NanoLogix and the Complex Phases of Strategic Marketing
Several people have challenged my statement that NNLX has only been marketing for approximately seven months. The contrary assertion is that it has been doing so for five years. Ironically, such a claim that marketing has been going on for some time is accurate even while demonstrating a complete failure to understand the multiple phases of marketing in the context of a developmental company such as NNLX with several key technological/methodological breakthroughs that possess the capability of challenging and transforming medical diagnostics and medical supply industries committed to aging, but still reasonably viable and generally accepted methods and technologies.
I have no desire or willingness to engage in personal attacks or one-liners. My only intent here is to offer some thoughts that could possibly be of use to other investors seeking to understand the nature and potential of an exciting company. I am responding only to the complex idea of marketing as an unfolding strategy that takes place over time and through a variety of paths. I am particularly focused on marketing as a multi-faceted set of processes operating within the specific dynamics, resources and qualities of a business (here NNLX) seeking growth within an industry or multiple industries depending on the products in question.
With that in mind I suggest the following:
• “Marketing” (like “negotiation”) is not monolithic but compresses multiple variables under the heading of a single term. This compression or collapsing of “marketing” can easily mislead us about the complexity of what marketing actually involves in specific situations for specific companies with specific products faced with specific competitors and opportunities.
• Marketing also revolves around and is dependent on a company’s resources, the maturity or immaturity of its products, and the point in a business cycle at which competitors and competitive technologies are located because there is inevitable “push back” by existing companies in control of the particular product field.
• Innovative marketing for new products offered by new companies inevitably confronts the “friction” of counter-marketing by the existing dominant suppliers who already occupy the “field” the new company is entering. There is also a need to penetrate the traditional relationships, habits and “comfort zones” generated by larger companies and the customers they have served for years.
• For new companies with new products that compete with the power of existing companies that are already marketing products accepted by traditional users there is an inevitably more challenging, complicated and entrepreneurial set of strategies that are required to overcome what can be defined as “traditional market lethargy” and resistance to change. Traditional, resource intensive marketing of the kind done by large corporate bureaucracies will not be successful in that context for a developmental company because it will always be outspent by the much greater resources of the major company. This necessitates the careful creation of alliances with powerful institutions and the building of those relationships over time in order to achieve credibility, trust and “buy in”.
Marketing by a developmental company such as NanoLogix therefore takes on a different character from the “bureaucratic marketing” that characterizes large corporations or any large institution—public or private. Along with this goes the fact that marketing executives in the bureaucratic, large-scale resource intensive context do not typically engage in innovative marketing. Nor do they tend to learn the kinds of skills and insights requisite for that distinct innovative and inventive form of activity in which adaptability, experimentation and rapid recognition of trends and opportunities are essential. Such bureaucratic managers are, in essence “blunt instruments” who have operated within what are pretty close to quasi-governmental organizations in terms of their scale and adherence to authoritarian chains of command. Such individuals are not inventive or innovative leaders and thinkers but followers of company dogma.
The companies themselves are much like the massive oil tankers plying our oceans where the vessels’ mass and momentum are so enormous that even an “emergency” stop or turn take fifteen to twenty nautical miles to accomplish. You can say they should adapt or take account of immediate conditions but they simply cannot do so with rapidity or flexibility. Marketing, for such companies, tends to consist of massive investment in brand identification, advertising and suppression of potential competitors because there is no real interest in change. In my experience one consequence of this mindset is that executives of major companies (and Washington agencies with which I have also dealt) are out of their depth when they are asked to function outside their comfortable “command and control” context. As a result they do not know how to adapt quickly or to engage in innovative marketing at the developmental level in situations where they lack massive resources and do not already possess a substantial degree of market dominance.
Having asserted these points I would like to set out several elements of innovative strategic marketing for a company such as NanoLogix. I am not going to write a book on this so I will be as succinct as possible.
Phase I Marketing:
1. Awareness:
2. Contact development:
3. “Show Me” or “Missouri” Marketing:
Phase II Marketing:
4. Credibility:
5. Alliance Building:
6. Product User Identification:
7. Testing of basic applications:
8. Testing by potential users to develop applications most useful for their needs and operations.
9. Industry and competitor “Mapping” and Niche Identification by needs and opportunities:
Phase III Marketing:
10. Brand Establishment Marketing by product and specific user requirements:
11. Sales Entry Marketing product-by-product:
Phase IV Marketing:
12. Advanced sales expansion and “full-bore” marketing aimed at most accessible, receptive and profitable product and market niches:
When I asserted that NanoLogix has been “marketing” for approximately seven months it was the Phase III “Sales Entry Product-by-Product” and “Brand Establishment” to which I was referring. This is in fact what I think most people mean when they use the term marketing, at least on the preliminary levels in which a company begins to move from lab demonstration of concept and technology into marketing of commercial products.
