Pharma Marketing

End Term Project

Asheeb Singh Raina

MMS B
140
Pharma Marketing

Asheeb Singh Raina

MMS 13-15

Project Report
On

Pharma Marketing

Under the Guidance of

Prof. Ralston Rajvaidya

Prepared by:
Asheeb Singh Raina
MMS-B (2013-15)
K.J. Somaiya Institute of Management Studies and Research
Mumbai:-400007
April, 2015
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DECLARATION
I, Asheeb Singh Raina, hereby declare that this project report is the record of
authentic work carried out by me during the final semester and has not been
submitted to any other university or institute for the award of any degree/ diploma
etc.

Asheeb Singh Raina

MMS-B, Roll No 140 (2013-15)
K.J. Somaiya Institute of Management Studies and Research, Mumbai
April, 2015

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CERTIFICATE FROM FACULTY GUIDE

This is to certify that Mr. Asheeb Singh Raina, a student of the Master of
Management Studies - Marketing, has worked under my guidance and
supervision. This Project Report has the requisite standard and to the best of our
knowledge no part of it has been reproduced from any other project, monograph,
report or book.

Organizational Guide: Prof. Ralston Rajvaidya

Designation: Professor, Marketing
Organization: K.J. Somaiya Institute of Management Studies & Research
Address: Vidyavihar, Mumbai- 400077
Date: April, 2015

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Acknowledgement

This project consumed huge amount of work, research and dedication. Still,
implementation would not have been possible if I did not have a support of many
individuals and organizations. Therefore I would like to extend my sincere gratitude
to all of them.
First of all I am thankful to Prof. Ralston Rajvaidya for having the brilliant insight of
suggesting a project based on the pharma sector. My project on PHARMA
MARKETING has helped me gain a valuable insight of the market realities, even
before I begin my job. I sincerely thank him for being my project guide through
the initial stages of project conceptualization and giving me a free hand during the
course of the project.
I express my gratitude toward our families and colleagues for their kind cooperation and encouragement which helped me in completion of this project and
also to all those who have helped me directly or indirectly in the successful
completion of this project.

Thank you
Asheeb Singh Raina
MMS (Marketing)
KJ SIMSR, Mumbai
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Table of Contents
Sr no.

1
1.1
1.2
1.3
1.4
1.5
2
3
3.1
3.2
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
5
5.1
5.2
5.3
6
6.1
6.2
7

Topic

Page
Number

Declaration
Certificate from faculty guide
Acknowledgement
Table of Contents
Executive Summary
Introduction
Indian Pharma Sector
Market Size
Investments
Government Initiatives
Road Ahead
Understanding the Supply Chain
Creative challenges for marketing medicines
Targeting and the Consumer
Complacency or Challenges and the Creative Contribution
Effective Marketing for OTC Products
Innovation as Market Driver
Market Dynamics of Innovation
Outperforming the Competition
Takeaways on Innovation
Levers to pull: Consumer Purchase Dynamics
Category Relevance
Marketing Effectiveness
Takeaways on Marketing Effectiveness
Consumer Perspective for OTC Products
Attitudes Towards OTC Brands
Attitudes to Advertising
Targeting
Summary and Recommendations
Summary
Recommendations
Bibliography

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Executive Summary
Indias pharmaceutical sector is currently undergoing unprecedented
change.
Much of this is due to the countrys introduction, on 1st January, 2005, of a
system of product patents. Both multinational companies and domestic
players are examining the prospects offered by the local market as the
government moves forward with initiatives aimed at providing Indias more
than one billion inhabitants, for the first time, with access to the life-saving
drugs they need. A further huge boost to the local market is emerging from
the rise of Indias new affluent consumers, who lead more Western-style lives
and are demanding innovative drugs to treat the chronic illnesses that these
changing lifestyles may produce. Indias leading drug manufacturers are
becoming global players, utilising both organic growth, through the gradual
development of their business, and mergers and acquisitions as they seek to
boost their presence in existing markets and open up new ones. With these
opportunities, however, there are huge challenges that require commitment
by both industry and government, and unprecedented levels of partnership
between them. This paper is as an attempt to put forth these marketing
challenges and suggest the way forward for pharma companies in India.

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Chapter 1
Introduction
1.1. Indian Pharma Sector
India is among the top six global pharmaceutical producers in the world.
Indian vaccines are exported to 150 countries. India produces 40-70 per cent
of the WHO demand for DPT & BCG and 90 per cent of measles vaccine.
Approximately 70 per cent of the patients in developing countries receive
Indian medicines through NGOs like The Clinton Foundation, Bill & Melinda
Gates Foundation, Doctors Without Borders, the UNCTAD etc.
Presently there are 10,500 manufacturing units and over 3,000 pharma
companies in India, growing at an exceptional rate. India has about 1,400
WHO GMP approved manufacturing units. India has been accredited with
approximately 1,105 CEPs, more than 950 TGA approvals and 584 sites
approved by the USFDA. Globally more than 90 per cent of formulations
approvals for Anti-retroviral (ARVs), Anti-tubercular & Anti-malarial (WHO
pre-qualified) have been granted to India.
Manufacturing costs in India are approximately 35-40 per cent of those in
the US due to low installation and manufacturing costs. India ranks amongst
the top global generic formulation exporters in volume terms. Indias pharma
exports stood at US$ 15 billion in 2013-14. India exports all forms of
pharmaceuticals from APIs to formulations, both in modern medicine and
traditional Indian medicines.
The countrys pharmaceutical industry accounts for about 1.4 per cent of the
global pharmaceutical industry in value terms and 10 per cent in volume
terms. The Government of India has announced a host of measures to create
a facilitating environment for the Indian pharmaceutical industry.
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The policies of the Government of India are aimed at building more hospitals,
boosting local access to healthcare, improving the quality of pharmaceuticals
and improving the quality of medical training. The Government of India is
committed to setting up robust healthcare and delivery mechanisms.
Indias pharma sales are expected to reach US$ 27 billion by 2016. India is
well placed to become one of the major drivers in providing healthcare to all
while controlling the ever-increasing healthcare spend of both developed
and developing nations.
Though this sector is growing rapidly and is getting acknowledged
worldwide for its contribution, it is not devoid of certain drawbacks. It is
currently marred by 15% to 25% of substandard and counterfeit drugs that
now exist within this sector.
The Government of India is trying to curb this unfavorable situation with the
setup of an expert committee with representation from the industry and
industry associations which will recommend measures to deal with the
problems of substandard and counterfeit drugs.
The growth in related industries like biotechnology, chemistry, IT and other
convergent technologies has contributed to the advantageous growth of the
Indian pharmaceutical sector. The adoption of globally relevant policies for
this sector coupled with the support from the government, institutions and
industry players would assure its positive performance on the worlds stage
in the years to come.

1.2 Market Size

The Indian pharmaceutical industry is estimated to grow at 20 per cent
compound annual growth rate (CAGR) over the next five years, as per India
Ratings, a Fitch Group company.

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Indian pharmaceutical manufacturing facilities registered with US Food and

Drug Administration (FDA) as on March 2014 was the highest at 523 for any
country outside the US.
Expect the domestic pharma market to grow at 10-12 per cent in FY15 as
compared to 9 per cent in FY14, as per a recent report from Centrum Broking.
The domestic pharma growth rate was 11.9 per cent in October 2014,
highlighted the report.
Gujarat clocked the highest growth rate in pharmaceuticals market at 22.4
per cent during November 2014, surpassing the industry growth rate, which
grew by 10.9 per cent, as per data from the market research firm AIOCD
Pharma softtech AWACS.
Also, growing at an average rate of about 20 per cent, India's biotechnology
industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bioindustry and bioinformatics may reach the US$ 7 billion mark by the end of
FY15, according to an industry body. Biopharma is the largest sector
contributing about 62 per cent of the total revenue, with revenue generation
to the tune of over Rs 12,600 crore (US$ 2.03 billion). The bio-pharma sector
comprises vaccines, therapeutics and diagnostics.

