Herbalife

A public relations group campaign project submitted as part of the final assignment for MC 304

Project Completed by:

Amy HjelmstadCourtney Kochlin

Akira FajarHillary Clifton Sloan

Nate Gilbraith

Submitted to:

Lok PokhrelAssistant Professor of Advertising and Public Relations

School of Journalism & Mass CommunicationMinnesota State University Moorhead

8 December 2014

TABLE OF CONTENTS

Executive Summary…………………………………………………………………………...2

Rationale of Campaign………………………………………………………………………..4

Situational Analysis…………………………………………………………………...............5

SWOT Analysis…………………………………………………………………………………...6

Secondary Research Findings……………………………………………………………...7

Primary Research Plan………………………………………………………………………..9

Survey Results…………………………………………………………………………………..10

Campaign Plan…………………………………………………………………………………..14

Methodology……………………………………………………………………………………..16

Campaign Time Table………………………………………………………………………...17

Campaign Evaluation Plan………………………………………………………………….18

Appendix…………………………………………………………………………………………..19

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Executive Summary

When founder Mark Hughes created Herbalife he dreamed of a company that would

change the nutritional habits around the world. The company started in February

1980, and expanded from a one-product weight loss supplement, being sold out of

the trunk of his car, to one of the leading supplement companies around the world.

As of 2012 the company has a net income of $477.19 million and employs nearly

7,400 people, with roughly 3.2 million independent distributors in 91 countries.

In the past, Herbalife has dealt with allegations that their products contain high

levels of lead and additives containing ephedra. They have also been referred to as a

“sophisticated pyramid scheme.” As of 2014 the company is under investigation by

the US Federal Trade Commission.

Although the image of Herbalife is not a perfect one, they have helped millions of

people achieve their health goals and live a productive healthy lifestyle. It is our

objective to recreate the company’s image by developing a campaign that will

rebrand Herbalife as a health enthusiast and specialist.

We will be working with Nutrition Avenue, a local Herbalife franchise, to complete a

six-month campaign. We have conducted primary and secondary research to

determine our target consumer and develop our strategy. Our goal is to change the

perception that Herbalife is merely a stop and go shop with subpar products and

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rebrand them as a community of health nutrition specialists, personal trainers, and

motivators. We will accomplish this goal in two ways:

Internally, we will accomplish our goals by:

● Creating employee uniforms to develop a more professional

atmosphere

● Developing a website that is both professional and user friendly

● Creating and utilizing social media pages (Facebook, Twitter,

Instagram)

● Educating employees about nutrition and fitness

Externally, we will accomplish our goals by:

● Partnering with the YMCA for the six month campaign

● Organizing a 5k “Run for Your Life” fun run/walk

● Providing participants a free personal training session

● Encouraging those involved to further invest in their health

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Rationale of Campaign

In our research we found two main problems with the Herbalife brand:

1. lack of name recognition

2. lack of positive associate where name recognition had been accomplished

With this in mind, we have developed a campaign strategy that aims to achieve

brand awareness and positive associations simultaneously.

We will accomplish these two goals by planning and executing a 5K “Run for Your

Life” fun run/walk. Our plan is to begin the campaign in January (when it is popular

to develop New Years resolutions) knowing that many people choose this time to

become more physically fit. This timeline will give Herbalife clients time to prepare

for the race, which will be held in June, while keeping them motivated to keep up

with their resolution. It will also give them time to spread awareness of the run by

word-of-mouth and social media.

We believe that by making the 5K a “fun run” we will encourage increased

participation of residents who may not have been Herbalife clients and thus

introduce them to the brand. We also believe that by seeking sponsorships of local

companies we will increase visibility of our campaign and build a positive

association of the brand as a community member and fitness advocate.

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Situational Analysis

Up until now Herbalife has only used word-of-mouth tactics to promote and

advertise their products and brand. From a Public Relations campaign standpoint

this is advantageous because we can build a campaign and brand image from the

ground up. This is one reason we decided to choose Herbalife as our client.

Secondly we chose Herbalife because they have received a very bad reputation in

the health supplement industry. We view this as a fun and opportunistic challenge.

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SWOT Analysis

We have developed a SWOT analysis by researching customer reviews of Herbalife’s

products, reading current news articles about the company, and by surveying the

company’s current advertising and promotional strategies.

