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OTC BRAND ADVERTISING INVESTMENT TO COUNTER PRIVATE LABELS

This article was originally published in The Tan Sheet

Executive Summary

OTC BRAND ADVERTISING INVESTMENT TO COUNTER PRIVATE LABELS in lieu of trade spending was suggested by SmithKline Beecham Consumer Brands Marketing Director Lisa Mason at an Oct. 18-19 Institute for International Research seminar in New York City. Mason, who directs marketing for SmithKIine's newly created Three Rivers Group, advised that advertising that consistently "strengthens brand image [and] leverages unique claims" is one way of holding off private labels. Mason cited brand advertisements for Whitehall's Advil, P&G's NyQuil and McNeil's Tylenol that are aimed at private label competitors. While the ads for Advil and NyQuil both explicitly go after private label competition, Mason favored the less direct approach of the Tylenol ad, which implies superiority through its claim that "the ingredients that go into our medicine meet Tylenol's stringent demands for purity, quality and consistency." J&J's approach to advertising is preferable, Mason suggested, because it reinforces Tylenol's brand "imagery" by "putting [the product] on a pedestal beyond reproach." Based on SmithKIine's experience in the U.K. with defensive advertising that explicitly goes after private label competition, Mason warned that "commercials that specify private label products tend to draw more attention to the private label . . . than not." For companies that have cut ad spending on brands, Mason suggested, "you may want to start trying to divert some of your monies from the trade spend back into advertising support." She also recommended reducing deep cut promotions and couponing while enhancing loyalty programs. Mason also stressed the importance of differentiating a brand vis a vis private label competitors and other brands. Noting that patent protection and exclusivity is the "best position to be in," Mason also pointed to product improvements, new packaging and trade dress, and patentable containers that are not easy to duplicate. Several other speakers stressed a return to traditional advertising strategies from the current trend of pricing promotions. Bruce Meyers, executive VP and director of strategy and new business development for BBDO New York, maintained that "this terrible promotion game . . . doesn't pay off economically." Pricing promotions, he continued, encourage the consumer to look for the deal, which lessons brand loyalty. Oppenheimer analyst Gabe Lowy suggested that a company will "undermine the value of their brand equity" by conditioning "the consumer to buy it at a discount. . . . The price that you put on the [product] is an artificial meaningless price as far as consumers are concerned and one which they will not pay because [the company has] now trained them to buy on deal." Susan Lavine Coleman, managing director for NCI Consulting, recommended "harnessing the power of 'professionals'" to get both active and passive product recommendations. To capture direct doctor-patient recommendations, Coleman maintained, a product must have "top of mind awareness and consistent marketing support." Detailing doctors about products "to break through the [product] clutter," she noted, encourages direct doctor recommendations. To gain passive recommendations, Coleman suggested direct mailings to physicians" offices four-to-five times a year with advertising, product samples and patient education materials. These materials, Coleman asserted, remind doctors of the product and imply doctor and staff endorsement when displayed around the office. American Lung Association Corporate and Foundation Relations Director Jill Pierce, PhD, suggested that endorsements from public health associations can also prove very effective in positioning a product on the market and creating brand equity. Public health associations can "speak with medical authority" and provide the public with reliable, accurate and up-to-date information, Pierce maintained. And, she continued, "people trust the leading nonprofit healthcare associations."
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