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Staying on top

How do the big names at the top of the OTC tree hold position in the face of new viable competitors and a changing marketplace?

Bird's eye view of a forestThese days, wherever you look brands are big business and pharmaceuticals are no exception. They've become a quantifiable line on the corporate balance sheet so a company that fails to nurture and protect such a valuable asset and extend its life expectancy does so at its own financial peril.

This year sees the 25th anniversary of the first POM to P switches in the UK so, after a quarter century of new opportunities to grow the life cycle of trusted prescription medicines, what are the lessons to be learned about delivering brand longevity in an ever-changing pharma marketplace?

The goal of every brand owner the world over is to win a profitable customer base; if possible, achieve market leadership and then not only keep that position but grow it. So what similarities and, more importantly, what differences are there between the way OTC switched brands can achieve and maintain longevity and how today's successful consumer giants operate?

Marketers must try to ensure that their product doesn't either go out of fashion or be entirely superseded by alternatives

Continuing to meet a genuine need is of crucial importance in successful POM to P switches, says Sheila Kelly OBE, executive director of the Proprietary Association of Great Britain. In OTC terms, it means offering a product that deals with symptoms people recognise for themselves and that would otherwise go untreated or need a doctor's appointment to sort out. It is definitely not a case of offering consumers something they didn't know they wanted, as can happen in the mainstream marketplace.

For the proposition to continue to hold, marketers must try to ensure that their product doesn't either go out of fashion or be entirely superseded by alternatives. Take the cold sore treatment, Zovirax, one of the earliest POM to P switches. This product went straight into a category that people would have normally not bothered to go to their doctor about, but they understood the problem and had a genuine need to treat it. While other products have since been launched offering both similar and alternative solutions, Zovirax has remained a market leader in its field and is thought by many to be one of the most successful POM to P switches in the last 25 years.

One of the quickest ways to brand success is to be the first in a category. Most likely, a pharmaceutical brand will also have a two year lead on any competitors because of the patent on a formulation/use of active ingredients. However, once that time is up, innovation will be even more crucial to the brand's survival and growth. Even so, market leaders have an in-built advantage that makes it easier for them to survive than number two or three. For a start, they have a higher level of awareness and speak in their own very individual voice to their consumers. Then, as they tend to be more profitable, they have deeper pockets to support continuing and substantial marketing, promotional and development spends. They also already have an established shelf position; it is for competitors to prove that a newcomer deserves the space more than existing SKUs.

Unlike mainstream consumer product manufacturers, pharma and OTC companies don't have the latitude to change their formulas on a commercial whim because there is a tight regulatory environment for approving medicines for sale. To stay ahead of competitors, a brand has to continually innovate and appeal to as many sections of its likely customer base as possible so that when competitors come along with a me too product, consumers will not need to look outside the existing brand franchise. Innovation includes embracing new formats and delivery methods as well as diversifying with brand extensions. Prime examples of brands that have done this successfully time and time again are Calpol and Nurofen. Each innovation had a point of difference and so minimises cannibalisation while maximising potential brand growth.

Innovation includes embracing new formats and delivery methods as well as diversifying with brand extensions

Calpol capitalised on its dominance of the infant analgesic market with the launch of a 6+ variant so that parents could continue to access the brand as their children grew older. A sugar-free product was also introduced and, more recently, sachets and melt-in-the-mouth tablets have offered greater convenience and portability. The brand's latest new product development includes cough remedies and a thermometer.

To stay ahead of the competition, Nurofen has introduced a series of variants to deal with different types of pain and fever and a variety of formats, from liquid capsules to topical gels to the latest innovation - Nurofen Express, to appeal to the widest range of consumer preferences. The core brand has even moved into the children's arena to challenge Calpol with Nurofen for Children.

Innovation on its own will not be enough to sustain brand success. With medicines, consumers have to believe and trust in the core brand's values, identify with the brand's personality and essence as well as see and understand the benefits of the main product and any variants. If Pharma brands are to thrive for a long time, it's not just because of their functional excellence, says Leslie de Chernatony, professor of brand marketing at the University of Birmingham Business School. Instead they need to build on emotion. Drugs work through brilliant molecular chemistry, but they also work through people feeling confident. They need to, in some way, hit an emotional nerve. This necessitates the company understanding the emotion of the patient or even the emotional state of the health professional who is trying to think rationally when administering some form of treatment.

To ensure customers aren't lured away from a brand franchise, successful brand marketers needs to constantly review, not only the marketplace, but also what is affecting their customers' lives and daily experiences. For example, topical analgesic Volatrol Emulgel P's communication proposition - the Joy of Movement - is designed to demonstrate empathy with what drives consumers with body pain to self-treat: the need to get back to normal life and movement as quickly as possible. This has already helped the brand to become the fastest growing in its category.

In the world of OTC medicines there are no loyalty schemes or loyalty-building offers. No products can be sampled and there are no BOGOF promotions, so brand loyalty is hard fought for but, once achieved, it is as much for a brand to lose it as for a competitor to win it away. Consumer surveys continually show that brand loyalty runs at about 90 per cent in the UK and for a brand to get to that point takes years. It is therefore hard for new products to break in, unless they can easily demonstrate real points of difference very quickly. In the POM to P switch of the H2-receptor antagonists in the early 1990s, Pepcid, Tagamet and Zantac came into a market where, not only were people reasonably satisfied with the existing range of relatively cheap, fast-acting OTC antacids, but the switched products' points of real difference were harder to get across in simple terms. In addition, pharmacists were obliged to refer patients with persistent acute indigestion back to their doctors so the new products could not be promoted for long-term use. Leading brands such as Rennies and Gaviscon also responded to the challenge from the H2s and expanded their market propositions to ensure their continued consumer appeal.

According to Sheila Kelly, companies should not underestimate the time it will take for a POM to P switch to become established and start to make inroads into a market. Companies are often looking for a significant return on their investment in the first year before committing further above-the-line and below-the-line support. However, a quick scan of the history of the market soon reveals that not even the most successful switches have achieved this.

While not every purchase will rely on the intervention of a pharmacist or pharmacy assistant, it will not be helpful if someone on the pharmacy team prevents a sale because they are either unaware of, or lack the correct knowledge about, a new product. This means recognising the different needs of each type of intermediary and providing them with the most appropriate style of training. Equally, training pharmacists to do something that their customers are not ready to co-operate with will be doomed to failure. Changing consumer behaviour and pharmacy education need to go hand-in-hand.

Companies should not underestimate the time it will take for a POM to P switch to become established...

Looking back 20 years, many of the same big names are at the top of the OTC tree today, but they are sharing a bigger pot with new, viable competitors. In the end, there is only so much shelf space available for products in store and two key factors will eventually decide who stays and who goes: current sales success and potential sales success, driven by points of difference and marketing support.

The most straightforward POM to P switches - where consumers can identify the condition themselves and make the move to self-treatment relatively easily - have now reached the marketplace. Switches in the future may need to be supported by more consumer education to deliver the necessary customer engagement and confidence to self-treat the conditions involved. In short, marketers will need to continue to get smarter at preparing the way for a brand that will not only be successful in breaking into a sector, but will be able to stay there for the long haul.

The Author
Alison Miles specialises in healthcare, consumer and business to business communications. She is a founder of Toniq Marketing and Communications Solutions

4th March 2008


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