Despite divestment, expect innovation for brands GSK holds on to
WHAT IT MEANS AND WHY IT’S IMPORTANT — Duh, winning! Because there are no losers in this. GlaxoSmithKline will be able to funnel its extensive marketing dollars into a stable of poised-to-explode brands, niche marketers can take those brands being sold and breathe fresh marketing life into them and retailers now benefit most of all because a greater portfolio of brands are being marketed with gusto.
(THE NEWS: GSK announces divestment of OTC brands. For the full story, click here.)
For GSK, it means a chance to focus. For example, with growing attention paid to wellness and healthcare plans that put more onus on patients to change such bad behaviors as smoking, the Nicorette brand is poised for more growth. On the oral care side, Sensodyne is re-emerging as a brand powerhouse for aging boomers whose gum lines are receding and teeth sensitivity is an issue.
And if the rule is that older remedies make way for — and lose market share to — newly switched-from-Rx medicines, then Tums is the exception that proves that rule. Because Tums continues to grow, innovate and extol its value to the consumer, despite the introduction of H2 blockers almost a decade ago and, more recently, proton-pump inhibitors.
Expect innovation to keep coming out of the brands that GSK keeps.
And there are niche manufacturers that are going to get bigger and better out of this, too. Just look at what Meda has accomplished in the past quarter: They’ve grown into a company that now owns iron between Bifera, Feosol and the legacy brand Geritol (and its iron tonic), and can claim a stake within cough-cold with Contac and within energy with Vivarin. For the GSK brands now up for sale, a niche marketer will give these other brands a better chance to thrive and grow as they become priorities for the small and mid-size company or companies that will buy them.
And for the retailer, this means nothing gets lost in the shuffle. More choice equals larger market baskets. And with the focus you can expect from both GSK on its remaining brands and niche marketers on their newly acquired ones, retailers can expect plenty of traffic-driving activity that’ll put Mom in front of that shelf to choose in the first place.