Strengths

Convenience

Variety of Products

Availability (over 2.7 million

independent distributors worldwide

operating in 88 different countries)

Weaknesses

Price

Website and Employees Lack

Professionalism

Lack of Brand Recognition

Lack of Scientific Support for Health

Claims

Opportunities

Update Website

Update Social Media Sites

Use Marketing and Promotion to

Increase Presence

Threats

Supplement Companies (i.e. Vitamin

World, GNC)

Shake and Meal-to-go Companies

(i.e. Starbucks, Slimfast)

Health Bar Companies (i.e. Cliff Bars,

Lara Bars, Luna Bars)

FTC

Public Opinion (Bill Ackman)

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Secondary Research Findings

We conducted secondary research in two ways:

First, we reviewed customer comments and complaints about Herbalife products to

determine the weaknesses of the Herbalife brand. What we found was a general

dissatisfaction with Herbalife. Customers feel that Herbalife employees are

unprofessional product-pushers, unconcerned with the needs of the customer and

un-knowledgeable about health and nutrition. While many consumers like the

products, they do not think the quality matches the price point.

We then examined a Gallup poll on weight loss trends in America to determine

exactly who Herbalife’s target consumer is.

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In the Gallup poll, approximately 36 percent of those surveyed described

themselves as overweight. Among that group, half said they were actively trying to

lose weight. Gallup found that 21 percent of women said they were overweight and

trying to lose weight, compared with 15 percent of men who said the same.

In addition, 10 percent of women said they were trying to lose weight even though

they didn't consider themselves overweight, compared with 6 percent of men who

said the same.

With Herbalife’s committed mission of addressing the global obesity epidemic by

offering high-quality products, one-on-one coaching with an Herbalife trainer and a

community that inspires customers to live a healthy, active life; we found that

targeting a public that is trying to lose weight in a healthy way was a good place to

start.

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Primary Research Plan

After examining the secondary research, we narrowed our focus to the section of

Americans that are overweight and trying to lose weight. In order to better

understand this demographic, we felt it necessary to implement primary research.

With this in mind, we compiled and distributed a survey. This short, ten question

survey was designed to provide us with insider information on customers who use

Herbalife products on a daily basis and help us develop a strategy for our plan.

To conduct our survey we utilized the online tool Survey Monkey. We shared the

Survey Monkey link through social media (Facebook and Twitter), ensuring that we

got a random population to participate in our survey. Our survey questions focused

on perceptions of Herbalife, purchasing behaviors of Herbalife customers, Herbalife

customer demographics, Herbalife customer lifestyles, as well as Herbalife customer

self-image assessment. In order to ensure we got complete answers, we asked a

combination of closed and open questions. Some of these questions include:

Which social networking website do you use most often?

On a scale of 1 (being low) to 10 (being high) how would you rank

your self-image?

What is your perception of Herbalife?

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Survey Results

Our survey was completed by 28 participants. In total, 23 women completed the

survey compared with 5 male participants. This datum suggests that women have

more interest in Herbalife products than men do.

Secondly, nearly all of the participants who completed the survey were between the

ages of 18 and 29, with the exception of one participant who was over age 30. These

first two pieces of information suggest that our target consumer is millennial

women.

We also assessed the participants’ self image. With a 50/50 split between

participants with a positive self-image and participants with a negative self-image,

this information is inconclusive and will not be factored into our campaign.

Of the 26 participants surveyed, 17 had tried Herbalife products before. We asked

them to comment on their perceptions of Herbalife and we then labeled these

comments as either negative (8 total), neutral (7 total) or positive (9 total). We also

found that a majority of people (14 out of 26) never purchase Herbalife shakes in an

average month. This is most likely connected to the cost of the product, but could

also be due to their negative perceptions of Herbalife.

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What is your perception of Herbalife?

Negative

1. Company that focuses more on selling than actual results.2. Seems like a scam.3. A scam.4. It’s too expensive for me to use.5. Doesn’t work.6. It’s expensive and useless.7. I don’t understand why you would drink the shakes if you can eat a balanced

meal with same amount of calories. I’d rather have a small piece of meat and veggies vs. spending $7 on a drink.

8. Gimmick.

Neutral

1. The concept is good, but the product does not taste good.2. Some of the shakes are good on occasion.3. Never heard of Herbalife.4. Meal replacement shake.5. Far too expensive, but delicious. 6. Neutral.7. For really fit people.

