- OTC medicines, or self-medication products, not requiring doctor’s prescriptions, constitute an important segment of the household’s medicine storage space. Across the globe, and in India too, there are many companies actively engaged in this exciting and growing segment of the consumer healthcare space – some new and, others, who have been there for a long while now. These “OTC players” have been following varying business models,and have had varying degrees of success on various parameters.
- Based on the business models adopted, we can list some typical types of OTC businesses in the OTC segment of the consumer healthcare space:
- Independent OTC divisions in large pharma companies, focused on reaching out to consumers through the retail pharmacy distribution route. Demand generation is primarily based on traditional and modern marketing inputs, with little or no doctor promotion. The product range is from varying sources i) from internal development, or ii) internal Rx to OTC switches, iii) external sourcing of products for marketing, or iv)direct acquisitions of high potential brand. In India, we have OTC divisions in companies such as Cipla, Sun Pharma, Piramal, Dr Reddy’s Labs, Alkem, Glenmark and so on.
- FMCG companies, with a range of OTC products, distributed extensively among chemists, non-chemists, and modern trade outlets. Demand generation is through high investment in marketing inputs across traditional and modern communication channels. Well know companies are Procter & Gamble, Johnson & Johnson, Dabur, Emami , and others.
- A host of smaller businesses in FMCG, in pharma, in areas of alternate medicines such as Ayurveda), who predominantly market their products tailor-made to cater to regional needs
- Some large companies with specialized OTC products, not only using mass media channels for demand generation, but also with selective dependence on HCP endorsement. Distribution coverage is through chemists as well as at high quality non-chemist outlets and modern trade (Glaxo Consumer Healthcare, Novartis, Abbott Nutrition)
- From among those who chose to be in the OTC segment, some are notably successful, while many have fared far below expectations. This mixed outcome scenario is due to varying levels of focus and performance on key factors for success in consumer healthcare business. They can broadly be classified as follows:
- Choice of and range of products in the OTC basket being marketed
- The pricing adopted
- Demand generation Process and Resources
- Logistics & Trade channel partner decisions
- Effective Internal resources of sales personnel and sales systems
- Overall financial resources consistently drawn upon by an enlightened management with long term vision of business
Subsequent write-ups will focus on sharing insights on each of the above and other aspects that would enable a consumer healthcare products business to succeed.