The main positive I take out of the change Pharma is the access to salons.
The CDY hair-care range claims a clinically proven advantage relating to a reduction in the rate of hair loss. Indeed it has been stated that it is the only topically applied product range that could validly make that claim. This is a message that would need to be credibly communicated to a consumer in a product area of long established skepticism and I doubt it would be difficult to identify a market more attune to skepticism with such products than is represented by the Australian, if not also the New Zealand, markets.
At the same time, when you are seeking to enter overseas markets making such a claim but are unable to draw attention to a successful domestic acceptance of the claim it seems to me you would be pushing certain objects uphill. It would cost a fortune to achieve that communication through a traditional direct to the consumer advertising campaign.
I don’t believe it is necessary for me to refer to the continuing problems the company has had in penetrating the domestic market.
The key would seem to rest in a word-of-mouth process where the consumer recognises the person proving the advice is (a) a person with whom they have a history of trust concerning advice, and (b) has the relevant expertise to evaluate the validity of the advice they are giving.
Such advice, at least in the female hair market, would seem to point towards the local hair salon.
Announcements have been made about an impending hair-growth supplement to hit the market within a few months. This will not only represent a product range that can claim a reduction in the rate of hair loss but will be able, so we understand, to claim an increase in the rate of hair growth.
With such a supplement the level of skepticism will be even higher and the trusted advice consequently even more relevant. This would be a more substantial claim and a wider range of expertise might also then be expected to come into play but the hair salon operator could be expected to remain a major one.
But, put simply Pharma, I see this move as potentially representing a major strategic development directed towards what I have seen as the major market inhibitor of the company’s product range acceptance. It also seems to be very timely in terms of upcoming developments.
Lets hope my glass-half-full doesn’t prove to have too many cracks in it.
poorinvestor
CDY Price at posting:
5.3¢ Sentiment: Buy Disclosure: Held