1.3 Investments
The Union Cabinet has given its approval to amend the existing FDI policy in
the pharmaceutical sector in order to cover medical devices. The Cabinet has
allowed FDI up to 100 per cent under the automatic route for manufacturing
of medical devices subject to specified conditions.
The drugs and pharmaceuticals sector attracted cumulative foreign direct
investment (FDI) inflows worth US$ 12,813.02 million between April 2000 and
December 2014, according to data released by the Department of Industrial
Policy and Promotion (DIPP).
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Some of the major investments in the Indian pharmaceutical sector are as

follows:
Stelis Biopharma has announced the ground-breaking for construction of its
customised, multi-product, biopharmaceutical manufacturing facility at BioXcell Biotechnology Park in Nusajaya, Johor, Malaysia's park and ecosystem
for industrial and healthcare biotechnology at a total project investment
amount of US$ 60 million.
Pharma major Strides Arcolab has entered into a licensing agreement with
US-based Gilead Sciences Inc to manufacture and distribute the latter's lowcost Tenofovir Alafenamide (TAF) product used for HIV treatment in
developing countries. The licence to manufacture Gilead's low-cost drug
extends to 112 countries.
Apollo Hospitals Enterprise (AHEL) plans to add another 2,000 beds over the
next two financial years, at a cost of around Rs 1,500 crore (US$ 242.57
million), as per Mr Prathap C Reddy, Founder and Executive Chairman, Apollo
Hospitals.
CDC, the UKs development finance institution, has invested US$ 48 million
in Narayana Hrudayalaya hospitals, a multi-speciality healthcare provider.
With this investment, Narayana Health will expand affordable treatment in
eastern, central and western India.
Cadila Healthcare Ltd has announced the launch of a biosimilar for
Adalimumab - the worlds largest selling drug for rheumatoid arthritis and
other auto immune disorders. The drug will be marketed under the brand
name Exemptia at one-fifth of the price for the branded version-Humira.
Cadilas biosimilar is the first to be launched by any company in the world
and is a finger print match with the original in terms of safety, purity and
potency of the product, as per the company.

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Torrent Pharmaceuticals has entered into an exclusive licensing agreement

with Reliance Life Sciences for marketing three biosimilars in India
Rituximab, Adalimumab and Cetuximab.
Piramal Enterprises Ltd has acquired US-based Coldstream Laboratories for
US$ 30.6 million in an all-cash transaction.
Indian Immunologicals Ltd (IIL) plans to set up a new vaccine manufacturing
facility in Pondicherry with an investment of Rs 300 crore (US$ 48.53 million).
SRF Ltd has acquired Global DuPont Dymel, the pharmaceutical propellant
business of DuPont, for US$ 20 million.

1.4 Government Initiatives

The Addendum 2015 of the Indian Pharmacopoeia (IP) 2014 is published by
the Indian Pharmacopoeia Commission (IPC) on behalf of the Ministry of
Health & Family Welfare, Government of India. The addendum would play a
significant role in improving the quality of medicines which in turn promote
public health and accelerate the growth and development of pharma sector.
The Government of India has unveiled 'Pharma Vision 2020' aimed at making
India a global leader in end-to-end drug manufacture. It has reduced
approval time for new facilities to boost investments. Further, the
government has also put in place mechanisms such as the Drug Price Control
Order and the National Pharmaceutical Pricing Authority to address the issue
of affordability and availability of medicines.

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Romania is keen to tie up with the Indian pharmaceutical companies for

research and develop new drugs. "Romania will collaborate with India for
license acquisition to sale India's drugs in Europe," said Mr Mario Crute,
Counselor in Ministry of health in Romania at GCCI. The country will tie up
with the Indian pharmaceutical companies for research and develop new
drugs.
Some of the major initiatives taken by the government to promote the
pharmaceutical sector in India are as follows:
Indian and global companies have expressed 175 investment intentions
worth Rs 1,000 crore (US$ 161.78 million) in the pharmaceutical sector of
Gujarat. The memorandums of understanding (MoUs) would be signed
during the Vibrant Gujarat Summit.
Telangana has proposed to set up India's largest integrated pharmaceutical
city spread over 11,000 acres near Hyderabad, complete with effluent
treatment plants and a township for employees, in a bid to attract investment
of Rs 30,000 crore (US$ 4.85 billion) in phases. Hyderabad, which is known as
the bulk drug capital of India, accounts for nearly a fifth of India's exports of
drugs, which stood at Rs 90,000 crore (US$ 14.56 billion) in 2013-14.

1.5 Road Ahead

The Indian pharma market size is expected to grow to US$ 85 billion by 2020.
The growth in Indian domestic market will be on back of increasing consumer
spending, rapid urbanisation, raising healthcare insurance and so on.
Going forward, better growth in domestic sales will depend on the ability of
companies to align their product portfolio towards chronic therapies for
diseases such as such as cardiovascular, anti-diabetes, anti-depressants and
anti-cancers are on the rise.
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Moreover, the government has been taking several cost effective measures
in order to bring down healthcare expenses. Thus, governments are focusing
on speedy introduction of generic drugs into the market. This too will benefit
Indian pharma companies. In addition, the thrust on rural health programmes,
lifesaving drugs and preventive vaccines also augurs well for the pharma
companies.
The Indian pharma market is expected to grow between 9 and 11 per cent in
the next five years and some of the key components of growth are given
below:
Population dynamics
Large population base 1.5 billion by 2050.
Increasing life expectancy projected to go up to 69 years by 2020 from the
current 65 years.
Geriatric population to double over the next 15 years.
Increasing capacity to spend
Literacy rate at 65 per cent and estimated to be close to 95 per cent by 2020.
GDP growth at 8 per cent and expected to be maintained.
Huge middle class with vigorous buying capacity450 million.
Opening up of reimbursement avenues.
High disease prevalence
18 per cent of worldwide mortality
20 per cent of worldwide morbidity
Low awareness/detection and diagnosis.
Interest from global stakeholders
Pharma and Insurance MNCs entering India
Medical tourism.
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Increased healthcare access

Current access at 30 per cent; government committed to take it to 80 per
cent in the next 1520 years.
Over 100 million untreated patients in rural India.
Multiple stages of evolution of the Indian Pharma market
Initiatives impacting local market:
Entry of new MNCs (BMS, MSD, BI, Eisai)
Launch of patented products by existing MNCs (Viagra-Pfizer, Prevenar
Wyeth).
Spurt in In-Licensing activities, both among Indian companies and among
MNCs.
Increased R&D investment by local companies.
Fund raising by local companies through GDR or FCCBs to finance
investments.
Emergence of organised hospital sector.
Initiatives impacting global market:
Global acquisitions by local Indian players
Focus on exporting APIs and formulations to regulated markets.
Increase in R & D and contract manufacturing tie-ups.
Increased focus by local companies on developing biogenerics.

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Chapter 2
Understanding The Supply Chain
THE OTC medicines market is not just unique and complex - it is arguably
deficient. You have an anxious, often clueless consumer, a respected but not
necessarily impartial or well-informed pharmacist, and in between them, to
bridge that void, is advertising which is handcuffed and neutered.
There is nothing more critical to survival than medicine. We can live without
most medicines, and we cannot live without food. But, pain and anticipation
of pain come way above hunger in Maslow's hierarchy of needs. Forget the
aspirational nature of fast cars, designer clothes, compact hi-fi systems and
badge beers. Consumers do not need to aspire to pain relief. They need it.
Their nervous systems demand it. No other market is driven by such powerful,
emotional and physical triggers as pain, fear, discomfort and personal
embarrassment. This dependency consumers have on medicine is at the root
of the complexity and uniqueness of the OTC medicines market.
Such basic and primal emotions demand practical and functional product
solutions. What role could a brand play, when all consumers are interested
in is whether it will work or not? What role could advertising play, when
consumers will listen only to pharmacists, doctors and mothers? Added to
this potentially complete disregard by consumers for marketing and
differentiating brands are other barriers, perceived by agencies and
advertisers, when trying to communicate the benefits of their wares:
The inability to display products in-store in a way which aids selfselection. In many cases a brand does not even enjoy the status of
appearing on the shelf.

