Medifast--which sells low-calorie meal replacements such as soups, shakes, oatmeal and granola bars--hopes to increase direct sales to customers after years of targeting doctors. Its first TV
infomercial will be based on a talk-show format, drawing on health and medical experts to position Medifast as a solution for obesity rather than a quick fix.
The company spent $5
million on information technology, manufacturing and distribution upgrades last year. It hopes to expand by franchising its weight-loss clinics and increasing advertising spending and online support.
NutriSystem, one of Medifast's main rivals, got rid of its franchised weight-loss centers about four years ago and now relies on direct sales and advertising. Its sales ballooned more than 25-fold
from 2003 to 2006.
Medifast's sales have been increasing, but the cost of acquiring new customers rose--peaking at $200 a customer late last year. Its stock price has been plummeting as a
result.
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