Marketing Campaign Case Studies

Saturday, March 28, 2009


NicoDerm CQ, a sticky patch that adhered to the skin and delivered a steady flow of nicotine to help ease the physical withdrawal symptoms associated with quitting smoking, was introduced by its manufacturer, the pharmaceutical company SmithKline Beecham, as a prescription drug in 1991. The product was a success, climbing to the top of the prescription smoking-cessation market and winning a prestigious R&D 100 Award for 1992. By the mid-1990s, however, NicoDerm’s sales had flattened, and SmithKline decided that the product’s future lay in the over-the-counter drug market. The company received approval from the Food and Drug Administration (FDA) in mid-1996 to sell NicoDerm as an over-the-counter medication rather than by prescription only. Hoping to attract the broad base of American smokers who had either been unsuccessful in prior attempts to quit smoking or who were contemplating quitting for the first time, SmithKline hired the advertising agency Jordan, McGrath, Case, Taylor, New York to design its initial advertising blitz. The pharmaceutical company dedicated $35 million to advertise NicoDerm and in August 1996 launched a multimedia campaign featuring a barrage of print, radio, and television spots.
The campaign pitted NicoDerm most directly against its main competitor—Johnson & Johnson subsidiary McNeil Consumer Products Company’s Nicotrol, another transdermal nicotine replacement product. Both products vied for the vast market of smokers of either gender between the ages of 25 and 64. The two companies vigorously sought to win over consumers. SmithKline’s NicoDerm campaign consisted of two kinds of advertisements, one that focused on NicoDerm’s effectiveness and the other that favorably compared its product to Nicotrol. For example, the commercial ‘‘Morning Break’’ relates the fate of two office workers who both recently quit smoking. One used NicoDerm while the other tried to give up the habit ‘‘cold turkey.’’ The man who used the patch remains calm and collected, but his co-worker suffers from constant cravings, nervousness, and an inability to concentrate. Another spot, ‘‘Pharmacy,’’ shows NicoDerm spokesperson, Carolyn McCormick, explaining the differences between NicoDerm and Nicotrol. Because NicoDerm supplied three different dosages of nicotine patches and Nicotrol only one, she emphasizes that NicoDerm is the better product because it allows smokers to taper. Testimonial ads—which featured personal accounts of how NicoDerm had eased the difficulties in quitting smoking—were often used as well. All of the ads bore the same tag line, ‘‘The power to quit, the power to comfort, the power to quit successfully,’’ and were careful not to understate the difficulty of quitting. Instead, they emphasized that with NicoDerm it was possible to do so. The campaign was a resounding success. Marketing surveys discovered that consumers considered the ads highly effective. Backed by its ubiquitous commercials, NicoDerm quickly assumed a dominant position in the over-the-counter smoking-cessation aid market. By 1998 the product’s power had nearly forced Nicotrol to abandon the field. McNeil severely curtailed Nicotrol’s advertising budget and chose to refocus its promotional efforts on a new antismoking nasal spray available only with a prescription. SmithKline, on the other hand, intended to continue its broad-based advertising campaign in order to protect NicoDerm’s position in the field against encroachment by other antismoking products.

In 1991 SmithKline Beecham released its prescriptiononly nicotine patch, which was designed to be attached—rather like an adhesive bandage—to the skin of a person attempting to quit smoking. NicoDerm delivered a steady flow of nicotine, the highly addictive substance in tobacco, transdermally so that the ex-smoker did not experience the uncomfortable symptoms of nicotine withdrawal. The product came in three dosages: 21, 14, and 7 milligram patches. Heavy smokers began using the 21 milligram patch and, through the full ten weeks of the ‘‘three step’’ NicoDerm program, progressively decreased their dosage of nicotine until they were not only smokefree but also patch-free. Those who smoked less could begin the regime with the 14 milligram or 7 milligram patch. Although early sales for this prescription program were strong, demand for the patch tapered off by the mid-1990s, and its revenues plateaued. NicoDerm was, however, the clear leader in this sector of the prescription drug market.
In a major policy shift the FDA decided to approve nicotine replacement products for over-the-counter use in 1996. NicoDerm was the second patch to become available after this development, following McNeil Consumer Products’ Nicotrol. SmithKline’s own Nicorette, a nicotine-laced chewing gum that served the same end as the transdermal patches, also hit the over-the-counter market before NicoDerm. Although its chief competitor, Nicotrol, became available to consumers first, NicoDerm had the advantage of having controlled nearly 40 percent of the prescription market.
Analysts expected nicotine replacement therapies to sell well over the counter. ‘‘Once you eliminate the need to visit a doctor, sales will increase dramatically,’’ George Quesnelle, a SmithKline Beecham marketing executive, told the September 13, 1996, edition of USA Today. ‘‘The ability to walk into the local pharmacy and buy these products will make a world of difference.’’ Still, experts concurred that advertising would play a substantial role in determining which of the nicotine patch brands would win over smokers.

