Control in ImmunoPharma Japan
The appointment of Mr. Hiroyuki Tanaka as CEO of ImmunoPharma Japan has allowed the parent company to focus on the development of a sales organization.
Production costs of AndoSan™ (Cost of goods)
The foundation and the original focus of ImmunoPharma is development, manufacturing, and sales of AndoSan™ as a medicinal supplement treatment for certain patient groups – such as patients with chronic inflammations and cancer patients undergoing chemotherapy. Although a lot of documentation – verifying such medical effects of the product – ImmunoPharma has come to the conclusion that medical practitioners are too conservative to implement this new knowledge in their treatment-regimes. As a company we have still some way to go to achieve sufficiently wide acceptance for the use of natural supplements additional to medical drug treatment of patients. In the meantime – until the conservative medical environment has changed their perception of natural substances and AndoSan™, the company has both a need and an obligation to its shareholders to seek out ways to exploit the benefits of significantly increased production capacity and reduced product costs of AndoSan™ and AndoSan™-containing mushroom products.
The Consumer Health Market
ImmunoPharma´s long-time experience and internal analyses have shown that the ability to establish significant sales in the short term for AndoSan™ lies in overwhelmingly promoting AndoSan™-based products to the consumer health market. The plan is to develop one or more products based on AndoSan™, but not pure AndoSan™, for launch directly to Consumers. This can typically be products with 1/3 AndoSan™ and 2/3 other, less expensive, active ingredients. There are two main reasons why we plan to launch diluted products in this segment rather than pure AndoSan™.
One reason is the product cost. Although production costs will drop drastically with the start-up of the improved production facilities in Japan, the production costs of undiluted AndoSan™’s will still be too high to provide satisfactory margins in the consumer health market.
The second reason is the desire for ImmunoPharma to retain and promote pure AndoSan™ as a premium product for the medicinal market. A soft launch of the medicinal product might be possible on the back of a major launch of a consumer health product.
The intended main customer segments for the consumer health products include allergy sufferers, sports athletes and the ever-growing group of affluent elderly people who are willing to invest in their own health and active old age.
ImmunoPharma´s sales channels
The usual way into the market for a manufacturer like ImmunoPharma would be to offer products for sale through external marketing and sales partners – as retailers. However, marketing through external partners is demanding both in terms of achieving optimal margins and getting adequate focus on our products in competition with the sales partners other products. ImmuoPharma’s solution will be to build up and control our own sales organization. However, setting up such a sales organization with sufficient competent personnel and build a decent customer base – requires major investments of time and money. In addition – for several reasons – there is no guarantee of success.
Mr. Kim Øien has agreed to join ImmunoPharma’s new sales organization, Nordic Healthy Living, with the responsibility to build up and structure internet-based direct sales of ImmunoPharma’s planned consumer health product based on AndoSan™. Through the development and implementation of a novel and proprietary AI-based automated marketing model, Kim Øien has previously taken the Norwegian direct sales company TG Montgomery from start to 80 million NOK turnover during a period of five – 5 years. Through his efforts, the company TG Montgomery has been able to create awareness of K2 in the general population. TG Montgomery’s model is based on regular subscriptions, and the company currently has around 60,000 Norwegian subscribers to its vitamin K2 product, which is approximately 3% of the total population of Norwegian over 45 years of age. TG Montgomery has recently applied the same automated marketing model to launch a natural anti-inflammatory supplement, growing the customer base from zero to more than 6,000 regular subscribers in three months. In parallel with the development of the automated marketing system, a bottom line focused on a highly successful program for customer retention has been developed and implemented.
Mr. Øien is currently working on building a team of competent employees to implement and further develop the automated marketing model within Nordic Healthy Living. The plan is to launch a pilot project in Norway by 2019 and then gradually expand into other major European markets based on experience gained through the Norwegian pilot project.
Other sales channels will include MLM (Multi Level Marketing) and retail of which the planning sales in the MLM channel is by far the most advanced.
Consumer market sales company will be organized as a separate company where ImmunoPharma has a controlling stake while the remaining stock will be offered to other shareholders. The main reasons for organizing the business in this way are that, while vitally important for ImmunoPharma, the lanning involves taking over established companies with substantial existing sales of established products that lies outside of ImmunoPharma’s core business.