Consumer Healthcare Goods span across the wide spectrum of life-style inhibiting “Illness” to life-style enhancing “Wellness” continuum. There are a number of Over The Counter (OTC) Medicines for episodic minor ailments. Then, there are prophylactic medicines, and other Health / Dietary supplements for a healthy-wellbeing. And, there are other specific health-benefit or life-style enhancing health products.
Among the key factors for ensuring success of a consumer healthcare products business, is the Product decision. Which product to include requires decision making on many aspects. But before one even gets into the marketing and commercial aspects of each product idea, it is imperative to consider the regulatory aspects related to that product. For instance, will a product you are considering be classified as “Food”, or as a “Medicine” or as a “Medical device”, or anything else? Regulatory aspects vary for each, so it is best if this is confirmed at the outset itself.
Though the compilation of product ideas, product idea screening and selection of products is a detailed process, we strongly recommend that there be no-short-cuts, and the required consumer research, product tests and a thorough market study be conducted. This is applicable to all sub-segments mentioned above. In fact, if it is an OTC medicine, the issues are even more complex.
The term OTC medicine is not a commonly used term in layman lingo. Even as per current Indian laws, there is no definition of OTC medicines. Only recently, a government sub-committee in the Central Drugs Standard Control Organization (CDSCO) has been mandated to come up with a separate OTC policy, classifying and clearly outlining the provisions of “non-prescription” products in the country…. The government’s OTC policy is in the process of being shaped, with inputs from all stake-holders.
So, until now, the definition of OTC is actually based on “the principle of exclusion”. If it is not listed in the regulatory authorities’ schedule of drugs, then it could be marketed as an OTC product. In India, the manufacture, distribution and sale of drugs is regulated by the Drugs and Cosmetics Act, read in conjunction with the Drugs and Cosmetics Rules. The regulations related to various drugs are based on their mention in specific schedules appended to the Drugs and Cosmetics Rules:
- Schedule H: list of more than 500 drugs sold by prescription only. The chemist can only dispense with a valid doctor prescription only.
- Schedule G: list of drugs which are required to be taken under medical supervision.
- Schedule X: list of drugs which are sedatives or central nervous system stimulants and which are likely to be misused.
- Schedule HX: list of antibiotics drugs
- In addition to the above, all biological products and Injectable formulations
Any drug not mentioned in the above schedules, can be marketed as an OTC medicine, without prescription of a doctor.
Further, there are rules related to which medicines require a drug licence for stocking and sales in the retail and wholesale trade. (As a facility for remote villages, Schedule K also indicates that non-drug-licensed stores (e.g. non-pharmacists) can sell a few medicines classified as household remedies, in villages with population less than 1000, subject to certain conditions)
Whether for OTC medicines or for other wellness products, of prime importance is finalizing the range of products in the company’s Consumer Healthcare Goods basket. This involves a deeper study of the market segment that a product belongs to. Surely, a lot of effort goes into studying the market, about the market segments with potential, about epidemiological data, about competing brands, and so on.
The above market analysis, that all organized manufacturers and marketers generally do, would definitely help identify products with potential, to include in the consumer healthcare goods basket. But, for a greater chance of success, it is necessary to screen the identified products further, using the following necessary, but not sufficient, criteria for each product’s inclusion
- It must cater to a real need gap in the market, with a strong value proposition
- It must have a distinctive edge over competitive offerings.
- It must have a reasonable long, obsolescence-free life to justify the investment likely to be made
One could ruthlessly eliminate any product not meeting all the three criteria above
While discussing the product range, certain other decisions also need to be considered such as:
- Is the DNA of the OTC player suited for launching a mass consumed product, or a niche product?
- Is the company keen on innovations, or will it be comfortable to follow the path treaded upon by others, with widely accepted product categories
- Through relevant market research, have any customer insights been gained about attitudes and usage parameters related to current or past users of the product
For crucial decisions related to the Product Strategy, conducting a study among the target group is a good way to generate insights and take rational product strategy related decisions. However, some companies are wary of spending money on primary market research. Either discomfort with the methodology of consumer research, or unwillingness to bear the cost of doing it, leads to some companies skipping the method of gaining consumer insights, and taking slef-based or inner-circle-based decisions.
Market Research might give a clear go ahead or it might indicate some likely pitfalls. If a properly conducted market research indicates limited potential for the consumer healthcare product, or limited acceptance among relevant target groups, it will make better sense to dump the plan, and go back to the drawing board. Of course, some companies do not heed uncomfortable feedback or indicators. They just say “Let us launch it anyway, and see how the market responds.” That is, obviously, a costlier way of learning.
To reduce the risk of wrong inclusion of products in the consumer healthcare product portfolio, we use, what we call, an Opportunity Priority Matrix, With this analysis, we decide regarding inclusion or exclusion of a product in the basket. This analysis involves a combination of factual and judgemental inputs, and helps inclusion of products, with a greater likelihood of success and, thus lesser risk for the business.