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 The restrictions and limitations on merchandising and discounting of

brands within the pharmacy - no personality endorsements, no loyalty
schemes, no cross-promotions, no free trial.
The price hikes we expect consumers to pay when brands are
transferred from prescription to OTC - on average a 200 per cent
increase.
The number of similar-sounding brand names in many categories
which must hamper brand loyalty and exacerbate consumer
confusion.
Even if the potential customer has seen the advertising, has taken out
a motivating message, has the money and has remembered the brand
name, the pharmacist could, at that final hurdle, fell an OTC brand by
suggesting a higher-yielding alternative.
No matter how confusing and unique this category may appear to be, there
has never been a market where the role for both a brand and its advertising
has been so critical for survival.
In every other consumer market, advertising provides just one of many bites
at the cherry. It is one of many opportunities to register a branded
proposition with the consumer. The armoury of the complete marketing mix
is at the disposal of the advertiser and every element tailor-made to optimise
and build on the advertising effect.
The nature of the OTC market, however, is such that the only direct link with
the end-user is advertising. This puts a huge onus on the advertising to work
- if it does not, nothing else will bail the brand out.
The pressures put upon advertising to perform are even greater when one
considers the nature of the pharmacist and the consumer.
OTC medicine advertisers can never rely on pharmacists either to
recommend or even endorse their brand. In fact, an OTC medicine advertiser
cannot even rely on the pharmacist to know enough about his brand to form
an educated opinion about its suitability for a particular customer.

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Being commercially aware is no crime. Pharmacists are shopkeepers after all,

particularly in their role as retailer of OTC medicines. The concern arises,
however, when you examine the relationship between the consumer and the
pharmacist. Many consumers perceive pharmacists as surrogate doctors
rather than retailers in disguise.
They have no choice but to respect and trust them. This relationship has
evolved, largely as a result of the growth in product switching from
prescription-only to OTC.
In all cases, OTC advertising must compensate for the frailty and
inconsistency of the supply chain. Through trade advertising one can bolster
and supplement the pharmacist's awareness and knowledge of a brand to
minimise false recommendation, presenting up-to-date information on the
product and making use of recent studies and clinical trial data. Whatever
the message to the trade, it must present and clearly distinguish the relative
importance of pharmaceutical versus business needs in the communication.
There is, however, a much bigger and more important role for advertising that of weaning consumers off their dependency on pharmacists - a more
preventative measure designed to build confidence in the consumer and
enable him to self-diagnose and self-select.
Confidence must be imbued by combating confusion and allaying anxiety a clear understanding of the problem combined with a simple and credible
demonstration of the solution.
No wonder the classic problem/ solution advertising formula is practically a
mandate in OTC medicines advertising. The problem helps you self-diagnose,
the solution helps you self-select.
As a formula it is watertight, but not foolproof. In markets like detergents the
problem/solution vehicle is difficult to foul-up. In this market it is easy.
The reason behind this is simple - no other mainstream market is
characterised by such complex and intimate personal anxieties and
insecurities. Removal of stains without boil washing, together with a tabletop demo, has understanding and empathy written all over it - a problem we
don't mind being made public and a solution we readily believe. The
discomfort and embarrassment of vaginal itch, together with a Heath
Robinsonesque solution, are different matters.
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An empathetic, reassuring tone and a simple but involving execution may go

some way to bridge the void created by both human insecurities and the
deficiencies in the supply chain.
But the most vital tool we have at our disposal, far too often neglected in this
sector, is the potential stature and influence of the brand. With all our powers
of concentration directed at communicating product efficacy in an
empathetic and legal way, we seem to have forgotten the importance of
building distinctive brands and maintaining their identity. This seems crazy
in a market characterised by consumer confusion and insecurity and driven
by pain, fear and embarrassment. In such a market a brand has the power to
help compensate for the loss of the friendly, family GP and his prescription,
and the gain of the cold, clerical environment of the pharmacist and the
shopkeeper in disguise. In such a market, a brand can act as a tangible
reassurance and a comforter, when both reassurance and comfort were just
what the doctor would have ordered.
Establishing a brand overnight is often what is required when medicines are
transferred from prescription-only to OTC. This is both the greatest challenge
and the greatest opportunity for advertisers and agencies. How do you create
a brand which has all the trust and integrity of a household name without
the benefit of time and household name budgets? For most advertisers, this
question is so daunting, they concentrate superficially and single-mindedly
on creating awareness for the brand - something easily accountable and
easily correlated.
Although brand awareness is critical, it is a misleading indication if the
brand's core values are not clearly identified and communicated. Without
that substance, a brand remains a word with little influence and little
reassurance. It is ironic to think that if a similar amount of effort was devoted
to building a brand as much as selling a product's specifications, the
inadequacies of the supply chain could now be history.
Arguably consumers would be far more confident to self-diagnose and selfselect. There would be less brand name confusion, less reliance on the
subjectivity and commercial bias of the pharmacist, or the fickle hope that a
product gains visible shelf space of POS display, and less resistance to paying
the price hike accompanying product switching out of prescription into OTC.
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The power of a brand is no compensation for a rational communication of a

product efficacy.
However, the emotional credibility and reassurance a brand brings to the
overall communication puts far less emphasis on the need to rely solely on
the persuasiveness of the product demonstration. Strong brands do exist in
this market and as a result, have benefited from extremely effective
advertising, in creating and nurturing brands and their properties and in
combating the complexities and frailties of the supply chain.
Although the OTC market is more complex and fragile than many other
consumer markets, and although the onus and emphasis on advertising to
compensate for this state of affairs is somewhat daunting, the opportunities
to exploit it with powerful brand building and an empathy for the consumer,
when so few advertisers have grasped the nettle, are still out there and
waiting to be taken.

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Chapter 3
Creative Challenge for Marketing
Medicine
OTC medicines are never simple, and rapid change is complicating this
market area. The release for sale to the general public of drugs which were
previously available only on prescription, the so-called POM to P switch, has
provided an option of powerful medication to the consumer, based upon
self-diagnosis of often complicated and sometimes serious conditions.
Many OTC medicines are potent drugs in their own right and are indicated
for the symptomatic treatment of potentially serious conditions. Neither the
medicines nor those conditions should be trivialised.
Aspirin and Paracetamol are GSL products with which we are familiar. They
were until recently the only effective analgesics for mild to moderate pain.
Science is only just beginning to understand how they really work, though
their use, abuse and potential for untoward effects have been known for
many years. Their use to control a hangover is well established, but they are
also used extensively for the treatment of chronic painful conditions, some
of them serious. Should they be advertised differently from more modern
drugs just because of our familiarity with them, or should they be treated as
a serious medicine and in a tone of voice which reflects that status?
Those conditions which require medical intervention and those amenable to
OTC medicines are ante hoc entirely in the hands of the sufferer, and subject
to that highly individual phenomenon, the pain threshold of the individual.
The attitude of individual sufferers towards a particular disease or symptom
are not uniform, although everybody wants one thing from a medicine: a
rapid relief of symptoms and return to normality.
OTC medicines generally treat symptoms and not diseases, the diseases
themselves being, in the main, self-limiting, acute and not generally lifethreatening.
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Though the conditions in many cases are 'trivial' within the total disease
spectrum (for example coughs and colds), they are often debilitating and a
cause of severe distress, which is of real significance to both the generation
and reception of advertising, whatever the medium. Pain and distress cannot
be characterised as trendy, aspirational or macho, and are rarely funny.
As with all medicines, there is no guarantee of success with any product, so
that in advertising terms the normal hyperbole is probably always
inappropriate. Both convention and legislation preclude its use. All drugs
have a specific dosage recommendation attached to their use. Often the
dosage is a complicated set of instructions relating to the age and weight of
the person to whom the drug is being administered, or to the schedule of
dosages or in relation to the stage of the condition itself, or indeed a
combination of these. Dosage must be addressed in communication to the
potential purchaser either because of the law or just through good practice.
It is an unfortunate fact that though OTC products must all have a unique
selling proposition there are attendant requirements within their advertising
which are entirely similar across the full range of the category. This may help
to explain the oft-heard cry that OTC advertising is so similar.

