P&G plans to purchase Merck’s consumer health business. I think it says something about the way forward for its consumer brands.
The Merck products sound like drugs, with names like Neurobion and Nasivin; the former is a B vitamin tablet that is based on a prescription injectable, and the latter uses a chemical compound found in many decongestants, but Merck developed it in the early 1960s.
These brands are sold mostly in Latin America, Asia, and Europe, and that exposure was cited in media coverage as the prime reason for adding them to P&G’s portfolio.
But I want to get back to the drug thing.
Unlike most consumer products, people buy drugs because they actually do something. Nobody buys an antibiotic because they like the packaging, or some celebrity endorser on Twitter used it. Something either works or doesn’t work for a particular problem, and it’s up to the government, doctors, and pharmacists to decide. Formulations are monitored, benefits and side effects noted, and sales closely regulated.
That’s why drugs get patent protection. Pharma companies don’t get to recoup their losses on drugs that don’t pass muster. They make money hand over fist because a medicine is judged on its efficacy, not its promises.
Contrast that with all the nonsense that passes for branding in the rest of the consumer healthcare world.
Face creams that promise to reverse the effects of aging. Shampoo that will repair hair damage by tearranging molecules. Toothpaste and deodorant that will make people want to fall in love with you. And everywhere, users in almost orgasmic joy when they use those products
Most of the shelves at your local pharmacy are filled with products that are selling the magic of branding instead of the objective reality of medicine.
Same goes for laundry detergent, dishwashing liquid, and anything else sold based on how it makes consumers feel — emotionally — in lieu of effecting an actual change in their physical wellbeing.
Entire sections of grocery stores are dedicated to making promises, and P&G has made many billions selling such magic to consumers.
Only it’s not so easy anymore.
Consumers are smarter and more cynical, and there’s no reliable mass media with which to knock them silly with branding promises like in the old days before cable and DVRs. Marketers have tried migrating their pursuit to social media, but engaging there has mostly failed to replace the convincing that traditional advertising accomplished.
P&G is under price pressure and overall sales are hurting. Other purveyors of branded promises are similarly struggling.
Maybe the answer is in the way drugs are sold.
The equation is deceptively simple: Identify a real, physical need, not just an emotional want; devise a unique way to address it, ideally proprietary; get respected third-parties to certify that the solution works; and then tell potential buyers the truth.
The branding could still be creative, funny, poignant, and whatever else the storytellers say is required to tell stories, but the major distinction would be that they weren’t fiction anymore. The challenge of differentiation would still exist — there can be two or more equally valid ways to accomplish an outcome — but it’s a different task if you want to find tangibly real ways to overcome it (and not simply invent beautiful claims with no basis beyond consumers’ aspirations).
There’s no accepted answer, but it’s the right question to ask.
Maybe the real value of Merck’s products won’t be in the markets they serve, but in acquiring the knowledge of how they got there and continue to thrive.