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How the Increasing Health-Conscious Market is Impacting Marketing for OTC Marketers

How the Increasing Health-Conscious Market is Impacting Marketing for OTC Marketers

Increased consumer awareness of health- and wellness-consciousness is fueling the over-the-counter (OTC) industry to make shifts in the way they market products. Factors leading to this shift — consumer awareness of health issues, greater focus on fitness, higher personal incomes, and the urbanization of emerging economies, just to name a few —  have united to form a new market of consumer-focused healthcare products.

Fitness Focused

With a growing market focused on fitness, pharmaceutical and consumer goods companies have either had to adapt to these changes or find themselves with a diminishing return on investment. A 2015 article by USA today reported younger consumers are by far the most concerned about everything from food ingredients, genetically modified food, to organic foods. The study, which surveyed 30,000 consumers in more than 60 nations, revealed the most health-centric consumer group is Generation Z — the men and women younger than 20 years old. Of this generation group, more than four out of ten people indicated they would be willing to spend more money for healthier products, as opposed to 32% of millennials, and 21% of baby boomers.

But, it’s not just the younger generation marketers need to be mindful of. According to a recent article by Store Brands, the baby boomer generation reportedly control 70 percent of U.S. disposable income and drive, to a large extent, demand for healthful food products. A majority of this group want more of the ingredients that have been identified to help prevent or mitigate conditions related to aging (fiber, antioxidants, vitamins and minerals, omega-3 fatty acids, vitamin D, and calcium). These enhanced nutritional needs have contributed to a robust new market shift toward functional foods and better-for-you healthcare products.

Wearable Fitness

Piggybacking on the fitness trend, we’ve seen an increase in fitness technology. Wearables such as the Fitbit and Apple Watch are taking the market by storm. In fact, new research from International Data Corporation (IDC) reveals the US wearable technology market is experiencing unprecedented growth. In the first quarter of 2016, the total shipment of wearable device trackers reached 19.7 million units, an increase of 67.2% from the 11.8 million units shipped in the first quarter of 2015. As wearable adoption continues to grow, companies must find ways to adapt to, and pull in, other health and fitness data sources in order to give users a complete picture of their individual health — all in one place.

Local-motion

In addition to a growing focus on fitness and wellness, more people are seeking ways to eat local foods more frequently. A locavore or localvore is a person who is interested in supporting local industry by eating food that is grown and produced locally, and not moved long distances to market. While there is no universal definition of “local” food, a commonly accepted distance is food grown within 100 miles of its point of purchase or consumption.

The locavore trend continues, from locally-sourced products to locally-grown entrees at a restaurant. Even meal delivery services like HelloFresh are priding themselves on locally-sourced meal ingredients. Additionally, the popularity of buying fresh produce at local farmers’ markets, while supporting local businesses and farmers, has continued to increase and shows no sign of slowing.

According to a survey conducted by the US Department of Agriculture (USDA) Agricultural Marketing Service (AMS), farmers’ markets continue to grow and serve as popular community gathering places. In fact, of the 1,400 farmers’ market managers surveyed, a common trend arose — success of the markets is due to farmers meeting customers’ demands of local, quality, and fresh produce, investing more in community engagement, and also increasing their online presence by using web and/or mobile-based technologies to communicate with customers, vendors, and their communities.

How the health-conscious market is affecting the OTC industry

OTC marketers are adapting their message, packaging, endorsements, delivery, etc., to meet the needs of the market; the look and feel of some brands’ marketing is shifting from being product centric to a more wholesome and healthy lifestyle approach. These changes make it easier for consumers to identify OTC products that align more closely with their needs and health choices.

Get to know your audience

Creating a product that resonates well with your audience first requires you to really know and understand your audience. Essentially, your target demographic is what keeps you in business, therefore it is critical that your marketing efforts attract the right consumer.

Understanding your target market, and adapting to their needs as they evolve will not only streamline and increase business it will also:

  • Keep you focused on your core customer and help drive better ROI
  • Allow you to tailor your marketing, advertising, and communications strategy
  • Help you position your OTC products in a way that appeals to your target market
  • Guide your retail strategy and right brand representation
  • Build a better relationship with consumers, ensuring customer loyalty
  • Keep you in-the-know regarding OTC marketing trends

Identifying your core customer is not always easy and it can change or diversify throughout your company’s life cycle. As such, it’s a best practice to implement a way to track consumer behavior so you can quickly identify changes in trends before they have a negative impact on your ROI and image.

Trends to track

New trends in the OTC industry show precisely how health consciousness is affecting marketing. We’ve outlined a few recent trends below:

With healthy eating, and the desire for more natural and organic products on the rise — the consumer value equation has changed. No longer are shoppers only concerned about price, they want to understand what they are putting into and onto their bodies.  According to research conducted by Deloitte Consulting for the Food Marketing Institute and the Grocery Manufacturers Association, consumer purchasing patterns are changing dramatically. Deloitte set out to try and understand what is driving consumer purchase behavior and determine if there is a shift underway.

Part of the research involved speaking with consumers after they finished a grocery shopping trip. Research conductors would review the products in the customer’s cart, choose a specific product and question the participant about what drove them to make that specific purchase. Results were divided into two categories: Traditional preferences, which includes elements such as taste and convenience, and evolving preferences, which included such attributes as health and wellness, safety and social responsibility.

“In terms of preference, more than half of the population identified evolving preferences over traditional preferences in relation to their purchase,” said Tom Phillips director of Deloitte Consulting. “And it’s not who you think. When you look at income level, it has been assumed evolving preferences would index heavily toward those who can afford it, but the research shows it is hitting a much wider demographic.”

The shift in consumer purchasing is consistent across age ranges, regions of the country, and income levels. “There is a conflation between health and wellness, safety and social responsibility,” Phillips said. “Safety is a wonderful example of that. The consumer didn’t just think about if they may get sick from a product. They also were concerned if there is something in the product that may cause long-term harm to their family.”

Beth Ford, executive vice-president for Land O’ Lakes, originally challenged the findings in this research. “The fact the results were so pervasive and across every income level made me question them,” she said. “But the fact it was post purchase is central to the findings. These changes are here now and we have to work with them.”

There is a consumer revolution in the healthcare industry. And be that as it may, most traditional health companies have not taken advantage of this shift in consumer needs. However, as a result of studies like the above, marketers are starting to rise to the challenge. They’ve become more flexible, adaptable, and engaging with consumers. Consumer expectations are ever-increasing and successful marketing teams need to open up dialogues with their target market to keep up with that.

The increasing health-conscious market is taking the OTC industry by storm; consumers are demanding more from the wellness industry. As a marketer, it’s critical to acknowledge these trends and work with them to deliver products your customers can (and will) stand behind. Being a health-conscious consumer isn’t a phase, it’s a lifestyle change with serious stamina that will be around for the foreseeable future. If your products don’t stack up, your share of the market will go down.