3.1 TARGETING AND THE CONSUMERS

OTC medicines are most frequently purchased after symptoms appear,
though they may remain in the proverbial bathroom cabinet for use in future
recurrence. On many occasions the purchaser will not be the eventual user,
with mothers being the largest group of purchasers within the family group
for a wide range of medicines. In attitude mothers are the most empathetic
to patient needs.
Reviewers of OTC advertising often endeavour to create the impression that
brand building is not an objective. Examination of sales data shows there
does appear to be a high degree of brand loyalty, with the majority of
customers at the pharmacy counter asking for products by name. This
branding has been established by advertising or other forms of promotion.
Even though the consumer target audience may be diverse, they are very
similar in what they 'need' to know about an OTC product before purchase.
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This is revealed over and over again in research. 'What's it calledwhat's it

forwhat's it dohow's it do ithow quickly.' There is a peculiar desire
among sufferers of most conditions, who are consulted in market research
discussions that the OTC will work. The resident cynic is rarely present.
The general level of knowledge among consumers about common diseases
and treatment is universally poor. Even people with advanced medical
knowledge appear to lose much of it when they are themselves the patients.
Coupled with this lack of knowledge is a high degree of apprehension
equating almost to fear. The consumer as sufferer is not the rational being
he or she would otherwise be. The implications of this for advertising are that
any message must be clear, unambiguous, relatively simple and, within the
parameters allowed, must represent a high probability of successfully
relieving symptoms.
OTC advertising is said to create an impression of being old-fashioned and
having a rational hard sell approach. The impression is probably correct. This
approach is the way to convey a relatively complex message unambiguously
to a select audience who are emotionally in the doctor/patient mode. Sales
evidence of branded OTC products would suggest that their advertising
achieves breakthrough with the target audiences, obviously creates both a
desire and action in the form of purchase, and by definition a clear and
reasonable message of efficacy and superiority. Within the OTC market this
is achieved usually with very small budgets and through creative use of
alternative media. Argument for activity must therefore be tempered by a
realisation that what we as advertisers regard as creative may lack credibility
with our target audience.

3.2 COMPLACENCY OR CHALLENGE AND

THE CREATIVE CONTRIBUTION
OTC medicine advertising should continuously seek to improve and become
more creative, and OTC advertisers are fully aware of this. Many OTC
medicines enjoy strong brand identity which, though built up over many
years in some cases, in others has been achieved in a remarkably short period
of time.
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As with other categories, more and more 'brands' must be established if such
products are to survive the 'own-brand' phenomenon, and OTC medicines
are in a particularly strong position to achieve this.
OTC advertisers are aware of these issues, but are their agencies? Some
undoubtedly savour the challenge, particularly those agencies dedicated to
the healthcare markets. To others the OTC market represents a client and
business opportunity, but an intellectual nightmare for planners and
creatives alike.
Dedicated medical agencies - those who do have a significant understanding
of the issues - fight an uphill battle in their quest to gain business from the
major OTC companies, or even to be considered in the pitch situation. Some
obviously do not have the capability of handling large consumer accounts,
preferring to remain in the 'prescription only' arena, but there are several
which do.
The OTC companies are usually drawn to the major consumer agencies by
the bright lights of 'creativity' and impressive case history in other markets.
Anecdotal evidence would seem to suggest that the executional creativity
displayed in OTC advertising, from either the mainstream or specialist agency
within the OTC market, is very similar.

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Chapter 4
Effective Marketing for OTC
Products
4.1. INNOVATION AS A MARKET DRIVER
The Role of Innovation in Business Strategy
Innovation shapes strategy. A company's' mission statement and strategy
both clearly point to the critical role innovation plays in their success, and
this holds true for companies operating in the Fast Moving Consumer Good
(FMCG) industry as well as in the Health Care sector. Some examples of
leading FMCG and Health Care companies' mission statements include:
l Working to create value through Innovation and Growth
We want to discover, develop, and successfully market innovative
products to prevent and cure diseases, to ease suffering and enhance
quality of life.
l To drive sales growth through focus and constant innovation while
optimizing costs to expand margins and profits ... Upto 40% of our net
revenues come from products launched in the past three years.

4.2 The Market Dynamics of Innovation

But what contribution does innovation really deliver to a company? How
much revenue is actually generated by new products?
How does this differ between FMCG and Over-the-Counter (OTC) categories?
And finally, how do companies actually perform when they have a strong
innovation push?
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To answer these questions, retail sales data from a comprehensive set of

FMCG and OTC categories, was analysed.
So what is the contribution innovation delivers to a business, and how does
this differ between FMCG and OTC categories?
See below for quantified contribution in terms of the revenue share new
products make up of total turnover (see Figure 1).

Figure 1: Weight of innovation

Firstly, innovations are, in fact, important revenue contributors. In the FMCG
categories for Germany, about 10% 15% of current annual revenue is
generated by new products launched in the past three years.2 Secondly, the
role of innovation tends to be less pronounced in OTC when compared to
FMCG companies. Worldwide, about 5% of current annual revenue is
generated by new products.

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4.3 Outperforming the Competition

Innovation is a challenging as well as risky business. Previous research and
experience show that a large portion of new product launches fail to reach
their business objectives and be sustainable in the market place.
But going without innovation isn't an option either. Take a look at how
companies have performed in the market place, depending on their level of
innovation. First, we grouped the companies are grouped based on the
proportion of revenue generated by new products and classified them as
high, medium or low innovators. Then there is the value sales growth of each
of the three groups within the categories (see Figure 2).

It is clear that manufacturers who undertake a strong innovation push clearly

outperform the market place. They can increase value sales by an average of
about 5%, per year, while those companies that achieved only a minor
innovation push actually lost market share. Thus, successful and frequent
innovations can lead to incremental sales and market share gains. In order to
achieve this, innovation must be well managed and executed. In our

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experience, four drivers are especially critical to insuring that innovations

generate incremental sales (see Figure 3).

4.4. Takeaways on Innovation

What should marketers take away from this? Should marketers assume that
they can grow and outperform competitors via innovation only? Certainly
not. The many examples of successful renovations of existing brands as well
as continuous and consequent marketing support of established brands
prove that growth without innovation is possible. However, the odds of
outperforming the market place are more favorable if marketers play their
innovation card well. Secondly, marketers need to care about the levers for
incremental sales as much as they care about the levers for a successful new
product launch. It is important to be successful in new product launches, but
it is also key that a new launch grows the brand or the franchise overall.
Next, we looked at how marketing support helps drive successful innovations
and, specifically, how marketing effectiveness differs between FMCG and
OTC initiatives. However, we must outline the most important differences
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between consumer behavior to better understand the consumer context

within which FMCG and OTC marketing must deliver.

