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VICKS ZzzQuil RESEARCH REPORT Basha Coleman, Clayton Damato, Collin Gatlin, Gabby Miller, Patrick Tice, Andrew Zadick December 2, 2014

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Page 1: VICKS ZzzQuil RESEARCH REPORT - Gabrielle Millerutprgabriellemiller.weebly.com/uploads/4/6/9/3/46934431/... · 2018. 8. 30. · VICKS ZzzQuil RESEARCH REPORT Basha Coleman, Clayton

VICKS ZzzQuil

RESEARCH REPORT

Basha Coleman, Clayton Damato, Collin Gatlin,

Gabby Miller, Patrick Tice, Andrew Zadick

December 2, 2014

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TABLE OF CONTENTS Introduction 1

Industry Overview 2

Client Profile 5

Competitor Profiles 6

Comparative Analysis 8

Consumer Analysis 9

Method and Research Objectives 12

Proposed Survey Design 13

Analytic Plan 14

Demographics 16

Summary of Questionnaire 15

People Who Have Trouble Sleeping 17

Perceptions of Sleep Aids 18

Prominence of ZzzQuil in OTC and Prescription Markets 19

Consumer Budget & Seasonality 20

Summary of Survey Research Findings 21

Qualitative Research Overview 22

Consumer Insights, Key Points & Conclusions 23

Final Recommendations to Client 24

Sources 25

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INTRODUCTION-ZZZQUIL-

ZzzQuil is a product created by the Vick’s

brand which is owned by the Proctor and Gamble company.

It was created for individuals who want a good night’s rest

but are not suffering from cold or flu symptoms and do not

need the additional ingredients. It is the best selling Sleep

Aid product and reported sales of $125.1 million in 2013.

ZzzQuil’s debut in 2012 sparked an increase in Proctor and

Gamble’s overall net sales for the year which proved it to

be a successful product addition to the P & G company. To

further explore the relatively new product that is ZzzQuil,

this situational analysis focuses on the industry of Over

the Counter Sleep Aids as a whole. More specifically, the

client profile describes the product in depth and how it is

performing in the market. The competitor profile narrows

in on how the competition for ZzzQuil is reacting to

changes in the market while the comparative analysis

compares ZzzQuil to its rival products. Finally, the

consumer analysis defines and describes the product’s

target market. Combined, these sections of the analysis

create a comprehensive description of the industry in

which ZzzQuil has recently become a major player.

-HISTORY-The OTC Sleep Aid industry is by no means

new, but the vast majority of the growth has come in recent

years. Sleep Aids weren’t sold over the counter until the FDA

approved antihistamines to be sold without a prescription in the

late 1970s. Before then, antihistamines and other drugs such as

barbiturates, Benzedrine and benzodiazepines were widely

prescribed for insomnia. In fact, the benzodiazepine Valium was

the most prescribed drug in the US from 1969 to 1982.

The approval from the FDA introduced OTC Sleep Aids as an

industry, but it was an industry that remained dormant until

2011, when Proctor and Gamble introduced Vick’s ZzzQuil, a

name recognized and trusted by consumers. The marketing

strategy behind ZzzQuil quickly spread awareness not only for

the brand, but for the entire Sleep Aid category by assuring

consumers that it was “non-habit forming” and that the product

can be trusted to have a much less drastic effect than their

prescription-strength competitors.

-SIZE OF INDUSTRY-Since the introduction of ZzzQuil in 2011, the

OTC Sleep Aid industry has grown exponentially. In today’s high-

paced world a sufficient night’s sleep is of high priority to most

people. 53% of consumers report suffering from sleep issues

like having trouble falling asleep as well as staying asleep.

Before 2011, the total sales for OTC Sleep Aids hovered just

above $200 million. But because of the overwhelming success

of ZzzQuil, the entire industry almost doubled to just under $400

million. This is a result of ZzzQuil’s marketing strategy. Figure 1uses data from Mintel to show that the industry has continued

to grow, reaching $490 million in 2013, and is not projected to

slow down anytime soon. Projections made by Mintel expect

sales to easily hit $841 million by 2018 with continuing trends of

sleep concerns by consumers.

-PRIMARY COMPETITORS-The primary competitors in the Sleep Aid

industry are Unisom, Sleep MD and MidNite. They were selected

as the most direct primary competitors because of their high

advertising expenditures that draw in consumers and share

ZzzQuil’s relative advertising costs and target consumers.

200

400

600

2009 2010 2011 2012 2013Figure 1

in millions

OTC Sleep Aid Growth

1

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INDUSTRY OVERVIEW-ADVERTISING EXPENSES-

Just as the annual sales for OTC have

increased drastically over the last few years, so have

advertising expenditures. As Figure 2 shows, there was a

large jump from 2011 to 2012, increasing from $17.6 million

in 2011 to $57.5 million in 2012 in total dollars spent on

advertising from the top competitors. This amount shows

no sign of slowing down, jumping to $77.9 million in 2013.

Young people and women, especially those living in

households with children, are the target demographic for

the industry. Magazine advertisements are a very efficient

method of reaching this audience, explaining why the

industry recorded $27.3 million spent on magazine

advertisements in 2013. This is the highest expenditure for

the industry, nearly doubling the expenses spent on both

network TV at $15.6 million and cable TV at $16.3 million in

2013. These are still impressive numbers compared to

pre-2011 expenditures, which sat at only $290,000 for

network TV and $1.1 million for cable TV. These numbers

indicate just how dramatic of a growth period this industry

is in. It is also fairly early in the growth stage, meaning

there are still plenty of years left before the industry hits

any sort of maturation; the likelihood of new competitors

entering the market is high.

-STAGE IN PRODUCT LIFE CYCLE-As discussed, the OTC Sleep Aid industry is in

a growth process, and should easily continue to grow at

exponential rates over the following years as the concern for

getting enough sleep continues to be prevalent in today’s

society. The only concern is, although more than half of

consumers say they have experienced and are concerned with

sleeping difficulties, 33% say they have not used OTC Sleep

Aids and are not interested in trying them. 40% of actual

users say they are concerned about the side effects. The fear

of side effects comes naturally with any sort of medical

product, but much of the concern was eliminated with the

market strategy ZzzQuil employed, promoting the fact that the

product is “non-habit forming.” This made consumers feel

more confident in not only ZzzQuil, but also the OTC Sleep Aid

industry in general. In order for the industry to continue to

grow at such a healthy rate, more specific lines and products

must be introduced to appeal to individual demographics such

as mothers.

