Consumers Turning to Generics in OTC Medication Market
Globally, the market for over-the-counter (OTC) medications has reached $95 billion. Despite the recession, consumers purchased 4.7% more of these products in 2009 when compared to sales results from 1 year earlier. A Nielsen report indicates much of the growth in demand for OTC products is occurring in BRIC quadrant (Brazil, Russia, India and China) but there are ways for manufacturers to boost sales in the U.S.
Last year, during the recession, almost half of surveyed consumers said they would cut back on their OTC medication use while 1 in 5 was seeking out traditional or homeopathic remedies. This year, only 1/3rd of consumers say the tough economic times are affecting their purchases of OTC medications. Here are the steps consumers are taking when they change their buying behavior:
- Buy small packages: 4%
- Buy more products that help me stay healthy: 5%
- Stop buying OTC remedies: 10%
- Use less than recommended dose: 12%
- Buy cheaper products: 15%
- Use products less frequently: 17%
- Use more natural/traditional remedies: 18%
- Visit doctor instead of buying OTC: 19%
Manufacturers may find one of these statistics particularly troubling. Between 2009 and 2010, the number of consumers planning to purchase less expensive products jumped from 10% to 15%. Firms marketing branded products have seen the trend of consumers purchasing generics and store brands across many CPG categories during the recession.
Nielsen analysts note that “manufacturers need to invest in brand equity to protect sales.” Increased marketing strategies may include trade promotions such as coupons and more targeted advertising.[Source: Buckeldee, Robert. Self Help and the Rise of OTC Medications. Nielsen.com 30 Jul. 2010. Web. 11 Aug. 2010]