4.5 LEVERS TO PULL CONSUMER

PURCHASE DYNAMICS
The previous section looked at the role innovation plays in FMCG and OTC
companies. In this section, we focus on how category purchase dynamics
affect key performance indicators of new product launches in these
businesses. When thinking about category purchase dynamics, we look at
them in two ways. First, we want to know how many households have bought
in a specific category in the past year, i.e., its penetration. Penetration is a
good indicator for the overall relevance of a category: the larger the category
penetration, the broader the need consumers have for products from this
category. The second important metric relates to the rate of consumption;
that is, how frequently consumers buy in a category.
In categories with high purchase frequency, the time frame between past and
current purchases may be about two weeks, whereas in categories with
relatively low purchase frequency, the time frame between purchases spans
several months rather than a few weeks.
Figure 4 illustrates how categories behave differently regarding the two
metrics of penetration and buying frequency. It ranges from chilled fruit
yoghurts, a category where almost all households buy products on a biweekly basis, making it a very short purchase cycle category... to the OTC
laxative category, with a penetration of roughly 10%, with overall category
purchase frequency of about six purchase acts.

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4.6 Category Relevance

Often, the penetration of OTC categories is limited simply by the incidence
of certain conditions. Category penetration is obviously restricted for
products that treat a condition such as indigestion, for example, from which
only about 10% of the European population claims to have recently suffered.
Also, suffering from a certain condition does not necessarily mean consumers
would instantly make a category purchase. Using home remedies, consulting
a doctor or using treatments which are already in home are alternative
courses of action. On average, just one-fourth of all consumers, who claimed
to have suffered from a specific condition, actually claim to have purchased
an OTC product immediately after the condition occurred.
OTC categories tend to not only experience lower category penetration, but
also they tend to have longer purchase cycles.
How frequently consumers buy a certain category can have a profound
impact on consumer buying dynamics at a brand level.

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There are 2 key areas:

Consumer Key Performance Indicators
Fourt and Woodlock developed the well-known concept of decomposing the
market volume of brands into trial and repeat volume. By understanding how
much volume comes from a consumer trial purchase versus how much is
coming from repeat buyers, the trial and repeat dynamics can be used to
predict new product sales from early in-market data.
Trial volume is equal to the number of consumers who try the product
multiplied by the quantity they purchase when making the trial purchase. The
repeat portion of the volume decomposition is driven by the number of
consumers who repurchase the brand once they have tried it, as well as the
depth of repeat buying and the average quantity per repeat purchase act.
When we compare these Key Performance Indicators for new product
launches in shorter versus longer purchase cycle categories, we see
pronounced differences.
To start with, the longer the purchase cycle, the lower the trial rates generally.
This is partly driven by the fact that the overall need, and therefore size, of
the interested consumer universe tends to be smaller for these categories.
Overall purchase interest for OTC initiatives are on average about 10% to
20% lower than for Food or Household Care initiatives. But this does not
explain all trial rate differences. The second major factor is that there are
simply fewer buying opportunities in longer purchase cycle categories. To
put it another way, the time-to-trial for a new product is longer in long
purchase-cycle categories than it is for short purchase-cycle categories.
For example, consider chilled fruit-yoghurt. Assume you bought a fruit
yoghurt last week and today you see an advertisement about an appealing
new fruit yoghurt. Even though you only recently bought a fruit yoghurt, with
a bi-weekly category purchase-cycle, you are already in the market again.
Even if you do not buy the new fruit yoghurt this week, you are again inthe-market just two weeks later. In fact, you will have roughly 30 purchase
opportunities in the course of a year to try the new fruit yoghurt.
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Now compare this to the laxative category. Assume again you bought a
laxative just a few days ago, and today you see an advertisement about a
new laxative.
Given a category purchase cycle of two to three months, you have a relatively
long time to-trial this new laxative, even though you might be very interested
in buying it. If you do not buy this new laxative in the next category purchase
act, then it will be a considerable length of time before your next purchase
opportunity arises. In fact, throughout the year, you are more likely to have
just six purchase opportunities, rather than thirty-odd in the chilled fruit
yoghurt category.
As already stated, trial rates are generally lower in OTC categories. In addition
to this, volume contribution from repeat purchasing is smaller in longer
purchase cycle categories, due to lower repeat rates as well as lower depth
of repeat. Overall, these dynamics lead to a substantially lower volume
potential.

4.7 MARKETING EFFECTIVENESS

Marketing support is critical for the success of new product launches. A new
product might be highly appealing to consumers. However, unless this
product is sufficiently supported by marketing investment, it is unlikely to be
successful in the market place. Why? There is a straightforward chain of
events underlying new product launches. In the previous section, we
highlighted the first link in this chain of events: higher trial rates tend to
generate higher sales. The second link is: higher awareness tends to
generates higher trial rates.
That is not to say that awareness is the sole determinant of new brand trial.
Many other factors such as distribution, consumer and trade promotion,
concept appeal and category purchase dynamics influence new brand trial.
Awareness, however, is one of the strongest factors. This makes sense: if you
are unaware of a product's existence, you aren't very likely to buy it. Here is
where marketing investments come in: strong investments and effective
marketing drive awareness.

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The Foundation
However, before getting to this, it is important not to lose sight of an
important lever for effective marketing spending: a strong concept. One
could even argue that an appealing concept that generates high buying
interest is in fact the strongest lever marketers can pull to get the highest
return on marketing investment.
To illustrate this point, we look at the following case. A personal care brand
has been launched with 5MM gross advertising spending. Average
awareness in the first year of launch was roughly 35%. Year I trial rate reached
1.8% (~ 0.7 million households). The concept of the new launch did not
generate strong consumer appeal. While consumers perceived the new
product as new and different from currently available products, the
proposition was not especially relevant to consumers, resulting in a less than
average purchase interest. To get one household to make the trial purchase,
this new product had to invest an average of 7 in advertising spending (=>
5MM advertising spending divided by 0.7 million households). However,
with a considerably stronger concept appeal, trial rate would increase by
roughly 50%, which would reduce the spending per trier from 7 to about 5
. Thus, to get most out of marketing investments, marketers should only
launch and support initiatives that have strong appeal.

Marketing Investments
How much do marketers invest when they launch new OTC products
compared to their FMCG counterparts? When we partner with our clients to
assess and forecast the market potential of new initiatives, we work with two
sources of inputs: consumer feedback for a specific initiative, gathered via
primary research, and marketing plans, provided by the clients' marketing
team. These marketing plans include detailed information regarding
marketing execution. Key elements of these marketing plans are captured
and indexed in a database.

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Advertising's Effectiveness in Generating

Awareness
Let's move on to the primary determinant of new brands' awareness
advertising. There is a strong correlation between new brand awareness and
advertising, usually expressed as GRPs. The higher the GRPs for a new launch,
the higher the generated awareness tends to be. But an increase in GRPs
generally does not lead to a proportional increase in awareness.
As advertising increases, awareness increases at a decreasing rate. In short,
there are diminishing returns to advertising support.
There are different aspects to consider when linking GRPs to awareness. Will
1000 GRP always lead to the same awareness level? Certainly not. Even
though two campaigns might have the same quantity of GRPs, their potential
in raising awareness might differ due to their quality. For instance, all other
things being equal, 1000 GRPs with a 15 second copy tend to generate lower
awareness compared to 1000 GRPs with a 30 second copy. The same holds
true for the copy memorability: the stronger copy recall is, the higher
generally the awareness levels are.
The key takeaway is that the same media support in terms of GRP quantity
and quality generally results into lower awareness levels for OTC initiatives.
Consumers' attention to commercials is linked to interest in particular
categories. As pointed out in the previous section on category purchase
dynamics, overall relevance of OTC categories tends to be lower than for
food categories, which makes it more challenging for OTC new product
commercials to raise awareness as effectively as for food initiatives.