2

0

5000

10000

15000

20000

25000

Q 1 Q 2 Q 3 Q 4

OTC Sleep Aid Quarterly

Advertising Expenses

(in thousands)

2011 2012 2013

Figure 2

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INDUSTRY OVERVIEW-SEASONALITY-

After observing media expenditures it

is safe to say the industry has an obvious increase in the

last three months of the year. In 2013, the industry

recorded $22.3 million in total dollars spent on all media

during this time, whereas the other three month periods

record expenditures of $19 million or less on total

advertisement. This trend is reciprocated in previous

years, with the third quarter expenditures surpassing

the other quarters by at least $2 million each year. This

is likely due to the amount of activity that happens that

time of year. For the main demographic of the industry,

mothers who live in households with children, the end of

summer and beginning of a new school year can bring

stress. Younger consumers could easily be in the

beginning of a new college semester after a long

summer; this can be a difficult and stressful transition.

The returning pressure of succeeding academically can

cause great sleep concerns to the younger generation.

-GROWTH POTENTIAL/FORECASTS-The industry has experienced exponential

growth since 2011, and there is still a great deal of growth

potential. It lies in what initiated the growth when ZzzQuil was

introduced. ZzzQuil made consumers more comfortable by

advertising the product as “non-habit forming.” There is still a

great deal of untapped potential in the consumer population of

those who have sleep concerns but remain skeptical about

possible side effects of the product. In order to lure them into

the market their product confidence level must increase, which

can be done by featuring natural and herbal ingredients. After

the initial spark in 2011, sales for the industry have increased by

well over $100 million each year, recording a 43.6% increase in

2012. The trend is not predicted to slow down. Over the next five

years, sales are predicted to increase by at least $70 million a

year, landing at

a projected $841 million in 201815.

Indices in this table represent relative growth over time, with

2008 being the base year in one column and 2013 being the base of

another. The OTC Sleep Aid industry is tough to predict because of

the volatile nature of medical products, but if the industry

continues making the right marketing decisions, the potential for

continual growth is extraordinary.

2008 219 na 100 45

2009 225 2.7 103 46

2010 233 3.6 106 47

2011 252 8.4 115 51

2012 362 43.6 166 74

2013 (est.) 490 35.3 224 100

2014 (fore.) 583 18.8 266 119

2015 (fore.) 640 9.9 293 131

2016 (fore.) 703 9.8 321 143

2017 (fore.) 771 9.6 352 157

2018 (fore.) 841 9.1 384 171

$million % change Index (2008 = 100)

Index (2013 = 100)

Figure 3

3

The industry can reach this stage by

introducing specific products to better appeal to the target

demographic as well as branch out to other demographics

not currently likely to purchase the product, such as the male

population. In Mintel’s fan chart forecast shown in Figure 3,

an $841 million industry size is within reach; sales topping $1

billion lie comfortably in the realm of possibilities.

OTC Sleep Aid Industry Sales from Mintel

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INDUSTRY OVERVIEW-ECONOMIC ENVIRONMENT-

Macro level economic trends in the Sleep

Aid industry in the United States economy consist of a

hesitation to buy prescription or OTC Sleep Aids in order to

focus on more traditional remedies. Consumers tend to be

afraid of the addiction that generally accompanies any

Sleep Aid medicine. This affects the overall industry of

Sleep Aids sold in stores because consumers are more

likely to save money and use herbal remedies that also

promote sleep without the use of drugs.

-LEGAL/REGULATORY ENVIRONMENT-The main points addressed by the Federal

and Drug Administration (F.D.A.) pertaining to over the

counter Sleep Aids (OTC) consists of restrictions on how the

product must be labeled to the market. Under section 330.1

of Title 21, there are 10 guidelines regarding OTC sales

(Cornell, 21 CFR 330.1). Subhead a) and b) are focused on the

current condition of the company and that the company is

properly registered with the F.D.A. Subhead c), e), f), and g),

contains all of the information pertaining to what must be

labeled on the drug. This includes displaying what is active in

the drug, what is inactive in the drug, and how the container

must be designed and labeled with warnings. Subhead d)

specifically addresses what the drug is and what its purpose

is. Subhead h) pertains to the maximum doses and

acceptable dose size. Subhead i) and j) consists of words that

can be used in replacement of other words and what words

can be omitted.

-SOCIETAL/CULTURAL CONSIDERATIONS-Because OTC Sleep Aids have just recently

become a major category there is still much concern from

consumers about the nature of the product and possibilities

of serious side effects or addictions. According to data

provided by Mintel, this concern is evident considering 40%

of OTC Sleep Aid users read the ingredient labels; this shows

they still don’t have complete confidence in the product.

Side effects such as fatigue the following morning, dizziness,

and memory problems make up the largest concerns with

38% of OTC Sleep Aid users saying they are worried about

the side effects. 22% of users believe OTC Sleep Aids are

not safe to be used more than once a week. These statistics

make it clear that the average consumer still knows very

little about Sleep Aids which leads to a lack of trust in the

product. Another common thought among users is that

traditional herbal home remedies, such as teas, provide a

safe alternative to medicinal Sleep Aids with 27% saying it

is a concern of theirs. In order to eliminate the main

negative stigmas for OTC Sleep Aids, marketing strategies

need to begin to focus on providing consumers with more

health information and using natural ingredients.

4

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CLIENT PROFILE-HISTORY OF CLIENT-

ZzzQuil is a Sleep Aid product made by

Vicks, a brand owned by the company Proctor & Gamble.

The history of Vicks, according Vicks official webpage, dates

back to Dr. Lunsford Richardson’s first product “Croup and

Pneumonia Salve” made in the 1890s to fight a flu

pandemic. The evolution of his initial salve began with cough

drops in the 1930’s, cough syrup and nasal spray in the

50’s, the first NyQuil in the 60’s, sinus and DayQuil syrup in

the 80s-90s and now, ZzzQuil, Vick’s first ever Sleep Aid.

