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Nanotechnology-based products that address large consumer markets are increasingly being launched. Management at companies making and selling such products must decide how to market those products. In particular, companies must decide whether their marketing campaigns should emphasize the nanoscale components or materials inside of the products. In this article, the issues associated with a "nano inside" marketing campaign are analyzed.
January 14th, 2009
Issues and Strategies for Marketing "Nano Inside"
Intel Corporation formally launched a global marketing program in 1991 to call attention to the microprocessor, a virtually unknown but essential silicon-based device that powers the PC. The Intel Inside® Program was pure genius. It targeted an emerging mass market of computer users and sought to educate those consumers about the value of Intel microprocessors without technical jargon. In addition, Intel partnered with computer manufacturers to display the Intel Inside® logo in their advertising campaigns.
Program results were dramatic. Intel successfully raised awareness about processors in general, but more importantly, it dramatically enhanced the visibility of its own processor brand. Consumers and business decision makers considered what was on the inside of the computer before making a purchase, and Intel provided the only conceivably relevant solution. In 1992, Intel worldwide sales rose 63 percent. By 1994, Intel reported that the Intel logo had become one of the most recognized logos in consumer merchandising, on par with such brands as Coca-Cola or Nike.
Just as consumers were once incognizant of the microprocessor, only a small fraction of the population currently understands what nanotechnology is and what it is not. Last year, the Project on Emerging Nanotechnologies at the Woodrow Wilson International Center for Scholars released the results of a study on public perception of nanotechnology conducted by The Cultural Cognition Project, an interdisciplinary team of experts from Yale University, the University of Washington, The George Washington University, and Decision Research. The online study of 1,800 subjects confirmed a major finding of an earlier poll conducted by Hart Research that Americans remain largely unaware of nanotechnology. More than 80 percent of the U.S. respondents had heard little or nothing at all about nanotechnology. When asked what they think about nanotechnology, Americans instinctually lean toward their views of other issues, such as climate change or nuclear power. When they learn more, they tend to adopt a stance about nanotechnology that fits their political and cultural predispositions.
The changes and innovations in materials, properties, applications and innovations involving nanotechnology, or technologies at the nanoscale, may require government, business and educators to take a more proactive approach to nanotechnology public engagement and communication. How people learn about nanotechnologies, from whom, and with what message will be critical to future public perceptions of nanotech-based products.
If companies were to take a holistic stance in promoting nanotechnology, would it be possible to emulate the success of the Intel Inside® Program in order to successfully educate and inform the public about the value of nanotechnology? In other words, should companies market their end products as "nano inside"?
II. ISSUES IN MARKETING NANOTECHNOLOGY-BASED PRODUCTS
As nanotech-based consumer products are commercialized, management must grapple with how to market those products. As of August 21, 2008, the Project on Emerging Nanotechnologies estimates that over 800 manufacturer-identified nanotech products are publicly available, with new ones hitting the market at a pace of three to four each week. Examples of new nanotech-based products coming to market include:
• New lithium ion batteries for power tools and other applications incorporate nanoparticles.
• Plastics and paints with nanoparticle additives to reduce static build up.
• Major investments are being made in next generation solar cells based on nanomaterials.
• In consumer electronics, nanomaterials will likely be incorporated into touch panels and flexible displays in the near future.
• Pharmaceutical companies are investing in nanoenabled drug delivery systems.
With its opportunities, there exist a variety of challenges for companies that exploit nanotechnology to distinguish their products in the marketplace. It may be difficult to articulate to customers what nanotechnology means. Because of the breadth and complexity of the technology itself, the term "nanotechnology" can have different meaning to different people. Even Discovery Communications' HowStuffWorks, the award-winning source of credible, unbiased, and easy-to-understand explanations of how things work has a long and confusing explanation of nanotechnology. Indeed, a "nano inside" ingredient brand campaign could project very different information for electronics using nanoscale materials than a campaign for cosmetics or medical products.
Also, the nanotech field has been plagued by negative press related to potential toxicity issues associated with engineered nanomaterials. Negative information about nanotechnology in general can be devastating to furthering the nanotech ingredient brand for a particular product. For example, in a report released in November by UK consumer watchdog magazine Which?, titled "Small Wonder: Nanotechnology in Cosmetics", the magazine expressed concerns about the safety of nanotechnology in cosmetics saying there were "unresolved issues." Which? also reported that cosmetic companies are reluctant to reveal which of their products use nanotechnology. The magazine wrote to 67 cosmetics companies asking about their use of nanotechnology, what benefits they thought it brought and how they ensured product safety. Of the 17 respondents, only eight were willing to provide information on how they use nanotechnology. The magazine went on to say that cosmetic companies are omitting nanotechnology from labels and advertising leaving the public largely ignorant about the technology.