Distribution-Based Awareness
As already stated, consumers need to be aware of a new product in order to
buy it. But once aware, consumers need to find the new product in the stores
in which they usually shop, in order to buy it. Distribution has to insure a
product's availability to consumers. Yet distribution is not just about
availability. Distribution is, as already stated, also a source of how consumers
become aware of a new brand.
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Several factors drive the ability of a new product launch to gain distributionbased awareness. Strong presence on the shelf via facings and optimal shelf
location, as well as strong store presence e.g. dual placements, increase a
new products' potential to gain distribution-based awareness. Also, strong
packaging design (e.g. form, size, color) is critical in succeeding to break
through the shelf clutter and maximize distribution-based awareness.
Generally, new products in the OTC business have a more limited potential
in raising distribution-based awareness. Consumers tend to shop less
frequently in pharmacies, drug stores or OTC shelves compared to traditional
packaged goods, and therefore, have fewer opportunities to become aware
of a new launch by seeing it on the shelf. In markets where OTC distribution
is restricted to pharmacies and/or available behind-the-counter only,
differences can be even more pronounced.
This is, of course, not to say that for each and every OTC launch, distributionbased awareness is lower than for FMCG launches. Strong marketing
execution (shelf presence, strong packaging break through, etc.) can certainly
offset some of the category-specific disadvantages. But due to different
category purchase dynamics (frequent vs. less frequent shopping trips) the
ability for new OTC launches to raise distribution-based awareness is clearly
more limited.

The Influence and Importance of Buzz

Is it possible to influence the level of Buzz for a new product? Yes! To
generate Buzz, you need to invest in traditional media!
Traditional media spending is strongly correlated to the level of Buzz. This
might appear somewhat surprising, but at the same time, is encouraging. It
means marketers still have some power over Buzz and Consumer Generated
Media. Traditional media matters but it cannot explain all the differences we
observe in level of Buzz. They are also categories that generate Buzz more
easily or spontaneously than others. OTC is a category that has the best
Buzz/sales index among FMCG, but OTC products don't benefit from
stronger media investments than other FMCG products. It means that

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consumers' involvement in a category is also linked to the level of Buzz one

can generate.
Health is one of the most common searched topics on the Internet among
females and a lot of forum and blogs are about health and medical issues.
With a high amount of discussion about health issues or conditions, the
amount of discussion about the solution can be considerable and OTC
obviously gets a fair share of it.

The Professional's Influence

Leveraging healthcare professionals' recommendation, noticeably physicians
and pharmacists, is certainly a marketing opportunity which clearly
differentiates new OTC from FMCG products. However, the influence
professionals can have varies across OTC categories and depends on several
factors. Generally speaking, healthcare professionals' influence tends to be
high in cases when:
marketing support is substantially directed towards healthcare
professionals;
consumer directed marketing spending is relatively low;
OTC products are distributed behind-the-counter, so that there is
limited visibility and no reach;
the condition for which consumers looking to treat with OTC product
is more severe;
Consumers are not that comfortable regarding self medication (due to
side effects, dosing etc) and need professional advise on usage;
regularity requirements restrict easy access for consumers.
This list needs to be extended by one additional important factor: the mode
of interaction between healthcare professionals and consumers. Here, the
following aspects are important to note:
The first aspect relates to the frequency of interaction. This aspect
basically covers how often consumers and physicians talk with each
other about a specific condition. The less frequent the consumer
interactions with physicians, the lower the potential of professionaldirected marketing to translate into professional-driven sales.
l

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The second aspect relates to professionals' endorsement power; that is

how far professionals can increase consumer purchase intent for a new
OTC product. In fact, there are two types of settings in which
professionals' endorsement power is constricted: (a) Consumers have
very limited interest in buying the new OTC product and even
professional endorsement will not substantially change this attitude;
and (b) Consumers' interest in a new OTC initiative is very strong, such
that consumers would buy the OTC product in any case, regardless of
professional endorsement. In this setting, professional-directed
marketing works more as a source of awareness, rather than having an
additional positive effect on increasing consumers' buying intent.

4.8 Takeaways on Marketing Effectiveness

Specificities of the OTC category dynamic tend to reduce marketing
effectiveness of advertising and distribution. Does it mean OTC brands
should avoid spending in media? Certainly not. Even if the longer purchase
cycles for OTC categories, OTC products still need to develop awareness. Also
the purpose of advertising is not only to trigger immediate sales but also to
build a brand's equity. On the other hand, OTC brands have incredible and
specific assets over FMCG. Given consumers interest in health, blogs, forum
and all internet communities can help creating awareness and equity. Finally,
OTC brands also have strong ambassadors with pharmacists and doctors.
They might hardly change consumers' mind if they are already decided but
they have a really strong power over consumers suffering from a condition
they are not used to or that are not decided yet over one brand or another.
1. Implication for Innovation Management:
To fully leverage the potential of innovation to drive growth, processmanagement capabilities become a competitive advantage. Those
companies most likely to outperform the market, and which will get most out
of the innovation pipeline, are those supporting the innovation management
with a well-structured and consumer-centric process, which enables a unified
language and clear-cut action standards, but which is still easy to understand
for decision makers.

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2. Implications for Business Planning

Business objectives for new product launches should not focus only on
volume target for the new product launch. To assure total franchise growth,
business objectives should also be set for the incremental volume that the
new launch delivers to the overall business. Trial rate targets should be
included into the business objectives for new product launches, as standard.
Due to differences in overall category relevance, purchase cycles and longer
time-to-trial, OTC marketing and distribution tend to result into lower
awareness levels and lower conversion-to-trial than FMCG marketing.
Business targets on awareness and trial rates need to account for category
dynamics. All this must be taken carefully into consideration, when preparing
the P&L of innovation.
3. Implication for Marketing Research methods.
Purchase Intent or Preference Shares are essential metrics for evaluating
the market potential of new initiatives; but not sufficient. In fact, initiatives
with same purchase intent can have different trial rates. Marketing research
needs to add important consumption metrics like time-to-trial and purchasecycle to capture the total market potential of a new product.
4. Implications for Marketing of Innovations:
Pursue opportunities to broaden the relevance of OTC launches. With a
treating positioning, OTC products tend to be limited to sufferer
populations. Pursuing opportunities, which move from a treating
positioning to a preventing positioning, can increase overall relevance and
market potential of new OTC launches. The best investment in terms of
getting the most out of marketing spending is a strong proposition. The cost
of getting one trier is inversely linked to the appeal of the initiative: the
stronger the appeal, the lower the required investment to gain one trier.
Marketing teams with the strongest discipline to execute and launch
strongest possible propositions will get highest return on their marketing
investment. To get most out of their marketing, OTC marketers need to fully
leverage the opportunities that Buzz and Professional endorsement can offer
to OTC launches; and OTC Marketers need to optimize all stages of the
consumer adoption process of new products.
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Chapter 5
Consumer Perspective for OTC
Products
THE PURCHASE decision process in any market represents a complex number
of factors, some logical and readily rationalised, others more emotively based
and some just flippant. The complexity of a market is not necessarily reflected
in the computations of the purchase decision process. Technologicallydriven markets such as computers or software often cause consumers to
regress and transfer priorities on to facets of the product or brand they can
appreciate. Simply, they buy in a state of secure ignorance, opting for a brand
with a reputation or image that they, their peers and opinion formers trust.
OTC medicines also are bought into on the basis of trust and/or experience.
Consequently, it is emotive appeal enhanced by recommendation that
currently drives brands within this sector because of a lack of consumer
understanding - and possibly apathy. The OTC medicine market will retain its
current structure and status quo until consumers become more responsible
and enlightened. An OTC medicine market catering for informed consumers
would have a very different structure from today's market.
Structural changes are, however, driving a change, causing a consumer
evaluation which will ultimately impact on the framework of this market, like
other sophisticated and technological markets which have had to adapt to
an evolving consumer. Advertising can act as an interface between the brand
and consumer, adapting established brands and introducing new products
into a more elevated OTC medicine arena.