-SALES-According to Jack Neff, a personal

products and research editor, ZzzQuil’s annual sales of

$120 million and its 29.3% share of the $411 million Sleep

Aid market has proven to be a victory for P & G. P & G’s net

sales over the last 5 years have remained fairly steady.

One increase to note is from 2011 to 2012 because 2012 was

the launch and beginning of ZzzQuil.

-TARGET CONSUMERS-According to Dan Monk, Senior Staff Reporter

of the Cincinnati Business Corrier, about 25% of Americans

say they have trouble sleeping, and about 15% of these people

are not combating their issue6. Vick’s is targeting those non-

consumers who do not currently buy Sleep Aids but will

hopefully start with this new product. To do this, it did not have

to create a whole new category of Sleep Aids, just a variation

within the category. One way non consumers were sought was

by using Drew Brees, NFL quarterback, in an ad campaign.

Many people put a lot of thought into bandwagon advertising

whether they realize it or not. Many American’s may think, “If

Brees can use ZzzQuil to get a good nights sleep and still play

football the next day, then I can use it too!” The company also

targeted consumers looking strictly for a Sleep Aid medicine

with the “Sleep is a beautiful thing” campaign featuring

Katherine Heigl3.

-FOUR P’S OF MARKETING-Product: ZzzQuil is marketed as an over-the-counter Sleep Aid

medicine that comes in a liquigel pill or a liquid syrup form.

ZzzQuil’s main ingredient is diphenhydramine HCl, a small

compound used to bring on sleep that is also found in many

other Sleep Aid medicines.

Promotion: Promotions for ZzzQuil include the Drew Brees and

“Sleep is a beautiful thing” campaigns used to target its key

consumers: those that don’t buy Sleep Aids already and those

that are looking for a Sleep Aid used only for sleep.

Place: ZzzQuil is made in Cincinnati, OH and is sold over the

counter in any major grocery store, drug store, supercenter,

gas station, etc.

Price: According to Walmart, an over-the-counter six fluid

ounce bottle of ZzzQuil cost $4.47.

-NEW DEVELOPMENTS-P & G has been recently looking into more

Sleep Aid options to add to the ZzzQuil brand such as electronic

sound generators that will play soothing sounds that will cause

drowsiness, aromatherapy pads and light-therapy units.

5

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COMPETITOR PROFILESPRIMARY COMPETITORS

-MIDNITE-History: MidNite is a drug free Sleep Aid acquired by Meda AB

in 2012. It is sold in a tablet form that is drug free and

prevents next day grogginess that traditional OTC Sleep Aids

cause.

Sales: Since it was formed the sales of Midnight have

decreased from $20.7 million in 2012 to 19.5 million in 2013, a

5.7 % drop. These stats are opposite of ZzzQuil’s, which have

posted a 180.8% rise in sales ($44.6 million to $125.1 million)

over the same time.

Target Consumers: MidNite’s target consumers are mostly

females ages 18-34.

Product: The tablets are sold in three different varieties:

MidNite, MidNite PM and MidNite for Menopause.

Promotion: MidNite promotes a product that is effective and

does not cause grogginess. It allows the user to both fall

asleep at night and fall back asleep after waking up in the

middle of the night.

Place: MidNite can be purchased over-the-counter at many

grocers, drug stores and other retailers.

Price: MidNite’s average unit price is $9.60 for 28-30

tablets.

New Developments: MidNite has launched the app. “sleep

sounds” that plays relaxing sounds to prevent one from

taking OTC pills, but still have the product on their mind.

-UNISOM-History: Unisom is a Sleep Aid product that was formed in

1978. Unisom was purchased by Chattem, a Chattanooga,

Tn. Based company, in 2006.

Sales: Unisom SleepGels earned $29.8 million with a 11.8%

change. Unisom Sleep tabs only had a 0.2% increase and

Unisom QuickMelts stayed the same.

Target Consumers: Consumers who are looking for a new

form of sleep-aid to promote sleep.

Product: Unisom is sold over-the-counter in five different

forms including Unisom Liquid, Unisom SleepTabs,

Unisom SleepGels, Unisom QuickMelts, and Unisom PM

Pain. The main ingredients differ from product but all

consist of diphenhydramine HCI besides SleepTabs which

contain doxylamine succinate.

Promotion: Launching a product that meets a variety of

customers needs. Offering many forms of a product

which help pain and promotes sleep.

Place: Unisom can be purchased at Walgreens, Walmart,

CVS/pharmacy, Amazon.com, and additional retailers.

Price: According to Amazon.com, the price ranges from

$7.99-$18.99 depending on which product is being

purchased.

-SLEEP MD-History: Sleep MD provides effective relief of occasional

sleeplessness for a full night's sleep that leaves the

consumer feeling refreshed in the morning. Sleep MD is

manufactured by a Canadian company called Iovate

Health Sciences, which has been around for about 15

years.

Sales: Sales for Sleep MD have decreased in the past

year.

Target Consumers: Consumers who are suffering from

occasional sleepiness and want to fall asleep fast.

6

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COMPETITOR PROFILESProduct: Sleep MD is a dietary supplement Sleep Aid that helps

provide relief from occasional sleeplessness. It comes in a pill

form and its key ingredient is melatonin14.

Promotion: Sleep MD promotes a product that allows users to

fall asleep easier and faster due to a higher dosage of melatonin,

its key natural ingredient.

Place: Sleep MD is sold at Walgreens, CVS/pharmacy, Publix, and

other grocers.

Price: A package of 30 capsules costs $13.99, according to

Walgreens.com.

New Developments: Sleep MD has launched a new product that

has two times the active ingredient to help users fall asleep

faster.

SECONDARY COMPETITOR

-LUNESTA-Lunesta is an easy choice for a secondary competitor

because it is a leading prescription Sleep Aid that millions

of people have used. Though it is more difficult to attain

than over-the-counter sleep-aids, it is proven to help

people who suffer from insomnia10.

History: Lunesta is a prescription Sleep Aid that guides

people to sleep. It is marketed by Sunovian and approved

by the U.S. Food and Drug Administration (FDA).

Sales: The sales of Lunesta reached $779 million in 2012.

Target Consumer Segments: People who suffer from

insomnia.

Product: Lunesta is a prescription Sleep Aid that allows

those who suffer from insomnia to find sleep and stay

asleep, allowing them a good night’s rest.

