Decoding the ‘X’ factor of India’s successful OTC brands

The latest version  of the Indian OTC Brand Case Studies Master Report, covering 18 brands, from frank OTC launches and Rx to OTC promotional switches, tries to answer vital questions dogging the marketer’s mind. Sreedevi Yallamrazu, Senior Strategic Analyst, CubeX, Sorento Healthcare presents some highlights of the report

A lady, sitting next to Raymond Loewy, struck up a conversation.“Why”, she asked “are there two Xs in Exxon?” The famous man, who designed the company’s logo, answered, “Why ask?” “Because”, she said, “I couldn’t help noticing” “Well”, he responded, “that’s the answer”.

Today, brands need to have more than an additional alphabet in their name to get noticed they need to have an ‘X’ factor to sustain the attention of the evolving consumer.

The OTC market is a highly potential segment which can drive the next wave of growth for pharmaceutical companies that traditionally function in the prescription domain. Ranbaxy, Zydus Cadila and Cipla have already proved with successful brands like Revital, Volini, Sugar Free and i-pill (till it was marketed by Cipla). The fact that FMCG companies have coveted this space proves that it is indeed lucrative. The recent OTC brand acquisitions like Seacod further validate this point. Currently, the Indian OTC market is growing at a CAGR of 10 per cent, with an estimated value close to $ 2500 million for 2011.

CubeX, the strategic consulting division of Sorento Healthcare Communications, has decoded the ‘X’ factor of successful OTC brands in its recently launched report ‘Indian OTC Brand Case Studies Master Report Ver. 2.0 — A Biography of India’s Successful OTC Launches and Promotional Switches’. This is a sequel to its Indian OTC Brand Case Studies Master Report Ver. 1.0.

The latest version covers 18 brands (frank OTC launches and Rx to OTC promotional switches) and has been designed to answer vital questions that are dogging the marketer’s mind, like:

How do we switch an existing heritage brand which is losing prescription share but still growing in sales.

Or is it better to understand unmet needs and launch new OTC products!

How do we follow a more calculated OTX strategy where we keep all stakeholders in the system and use retail as a strong channel for consumer acquisition and sale. Do we have to only rely on mass media which is fragmented and also expensive or are there alternative and effective ways to create surround sound for our OTC brand? How have other successful OTC brands made it possible?

The best way to answer most of these questions would be to understand what successful brands have done and are doing in the OTC market.

First, break all the rules
A case in point would be Amway’s Nutrilite—the only supplement to have ingredients that have been grown, harvested and processed on its own 6,400 acres of certified organic farmlands. It has struck the right chord with its “organic” contents in an increasingly inorganic world, making it the world’s largest selling dietary supplement. The brand is now making noise in the market after having successfully tapped the potential of Indian housewives to be apt “brand ambassadors” and not just “IBOs” (Independent Business Owners as they are called in the company’s parlance).

Volini was the first brand among topical analgesics to launch 5 gm trial packs and mass advertise to induce consumer trials. Aggressive sampling initiatives have led to the brand’s impressive growth (CAGR 18 per cent) in the segment, paving the way further up, as per Nicholas Hall DB6 2011. Similarly, Otrivin and D’cold set precedence in the nasal decongestants and cold tablets category respectively with their brand strategies.

The road not taken
Brands like Itchguard, i-pill and Sugar Free have charted their own route for success. Itchguard created a whole new category of anti-itch products by tapping an unmet yet highly relevant need. It connected well with consumers through its clutter-breaking communication. While the launch of i-pill aided emergency contraception, it gave birth to another new category of emergency contraceptive pills. Competition soon followed, with Mankind’s Unwanted-72 emerging as the biggest competitor to i-pill, having crossed the $ 10 million mark in 2010.

Back to the roots
How likely is it for a product from an MNC to contain herbal ingredients, which rarely have clinical studies that validate their efficacy? Not too often. In the OTC domain, companies have realised that it is indeed a worthwhile strategy. The herbal renaming of ingredients helps the brand to pave its way into modern retail stores and local groceries as they do not require a license for sale. Besides, they automatically fall out of the purview of price control. An example would be Khatika Churna–Calcium Sandoz@250 launched by Novartis. Dabur attempted to leverage its leadership in the ayurveda segment and cash upon the growth of the OTC market by launching Dabur Honitus in the cough and cold segment.

Just what the doctor ordered
Brands that have been promotionally switched from doctors to OTC have followed a key strategy of continued doctor support. Benadryl, Revital and Volini are still detailed to doctors. The trust placed by doctors in the brand has been leveraged in consumer communication.  Also, companies have gone further and launched brands specifically for doctors. Otrinoz is the prescription brand in place of Otrivin while Digene Total, a PPI, was launched when Digene went OTC.

I’m alive!
This is what Horlicks and Dabur Chyawanprash seem to be saying, despite being age old brands. These brands have redefined their life cycle strategies to cater to the needs of a large section of consumers, while continuing to address the needs of growing children. The target audience has been gradually expanded over time from gender specific variants like Woman’s Horlicks to low calorie variants like Horlicks Lite to cater to the needs of lifestyle-conscious consumers. Horlicks has also forayed into the food segment with innovative products. Dabur Chyawanprash is not only the largest brand in the vitamins, minerals and supplements but is also the leading OTC brand, having clocked sales close to $ 60 million in 2010.

From fruit fights to market share fighting
Eno has usurped Digene’s numero uno spot in the OTC antacids category, according to Nicholas Hall DB6 2011 by steadily increasing its market share from 12 per cent in 2006 to 18 per cent in 2010. Gelusil, the first prescription antacid to be promoted OTC, held the third spot. 

To create excitement among the consumers about Eno, a campaign titled “Fruit Flavour Fights’ was launched to select ‘viewers’ favorite flavour”. Digene introduced a new variant Digene Fastmelt, an on-the-go powder format of Digene. Pfizer targeted Generation Next specifically with digital campaigns and a new variant Gelusil MPS Xtra Cool. It would be interesting to keep a tab as to how these brands capture the attention of the youth with these innovative formats.

Discover your brand’s ‘X’ factor
It has been proven successfully that product innovations that keep pace with the changing needs and tastes of consumers will create the ‘X’ factor required to sustain the brand in the midst of growing competition. Today’s consumers are teaching marketers a thing or two about marketing through insightful product feedbacks. It has thus becomes imperative for marketers to listen to them, educate them to ensure that the right information reaches them and to make the local chemist a brand custodian to make an OTC brand successful.

(CubeX is the Strategic Consulting and Business Intelligence division of Sorento Healthcare Communications with expertise in the Consumer Healthcare and Wellness domain. CubeX is the network partner for Nicholas Hall & Company in India. To know more about reports from CubeX, write to [email protected].)