5.1 ATTITUDES TOWARDS OTC BRANDS

Overall, consumers do not regard the OTC medicines market as
accommodating to them. The structure of the market is seen as complex and
consequently confusing, with brands often being beyond their reach.
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Thus, consumers do not actively integrate with brands within this market as
they would, by contrast, with fmcg brands.
The OTC medicine market prompts a different consumer brand relationship
with the consumers' role being subjugated as they abrogate their
responsibility as critical, rational consumers to the brand or a third party, such
as the pharmacist. As they lack specialist or even superficial knowledge,
consumers defer to a higher authority. Attempts to appraise a brand
objectively are suspended; instead reliance is placed on more emotional
evaluations and associations: 'Anadin always worked for me', or 'Lemsip
makes you feel better.'
In the OTC medicine market, brands are less likely to exist as distinct entities
that can be bought into freely. More often the consumer requires some form
of introduction to the brand, either professionally via the pharmacist, dentist
or doctor, or personally via family and friends. This situation has arisen
because consumers lack the necessary knowledge to decode and decipher
the various product claims or ingredients to appraise product performance.
OTC medical brands seem deliberately to adopt a non-accessible, even
hostile, personality in order to promote their medical credentials. Consumers
do feel intimidated and excluded by such overt disregard for their emotional
needs. Many brands perpetuate this illusion of medical mystique using
powerful semiotic devices in their advertising, packaging and promotions to
convey efficacy and potency (eg targets, arrows, shotguns), often
accompanied by more overt statements of superiority such as 'Extra' or 'Plus'.
Allied to this are the quasi-military terms used (combat, fight, control, attack).
This aloof and authoritative brand attitude, which is common to many OTC
medicines, is deemed conventional and consequently acceptable from the
consumers' point of view, with the brands commanding respect and
demanding medical dignity and decorum. Intuitively, if not intentionally,
brands attempt to borrow the persona of the professionals who instil implicit
trust and faith while suppressing fears and concerns about symptoms and
their treatment. Doctors have mastered this role by their personal approach,
empathising with the patient while retaining medical respect.
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OTC medical brands, while striving for respect, often fail to generate the
necessary empathy and thus fail to create the same holistic solution.
Consumers within the OTC medicine market are undergoing a change, driven
not so much by desire, but through necessity.
Most consumers now feel the need to be equipped with basic knowledge
within this market in order to cope with various situations. Typically, many
consumers feel vulnerable and isolated from their doctors. While a decade
ago their intuitive response to illness may have been to visit the surgery, this
once reactive instinct is more commonly found as a last resort.
Thus consumers are weaning themselves off doctor dependency for minor
problems and are more likely to have their own regimes for coping initially
with less severe or more frequently encountered ailments, such as coughs
and colds. These consumers represent a new breed, a second generation
evolving out of the dark ages of the suck it and see syndrome. Such
consumers want evidence of efficacy, either through ingredient familiarity or
being impressed by the active components.
Whereas, previously, OTC medical brands were passively accepted, they now
tend to be more actively interrogated. However, it is not merely greater
efficacy that drives this brand or product appraisal. Along with greater
consumer insight and sensitivity to ingredients is a more cautious and
concerned approach. Amplifying this are two factors: first, consumers
consider themselves more distant from their doctors and the security of
using 'drugs' under supervision, and, secondly, they perceive the market as
evolving in terms of potency and efficacy with more products being
deregulated, moving from POM to P designation. Consumers are changing
from submissive and passive patients to be administered to, to more active
and involved consumers to be advised. However, these changes have not
been paralleled by advertising.

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5.2ATTITUDES TO ADVERTISING
Overall, consumers have relatively low expectations of OTC medicine
advertising due to exposure to past executions. Generally, consumers believe
that advertising within this sector adheres to a clichd and conformist model,
often being regarded as didactic and dependent on demonstrations.
Advertising within the OTC medicine market tends commonly to exploit the
problem/solution advertising model. While suggesting efficacy and speed,
this advertising genre lacks genuine empathy. The voyeuristic 'slice of life'
approach often favoured suggests that viewers should have sympathy for the
sufferer and circumstances, but this tends to distract from the more potent
point of connection, namely recognition of the symptoms.
Consumers can readily construct a pastiche of such advertising, drawn from
exposure and past experience.
An example of this advertising clich is the dominant advertising model for
analgesics. This comprises a woman in her mid-20s looking tired and rundown, possibly with bags under her eyes and children in tow, the aim being
for the viewer to identify with the sufferer, typically deemed as a housewife.
The action is also predictable, with the mood changing from depression to
relief, or from pain to instant recovery. In response consumers adopt a cynical
attitude, using the term 'miraculous cure'. This 'transformation model' is also
accompanied by a few 'pharmospeak' phrases, elaborated on with models of
skulls and men in white coats, or possibly medical-looking scanners
emphasising this transmutation from pain to relief, or chaos to calm.
Consumers are familiar with this transformation model of advertising as a
framework for OTC medicines. Such advertising purports that the product
offers instant relief and possibly even a cure for the specific ailment. This style
of advertising, when adopted in the OTC medicine market, arouses consumer
scepticism and tends to be appraised cynically. Contributing to this reception
is not so much the message but the clichd approach adopted. Moreover, the
adherence to this executional style does not help consumers differentiate
between brands, and consequently messages and advertising attribution
becomes vague, causing 'brand blur'.
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Consumers are relatively ignorant and apathetic over the specifications of

products, their interests being centred on the promised relief and the process
of achieving it. As a consequence of this, OTC medicine ads also focus on this
relief, both in the physical and psychological sense. It is here that there is an
advertising paradox in that consumers want to believe in brands and their
promises. However, purporting to be a cure does promote consumer
cynicism. Overt demonstrations of the promise of an instant cure tend to be
resisted. Adopting the same demonstration strategy as floor cleaners and
washing powders contributes to this advertising resilience. Whereas
consumers can evaluate such mundane cleaning products for themselves,
OTC medicine advertising needs to instil faith and inspire belief in the brand.
More subtle suggestions using metaphors are often better received than
more overt clichd communications. Consumers want to trust favoured or
selected brands, with this contributing to the healing process. The placebo
effect is powerful, with advertising contributing to 'faith healing'.
Advertising within the OTC medicine market has evolved from first
generation 'prove it' ads to more subtle appeals, using semiotics and
symbolism in order to convey the message. However, adherence to the
transformation model has left advertisers struggling for different metaphors
to represent the specific ailments or symptoms and convey the relief offered.
Increasingly, the creative task is focused on expressing the problem via
similes or metaphors in order to create identification, empathy and interest.
Thus, ownership of the most appropriate device becomes a competitive
advertising advantage.

5.3 TARGETING
As planners, our generalist background also affords us the opportunity to
compare advertising targeting across different markets. The current vogue
with many fmcg products is to adopt a refined and defined approach when
considering the target audience. Here we have seen greater brand exclusivity,
not only in terms of defining the catchment the advertising is aimed at
appealing to, but also in identifying the competitive products and the
consequential consumer response as a result of exposure to the advertising.
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While this task may be more complicated in the OTC medicine market
because consumers tend to adopt portfolios of products, specifically
targeting the advertising is not just an academic exercise. Consumers require
pointers as to how a brand is positioned: is it for instance a reactive product
to be taken at the first sign or symptom of an illness, or is it to be reserved
and used as a last resort?
Previous brand targeting within the OTC medicine market would appear to
be inclusive with the appeal trying to encompass anybody sharing those
specific symptoms. This is particularly true for analgesic or cold and 'flu
remedy products. The working hypothesis here seems to be that by loading
the advert with recognised symptoms you will broaden the appeal of the
product.
Against this theory is an emerging consumer response in this market.
Consumers are beginning to distrust products that purport to be panaceas.
Greater credibility and competitivity can be achieved by focusing on specific
symptoms or problems.
Consumers are more accepting of products that have a specific and
dedicated role, suggesting specialisation. The theory of selective perception
suggests that consumers tend to pay more attention to advertising when it
directly relates to them. Thus by identifying a recurring problem or a current
symptom, consumers are more likely to take notice.
Most marketers are able to define their consumer, both demographically and
psychographically. There are many models of consumer typologies
attempting to describe and categorise consumer behaviour from 'mainliners'
to 'martyrs' or from 'pill poppers' to 'phobics'. While such psychographic
models exist to describe consumers, it is rare that these are fully exploited
when undertaking advertising (often due to the inability to buy media against
such highly defined sectors). While such models of consumer behaviour
recognise and categorise differences between consumers, they are often left
behind in the development of advertising, due to the brand's desires to trawl
the broadest catchment possible.