Place: Lunesta is a prescription Sleep Aid that can only be

obtained by a healthcare professional at a pharmacy.

Promotion: Lunesta promotes that their product not only assists

falling asleep but staying asleep as well.

Price: According to GoodPx.com Lunesta can be purchased from

the low $300’s to the mid $300’s. Also, the price differs

depending on which health insurance the user has.

New Developments: Lunesta has set up a Rest for Less Saving

Program according to its website. This program is set up to allow

consumers the chance to pay nothing for their prescription. This

ultimately can save the customer $50 up to 12 times a year10 .

7

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COMPARATIVE ANALYSIS

-SUMMARY: ZZQUIL VS. COMPETITORS-ZzzQuil is the highest grossing of the OTC

Sleep Aids in terms of sales dollars and unit sales, posting

$125 million sales figures in 2013. Before ZzzQuil came on the

scene the market had been stagnant with few players; the big

spenders were Unisom, Sleep MD and MidNite, which

competed within a $200 million industry. From its

introduction in 2012 to the year end 2013, ZzzQuil’s share of

this market increased from 43.9% to 66.5%, growing 22.6%

and securing ZzzQuil’s spot as the leading product8.

In 2013 the closest competitor in terms of sales was Unisom,

which earned $49.9 million from all of its products. Moreover,

as shown in Figure 4, since ZzzQuil’s launch in the OTC Sleep

Aid industry has grown by $187 million with ZzzQuil’s sales

accounting for more than $80 million of growth8.

-COMPETITIVE EXPENDITURES-Prior to 2012 companies were each spending

around $5 million per quarter advertising on network TV, cable

TV, syndicated TV, magazines, Sunday magazines, network

radio, and the Internet. Unisom focused on TV and radio while

MidNite and Sleep MD mainly advertised in magazines. Between

2009 and 2011 Unisom spent $16 million, MidNite spent $21

million, and Sleep MD spent $10 million.

In Quarter 2 of 2012 ZzzQuil was introduced and completely

disrupted the OTC Sleep Aid market. Its first quarter

advertising expenses were just $1.9 million and focused on

network TV, syndicated TV and Sunday magazines; this may

seem unimpressive against MidNite’s $3.9 million which was

spent mostly on magazine ads. But the next quarter ZzzQuil

used $18 million across all media, dwarfing all other

competitors’ spending. This trend continued from Quarter 2 of

2012 until the 2013 year end. Figure 5 shows that ZzzQuil’s

advertising spending makes up more than 85% of the total

industry’s advertising expenditures17.

-MEDIA MIX-There are two basic strategies that OTC

Sleep Aids used to advertise. The most basic is used by

Somnapure and Sleep MD, which focus on single media

outlets. Somnapure, bolstered by its parent company Peak

Life, spent 100% of its dollars on Internet over all five years,

likely seeking a young demographic who is informed and

spends time researching products before they buy. Sleep MD,

which spent 97.8% of its 2012 budget on traditional

magazines, also used a single-focus approach to advertising.

During the same year it allocated 2.2% of its budget to

Internet ads, but that was the only diversion from a focus on

long lasting, pass-along impressions that magazines provide.

The other, more complex strategy used by

OTC Sleep Aids, is a diversification of advertising. Unisom and

ZzzQuil spread their money over network TV, cable TV,

syndicated TV, magazines, radio, and Internet. Unisom did focus 100% of its dollars on TV advertising 2009 and 2010,

but in 2011 its media use expanded to include Internet utilizing

3.2% of advertising. Then ZzzQuil arose in 2012 with a

designed media blitz. Utilizing every channel except radio and

even allocating .4% of advertising to outdoor ads, it evenly

distributed huge ad expenses to penetrate the market17.

Company Brand

52 weeks

ending Nov. 4,

2012

Share of

segment

52 weeks

ending Nov. 3,

2013

Share of

segment

Sales change

2012-13Share change

$million % $million % % % point

Total 101.6 100 188.1 100 85.1 -

Procter

&

Gamble

Vicks ZzzQuil 44.6 43.9 125.1 66.5 180.8 22.7

Total 44.6 43.9 125.1 66.5 180.8 22.7

Sanofi-

AventisUnisom

SleepGels25.7 25.3 28.8 15.3 12 -10

Unisom

SleepTabs13.9 13.7 13.9 7.4 -0.1 -6.3

Unisom

SleepMelts4.4 4.4 4.5 2.4 0.6 -2

Total 46.7 46 49.9 26.5 6.9 -19.4

Figure 4

Market Share of OTC Sleep Aids

8

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CONSUMER ANALYSISThe array of media ZzzQuil uses has resulted in a wide

range of exposure since its time of entry, keeping the

product on the minds on a variety of consumers in a way

that many competitors have not attempted. And as Share

of Voice analyses will show, ZzzQuil’s massive budget is a

large factor in its industry dominance16.

-SHARE OF VOICE-In the past, these two Media Mix

strategies used by OTC Sleep Aids created unique

opportunities for Share of Voice among competitors. From

2009 until 2012 there were niches which allowed certain

products to hold a considerable Share of Voice in

separate media categories. Sleep MD focused all its effort

towards traditional magazines while MidNite was the only

product to use Sunday magazine advertising. This gave

MidNite 100% Share of Voice in that channel. And while

Somnapure and Peak Life, being part of the same family,

had nearly 100% share of Internet advertising with little

or no competition, Unisom was allowed more than 80%

Share of Voice in all TV advertising categories from 2009

to 2011.

ZzzQuil’s competitive advantage lies in vast resources

provided by its parent company, Procter & Gamble. P & G

earns $83 billion in annual revenue. This is almost twice

as much as Unisom’s parent, Sanofi-Aventis ($45 billion),

and over 40 times MidNite’s parent, Meda AB ($2 billion)

(cite). In 2012, its first year, ZzzQuil spent more than $38

million on advertising, outspending its combined

competition by $20 million; this is impressive considering

it was brought to market in Quarter 2 with a mere $1.9

million budget (cite). ZzzQuil dispersed this large budget

across all relevant channels. It outspent Unisom in TV

advertising, earning 98.2% in network TV, 88.5% in cable

TV, and 84% in spot TV. It also rivaled the biggest

competition in magazine advertising, MidNite, earning

shares of 45.9% in traditional magazines and 48.9% in

Sunday magazines.

