large populations, but the average age in these coun- concentrate on the most to succeed in a global arena? Why