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Private label is on the attack as never
before this recession, particularly in over-the-counter drugs, so why is Procter
& Gamble Co.'s Pepto-Bismol gaining share?
Procter & Gamble Co.'s 108-year-old standby has added 0.7 share points in its
original stomach remedy liquid and 2.5 share points in stomach remedy tablets in
the 52 weeks ended Sept. 6.
That's despite the fact that the products are priced roughly 60% more than
private label in an over-the-counter drug business that's been hardest hit in
all of package goods by those lower-priced rivals. An IRI report earlier
this month found private-label shares in healthcare products overall are up 1.5
points across all channels in the past year.
What's behind that success seems to mystify even Pepto Brand Manager Nathan Fox
somewhat, but he largely credits an ad campaign from Publicis Worldwide, New
York, that took flight into the worst headwinds of the recession last fall.
The recession itself may have helped, too, he said, as consumers turned to a
relatively cost-effective multipurpose product at a time when a plummeting
economy was literally making some of them sick.
Mr. Fox believes the "Coverage" TV campaign that launched last fall has made a
difference. One reason to believe: It's the best-scoring Pepto campaign on
copy tests since P&G acquired the brand 28 years ago.
The brand spent $24 million in measured media in 2008, according to TNS Media
Intelligence, down 18% from 2007.
Lest anyone conclude the high-scoring campaign must be formulaic, "Coverage"
actually breaks with an OTC business that often produces cookie-cutter ads.
It features a headset-wearing, pink-vested "Pepto Guy" fielding calls and
offering humorous advice to gastrointestinally-challenged callers, including
most recently a driver stuck in a car with a flatulent passenger in a donkey
suit.
"Coverage" replaced the 5-year-old "Singing the Praises" campaign from Publicis,
which was successful in its own right. The commercials, featuring singers
highlighting the five symptoms Pepto treats, took hold in pop culture, spawning
copycats everywhere from schoolyards to YouTube.
But it was getting old. Mr. Fox said copy-test scores on ads were declining, a
sign the campaign itself was wearing out.
"We wanted a more emotional approach," Mr. Fox said, "something that said using
Pepto is almost like a good insurance policy."
The campaign also makes it easier to cover the full Pepto product lineup beyond
the liquid in the bottle, including the launch last year of cherry-flavor Pepto
Max and the rest of the cherry-flavor lineup, which has fueled much of the
brand's growth, he said.
And Mr. Fox said he suspects the economy too has helped the brand. The
most recent "Donkey" ad hits hard on a value message, using one product to treat
multiple problems. "We believed we had the momentum and tried to build on
that," he said.
Pepto didn't hike its media spending, mostly TV, but didn't cut significantly,
either, Mr. Fox said. "Having an older brand, we've got a lot of
experience on what levels of media work well for us," he said, adding that Pepto
is still "learning its way into digital," including some search ads. WPP's
Bridge Worldwide, Cincinnati, handles digital for the brand.
He also believes Pepto's advanced age may have helped rather than hurt against
private label. "That equity has really benefited us quite a bit," he said,
"particularly as people hearken back to solutions that are tried, true and
trusted."
But the brand is looking to contemporize that image with a recently shipped
product, Insta-Cool chewable tablets, which produce a cool sensation in the
mouth, backed by a marketing plan that includes a tie-in with P&G's sponsorship
of the U.S. Olympic Committee for the 2010 Winter Games.
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