At the end of 2013 ZzzQuil is still the loudest of the OTC

Sleep Aid players. It boasts a majority Share of Voice in all

TV categories again, holding over 90% in network, cable,

and spot TV. In fact ZzzQuil is louder than its competitors

in every channel it has used except for Internet

advertising, which Peak Life’s 50.8% share edges past

ZzzQuil’s 48.1%16. Figure 6 shows Share of Voice across

all media in 2013.

MidNite 12074.2 9.7%

Sleep MD 1718.6 1.4%

Unisom 7796.8 6.3%

Somnapure 104.2 .00%

ZzzQuil 102279.6 83%

Total 123973.4

Expenses from Q2 2012

to Q4 2013 (in thousands)Figure 5

9

3% 5%2%

2%

88%MidnitePeak LifeRescue GumSleep MdZzzQuil

Share of Voice for 2013

Figure 6

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CONSUMER ANALYSIS-TARGET MARKET-

According to surveys and data

collected by Simmons, there are several consistent

variables for those who should use ZzzQuil. The ideal

customer for ZzzQuil is an older female, age 50 and

up, who either lives by herself or with her spouse.

Generally, there is a strong correlation between the

women exerting independence in multiple facets and

the use of ZzzQuil. The strong level of independence

could be caused by the user feeling as if they are

alone in the world and that no one cares about them

so they must worry about themselves. Even though

these customers are not very religious, they do value

ethics and morals and expect ethical behavior from

brands they support. Even though these customers do

not feel that they can change their lives, they do like to

take risks every now and then in order to feel alive17.

-TARGET MARKET & HEALTH-Given the target market’s financial

well being and strong level of independence, the

customer chooses to self medicate rather than go to

the doctor. Most of the time, even when the

customer does go to the doctor, they will question

the doctor with research that they have found about

products that they feel would help them out. Even if

the doctor advises against a product, the consumer

has been known to bypass doctor recommendations

and use the information that they collected on the

Internet. Health websites, fine print on magazines,

and newspaper ads are the primary tools that this

target market uses in order to decide whether or

not to buy a product. This target is also very

concerned with what they put into their bodies, so

they are more inclined to do extra research on

products that are consumed. Preventative health is

also something that this consumer cares about, so

the use of probiotics is quite common in this group17.

-TARKET MARKET & ADVERTISING-There are three primary forms of media that

are effective for this target market. The most

effective medium to use is magazines. This target

market is very interested in what is going on in the

entertainment world, so a magazine such as People would appeal to them. Even though the consumer does

not necessarily buy the product that is being

endorsed by celebrities, the fact that the product has

an ad in the magazine bodes well for this market.

Having information about the product in small print

also attracts the attention of eager, self motivating

individuals. Having a supplement page in a magazine

also helps draw the attention of the target market

because it gives them the opportunity to feel as if

they have done research before buying a product. The

second most effective way of reaching this target

market is by using television. The use of television is a

very useful tool for this target market, but it must be

used in the correct fashion, else the communication

effort becomes futile. This target market will not

consistently watch commercials17.

10

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CONSUMER ANALYSISMore than likely, this target market has been known to

record television programs in advance so that they can

fast forward through the commercials. If they watch a

show in real time they are also known to flip channels

in order to skip the commercial advertisements. In

order to combat this constant desire to avoid

commercials, product placement within the television

shows is the key for advertising the product. If the

product can properly be placed in a show, the target

market has a better retention rate and a higher

potential of purchase rate as well. The least effective

medium for the product would be radio. Like television,

this target market tends to swap radio channel during

a commercial break. In order to combat the channel

flipping, a very well thought out and repetitive ad like

HeadOn uses would be recommended17.

-SUMMARY-Based on the information collected about

the target market there are two predictions that can be

made. The first is that the average consumer is generally

and older female who has limited income. Due to limited

income, the target customer is more likely to self medicate

with over the counter drugs than to use prescription drugs.

The second prediction that can be made is that magazines

are the best channel of communication to reach the

desired audience, ZzzQuil’s prime consumers are

entertainment savvy and read magazines like People or

Entertainment Weekly. An advertisement in publications

such as these that include detailed information about the

product allows the customer to feel like the have done due

research before making their purchase decision17.

11

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METHOD & RESEARCH OBJECTIVES-METHOD-

For our survey we focused on several of the

characteristics deemed important in the OTC sleep aid

industry analysis. We chose online mediums like Facebook,

e-mail, and text message to distribute our survey. An

accurate depiction of the target market and its use of

ZzzQuil was obtained. We planned to focus on gender, age,

marital status, and income level and received a wide range

of diversity among these characteristics in our sample. In

order to keep a good random sample and possibly find new

potential consumers of ZzzQuil, we did not limit the survey

respondents to just those categories. We expected to

received 120 responses to give us an accurate depiction of

the target market. However, of those 120, we actually

received 16% from our target market of 35-49 years of

age. The other 84% respondents were not in our target

market (18-34 years of age), but still helped us understand

the consumer patterns of ZzzQuil. The survey took

approximately 10 minutes to complete and was conducted

from October 28 to November 4.

-RESEARCH OBJECTIVES-

-To measure the prominence of ZzzQuil in the market of OTC sleep

aids

-To measure how financially relevant OTC sleep aids are in the

consumer budget

-To measure the target market’s exact demographic (age, gender,

income, family)

-To measure how/if ZzzQuil competes with prescription drugs in the

area of diagnosed sleep disorders

-To measure the target market’s perception of sleep aids

-To measure the target market’s scale of attitude towards sleep

aids

-To measure the seasonality of ZzzQuil in the market of sleep aids

12

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PROPOSED SURVEY DESIGN

Research Objective Survey Question Numbers

To measure the prominence of ZzzQuil in the market of OTC sleep aids Q19, Q20, Q21, Q22

To measure how relevant OTC sleep aids are in the consumer budget Q18

To measure the target market’s exact demographics (age, gender,

income, family)

Q1, Q2, Q3, Q4, Q5, Q6

To measure how ZzzQuil competes with prescription drugs in the area of

diagnosed sleep disorders

Q9

To measure the target market’s perception of sleep aids Q14, Q15, Q36, Q37, Q16, Q17, Q34

To measure the percentage of the target market who experience

problems with sleep

Q7, Q8, Q10, Q13, Q11, Q13, Q32, Q33

To measure the seasonality of ZzzQuil in the market of sleep aids Q23, Q35

To determine differences between gender likelihood to use ZzzQuil Q2, Q19

1. We conducted a survey using the internet and mall intercepts. The internet reaches a more diverse

group and provides the respondent with an easier format to reply; mall intercept allows the research

team to identify the participant as one who does or does not fit into our target market.