NicoDerm’s big-budget campaign had a wide audience to reach. Of the 48 million American smokers, nearly 16 million tried to give up smoking each year. According to Brandweek, NicoDerm’s ads especially targeted those smokers aged 25 to 64. Not all who tried NicoDerm were first-time quitters. The Centers for Disease Control declared that only 2 million of the 16 million people who attempted to kick the habit each year actually succeeded. Moreover, nearly a quarter of those who did had made up to five attempts at quitting. ‘‘The consumer has to have made a very important decision about his own health and welfare before he ever considers this kind of product,’’ a marketing analyst told USA Today.
Appealing to this target market could be a delicate task at times. Instead of creating slick ads that downplayed the enormity of the challenge facing the soon to be ex-smoker, Jordan, McGrath focused on relating to the concerns of its desired audience. Joe Martin, a senior brand equity manager for NicoDerm CQ, told the March 31, 1997, edition of USA Today that the ads wanted to reassure consumers that ‘‘it is difficult to quit smoking.’’ The commercials and print ads never trivialized the symptoms such as anxiety, restlessness, and withdrawal that might have been experienced by NicoDerm’s potential users during past attempts at quitting smoking. The campaign also strove to appeal to its target market by not being pejorative. Smokers had come to inhabit a world that increasingly condemned their habit. Not only were most smokers fully aware of the negative health risks associated with the vice, they were also constantly reminded of these by their doctors, spouses, co-workers, newspaper articles, and the antismoking commercials funded by some states. Jordan, McGrath realized that harping on this theme would not boost NicoDerm’s sales. ‘‘We aren’t here to preach the horrors of smoking; we’re here to advertise a product that is available to smokers once they’ve convinced themselves it’s time to quit,’’ Ilon Specht of Jordan, McGrath told USA Today.
Although the ads did not seek to impress the viewer like some of the more flashy campaigns for athletic shoes or cars, they did try to capture a certain earnestness in an attempt to win the trust of their audience. ‘‘A key motivating factor is for consumers to feel comfortable purchasing a product without a doctor’s prescription or advice,’’ said Don Stuart of the marketing-consulting firm Cannondale Associates. The ads did need to motivate viewers, though. Since so many people had unsuccessfully attempted to stop smoking in the past, the NicoDerm spots explicitly stated that their product, and theirs alone, could help end an ongoing struggle to become tobacco-free. Jordan, McGrath’s testimonial ads were designed to serve this purpose. The message conveyed in these was: ‘‘If I could do it, so can you.’’

