docBuilding Brand Equity: The Mucinex Story
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Building Brand Equity: The Mucinex Story
Building Brand Equity: The Mucinex Story Bob Casale June 4, 2009 Small Company Growth •$468 Compound Annual Growth Rate f From 2003 – 2008: 102% •REVENUE IN MILLIONS •$331 •$239 •$160 •$61 •$14 •2003 Philosophy IB, LLP 2008 •2004 •2005 •2006 •2007 •2008 1 Question How did this happen???? 2 How Did Mucinex Get To Market? Immediate/Extended Release Guaifenesin f Old Ingredient f Unapproved Rx Product f Multiple Brand Names – Generic Pricing Drug Delivery Strategy - 12 Hour Duration of Action Adams filed NDA based on pharmacokinetic studies f Sought FDA removal of unapproved products f Bridge to OTC monograph for safety 3 4 The Mucinex Story – Extended Release Guiafenesin Good News – FDA approved product and takes all other single ingredient products off the market “Bad News” – FDA approves Mucinex OTC Opportunity – Consolidate $130MM Rx Market Real Opportunity -Tap $3 Billion+ OTC market 5 Consumer Market Before Mucinex® Basic Characteristics Growing Complex (with Claritin) >10 ingredients alone and in combination +25% since 2000 Big OTC Cough/Cold/Allergy Market Crowded $2.8bn annual sales 45 SKUs each Sell >$10MM/year Confusing Top 40 SKUs= 36% of sales 6 7 Manufacturers Controlled 70% of the Cold/ Flu/Allergy Market 2002 Pfizer, Inc. $350M P&G 290M McNeil Consumer Products 260M Whitehall-Robins 260M Novartis Consumer Health 250M Schering-Plough 150M Bayer Consumer 120M Private Label 500M 7 Clutter Reel Play Clutter Reel mucinex clutter reel.wmv 9 Mucinex Success Factors Single minded focus Small experienced team Rapid decision making 10 Timeline April 2004…Board approves $20MM advertising spend f Projected on-air date…November 15, 2004 May 2004…Qualitative Research, develop positioning, brief ad agencies, select ad agency June 2004…Quantitative Research, Creative development July 2004…Quantitative Results (Uh Oh), refine creative, produce animatics August 2004…Copy test results (Uh Oh), media planning, select campaign, board approval September/October 2004…produce commercial including animation, worry November 15…2004…On Air 11 Mucinex Claims THE ONLY 12 HOUR FDA APPROVED EXPECTORANT Immediate/extended release bi-layer tablets Relieves chest congestion Makes coughs more productive Thins and loosens mucus Convenient tablet vs. messy syrup 12 Single Minded Focus 13 Brand Positioning Educate consumers that mucus is the “root cause” of upper respiratory problems f Downplay f Simplify f Take specific symptoms in a confusing category Mucus out of the closet 14 Symptoms Head Congestion Nasal Congestion Excess Painful Sinuses Thick Post Nasal Drip Chest Congestion Tenacious Tight Cough Sneezing MUCUS Thinner Sinus Pressure Frequent Cough Expelled Normal 15 Mucinex Core Equity Mucinex = Mucus Out Mucinex In. Mucus Out. ™ 16 Strategy Test White Card Concept Test: Mucinex In, Mucus Out Results: f BELOW AVERAGE fNOW WHAT????? 17 Plan of Action Say the consumers in the test were stupid and did not understand our brilliance Make the strategy work we still believed in it Capitalize on Adams culture 18 Creative Challenges Need to make single-minded concept of mucus highly memorable Mucus is a new and potentially risky story Present “mucus” in an engaging way 19 Animatic Videos 21 22 Animatic Shortcut to Mr_Mucus.lnk Video_ts.ifo 23 Mr. Mucus Actively Involves the Audience Database distribution Rating scale 1% Active words interesting, unique, involving, irritating, unpleasant, disturbing. •8 6% •7 ‘Mr. Mucus’ (6.84) 17% •6 OTC Average (5.46) 30% Average (5.14) •5 27% •4 15% nice, boring, ordinary, soothing, mellow, weak. •3 3% •2 Passive words 0.5% •Base: 775 USA - English Animatic ads Philosophy IB, LLP 2008 24 Finished Commercial Video Finished Commercial 26 27 28 Initial Results: Mucinex® Sales 3/04 - 2/05 (Four Week Total Dollar Sales) $9,000 A d ver t ising B eg ins 11/ 15/ 0 4 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 3/ 21 / 20 04 4/ 18 /2 00 5/ 4 16 /2 00 6/ 4 13 /2 00 7/ 4 11 /2 00 4 8/ 8/ 20 04 9/ 5/ 20 04 10 /3 /2 00 10 4 /3 1/ 20 11 04 /2 8/ 20 12 04 /2 6/ 20 04 1/ 23 /2 00 2/ 5 20 /2 00 5 $0 Mucinex SE 20s Mucinex DM 20s Source: IRI Cold/Allergy/Sinus Trend Ranking Report, February 2005 Mucinex SE 40s Mucinex DM 40s 29 Consumer and Professional: Working Together to Build Trial & Conversion Consumer Advertising Professional Detailing Generates Consumer Awareness Generates Professional Recommendations Trial Purchase 30 Mucinex Success Factors – Part 2 If it ain’t broke, don’t fix it Actively utilize knowledge of the consumer Leverage the brand name through innovation 31 Married to Mucus Video Keep Pounding Away At Mucus Married to Mucus 33 Know Your Consumer Of the consumers who use Mucinex… f ~90% intend to buy it again f ~30% try more than one type of Mucinex f ~70% actually plan their purchase f ~50% would rather make an additional trip to another store if their store did not have Mucinex Source: Proprietary on-line research conducted 12/06. 34 New Products Fiscal 2007 Fiscal Fiscal 2006 2006 Fiscal Fiscal 2007 2007 35 Expansion Accelerates in FY08 Fiscal 2008 36 Mucinex Circa 2008 Children’s line Nasal Spray Max Strength 37 Children’s Line Consumer Need f Mucus and Kids…Perfect Together f Guiafenesin Bitter…Taste Masking Required Searched US and Europe for taste masking technology f Mini Melts! f Unique coating technology sourced from Losan (Germany) 38 Launch of Children’s Line Tested on Employee’s Children…No other consumer testing Launched Traditional Liquid and Mini Melts line Achieved $30 million sales Year 1 #4 Brand in Children’s Respiratory Market 39 Mucinex Mini-Melts Video Mini Melt Commercial 41 Mucinex Nasal Sprays Full Force y Effective nasal decongestant y “Sensory signal” lets consumer know it is working y “12 Hour Concentrated Vapor Technology” Moisture Smart y Effective nasal decongestant y Specially formulated to soothe irritated nasal membranes y “12 Hour Membrane Hydration Technology” 42 42 More Commercials Nasal Spray Max Strength 43 Maximum Strength Mucinex 44 More Commercials Nasal Spray Max Strength 45 The Future – Before Other Mucinex Rx and OTC combinations utilizing extended release guaifenesin platform Continued penetration of US market Global expansion New Rx and OTC respiratory products 46 The Future - After Sold for $60 cash per share f 37% premium to recent share price f 250% premium over IPO price of $17 per share in July 2005 f 7 times FY07 sales Acquirer Reckitt Benckiser f Global leader in household products business f Sales in 180 countries f Will add significant value in globalizing Mucinex f Will culture of innovation survive? 47
