NEW YORK--(BUSINESS WIRE)--What marketing tactics help products achieve continued growth in their second year post-launch? A new Knowledge Networks analysis found that OTC (over-the-counter) products that received more in-store merchandising support were more likely to succeed in Year 2.
OTC Perspectives magazine has just published an article about the study;
you can quickly download a reprint by clicking here. Advertising Age also covered these results in a column by Tom Hespos; click here to read the story.
The study compared more than 80 OTC product launches for their use of four essential marketing efforts – media spend, coupon circulation, ACV distribution, and in-store merchandising.
About half (53 percent) of the products achieved increased sales in Year 2, with the average successful product growing dollar sales by 36 percent. The analysis – based on data from the New Product Profiler™ database — also showed that:
- OTC products whose sales declined in Year 2 had cut in-store merchandising on average by 26%, while those that grew had increased “merch” on average by 20% – the biggest disparity in the comparison
- OTC products whose sales increased in Year 2 increased their coupon circulation in Year 2 – by 9% on average, versus 2% for those that did not grow
- There was a much sharper decline in media spend among products that did not succeed in Year 2 (average decline: 34%) versus those that did (average decline: 16%)
The analysis also looked at non-food CPG products, and found both similarities and differences when comparing their Year 2 marketing strategies.
“With any consumer product, the potential for swings in Year 2 sales is significant,” observed Neal Heffernan, Senior Vice President and General Manager at Knowledge Networks and a co-author of the study. “This makes it critical to understand which marketing levers are most influential in driving sustained growth, to create a continued story of success. Although most of the tactics we studied seemed to play a part in that success for OTC product launches, merchandising stood out as the biggest differentiator between those that grew in Year 2 and those that came up short.”
Heffernan co-authored the OTC Perspectives article with Erica DesRoches, Vice President at Knowledge Networks; together, they presented results from the analysis yesterday at the OTC National conference in Atlantic City, NJ.
Building upon its partnership with the SymphonyIRI Group, Knowledge Networks can leverage the New Product Profiler™ (NPP) database to help brand managers set realistic volume goals – and determine the level of marketing support needed to deliver on them.
Knowledge Networks is passionate about research in packaged goods, retail, media, health and social policy – collaborating closely with client teams throughout the research process, while applying rigor in everything we do. We specialize in innovative online research that consistently gives leaders in business, government, and academia the confidence to make important decisions.
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