The other activities that have been taking place over four or five years fit into the descriptions of the other elements of marketing. Participating in trade and science fairs and conventions to bring the technical concept into the awareness of potential users and allies is something that must occur in the early phases. In fact I believe the contacts and eventual collaborative partnerships with Battelle, Texas Medical Centers and the Environmental Protection Agency occurred through this initial form of “marketing”. It is the way to open the dialogue with these large “players” and potential allies and it has worked.
But that stage of preliminary “awareness” marketing takes time. Ultimately in the case of NanoLogix it led to a stage in which research arrangements and projects were developed so that the NNLX technology could be tested, evaluated, modified, focused and adapted to specific user needs rather than left solely as an experimental concept in a laboratory. The Battelle and Texas testing projects themselves occurred over several years and this is the requirement of rigorous science. If you read the published report it can be seen that the TMC research project, for example, required the identification of something like 350 pregnant women subjects who were at a specific point in their term to create the window with which the researchers were specifically concerned. This unfolded over a relatively lengthy period and was also entirely outside the control of NanoLogix since you cannot force a scientific research process. But it was essential if the research project was to be accepted as scientifically valid.
Beyond the completion of the research projects with Battelle, TMC and the EPA the “vetting” process of submission, acceptance and publication of scientific results in respected peer-reviewed journals often takes a year or more. But it is absolutely necessary if a method, technology or process is to gain the kinds of credibility that allow a company’s products to enter into the domain of being accepted for commercial sales. That has now occurred for Battelle's work on TB and is in its final stages for TMC's work on Group B Strep. It is for that reason I stated and continue to state that NanoLogix entered what can be described as the early stages of serious product marketing approximately seven months ago.
The different phases of marketing should also be viewed as ones in which overlapping occurs. You never, for example, stop “mapping” your potential consumers and competitors. Similarly, the emphasis on a particular activity shifts at various points even if it is a movement from early development of a product to refinement and improvement. The original BioNanoChannel (BNC) represented the early “proof of concept” in a limited laboratory R & D context but it was not a serious commercial product. It offered the concept on which the NanoLogix advantage is based but was a crude instrumentality that was not well-suited to commercialization. As the technology was refined the BioNanoPore (BNP) and BioNanoFilter (BNF) were developed with significantly greater commercial applications. Along with this I see the development of the NNLX packaging technology as a critical breakthrough, not only in relation to enhancing the durability of the BNP but as an independent product line with great profit potential.
In any event, those are a few of my thoughts on marketing as a complex phenomenon. As I look at what the company has done under its current leadership I have great respect for how its CEO has “shepherded” NanoLogix and developed and implemented the only set of strategies that could have made sense within the operating conditions, resource realities, need for allies and credibility, requirement of workable commercial product lines, and competitive market conditions and obstacles. A company such as NanoLogix requires an adaptable leader capable of developing, recognizing and seizing opportunities as they arise and this in fact is what has occurred. Without that leadership I have little doubt that NanoLogix would have not be positioned for the significant advancements that lie ahead in the near future. Contrary to what a poster on one message board stated, success lies in the hands of the NanoLogix board and its CEO and Chair.
One thing that seems obvious, however, is that in a tiny company such as NanoLogix where there is a need for a multi-directional marketing strategy it is likely that some reallocation of resources and functions be done. I described the fact that NanoLogix is moving into a phase where substantial marketing of diverse products in several distinct sectors and global locations is essential. The problem is that given the severe resource constraints in which such small companies operate and the need to do what might be called “cross marketing” (generic Petri plates, BNP for TB, BNP for Group B Strep, US Defense industry, food industry, etc.) the flexible and creative strategic marketing and development we have seen to this point that has positioned a tiny company in very positive ways will also require a strategy in which a diverse set of personnel with contacts and experience in the core product sectors will need to be recruited.
I trust acquiring this added capability is in process or soon will be. To this point the CEO has demonstrated an awareness of strategic needs and there is no reason to think either that the most productive opportunities will not be seized or that the hard decisions won’t be made in order to maximize shareholder interests. With the limited financial resources available this is unfortunately likely to require reallocation of positions and identification of several different personnel but in the interests of the shareholders and the company’s development it seems a necessary next step.
AI