The smoking-cessation aid market exploded after NicoDerm and Nicotrol began being sold over the counter in 1996. Total revenues for the industry in 1997 reached nearly $650 million, more than double the previous year’s volume. Analysts believed this expansion would continue. ‘‘I still see growth in the [smokingcessation aid] category,’’ Barbara Kuhn, a buyer for a major drug-store chain, told the October 6, 1997, edition of Drug Store News. ‘‘I don’t think it’s peaked yet, with more companies going to non-smoking policies and more public places being restricted.’’ On the strength of its 40 percent share of the prescription drug market at the time of its shift to over-the-counter status, coupled with a $50 million advertising blitz, NicoDerm surged to a commanding lead in the field. Its 1996 sales were more than $134 million, as compared to $52 million for its most direct competitor, Nicotrol.
Nicotrol, however, had no intention of remaining in second place and decided that advertising was its key to success. McNeil Consumer Products unleashed a fullscale advertising barrage on behalf of its brand, spending more than $53 million between March 1996 and March 1997 alone. Nicotrol was promoted via print, radio, and television spots, coupon offers, and brochures sent directly to doctors. The company bought air-time for commercials on such highly rated network television shows as ER. Some of these ads featured celebrities such as actress Patricia Kalember, who had appeared in the television shows Sisters and thirtysomething. Others were ‘‘reality-based’’ spots that tracked the progress of three Ann Arbor, Michigan, residents as they used Nicotrol to help themselves quit smoking. These testimonial commercials in particular proved to be quite popular with consumers. ‘‘We discovered that the best way to reach smokers who are ready to quit is to have other smokers talk to them,’’ McNeil Consumer Products spokesman Ron Schmid told The Detroit News.
Although Nicotrol was the only other transdermal patch available over the counter, NicoDerm faced competition from prescription smoking-cessation aids as well. In June 1997 pharmaceutical titan Glaxo Wellcome introduced an oral tablet designed to curb smokers’ cravings for nicotine. It supported this new product, called Zyban, with a strong direct-to-consumer marketing campaign. Novaritis’s Habitrol, which did not make the shift from prescription to over-the-counter status with NicoDerm and Nicotrol, remained a market player as well. Although its sales were relatively small compared to NicoDerm, the National Advertising Division of the Council of Better Business Bureaus (NAD) noted that the prescription/over-the-counter distinction ‘‘does not remove competition between [NicoDerm and Habitrol] or reduce Habitrol to bit player status.’’ Johnson & Johnson was also developing an antismoking nasal spray.
The increased competition had an impact on NicoDerm’s share of the market. By the second quarter of 1998 NicoDerm’s sales had dropped 18 percent, although sales of Nicorette, SmithKline Beecham’s nicotine gum, continued to rise. SmithKline’s NicoDerm, though, still enjoyed a substantial lead over its rivals.
The battle between the manufacturers of these smoking-cessation aids was heated. McNeil Consumer Products and Novaritis both filed complaints with the NAD, which served as a watchdog agency monitoring the accuracy of consumer advertising; the companies alleged that SmithKline Beecham had made misrepresentations in its advertising for NicoDerm. SmithKline filed two complaints against Nicotrol as well. The NAD sustained both of the complaints against NicoDerm and admonished to alter some of its ads. It rejected one of the complaints against McNeil Consumer Products but sustained the other, mandating changes in ad copy.SmithKline and McNeil also went to court over one of these disputes, eventually reaching a confidential settlement on the matter.