Positive

1. I enjoy it.2. I’m a fan. It helps you learn how to make healthier choices.3. I like how the shakes taste and it keeps my pretty full.4. I love Herbalife. I have it every morning for breakfast. I purchase my own

product from a distributor instead of buying it at a shake place.5. Would like to try it.6. It’s healthy.7. Love it.8. It is healthy and delicious9. Everyone drinks it thinking they are getting skinnier but you actually have to

out otherwise you’ll get too much protein and gain weight. But they’re really good! Lots of flavors.

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Campaign Plan

Objective #1: Increase Herbalife’s Online Presence

The current website for Herbalife is unprofessional and unorganized. Social Networking sites are under-utilized.

Strategies: Our strategy to increase Herbalife’s online presence is to make the current website more professional and increase social media interaction.

Tactics: 1. Develop an Herbalife website that is professional and user friendly2. Create a Twitter page3. Create a Facebook page4. Create an Instagram account

Key Messages: Herbalife is professional, current, and connected to its consumers.

Objective #2: Change Negative Perceptions of Herbalife Employees

At present, Herbalife employees do not have a uniform. Many employees work in less-than professional looking attire.

Strategies: Make employees look more professional.

Tactics: 1. Create and distribute Polo T-shirts with Herbalife insignia2. Develop and enforce dress code

Key Messages: The Herbalife brand is professional and has the expectation of professionalism in its employees, their appearance, and their conduct.

Objective #3: Increase Awareness of Herbalife Brand

Strategies: Develop and execute a 5K fun run/walk

Tactics: To make this event as successful as possible, we will:

1. Partner with local businesses 2. Advertise in-store and online3. Distribute promotional posters to sponsors4. Create event t-shirts for participants5. Develop a hashtag for the event

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6. Provide participants with a goodie bag after the race. Gifts will include: Herbalife product samples, an Herbalife water bottle, + sponsor products

7. Winners in each age division will be awarded special gifts

Key Messages: Herbalife is a professional business and active community member.

Objective #4: Change Consumer Perception of Herbalife Brand

Many consumers view Herbalife as a gimmick – a company whose only concern is pushing product sales.

Strategies: Our strategy to change negative consumer perceptions is to have Herbalife provide each of their clients with a personalized health and nutrition plan upon request.

Tactics:

1. Educate sales staff by requiring attendance of health and nutrition seminars. A final test must be passed in order to sell and promote Herbalife products.

2. Develop personalized health and nutrition plans for Herbalife clients.3. Display nutrition guides in stores and online.

By implementing these steps, Herbalife customers will be able to achieve maximum results and develop a one-on-one relationship with their consultant.

Key Messages: Herbalife’s main focus isn’t product sales; Herbalife is a company focused on building relationships with their clients and improving their health.

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Methodology

Social Media

Through the use of social media including Facebook, Twitter, and the Herbalife

website we will reconstruct the image of Herbalife. We will make consistent posts

both on Facebook and Twitter advertising promotions and health tips. At this time,

Herbalife does not have a webpage or social media accounts. As a team we will be

developing these sites to fit the consumer’s needs and expectations.

Word-of-Mouth

Herbalife is known for using word-of-mouth advertising. Many of the shake shops in

the area including Nutrition Avenue exclusively use word of mouth to advertise the

store. We will attempt to enhance this tradition by creating hashtags for Herbalife’s

5k event and sales so consumers can tag Herbalife directly and spread the word.

Posters and Pamphlets

We will create posters advertising the 5k fun run, which will be hung in the store,

posted on the social media sites and distributed to sponsors. Herbalife’s nutritional

pamphlets will be available in the stores and a printable version will be posted on

the new Herbalife website.

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Campaign Evaluation Plan

The success of the Herbalife campaign will be evaluated based on the campaign’s outputs, outtakes, and outcomes.

Outputs

Was the campaign on time? Was the campaign on budget? Was the campaign on message? Did the campaign adhere to corporate standards?

Outtakes

Did the Herbalife website traffic increase?How many new “likes” did the Herbalife Facebook page garner?Did consumers comment on posts and express opinions?Did consumers click links on Facebook page?

-If so did they read more pages or fill in a form?Did attendance at our 5k event meet the expected goals?

Outcomes

Did brand awareness increase?Did sales increase?Did consumer opinion of Herbalife improve?Did customer loyalty for the brand improve?

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Appendix

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