June 2005 Times & Trends Executive Summary:
Chronic Disease: Capitalizing on Growth Potential Through Patient Marketing

 Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This month’s Times & Trends provides guidance to Rx, OTC, and CPG manufacturers regarding marketing, merchandising, and product development opportunities targeting key chronic disease segments.

This free summary is also accessible via the GMA Web site  at http://www.gmabrands.com/publications/gmairi.cfm

INTRODUCTION

Given the prevalence and rising incidence of chronic disease and the influence that disease state management has on consumer purchase behavior across Rx and OTC remedies as well as food and beverages, patient marketing – targeted marketing to specific ailment sufferer segments – offers major growth potential for both manufacturers and retailers across a broad range of categories.

This report provides a unique, in-depth assessment of purchase behavior among sufferers of obesity, high cholesterol and diabetes, each of which affects a significant proportion of the population and is a key influencing factor in channel and product selection. Leveraging high cholesterol as a case study, the assessment also reveals critical differences among patient segments within ailment groups as determined by insurance coverage, demographics and presence of additional ailments.

Focused marketing and merchandising initiatives, including product mix aligned with sufferer needs, in-store signage and information, cross-merchandising with other high purchase products and relevant, targeted marketing messages highlighting disease management benefits will be rewarded with customer acquisition and retention among these high-value consumer segments.

DISEASE PREVALENCE

Chronic disease impacts a large and growing proportion of the population. All three ailments studied for this report represent sizable segments of the population : obesity: 30% (adults); high cholesterol: 17%; diabetes: 6%. Each of these segment’s unique purchase patterns related to disease management offer significant market opportunity for retailers and manufacturers.

DISEASE MANAGEMENT PRACTICES

Diet is a fundamental component of consumers’ chronic disease management efforts. Consumers suffering from obesity, high cholesterol and diabetes are 2-3 times more likely than non-sufferers to follow specific diets, including low fat, low sugar and low carbohydrate. These consumers represent prime targets for products with such dietary benefits, and retailer initiatives to attract chronic disease sufferers must include an appealing mix of products with these characteristics.

The vast majority of high cholesterol and diabetes sufferers use prescription medications in addition to diet to manage their conditions. With roughly three-quarters of consumers with high cholesterol and diabetes taking prescription medications for their ailments, the pharmacy should serve as the cornerstone of patient marketing to these consumers, as it provides frequent access to disease sufferers and strong cross-marketing and cross-merchandising potential. As a relatively small proportion of obese consumers use medication to control their condition, programs seeking to appeal to an obesity sufferer will need to be centered around non-pharmacy activities including weight management signage throughout the store and informational kiosks.

CATEGORY OPPORTUNITY

Ailment sufferers balance dietary restrictions with some indulgence. Sufferers of chronic disease index high on purchases of categories with disease management benefits, such as low calorie soft drinks, vitamins and minerals. Despite diet restrictions, however, these consumers – like the general population – also make room in their diets for more indulgent products. Foods and beverages with dietary benefits should be offered to consumers within the context of a balanced diet. Retailers’ targeted marketing initiatives to these segments do not need to be limited only to products with disease management characteristics.

Sub-segment analysis reveals key differences in disease management and purchase behavior across sufferers of a single ailment. Male sufferers of high cholesterol, for example, are much more likely than their female counterparts to purchase heart-healthy products such as fresh cut salads and snack nuts, but they are also more frequent purchasers of indulgences such as cookies and frozen novelties. In addition, uninsured high cholesterol sufferers are significantly less likely than those who are insured to purchase heart healthy products.

CHANNEL TRENDS

Presence of chronic disease is a key driver of channel selection and shopping behavior. Given the high proportion of high cholesterol and diabetes sufferers who treat their conditions with frequently filled prescription medications, retailers who fill these prescriptions have a potentially huge advantage in capturing sales throughout the store among ailment sufferers. Drug stores currently hold the largest share of transactions among these consumers, and while the channel has secured a higher share of CPG spending among sufferers versus non-sufferers, the upside potential through cross-marketing is substantial.

Patient segments within ailment groups exhibit unique shopping patterns. As with product selection, channel selection tends to differ even within a single ailment group. For example, cholesterol sufferers with insurance coverage are about 600 times more likely versus their uninsured counterpart to shop the mail order channel. Female cholesterol sufferers are more likely to shop the drug channel, while males are more likely to shop discount.

Mail order represents a large and growing threat to traditional pharmacies among chronic disease sufferers. Capturing 14% of cholesterol sufferer prescription transactions and 15% of diabetes sufferer transactions, the mail order channel has made significant inroads in chronic disease prescriptions– particularly among senior consumers. Traditional pharmacies have opportunities to protect and grow share within these highly attractive segments through targeted marketing programs offering one stop shopping for all disease management needs and through delivery services that include both Rx and non-Rx products.

 

Source: IRI's Times & Trends Reports
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