OTC makers try cashing in on brand profiles

Drug Store News, Dec 11, 1989

OTC makers try cashing in on brand profiles

Manufacturers of over-the-counter products hope brand recognition will help them carve out some of the $18-$23 billion in overall OTC sales that are projected to be reached within the next five years.

Already accounting for nearly 15 percent of total chain drug store sales, OTC drugs are a major focus for drug retailers who look to the category to provide vital growth in the face of intense competition over the next decade. Manufacturers, for their part, are intensifying their marketing efforts and boosting ad budgets in order to keep brand recognition high enough to lure consumers to purchase their products.

While consumer brand preferences may not always agree with the perceptions of store managers about leading brands, one thing is clear: Brand awareness does make a big difference in consumers' buying habits.

According to the 1989 Drug Store News Consumer Brands Preference Study (a telephone survey that investigated buying habits of 600 female shoppers 18 years of age or older in six major markets), 83 percent of the shoppers polled reported that brand is a very important factor in their decision to purchase one OTC pharmaceutical product over another. The survey investigated some of the hottest OTC categories in the marketplace, including cough/cold, analgesics, eye care/lens care, laxatives and dental.

Although dental products such as toothpaste, mouthwashes and rinses were once perceived as toiletries in the minds of many consumers, advanced formulas to fight plaque and tartar have prompted many drug store owners to planogram them closer to more familiar OTC pharmaceutical categories.

No doctor visit

Over-the-counter pharmaceutical products enjoy their healthy sales picture, in part, because of a desire by many consumers to treat uncomplicated medical problems themselves, avoiding a costly visit to their family doctor.

As Jack Walden, senior vp and director of public affairs for the Nonprescription Drug Manufacturers Association, points out: "The average OTC [remedy] still costs about $2.50, and you can still cure a headache for less than a dime."

Media blitz

While trends like Rx-to-OTC switches and self-care are important to increased OTC sales, nothing promotes brand preference like advertising and public relations campaigns.

While advertising is an obvious method of increasing brand awareness, companies occasionally are treated to "free" advertising, thanks to important medical studies that can have a profound effect on specific product categories. A good example in the analgesic category is the surge of aspirin sales after The New England Journal of Medicine published an article reporting that taking aspirin daily reduces the risk of heart attacks. Similarly, another study reporting that bulk laxatives can lower cholesterol spurred growth in the laxative category.

Brand loyalty

One should not confuse brand preference with brand loyalty. An example of an OTC product category having a high degree of brand preference with relatively low brand loyalty is the cough/cold category. According to the study, 88 percent of the shoppers questioned said they normally choose a cough/cold product based on a specific brand. However, two out of five survey respondents said they would switch to another brand if the store did not have their regular brand in stock.

The study did uncover another OTC category that does couple high brand preference with the highest degree of loyalty among the shoppers. That category is eye care/lens care. Ninety-one percent said they would go to another store or wait until their own drug store had their regular brand if they didn't find it in the store they usually shop.

Most shoppers who wear contact lenses feel their eyes are too "valuable" to take a chance on an unproven brand and therefore are more likely to purchase and stick to a specific brand recommended by their doctor. For that reason, manufacturers of OTC lens care products concentrate heavily on detailing to fitters of contact lenses by giving away (or selling for a nominal charge) "starter kits" of cleaning and saline solutions used by contact lens wearers. Industry observers said that brand loyalty of eye care/lens care products lasts about one year. After that, there is some switching, but relative to the other OTC categories looked at in the study, the switching is nominal.

The study found that 86 percent of those polled said they buy a regular brand of laxatives, while only 10 percent said they would switch if they couldn't get their brand at their drug store.

But the link between brand preference and brand loyalty is not as strong when it comes to dental products like toothpaste, mouthwashes and rinses. Although the study showed the purchase of these dental products carries the strongest brand preference among consumers, dental is also the most highly substituted category when consumers' specific brands are not readily available. According to the study, a resounding 94 percent of the shoppers said they buy toothpaste, mouthwash and rinses based on brand preference, while more than half (55 percent) said they would substitute another toothpaste, and 32 percent said they would substitute another mouthwash/rinse brand, if their store did not have their regular brand in stock.