2. Research Objectives Table

3. Survey bias was reduced by carefully wording and

structuring each question to avoid:

a. leading respondents to a specific answer. When asked

whether the respondent recognized ZzzQuil or were aware of

it, the questions were not prefaced with extra information that

highlights ZzzQuil’s notoriety.

b. asking double-barreled questions. We either broke up

our questions into multiple questions to avoid this or we gave

options using the phrase “one of the following”.

c. omitting secondary markets. All age ranges, genders,

income ranges, marital statuses, education levels, family

styles, etc. were included to ensure that all variations of

respondents will complete the survey.

d. asking for overly detailed information. We did not ask

respondents for information more than one month prior to

maximize accuracy of recall.

13

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ANALYTIC PLAN-To discover the prominence of ZzzQuil in the market of OTC sleep aids we analyzed

respondents’ awareness of and attitudes toward ZzzQuil. By comparing awareness of ZzzQuil to

awareness of other brands and likelihood to use ZzzQuil again, ZzzQuil’s prominence was

revealed.

-To measure how relevant OTC sleep aids are in the consumer budget we measured how

much the average user of OTC sleep aids spends in a month on sleep aids and compare that to the

price of ZzzQuil.

-To uncover the target market’s exact demographics we analyzed the age, gender, education,

family size, and household income of respondents.

-To measure how ZzzQuil competes with prescription drugs in the area of diagnosed sleep

disorders we used our diagnosis of ZzzQuil’s prominence compared to respondent’s likeliness

to use prescription sleep aids.

-To discover the target market’s perception of sleep aids we determined respondents’ usage of sleep aids,

willingness to self-prescribe, feelings after using sleep aids, and patterns of sleep aid usage.

-To quantify the percentage of the target market who experience problems with sleep we uncovered how many

respondents sleep without sleep aids, how many nights they have trouble sleeping, and if there were any other plausible

causes for their sleeplessness such as pets or children.

-To measure the seasonality of ZzzQuil in the market of sleep aids we asked the respondents when they are most

likely to buy sleep aids. We then compared that to their likeliness to use sleep aids.

-To find difference between gender and likelihood to use ZzzQuil we will analyze responses from our questionnaire that

asked respondent's how likely they were to use certain OTC sleep aids

14

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SUMMARY OF QUESTIONNAIREThe questions we used in our survey were written to

gain information about the consumer, specifically the target

demographic. We focused on information that was unobtainable in the

situation analysis to verify our target demographic and get more

insight on how consumers perceive ZzzQuil and over the counter sleep

aids in general. The questions were categorized throughout the survey

in two main ways. The first half of the survey asked for general

demographical information such as age, income, and details regarding

previous problems sleeping/sleep disorders. The second half was

more specific to the consumer’s perception of ZzzQuil and how

confident they are with ZzzQuil relative to other competitors.The survey was

created mainly with the

target demographic,

middle aged females of

varying financial status and ethnic background, in mind. It

consisted of 20 simple questions that take between five and seven

minutes to complete. Qualtrics online survey software provided

the platform for the survey that will be distributed online and in

mall intercepts. The research team visited various malls and

grocery stores to distribute the surveys in person.

15

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DEMOGRAPHICS

1%

70%

11%

16%

2%0-17

18-34

35-49

50-64

65+

34%

66%

Male

Female

7%7%

23%

9%44%

10%

High School

Grad

Associate's

Bachelor's

Master's

Enrolled in

College

Other

61%

29%

4%2% 4%

Single

Engaged

Married

Divorced

Widowed

As shown in Figure 10, from the data collected in the survey of 122 participants

we reported that 81 of the people who participated were females, accounting for 66.4% of the

respondents. The remaining 41 respondents were males, representing 33.6% of the total

population.

Figure 8 shows the largest age group in the sample was 18-34 year olds who

accounted for 70% of our results. The next largest portion of the data collected was the age

range of 50-64 years. This group was comprised of 19 participants and made up 16% of our

respondents. The next largest group, 35-49 year olds, made up 11% of our sample. The

response rate for the age ranges of 0-17 years and 65+ years was very low. Together the two

groups combined for 3% of the overall responses.

Of those surveyed and displayed in Figure 9, 61%, or 74 of the 122, marked that

they were single. The next largest group were those who were engaged at the time they took

the survey. This group consisted of 35 participants, making up 29% of the overall total. Of

those who are married, widowed, or divorced there was very little significance in the data

collected. Combined, these three sections represented 12 respondents and only 10% of the

overall data.

Age

Education Marital Status

Gender

Figure 7

Figure 8

Figure 9

Figure 10

16

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DEMOGRAPHICS & PEOPLE WHO HAVE TROUBLE SLEEPING

When assessing the prominence of sleep problems in the market, we first asked

respondents to answer how many nights within the last month they had trouble sleeping.

Explained in Figure 12, at 40%, most of the respondents replied with only 1-3 nights this month.

But 29.5% responded with 4-7 nights, which is a moderate sleep problem. With 18.8% of

respondents claiming to have trouble sleeping more than 8 nights this month, we’ve discovered

our respondents seem to have a mild problem with sleep. We then ran correlation analysis to

see if there was a correlation between any specific one of our demographic groups and the

amount of nights in the past month they had trouble sleeping. Pearson Correlation showed

there was no strong correlation between any of the

demographics, Correlations were sporadic and

inconsistent; all of the Pearson Correlation

numbers were significantly closer to 0 than

1 or -1.

11%

40%30%

9%

10%0

1 to 3

4 to7

8 t0 10

11+

Figure 11 shows that of the 122 respondents 51

people, or 42% of the total, made between $0 and $24,999

within a year. And while 24% of the respondents, or 29

respondents, claimed that they make between $50,000

and $99,999, 19 respondents, or 16% of the sample,

marked that they earn between $25,000 and $49,999.