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Evaluation of the relative ego states of the viewer or sufferer is of more

pertinence when considering targeting. Within most markets, consumers will
evaluate products against a number of different criteria, which often
represent conflicting mindsets. In the OTC medicine market, three such
mindsets exist which are pertinent to branding and advertising. First, there is
the consumer in his or her role as a patient. In this mindset the consumer is
likely to respond positively to an empathetic or sympathetic message, and
will also react to advertising that shares his or her common symptoms.
Secondly, there is the role of the mother. This mindset exercises a cautionary
approach with concern over 'drug' potency being prominent. The mother
mindset is concerned with caring for the patient (whether herself or her
family's). Thirdly, there is the role of the nurse. In this capacity, consumers
want to know more about the active ingredients and the effects of the
product. They are taking on active responsibility for looking after their or
their families' health and consequently want to be equipped in order to make
competitive decisions.
Arguably, much of the first generation OTC medicine advertising involved
appealing to the patient and mother mode, placating concern by promoting
friendly and familiar brands and forging a connection through a sympathetic
tone (the tried and trusted appeal). With the advent of a marginal
advancement in consumer understanding and comprehension within this
market, advertising appeals need also to evolve on to a higher plane and
communicate to the nurse mindset as well, in order to ensure a holistic
advertising message that appeals to the various consumer ego states.

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Chapter 6
Summary and Recommendations
6.1 Summary
In terms of its execution, advertising within the OTC medicine sector is
evolving. However, its framework has remained relatively basic compared
with advertising appeals in other markets. Branded sophistication within the
OTC market is predicted to increase due to the complexity of the products
and added competition within the specific sectors. As a consequence of this,
advertising needs also to evolve and exploit the latitude that consumers are
prepared to give OTC medicine advertising.
The creative challenge is to produce advertisements which can overcome
consumers' innate cynicism of supposed miracle cures (particularly in relation
to the cold and 'flu market), while reflecting a degree of empathy with the
sufferer.
Formulae advertising that adheres to the proven transformation model will
always be an acceptable option for marketers within this sector. However,
the potential for brands to capitalise on consumer frustration is evident.
There is scope within this market for brands to be more radical in terms of
their advertising approach, and adopt more pioneering advertising that
breaks away from the OTC medicine advertising clich and delivers, within a
creative framework, a pertinent and easily assimilated consumer-orientated
benefit.
While many of the established brands within the OTC medicine market are
based on tradition, echoing the maternalistic medicine chest, the market is
undergoing a transformation. Consumers now respond to more intelligent
and specifically targeted treatments. Greater accessibility to such products as
they become de-restricted will need to be handled with subtlety and
sensitivity.

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Consumers are becoming more aware of medical matters, driven by necessity

and, to a degree, curiosity. Ultimately, this will lead to consumers
interrogating brands more closely in terms of their performance promise and
contents. While consumers are dismissive of miracle cures or panaceas they
do expect medical technology to have advanced and while exercising caution,
they will want brands that treat symptoms effectively, intelligently and safely.
The prophecy for OTC medicine advertising will be protecting the
effectiveness and potency of traditional and established medical brands and
launching new or previously restricted brands into the consumer market.
Thus the future of OTC medicine advertising will be marked by both
defensive and aggressive strategies. This should act as a catalyst for new
advertising approaches, breaking away from the clichd and first generation
advertising appeals.

6.2. Recommendations
Despite the regulatory issues and unique purchase occasions applicable to
most brands, the over-the-counter (OTC) pharmaceutical sector is not as
different from other consumer-facing industries as is frequently assumed.
What is important, whatever the product and market, is devising and
executing a coherent plan.
Similarly, the advent of targeted products is growing more common in the
pharma category, as is the case for FMCG and household goods. That's
something that we see in vitamins - vitamins for the elderly, vitamins for kids,
vitamins for the midthirties. It is equally true for pain relief lines with stronger
ingredients to help specific conditions, like GlaxoSmithKline's Panadol Osteo
for managing osteoarthritis, and Panadol with added caffeine to enhance its
analgesic effect. In keeping with this notion, the path to purchase for OTC
brands has not been immune to the rise of digital media. This channel has
transformed the trading environment for companies in areas from travel and
electronics to publishing, and is also gradually staking a claim in a wider
assortment of sectors.

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Here are four recommendations that every Pharma company should follow
for the Asian market as told by Dr Sebastien Boisseau, regional strategic
planning director, Asia Pacific at Ogilvy Health, the agency, delivered to
attendees at the OTC Pharma Asia 2013 Conference:
Tip 1: Decode the decision-making journey of the target audience
Finding the "sweet spot" - or the point of convergence between logical, leftbrain thinking and creative, right-brain thinking - is the key to achieving such
a goal. Besides conducting market research and converting the findings into
insights that can be linked to business objectives, brands should understand
the decision journey of patients, pharmacists and healthcare professionals,
and the motivations behind their every choice, from seeking information to
picking a product and, finally, becoming loyal to a particular brand. It's about
building an effective campaign, making sure whatever we do in terms of
investment would be clearly defined and have clear objectives to change the
perception of your brand.
Tip 2: Appeal to emotions
Emotive ads tend to drive sales more effectively than those focusing on
rational appeals. As expertise about different conditions and brands is often
spread across various corporate functions, marketing teams could also
benefit from crowdsourcing such ideas in-house. By working with all the
different stakeholders in a company, you can identify some nice ideas.
Tip 3: Use the digital space to engage customers
The transformation of information gathering and the emergence of the
engaged patient has demonstrated the increased importance of social media
in the broader healthcare context. For the healthcare industry, it is becoming
increasingly important to be able to react quickly and decisively to events on
social media.
Tip 4: Secure expert recommendations
OTC brands can look at enhancing their credibility by strategically aligning
themselves with experts. One of the ways to build communication is either
to build credibility with doctors about OTC brands, or to use a structure, an
organisation [or] a medical association that can be used to endorse the OTC
brand.
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Chapter 7
Bibliography
Fast moving consumer and OTC products: zoom on marketing
effectiveness
Erk Maassen, Robert Buckeldee and Clmentine Fischer ESOMAR,
Healthcare Conference, Rome, February 2008
Four marketing tips for OTC pharma brands in Asia
Low Lai Chow
Event Reports
OTC Pharma Asia Conference, March 2013
Marketing medicine - A consumer perspective
Julian Rodway
Admap
November 1995
Marketing medicine - The creative challenge
Mike Lees
Admap
November 1995
Marketing medicine - Understanding the supply chain
Justin Kent
Admap
November 1995
Pharma marketing in India: Opportunities, challenges and the
way forward.
Bhangale, Vjay bhangale.vijay@gmail.com
Source: Journal of Medical Marketing. Jun2008, Vol. 8 Issue 3, p205210. 6p. 1 Diagram.

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Pharma Marketing

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MMS 13-15