Thursday, December 20, 2007

OTC Market in India: Marketing the FMCG Way

Over-the-counter (OTC) drugs are medicines that may be sold without a prescription, in contrast to prescription drugs. These items can be found on the shelves of grocery/ cosmetic stores and bought like any other packaged product in some countries or in others may be bought "over the counter" from the pharmacy, while prescription drugs are sold at a pharmacy counter.

In 2005 the Indian OTC segment was Rs 4500 crore it could be considered as Rest 17000 crores if cosmeceuticals & neutraceuticals are also included. The CAGR for Indian OTC markets is currently hovering between 12 and 15% and this is much faster than OTC market growth of most development countries.The OTC Market in India in 2007 will be around Rs. 6000 & 20000 crores. As per Euro RSCG India,OTC market is hovering around Rs. 2800 crores.
The global OTC market is projected to be USD 75 billion with a cumulative annual growth rate (CAGR) of 4.5%, which will make it 82 B$ in 2007.

There are different categories under OTC, out of which here is a list of categories which have spent maximum in brand building through on TV are as follows:

1. Rubs/ Balm - Moov, Iodex, Himani Fast Relief, Emami Mentho Plus, Amrujanjan Joint Ache Cream
2. Analgesic/ Cold Tablet - Dcold, Stopache, Crocin, Disprin
3. Digestives - Eno, Hajmola, Pudin Hara, Dabur Hingoli
4. Medicated Skin Treatment - Itch Guard, Krack, Ringguard, Clearasil
5. Cough Lozenges - Strepsils, Halls
6. Vitamin/ Tonic/ Heath Suppliments - Horlicks, Complan, Boost, Chawanprash - Dabur, Sona Chandi, Himalaya, Calcium Sandoz, Jeevanprash
7. Antiseptic Cream/ Liquids - Borosoft, Boroplus, Dettol

'Cipla I-Pill' a new brand was the most advertised brand on TV during January-September 2007.

12 per cent growth was observed in the advertising volumes of OTC (Over the Counter) sector on TV during January - September 2007 over January-September
2006 (AdEx - division of TAM Media Research). 'Rubs/Balms' had the largest share of overall OTC advertising pie.

Challenges for OTC Market & Inhibitions for branding

1. There is no clear definition of what constitutes an OTC pharma product. The healthcare segment in India has to mature enough for OTC expansion. The Drugs Technical Advisory Board has resisted approval of shift of molecules from prescription to OTC. So, that is the real challenge, not that OTC companies have not invested enough in brand building
2. There are a number of drugs such as Ranitidine (a digestive drug) which are sold in supermarkets in the West under various brand names. But the regulatory authority in India allows Ranitidine to be sold only through the prescription route
3. As per the regulations, one cannot sample OTC products directly to consumers. It has to be at the pharma shop level
4. The Indians always prefer home remedies to a prescription drug - Dadi Maa Recipes
5. Huge expense a brand may incur to advertise. The brands' turnovers are not large; many brands wonder whether spending 5-6 per cent of their turnover would give them enough returns
6. Invest in branding also has a fear of getting alienated by the community of doctors. Most brands consider the prescription route to be much safer
7. Consistent brand bulding is required over a period of time - Brands such as Coldarin have collapsed due to lack of consistency not only in spends but also positioning
The challenge for the pharma industry is to reach the fragmented target population of end-users while maintaining their traditional relationship with doctors.

Some players are already investing money in brand building. Benadryl, for instance, has spent Rs 7.5 crore on a brand turnover of Rs 35 crore, while Glycodin has spent Rs 4.5 crore on a brand turnover of Rs 18 crore.

