Pepto Bismol: an America's Hottest Brands Case Study

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Pepto Bismol
Private label has been the clear winner in most over-the-counter drug categories, gaining 1.5 share points across all channels in the past year, more than in any other segment of package goods, according to Information Resources Inc.

One exception has been Procter & Gamble Co.'s 108-year-old brand Pepto-Bismol, which added 0.7 share points in its original stomach-remedy liquid category and 2.5 share points in stomach remedy tablets in the 52 weeks ended Sept. 6, according to IRI data. That comes despite a roughly 60% price premium for Pepto over private label.

Nathan Fox, brand manager on Pepto, believes a new ad campaign launched shortly after he took over the brand last year has been one key to the successful defense. The "Coverage" campaign has produced the best scores on copy tests since P&G acquired the brand 28 years ago, including the "Singing the Praises" Pepto campaign it replaced.

That campaign, which featured a dance to illustrate the five gastric distress conditions Pepto treats, certainly captured imaginations, particularly on schoolyards and YouTube, as people acted it out.

As endearing as the dance was, it was wearing thin. "'Singing the Praises' had been on the air for over five years, and over time our copy quality had been deteriorating a little bit," Mr. Fox said. "We saw it as a sign the campaign itself was wearing out."

The new "Coverage" campaign, which features a headset-wearing, pink-vested "Pepto Guy" fielding calls and offering humorous advice to gastro-intestinally challenged callers, does a better job of covering the growing range of products in the Pepto lineup, including a recently launched Insta-Cool product, Mr. Fox said.

Nathan Fox
Nathan Fox, brand manager, Proctor & Gamble Co.
"We wanted a more emotional approach," Mr. Fox said, "something that said using Pepto is almost like a good insurance policy."

The most recent ads focus squarely on Pepto as a cost-effective alternative because it works against a wide array of problems. Mr. Fox believes that message, along with steady product innovation, can keep the brand ahead of private labels.

Mr. Fox, 33, started his five-year career at P&G in the recently divested prescription-drug business, working on newer drugs such as Actonel and Enablex as well as upstream product development and acquisitions. The former engineer for Marathon Oil went back to get an M.B.A. at University of North Carolina because he was interested in marketing, and he saw P&G and the drug business as the places he most wanted to ply his new trade.

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