III. MARKETING STRATEGIES FOR COMPANIES TO CONSIDER
Notwithstanding the challenges, it may be possible to formulate a highly successful marketing campaign based on the "nano inside" concept. Because there is not a widespread understanding of the subject among the general public, there is an opportunity to educate audiences and establish a leadership position in introducing nanotechnology-based products to the world. Companies seeking to promote nanotech-based products should apply a strategic, multidimensional approach.
First, as in any marketing campaign, companies must clearly articulate its technology and how it adds value to the end products or services. The benefits are the overarching purpose that drives the marketing initiatives and every technology and each theory that explains a technical concept can be tied to benefits and made exciting to audiences - as long as it's easily understood and applicable to the consumer. This is easily accomplished by presenting facts, scientific knowledge, and analysis into symbols, pictures, sounds, and labels, and comparing it to something a lay person understands.
A popular use of analogies for conveying complex concepts to a non-technical public is the Genomic Analogy Model for Educators (GAME), an educational resource for high school science teachers and higher education instructors for making concepts in genomics easily understandable by using familiar objects and concepts associated with daily life.
The same novel properties making nanomaterials commercially appealing also pose potentially serious risks to human health and to the environment, although not widely known. A November 2007 report issued by Dietram A. Scheufele, Professor of Journalism and Mass Communication and Life Sciences Communication at University of Wisconsin, and Elizabeth Corley, Associate Professor in the School of Public Affairs at Arizona State University, however, stated that research into the potential threats nanotech poses to the environment, health and safety is starting to emerge on the policy agenda, but is not on the radar of the general public. The report was based on a national telephone survey of American households and 363 leading nanotechnology scientists and engineers.
By having product messages ready on how products are distinguished from potentially "unsafe nanotechnology", there is an opportunity to proactively educate and influence the public but only if it is relevant to the decision-making process. For companies to fully differentiate themselves and their products, a responsible and proactive approach would be to place priority on engaging in nanotechnology risk assessment and management, and standardizing nomenclature and ideologies. They could then become the voice of responsible nanotechnology, much like beer distributors are leaders in promoting the legal and responsible consumption of alcohol products.
Second, companies may need to form partnerships with other organizations that have direct to consumer channels. Intel, for example, had very little consumer appeal on its own. By implementing an aggressive and robust print and TV advertising campaign and embracing hardware partners, consumers developed a preference to PCs with "Intel Inside."
Third, it will be important to enlist a prominent individual that the public trusts to impart information. As reported by the Project on Emerging Nanotechnologies (PEN), people tend to agree with the expert whose values are closest to their own when considering the potential risks and benefits of a new technology, regardless of the position the expert takes. The study, which engaged 1,600 American adults, highlights the significance the public places on receiving information about nanotechnology from sources they trust. For years, high profile personalities have used their celebrity status to help raise awareness and attract interest to a wide range of products and issues.
Fourth, companies marketing nanotech-based products might consider forming broader coalitions wherein they can adopt industry-wide marketing programs designed to educate and edify consumers. Earlier this year the International Diamond Manufacturers Association (IDMA) launched an industry-wide comprehensive diamond promotion campaign designed to raise awareness of the need for effective advertising and promotion of polished diamonds and diamond jewelry and to drive increased consumer demand.
Fifth, because consumers differ greatly in their expertise and level of knowledge, intelligent sales assistance may be required for supporting purchase decision-making. This will require partnering with the end user channel to assist sales representatives by guaranteeing the consistency and appropriateness of the proposed product or service. Support will also ensure representatives are able to elicit users' requirements and identify products or services to meet these requirements, and identify additional selling opportunities.
Finally, the key to successfully marketing "nano inside" will involve the adoption of innovative marketing techniques, a commitment to an aggressive marketing budget and maintaining substantial campaign spend even during economic recessions.
Relatively few ingredients have been well branded for the simple reason that consumers were neither aware of, nor particularly concerned with what made the product function. In all markets, from cars and paint to furniture and food, as long as it fulfilled its expected role, the technologies that facilitated its performance were unimportant.
Today's consumers are educated and judicious, making product differentiation a necessity more than a luxury. A successful "nano inside" branding campaign at present has the potential to not only generate effective change in the public perception of nanotechnology, but would brand that company's technology as the number one "ingredient" of choice in their market.
On a grand scale, if nanotechnology companies were to band together to incorporate an ingredient brand strategy, it would be the largest, most comprehensive such initiative in our history to date.
Patti D. Hill,"Issues and Strategies for Marketing 'Nano Inside'," Issue 5.4, Nanotechnology Law & Business (2008), is reprinted with permission of Nanotechnology Law & Business, www.nanolabweb.com. Copyright (c) 2008. All rights reserved.