Let me also enumerate some unconventional ways of marketing by OTC companies:

1. In-film & Event branding: Boots Piramal Healthcare started an initiative in Salaam Namaste where actress Preity Zinta attributes her clear voice to Strepsils. Second, for the Strepsils-Sa Re Ga Ma tie-up to release 12 music albums (twin CD packs) comprising retro originals. The Sa Re Ga Ma tie-up is a unique brand exercise to leverage the brand's identity of a clear voice by associating it with public figures such as Asha Bhosle and Kishore Kumar
2. Says Adarsh Somani, Director of Kopran which launched the Smyle Sore Throat Reliever in 2003, "The Reliever was not well received initially due to its gargle-and-gulp process. It took us some time to establish this product. We invested a lot in advertising and in building up the concept." A trend-setter in its ads constructed around Kaun Banega Crorepati, the Smyle campaign became the talk of ad circles. The advertisement presented a child actor answering a
question, "Which is the best cough syrup?" The question was asked by a voice resembling that of Amitabh Bachchan on KBC. The child's answer, "Smyle Sore Throat Reliever," wins him a crore of rupees. The ad helped make the product a national brand
3. FMCG major Procter and Gamble (P&G) India has emerged as a winner in the OTC category by implementing various promotion programmes for Vicks (Vaporub, cough drops and Vicks Action 500). Their Mass Consumer Contact programme was a first-of-its-kind initiative that not only displayed the product but also allowed consumers to experience its effect first hand at small towns and villages, stores and cinema halls. Recalls Rahul Malhotra, the company's Head of
Marketing, "Regulations do not permit marketers to sample allopathic drugs outside a drug store. In the early eighties our company hit upon a unique mass sampling idea. We released an ad in leading dailies which had a tear-off coupon at the bottom. Readers could exchange the coupon for two free Vicks Action 500 (VA500) caplets from the chemist store. This single initiative helped VA500 generate mass trials overnight."
4. P&G also conceptualised the House of Vicks, a counter display for chemists to store Vicks products so as to increase product visibility. Converting Vicks Inhalers into trinket key-chains proved a good campaign for the brand too
5. In 1999, Kopran had put up a 2 km-long banner starting from Nariman Point up to the Marine Drive Flyover in Mumbai. The publicity event, which was timed to coincide with the one-day cricket match nearby, gave the company an additional audience of 6,000 people. The event also received appropriate coverage in a few newspapers as Kopran had also provided TV screens on the pavement for cricket-lovers who could not get tickets into the stadium.
6. Then in 2003 Strepsils launched a Clear Speak column on the front page of The Indian Express. This 10 column centimetre (cc) fully-coloured column consisted of 5cc of Strepsils branding and another 5cc of an interesting comment from a commentator, cricketer or coach

This clearly shows that lot of branding efforts have been put in past despite lot of challenges in this category. Also with the fast moving life, people are shifting from Doctor prescription to OTC products (driven by marketing efforts); definately makes OTC a big segment in future.

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Blogger Rashmi said...

This blog is very informative. The data provided is very helpful for OTC pharma brand manager.Thankx Nitin

April 13, 2009 12:41 PM  
Blogger Suhas Wadwalkar said...

Quite informative and analytical too. Good job.
Suhas Wadwalkar

July 28, 2009 5:43 PM  
Blogger vin said...

Gr8 info Nitin...Thanks for sharing..keep on doing this good work

August 05, 2009 3:48 PM  
Blogger Himanshu said...

You mention P&G as one of the leading companies in OTC. But in your brand examples of OTC products by categories - I do not see any P&G brands? Any particular reason for the omission?

October 06, 2009 1:31 PM  
Blogger priya said...

very good information...

January 19, 2010 5:03 PM  
Blogger priya said...

very good information...

January 19, 2010 5:03 PM  
Blogger Tushar said...

OTC products sales developement is all about developing awareness & interest in consumer mind. Article by Mr. Nitin is quite informative about creativities & innovations of brand managers.


February 25, 2010 6:21 PM  
Blogger kanesh_4u said...

Very Good Information ,....
Thanks For Sharing

April 27, 2011 12:08 AM  
Blogger Sanjeev Chawla said...

nice and informative comment. Can anybody guide me how to proceed and which channel to adopt to make the new dietry suppliment an OTC/FMCG

November 25, 2011 10:44 AM  
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