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A look at the competitive picture.

At approximately $1.4 billion in annual retail sales, the cold/ allergy/sinus tablets/packets category is almost four times the size of the cold/allergy/sinus liquid/powder cateogry, according to data from TRI. But the leading national brand and store brand liquid products have had significant unit sales gains over the past 52-week period, while tablet unit sales have decreased. The top 10 liquid brands combined to enjoy a 13.2% increase in unit sales, while nine of the top 10 tablet brands had decreases resulting in a 6.57% decline in unit sales during the same period.

The average retail price increase for liquids is also outpacing that of tablets. The average retail price increase for liquids was $1.03 per unit, compared with an increase of $0.83 for tablets.

Discounts and promotions play an important role in this category. Off-invoice allowances tend to be seasonal for all cold/allergy/ sinus products. However, liquids tend to have a slightly higher off-invoice allowance as a percent of list price. Over the past 20 months, the highest off-invoice percent was offered in April 2013. Our analysis also showed that the average off-invoice allowance for liquids was 8.48%; for tablets it was 7.32%.

Retailer margin is another key metric used to evaluate the two categories. Competitive Promotion Report LLC (CPR) obtained list price by SKU from its database for each of the leading brands in both categories and compared this to the average retail price by SKU in the drug channel to calculate retailer margin. In the liquids category, retailer margins for the leading national brands hovered around 31% to 34% with the exceptions of Tylenol Cold (40.2%) and Mucinex (41.4%). There was a wider gap among the leading national brands in the tablets category with Claritin at 22.4%, Alka Seltzer at 41.2% and Mucinex once again the leader at 41.4% average retailer margin.

The aggressive introduction of store brands has had a significant impact, especially in cold/allergy/sinus categories. Competitive retailer margin percent and retailer margin dollars generated are extremely important metrics as more and more manufacturers and retailers utilize the National Brands and Store Brand Optimization advanced analytics tool from CPR to determine the optimal mix of national brands and store brand to drive overall business performance for the category.

Finally, a significant factor in your ability to grow and remain competitive will be your ability to successfully develop and introduce new products on a timely basis. New product development often requires long-term forecasting of market trends, development and implementation of new designs and processes, and substantial capital commitment. According to data obtained from the CPR New Product Flash database, 100 new products were introduced in the Cough Cold Internal category during the 12-month period included in this analysis, down from 166 in the previous 12-month period.

Understanding the competitive environment for these categories may be intimidating, but by obtaining and mining the right competitive intelligence, you can gain valuable competitive insights that will give your brands a competitive advantage.

Glenwood Davis is president and chief executive officer of Competitive Promotion Report LW (CPR), a leading provider of competitive intelligence, insights and analysis in the health, beauty and wellness sector of the consumer packaged goods industry.
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Author:Davis, Glenwood
Geographic Code:1USA
Date:Feb 10, 2014
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