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Retail buyers laud impact of switch products.

NEW YORK - Drugs that have been converted from prescription to over-the-counter status had the biggest impact on sales during last year's cough/cold season, says K&B Inc. O-T-C buyer Jude Eserman.

He reports that sales of such products at the 184-unit New Orleans-based drug chain were "good" during the season, which he describes as running from November through May. The performance of the category, as well as such related segments as analgesics, nasal and sinus, were slightly ahead of the previous year's rate.

The season was also a good one at Snyder's Drug Stores, according to cough/cold buyer Roger Musil. The Breathe Right line of nasal strips was among the hot sellers at the Minnetonka, Minn.-headquartered chain's 73 outlets.

Musil notes that because of the large number of cough/cold products available, "some of them basically extensions," many consumers are becoming confused when they shop. Snyder's tries to assist them by merchandising products by vendor, condition or some other recognizable characteristic. The retailer continuously tries to improve signing so that consumers "can make basic sense" out of the different segments of the category.

Much of the cough/cold business, he says, is driven by vendor advertising, "and so we must be there when the manufacturer begins a major product rollout because we know our customers will be looking for such items.

"We also try to put together a very strong promotional program, basically driving volume every single week with our circulars, full-page ads or coupons," Musil continues. Other tools include promotional pricing, strong displays, end-caps, wing units and counter displays in pharmacy departments.

Such planning is critical, especially in the Midwest, "where we expect something of a cough/cold season every single year," he says.

The executive notes that purchasing decisions are based on year-to-year patterns in an effort to "take away the peaks and valleys and look at the cough/cold season from an average standpoint."

The category is reviewed annually; revisions are made whenever needed. Musil notes that there could be serious problems if buying decisions were based on a severe cough/cold season one year or a soft season another.

Promotional buys are probably more of an influence on purchasing than predictions about the severity of a cough/cold season. The focus, Musil says, is to make certain that Snyder's has key items in stock.

One method of making sure that happens is the use of the Tylenol Store from McNeil Consumer Products Co. "The Tylenol Store helps us present basic, strong items in the category, whether they are products targeted to adults or children," explains Musil. "It symptomizes products and conditions, making it much easier for consumers to analyze the situation and make product choices."

Noting the trend toward self-medication, Snyder's utilizes as many brochures and other information as possible from manufacturers that can be useful to its pharmacists. That is particularly true in the case of products being converted from prescription to over-the-counter status.

"We try to roll out switches as quickly as we can, either through normal warehouse delivery or direct-store delivery," Musil says. "The goal is to be the first in the marketplace, and we use counter displays, wings, off-shelf displays and circulars. We even utilize newspaper ads to announce that we have the switch products in our stores."

Other factors affecting the category include private label items (Snyder's has given major emphasis to the facings of such products), herbal remedies and homeopathic medications. Musil says the natural medicine segment could enhance the entire category if that aspect of the business continues to grow.

Like other drug chains that aim to capitalize on their health care image, Snyder's has benefited from flu shot programs that provide immunizations for thousands of customers. Last year's program represented a significant expansion over previous efforts, and Musil anticipates continued success for such initiatives.

K&B also tends to downplay the various and sometimes contradictory predictions of medical experts on pending cough/cold seasons, instead taking "a be-prepared approach," says Eserman.

He notes that Upjohn Co.'s Children's Motrin has been a "hot seller" since its introduction almost a year ago, and that Sandoz Inc.'s Theraflu also continues to be a strong performer. Last year's launch of Theraflu sore throat medication, he adds, solidified the brand's position as a leader in the cough/cold segment. As was the case at Snyder's Breathe Right nasal dilators did well at K&B last year.

With assistance from manufacturers, K&B designs special cough/ cold centers for the majority of its stores. "Some outlets may be sent centers based on the Tylenol, Robitussin [Whitehall-Robins] and NyQuil [Procter & Gamble Co.] brands," Eserman explains.

"Most stores will receive eight brand-specific centers. These units are set up in high-traffic areas and near pharmacies, offering customers a convenient way to shop and giving our stores a ready supply of safety stock."

The brands also enjoy extensive print and television ad support.

Eserman adds that some manufacturers provide pamphlets and brochures with their cough/cold centers, and that K&B's pharmacists "are always available to recommend over-the-counter products and answer questions about drug interactions for customers."

The retailer reviews each cough/ cold item for the previous year's sell-through, and cough/cold centers are then configured to reflect an improved merchandise mix, according to Eserman. "A previous mild cough/cold season will affect the following year's purchasing only if stores have a heavy carryover on certain items," he adds.

Besides brand name products, K&B offers a wide variety of private label items in the cough/cold section of the drug wall. "Additionally, each store is sent two private label cough/ cold and analgesics prepacks to set up on a required private label cough/ cold end unit," says Eserman.

Suppliers have helped the drug chain with product introductions, particularly those involving switches from prescription to over-the-counter status. "Both McNeil [Children's Motrin] and Whitehall-Robins [Children's Advil] have offered services to all of our stores during product launches," says Eserman.

"We have taken advantage of those opportunities and supplemented national advertising with local promotions. All store managers and pharmacy managers are sent a special memo prior to launch detailing item placement on shelf, product use and prescription heritage."

Working with K&B's space management team, Eserman determines the mix and placement of all products. Measurements the retailer uses to evaluate a product include sales, turns, gross product contribution, sales relative to shelf space and gross profit relative to shelf space.

"This category has been oversaturated for some time, and some subcategories are very confusing," Eserman notes. "The consumer is the ultimate judge of what will appear on the shelf next year. Oversaturating almost always results in a category contracting later."
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Title Annotation:prescription drugs converted to over-the-counter status
Publication:Chain Drug Review
Date:Aug 12, 1996
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