There is an equal distribution among those who make

between $100,000 and $149,999 and those who make over

$150,000. For each of these groups there were 11 respondents,

representing 9% of the total.

In Figure 7 it is explained that of the results collected, 54

of our 122 respondents are in college. This was our largest distribution

at 44% of the data. The next largest distribution were those with a

bachelor’s degree which was 23% of our total, or 28 respondents. The

next largest group, those who claimed another level or degree type not

covered in our questionnaire, was 10% or 12 respondents. The 11

respondents who marked that they had a master’s degree covered 9%

of our overall total. The final two pairings were each rounded at 7% of

the total. There were 9 respondents who said they were high school

graduates and 8 who said that they had an associates degree at most.

42%

16%

24%

9%

9%$0-24,999

$25,000-

49,999

$50,000-

99,999

$100,000-

149,999

$150,000+

Income

Nights w/

Trouble Sleeping

Figure 11

Figure 12

17

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PERCEPTIONS OF SLEEP AIDS

0%10%20%30%40%50%60%70%80%90%

100%

How People Feel After Taking Sleep Aids

Would you be more likely to.. %

go to a doctor for a prescription 29

self-prescribe medication 71

We also wanted to analyze the target market’s perception of sleep aids. We

did this by asking our respondents to tell us if they would be more likely to approach a

doctor for a prescription or self-prescribe themselves for sleep issues. We found a

convincing 71% of our respondents would choose to self-prescribe, which in Figure 15

shows that our market is actually significantly more trusting of over the counter sleep aids.

We also asked our respondents how they felt after taking sleep aids. As Figure 14 will show,

the results were a little scattered with the three most common answers being “rested” at

76%, “groggy” at 60%, and “energetic” at 54%. This shows that although there are many

who benefit from sleep aids there is still a large portion of the market who feels that there

are potential downsides to using them. This could be a result of a number of things, such as

how sleep aids affect different people. There is also the possibility of the product not being

used appropriately by the directions given for usage.

Figure 13 shows the mean differences between men and women and their

likelihood to use ZzzQuil. We found that there is no statistical significance between mean

ratings, revealing that men and women are equally likely to use ZzzQuil.

Figure 14

Figure 15

18

Likelihood to Go to a Doctor

or Self-Prescribe

ZzzQuil MidNite Sleep MD Unisom Somnapure Lunesta

Men 2.90 2.15 2.15 2.20 1.95 2.44

Women 2.88 1.86 1.93 2.17 1.88 2.05

Mean Ratings of Likelihood to Use ZzzQuil Between GendersFigure 13

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In this section of the survey our objective was to measure the rate that ZzzQuil was

recognized and the likelihood that people would use the product compared to the rest of the market.

We chose to show the comparison in Figure 16 of both over the counter competitors and prescription sleep aids.

While interpreting our survey results we discovered that ZzzQuil is the top performer in the sleep aid

market. ZzzQuil has 88% recognition with a mean likelihood of 2.89, proving to be higher than

any other sleep aid studied. Lunesta, a common prescription sleep aid, yielded similar results with a

recognition percentage of 80 and a 2.18 mean likelihood of use. The overall results for the sleep aids

means we chose to compare were low with a range of 1.90-2.89, meaning many respondents would

be unlikely to use them. Figure BLANK represents our research in the table below.

Our data also shows that ZzzQuil breaks in to the prescription sleep aid market. Figure 17

displays that those who prefer prescription sleep aids are more likely to use ZzzQuil than those who prefer over

the counter sleep aids, exhibiting means of 3.14 for prescription preference and 2.95 for over the counter

preference.

PROMINENCE OF ZZZQUIL IN OTC AND PRESCRIPTION MARKETS

Brand % Recognized Mean Likelihood to Use

ZZzzQuil 88 2.89

MidNite 12 1.96

Sleep MD 34 2.00

Unisom 56 2.18

Somnapure 7 1.90

Lunesta 80 2.18

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Prescription Over the Counter

Mea

n

Likelihood to Use ZzzQuil

Figure 16

Figure 17

19

Recognition and Likelihood to

Use of Brands Studied

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CONSUMER BUDGET & SEASONALITYConsumer’s monthly

budget for sleep aids %

$0-24 91%

$25-49 6%

$100+ 3%

Mean

1.18

In order to determine how relevant over the counter sleep aids are in our

consumer’s budget, we first assessed how much our respondents spend on sleep aids or

sleep aid alternatives in any given month. We can then take that information and apply it to

what we know about the price difference between over the counter sleep aids and

prescription sleep aids. When running this analysis we discovered most consumers don’t

place much importance on sleep aids when fulfilling their routine expenses. Figure 18

explains that in a given month 91% of our respondents stated that they only spend $0-$24

on sleep aids or sleep aid alternatives, telling us that the vast majority of respondents are

either not buying and using sleep aids or they are spending minimal amounts on them. This

is not necessarily bad for the sleep aid market given that the over the counter option is

much cheaper than their prescription-required counterparts. With this evidence, we can

assume that most of the market doesn’t find a need to purchase and use sleep aids. But if

they do, more often than not they will choose to purchase the over the counter option.

In Figure 19 we analyzed the seasons that customers were most likely to

purchase sleep aids. October-December resulted in the highest percentage with a 9%

while the other seasons all had results under 4%.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

January-March April-June July-September October-December

Seasons When People Buy Sleep Aids

Figure 18

Figure 19

20

Budget

Allocated to

Sleep Aids

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SUMMARY OF SURVEY RESEARCH FINDINGS

Our research affirms the original attitudes about ZzzQuil’s prominence in

the sleep aid market, both over the counter and prescription. Figure 20 shows that while

the percentage of the sample who has taken sleep aids is only 53%, these people are

aware of ZzzQuil significantly more than its competition.

The general consensus of respondents is that sleep aids, whether over the

counter or prescription, have negative side effects, but there are enough people with

sleep problems to provide significant data that sleep aids are of use to them. With the

majority of respondents self-prescribing sleep aids there is a huge potential for the over

the counter sleep aid market to continue its growth. ZzzQuil’s price also makes it relevant

to consumers of sleep aids who normally spend very little each month on products to

combat their moderate to severe insomnia.

And while it seems that

respondents purchase sleep aids in the late

months of the year, there is not much data to

back up these findings.

