Sales growth as shoppers rely on self-medication to ease their aches and pains

Drug Store News, Oct 10, 1994

When it comes to buying external analgesics there isn't just one consumer--there are several. There are arthritis-sufferers, most often women, who want to temporarily ease their pain. There are fitness-minded consumers, of all ages, who use topical products to alleviate the discomfort that often follows physical workouts. And there are the many aging Baby Boom consumers seeking comfort from the increasing aches that happen to people over 45 years old.

All these consumers have something in common: They want fast relief and are increasingly willing to rely on selfmedication. These shoppers are looking for specific topical analgesic products, and expect drug stores to offer a comprehensive assortment. The category racked up annual sales of $124.6 million in drug stores for the 12 months ended March 1994, according to Towne-Oller research. Drug stores sell far more topical analgesics than do supermarkets, but food stores have been expanding space devoted to the category and are gaining market-share. Mass merchandisers, also have been enlarging their external analgesic assortments and experiencing significant sales hikes.

Historically, the big competitive edge for drug stores has been their commitment to merchandise analgesics as a full-fledged category and to feature new products and promotions. As competition heats up from supermrkets and mass merchandisers, successful drug store merchandisers must work even harder to maintain these advantages over other formats.

Drug stores that make a commitment to topical analgesics find soothing relief to their aching bottom-line. Typical gross margins range between 35-40%, as shoppers are willing to pay a premium for products that really provide relief.

There is a growing variety of analgesic items that appeal to the broad spectrum of external analgesic consumers. The category, once limited to salves and balms, now includes medicated pads, liquids, creams, lotions, sprays and gels. Combination of active ingredients, such as camphor, menthol and capsaicin, add to the SKU expansion.

Sato Pharmaceutical, a major over the counter (OTC) pharmaceutical company, is emphasizing product innovation and strong merchandising support to build its U.S. market share. Satogesic, the company's topical flagship brand, is becoming a significant force in this growing category. The two latest additions to the company's family of products, Satogesic Hot and Cool Gels, are garnering strong sales. Each product is designed for a specific use. Hot Gel has an effective arthritis-relief formula, while the Cool Gel's sports formula helps ease muscle aches, backaches and minor strains. Retailers like the strong consumer acceptance of the gels, and appreciate the spacesaving vertical packaging developed by Sato. The gels complement Satogesic pad, lotion and spray products that have developed a loyal following among consumers.

The entire line is backed with radio and newspaper advertising, free-standing inserts and cooperative advertising. These efforts add to a full in-store program, featuring coupons and space-efficient floor and sidekick displays. Sato tailors planograms, displays and prepacks for store operators to meet local market needs.

The company has always placed high priority on efficient distribution, and this fits well with the growing popularity of Efficient Consumer Response (ECR) principles. All orders are shipped within 48 hours after they are placed. Sato collaborates with retailers to make sure their inventories stay lean while sales increase. The Satogesic brand averages six turns a year where it is planogrammed in major drug and food chains.