In-Store Merchandising proves strongest driver of OTC Growth.

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.

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.”

For more information at http://www.knowledgenetworks.com