53%

47% Have

Taken

Have

NOT

Taken

Taken Sleep Aid?

Figure 20

21

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QUALITATIVE RESEARCH OVERVIEW 22

In this section, we analyzed and interpreted qualitative data

gathered from depth interviews chosen at random. The respondents were asked a

series of questions in various formats to gain an insight into our target market’s

perception of the sleep aid industry. Allowing the respondents to elaborate on

their feelings and attitudes of ZzzQuil as well as over the counter sleep aids gives

us a deeper and more elaborate understanding than the quantitative data.

Our intended sample for the depth interview was chosen by looking

at specific demographic information such as age, economic status and gender.

We chose two respondents that matched the target market’s characteristics

described in Simmons data provided in our Situation Analysis and we chose the

third respondent with contradictory characteristics to provide a contrasting

perspective.

In order to obtain our qualitative data, we found respondents that

matched our sampling frame and the elements that we chose. Age, gender and

economic status are important characteristics in our study because previous

studies have shown a correlation between young to middle age, middle class

women and the likelihood to purchase ZzzQuil. The respondents we found to match

up with these elements were two women, one middle age, lower middle class and

the second respondent, young and upper middle class. Our third respondent, a

young, lower middle class male.

Figure 21 shows the objectives we used to guide our interviews;

these objectives were defining demographics of the respondents, distinguishing

preferences of OTC and prescription drugs, loyalty to the product and methods used

in choosing a sleep aid. From our survey results, these were specific topics that

called for further questioning. We created questions accompanied with probes to

allow us to dig deeper into our objectives. Probes for further inquiry were used

after each question as the situation needed; since every interview was difference

there was no specific guideline for probing, allowing for a free-flowing session.

Objective Questions

Define demographics of respondents Q1, Q3

Distinguishing preferences of OTC and prescription sleep

aids

Q2, Q4, Q10

Loyalty to the product Q5, Q6

Methods used in choosing a sleep aid Q7, Q8, Q9

Qualitative Research Objectives

Figure 21

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CONSUMER INSIGHTS, KEY POINTS & CONCLUSION 23Our in depth interviews revealed various levels of trust in

sleep aids as a whole, but high recognition and favorable perception of

ZzzQuil as a brand. Sleep aids are a touchy subject for many of our

respondents; people are either hot or cold about their use and

acceptance. Some said that they will not take sleep aids at all cite fear

of side effects the morning after as the reason why. The words ‘groggy’

and ‘tired’ were commonly used to describe potential feelings following

a night of over the counter or prescription sleep aid use. These

respondents believe that a certain amount of sleep is required to allow

the sleep aid to wear off, or else they will spend the entire following day

groggy or tired.

Those who use sleep aids have various reasons for doing

so, but their definition of a sleep problem is also varied. While some

respondents are prescribed sleep aids to combat sleep problems

caused by other medical conditions, some do not think that they have

medical issues and self-prescribe when needed (if they use them at all).

People that use prescriptions are dedicated to their treatment and take

daily measures to fit their prescription into their life, but those that

self-prescribe do so on a needs basis.

Some of our respondents using prescriptions tended to have a more

favorable opinion of sleep aids as a whole, but this is likely because they

are used to working them into their daily routine and are very

comfortable with their use and effects. On the other hand, those who use

over the counter sleep aids are not as reliant on them and are therefore

more cautious and conscious. Figure 22 shows important quotes from

our depth interviews that support our final recommendations.

Important Quotes from Depth Interviews

G: “Which sleep aids have you considered or one that sticks out in your mind?”

K: “NyQuil or ZzzQuil”

"I would have to know and trust a brand that I heard about through friends and family to ensure that it isn’t tied with bad experiences."

“Yes, I go for the liquid ZzzQuil. I saw the commercials for it and I hate taking pills, so it seemed like a good fit for me.”

“I’ve trusted ZzzQuil more than anything, otherwise non-pill form medicines work best for me. I’m just weird about it.”

"Yes, brand name is a big thing. Then I would look at the price."

G: “A good night’s sleep is worth $BLANK per night.”

I: “I’d say about $50. A good night of sleep is really good to find.”

“I haven’t really thought about it before, but I would consider Lunesta.”

Figure 22

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FINAL RECOMMENDATIONS TO CLIENT 24

Based on the data acquired through Simmons, online

databases and data collected through surveys, both qualitative and

quantitative, we have found several ways that ZzzQuil could become a more

successful product. The first recommendation we would make, is to keep an

aggressive control over advertising in the OTC market. Since its introduction

in 2011, ZzzQuil has had remarkable brand impression compared to other

products in the OTC market. Having a strong control over the advertising

realm creates the impression that ZzzQuil is the best brand. Our research

leads us to believe that if the consumer wants the best results, they will use

a well known product such as ZzzQuil. Also, ZzzQuil would benefit if they

started advertising more during the slow season for OTC drugs, January

through September. Being able to take over this period in which advertising

lulls, ZzzQuil could continue to reign in brand recognition.

Another recommendation that we have for ZzzQuil would be to

change the beliefs that people have towards OTC sleep aids and the

impression that taking the product will lead to being groggy the following

morning. We learned from our research that people believe they need a

minimum of eight hours of sleep in order for the product to benefit them.

ZzzQuil should create a campaign addressing this issue and show that this belief

is false and that it actually has a positive effect on its users. When these beliefs

can be discredited, ZzzQuil will have a stronger image in the market.

Another recommendation is that ZzzQuil should create a product

that has a more natural composition. In the current day and age people are more

concerned about what they are putting into their bodies; that is why there is such

a strong following behind the use of melatonin. If ZzzQuil can create a more

natural product, it could expand its target customer base.

The final recommendation for ZzzQuil is to create a word of mouth

campaign. Our interviews showed us that recommendations by friends and family

can strongly influence a person’s attitude toward a product. Because of this a

grassroots approach could greatly change the perception of the product, further

securing ZzzQuil’s position as the top selling, most recognized OTC sleep aid.

Page 27: VICKS ZzzQuil RESEARCH REPORT - Gabrielle Millerutprgabriellemiller.weebly.com/uploads/4/6/9/3/46934431/... · 2018. 8. 30. · VICKS ZzzQuil RESEARCH REPORT Basha Coleman, Clayton

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