Because its target market—adult smokers between the ages of 25 and 64—was so broad, NicoDerm employed a range of strategies to appeal to its potential customers. It ran ads directed at narrow segments of the market, such as smoking couples who were thinking about having children. One commercial featured a young couple using NicoDerm to stop smoking before trying to get pregnant in order to have a healthier baby. SmithKline also secured an exclusive sponsorship deal with the American Cancer Society (ACS) in August 1996. In return for payments of at least $1 million per year in sales royalties over the three years of the arrangement, the ACS permitted NicoDerm packages to be emblazoned with the society’s logo as well as with a reference to the partnership between NicoDerm and the ACS for promoting the cessation of smoking. The company also sought to increase NicoDerm’s sales through its association with special television programming.
NicoDerm was a primary sponsor of New
Year’s-themed programming on the TBS, Nickelodeon, and Family Channel cable networks that ran on and around New Year’s Eve 1997. For example, NicoDerm’s sponsorship earned it very visible signs on stage during ‘‘Comedy Cure II,’’ a movie marathon on the TBS channel hosted by comedian Rodney Dangerfield. Whenever Dangerfield or other comedians performed, NicoDerm’s logo was prominently displayed. In addition, the product received further billing during the course of interviews with passers-by about their new year’s resolutions. As NicoDerm’s media manager Nancy Louvre explained to the December 16, 1996, edition of Adweek, ‘‘It made sense for us to partner with programming that would showcase our product. This is our most critical time of the year, and we’re very heavy in both TV and print ads with a New Year’s resolution theme.’’
Creating effective advertising was a challenge, however. A writer in USA Today remarked on September 13, 1996: ‘‘Glitzy ad campaigns, attractive coupon offers, scare tactics, and other tried-and-true marketing tactics that help sell other over-the-counter medications may not work with heavy smokers.’’ SmithKline decided that emphasis on a simple, straight-forward message was the best way to promote the product. ‘‘Smokers know the problem with smoking,’’ said George Quesnelle, a vicepresident of medical marketing and sales for SmithKline Beecham’s consumer-health unit, in the May 22, 1996, edition of The Wall Street Journal Europe. ‘‘You might say they’ve been beaten over the head by it. What they need to know is that [quitting] is possible.’’
Building on this message, Jordan, McGrath devised two classes of ads to increase NicoDerm’s sales. The first, termed ‘‘equity ads,’’ strove to strengthen the cachet of the NicoDerm brand, stressing that NicoDerm was a product capable of helping even the most addicted smoker break the habit. The second type of ad, dubbed ‘‘competitive ads,’’ focused on distinguishing NicoDerm most directly from Nicotrol but also from its other competitors.
It was these ads, with their specific claims about
NicoDerm in contrast to other smoking-cessation products, that gave rise to the complaints that Nicotrol and Novaritis filed with the NAD. While NicoDerm was forced to alter particular statements in two of its ads in response, it continued to employ ‘‘competitive ads’’ as a way of defending and increasing its share of the market. NicoDerm employed a saturation strategy for these ads across television, radio, and print media. On television NicoDerm sought to reach all segments of its target market. It advertised on soap operas and other daytime shows, early morning programming such as the Today show, late night chat shows, and even syndicated and cable television broadcasts. Although SmithKline did make the occasional ad-purchase on prime-time shows, the company felt that the cost of such slots generally outweighed the benefits they brought in return.
NicoDerm ads also ran frequently on an assortment of radio broadcasts. SmithKline liked radio spots because they were comparatively inexpensive, allowing the company to bombard listeners with information about NicoDerm. Additionally, SmithKline advertised heavily in large-circulation magazines, such as Life, Better Homes and Gardens, Sports Illustrated, Readers Digest, and U.S. News & World Report. The company’s goal for this multimedia approach was to reach the maximum possible number of consumers.

NicoDerm’s advertising campaign was a tremendous success. Despite the handicap of coming onto the over-thecounter market a month after its closest competitor, NicoDerm was backed by SmithKline’s marketing muscle and quickly established itself as the leading brand in the field. It continually refused to relinquish this position, even as other smoking-cessation aids came on the market or strove to challenge its supremacy. By mid-1998, in fact, Nicotrol had effectively ceded the patch field to NicoDerm. A health-care marketing consultant told the June 8, 1998, edition of Advertising Age: ‘‘There comes a time when you’re spending more than you’re selling, and you cut your losses.’’ McNeil slashed its advertising budget for Nicotrol and shifted its focus promoting a new antismoking inhaler available only by prescription. But NicoDerm’s drop in sales volume through the early part of 1998, coupled with the $15 million McNeil planned to spend advertising its new product, as well as Glaxo’s heavy spending on Zyban—
$20 million in the fourth quarter of 1997 alone—indicated that NicoDerm would need to continue to fight to maintain its primacy in the field.
Although the ads promoting NicoDerm were not particularly innovative or cutting edge, surveys demonstrated their value. USA Today ’s ‘‘Ad Track’’ poll on advertising success reported that only 14 percent of consumers gave NicoDerm’s ads high popularity marks. But more then 20 percent of the people exposed to NicoDerm commercials said the ads were effective, an impressive response level for the industry. Buoyed by feedback such as this, SmithKline planned to continue its multimedia campaign in order to support and expand NicoDerm’s share of the smoking-cessation aid market

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