NEW YORK -- Behind the well-hyped introduction of its Aleve pain reliever, Procter & Gamble waved the inducement of a $100 million marketing budget, a widely quoted figure that no doubt cleared the heads of promotional agencies and retail buyers nationwide.
With a reported $60 million of that sum earmarked for national media advertising, another $40 million or so remained to be deployed on the promotion side.
But with an introductory deal structure that retail sources put at a slim 4.3%, and a spending program that includes an elaborate publicity program aimed at pharmacists and physicians, a variety of in-store displays and targeted direct-mail sampling, this introduction apparently does not hold many windfalls for the trade.
"P&G is obviously not going to deep-discount this program," said Jeffrey Hill, managing director at Meridian Consulting Group, Westport, Conn. "An Rx-to-OTC product like Aleve is very consistent with the strategic positioning of P&G. It is an added-value product, with a technical point of difference, that will not be aggressively trade-dealt."
He added, "It is being very aggressively supported. The emphasis is on the consumer side."
Aleve, the nonprescription version of the pain reliever naproxen sodium recently approved for over-the-counter status, was launched jointly by P&G and Syntex Corp. earlier this month.
The medication previously was available only by prescription under the brand name Anaprox.
Several observers commented on the disciplined approach to trade spending that P&G has espoused since beginning its value-pricing initiative, now 2 years old. Retail buyers say they are fairly used to P&G's deal structure by now, although by comparison, introductory allowances as high as 16.6% reportedly are not uncommon among other marketers of packaged goods.
"This entire program is fairly typical for Procter & Gamble," observed one retail buyer. "The amount of advertising money is also based on their normal program, although there will be the special introductory allowance for the first 12 weeks."
Aleve sales literature mentions a planned sampling program via targeted direct-mail that is expected to break about midsummer. Sources in the trade indicate that a national program of in-store sampling is also in the works, for about the same August time frame.
Major retail accounts, including Walgreens, Kroger Co. and Eckerd Drug, had the product on the shelves and ads on their circulars June 13, the day it was introduced. Questioned about the hype surrounding the product launch, a source close to the manufacturer confirmed that some retailers did indeed send trucks to P&G distribution centers "at 12:01 on the launch day" to pick up product for their stores.
"It is not unusual for us to go to P&G to pick it up. We backhaul a lot of stuff," said the OTC category manager from a leading supermarket chain.
The manager confirmed that its stores were using floorstands and counter units "pretty aggressively," although it had allotted very few endcaps. Some of those floorstands carried informational fliers as well as coupons.
But the planned retail programs included "no Carol Wright, no Catalina automatic coupons," the manager said, referring to direct mail and checkstand coupon vehicles.
While a number of major accounts made a splash with Aleve literally from day one, Procter & Gamble spokeswoman Kris Burbank said the company expected the product to reach about 40% of the market during its first week. "About 70% of retailers will have it by July 1," she said.
She confirmed plans to directly sample the pain reliever to consumers without providing details.
Part of P&G's strategy is to obtain numerous and prominent displays in food and drug stores, Burbank added. She said the company was providing a pharmacy display, counter units and freestanding shippers, among the display options. As a prescription-to-over-the-counter switch, Aleve comes complete with a solid reputation among health professionals and many consumers. According to several supermarket pharmacists, P&G and Syntex representatives are calling jointly on retailers. One described this coordination as "the best we've ever seen." Syntex's detail force has been calling on physicians and pharmacists.
One retailer expressed some frustration with the "low level of ad money" P&G provided, but added, "they did come in and detail the shelves."
Several retailers and observers remarked that the rush to put Aleve in the stores has been aided by published reports about the marketing advantages inherent in Rx-to-OTC switches. "Rx-to-OTC is an effective strategic method that customers can capitalize on to build their business," said a source close to Aleve.
A supermarket buyer mentioned concurred. "A genuine competitive advantage is being sold," he said, referring to a report published by the General Merchandise Distributors Council last year that concluded the grocery trade has not in the past received good marks for its prompt handling of switches.
"We believe it will be profitable for us to get out there early," he added.
Another retailer added, "They [P&G] are working more with the Rx-to-OTC switch, saying we have got to be first in the marketplace. It is a race to the finish line, to let the customer know you have it first. That has tended to drive us more than offers of actual dollars."
As a result, two weeks into the rollout, some smaller retailers said they were still waiting to hear about the terms and availability of the new product, while the largest accounts were already advertising and displaying it.