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Dimetapp

Dimetapp® is a combination preparation marketed for the common cold. It contains brompheniramine (an antihistamine), dextromethorphan (an antitussive or cough suppressant), phenylephrine and phenylpropanolamine (decongestants).

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Maturing children's OTC market may merit its own space in drug
From Drug Store News, 12/15/03 by Michael Johnsen

With the proliferation of over-the-counter products marketed directly toward children, re, tailers have to wonder if it's time to let kids OTCs stand on their own.

A children's remedy destination center strategically placed in-line certainly would drive home the message of a drug store's convenience to the harried mom with a sick child on her hip. And perhaps while she is there to grab that cough syrup or children's aspirin, she just might pick up a SpongeBob SquarePants thermometer or Scooby Doo multivitamins.

"If a mom has a sick kid, she's going to seek out the kids' analgesics or kids' cough-cold products" no matter where that product is located, on Bacon, supervisor of analytical services for Gladson International, a merchandising consulting company, told Drug Store News. The benefit, would be a complementary impulse purchase. "If you put all the kids' stuff together, impulse [purchases] will increase," Bacon said.

The fear, however, is that mom may never find that kids' OTC destination center, given the muscle memory that drives shoppers to look for nasal decongestants, for instance, among all the other cough-cold remedies. And a frustrated customer quickly can become the competition's customer in today's retail climate.

"People are programmed," said Bob Doyle, executive vice president for Information Resources Healthcare Solutions Group. "If they're a frequent shopper they know exactly where to go for things in the store. Move things around, and you confuse them--and you can lose a sale."

Another danger would be the loss of existing adjacencies created by brand blocking, Doyle noted. Customers are still brand loyal, he explained, and want to pick up their Tylenol cough-cold product right next to their Children's Tylenol cough-cold product.

There could be some initial loss in traffic resulting from moved product, Bacon agreed. But long term, "I would think you could dramatically increase sales of all the children's [OTC] products" by creating a one-stop destination for kids' OTC products, he said.

"The other thing it does is it gives the stores another private label opportunity," remarked J.P. Borneman, resident of Hyland's. "If they put four or five [comparable] brands together and then they merchandise private label next to it, that could be an opportunity."

First and foremost, moms want simplicity, suggested Janet Chan, editorial director of Time Inc.'s Parenting Group. So anything that makes shopping for children's remedies easier would be appreciated, she said.

But would a new kids destination center in drug stores increase kids' OTC turns or contribute to lost sales?

It might be a moot point, Doyle cautioned, because mothers with young children are more likely to purchase their kids' OTC products in food, mass or club stores--not in the drug channel. "She's shopping for price," Doyle explained. "Older folks are going to chain drug stores because of prescription needs. And those older folks aren't buying kids' OTCs unless their grandchildren happen to be in town--and they just happen to be sick, too.

But if drug stores could capture the business of those younger mothers, the potential kid's market is substantial. As of the last census count, there were some 58.4 million Americans who were less than 14 years old and 18.9 million more who had yet to reach their sixth birthday. The U.S. Census Bureau has projected that those population figures will grow 14.7 percent and 19.6 percent, respectively, by 2025.

Clearly some drug chains have been courting this business actively for a while--even if mom tends to buy formula and diapers somewhere else. For some time now, drug chains, such as Walgreens and CVS, have been marketing actively their 24-hour pharmacies as places moms can go in the middle of the night for relief for a sick kid--a more attractive option than talking to the pediatrician's overnight answering service. In fact, both chains have made growing their number of 24-hour stores a priority.

And certainly kids' OTCs is a space that has not been lacking successful new product introductions. McNeil's Simply Stuffy and Simply Cough, both introduced last year, together have gamered $3.7 million in drug store sales for the 52 weeks ended Oct. 5, according to IRI. Likewise, Wyeth Consumer Healthcare's Children's Advil Cold, a grape-flavored oral suspension that also was introduced last year, generated $2.5 million in that period.

Accordingly, the two new Tylenol kids' entries generated $8 million in sales over that period in food, drug and mass (minus Wal-Mart), and Children's Advil Cold pulled in $5 million. Factor in the missing Wal-Mart sales and club sales, to Doyle's point, and drug stores have quite the channel-shifting opportunity.

So far this year, Wyeth has extended its Children's Advil brand, and McNeil likewise has extended its Children's Tylenol analgesic suspensions with a pair of new flavor offerings: blue raspberry and strawberry.

Along the same lines, Novartis recently introduced grape-flavored Triaminic Sore Throat spray, and Wyeth launched Children's Dimetapp ND syrup, a fruit punch-flavored kids' loratadine product.

Creating an all-inclusive children's OTC destination center also might breathe new life into some kids SKUs that tend to get lost in the planogram shuffle. Take children's ear care, for instance. Typically, ear-care products are spliced into the eye care planogram, an area that traditionally sees less foot traffic than cough-cold or analgesics, given the total size (in dollars) of the category. It might help retailers with smaller but nonetheless important niche products, Borneman said. For instance, Hyland's Bumps 'n Bruises tablets might do well in a kids-only OTC set.

"Our merchandising strategy isn't to flood the market with 30-second television commercials. Our merchandising strategy is to capture the consumer, when they're walking into the store," he said. With a one-stop shop for kids' OTC products, drug stores are likely to capture a lot more purchases at the point of sale.

COPYRIGHT 2003 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2004 Gale Group

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