News: Analysis & Commentary: MARKETING
Bayer AG, the giant German drugmaker, spent 75 years trying to win back the rights to its name in the U.S. Last September, it finally recaptured its American trophy, paying SmithKline Beecham $1 billion for the business stripped from it after World War I. German executives were jubilant.
But oh, what a headache.
Bad enough that the Bayer brand's U.S. sales, battered by generic rivals, fell 8% last year to $110 million. But aspirin products all are fighting to keep market share from Tylenol, Advil, and other nonaspirin remedies. Supermarket sales of flagship Genuine Bayer Aspirin slipped from $42.4 million in 1990 to $28.1 million last year, according to A.C. Nielsen Co. (chart).
Now, Bayer is launching its own version of pain relief: a $40 million marketing campaign, including television ads set to debut on Apr. 21. That's a 33% hike over last year's spending. "We are ready to fight back," says Klaus Kluthe, a consumer care executive at Bayer headquarters in Leverkusen, Germany.
The new ads, aimed squarely at aging baby boomers, take a two-pronged approach. TV spots for Extra Strength Bayer--featuring, for example, an older father painlessly horsing around with his young son--will stress efficacy. Meanwhile, a print campaign for Aspirin Regimen Bayer, which debuted in February, plugs aspirin's ability to ward off heart attacks and strokes.
EROSION. With such tactics, Bayer hopes to double its U.S. market share to between 8% and 10% by 2000. That may be a tall order. "I can see them turning this around. I can't see them making it a top brand," says Samuel D. Isaly, a partner at health-care research firm Mehta and Isaly. Bayer's push to sell aspirin as a heart-attack fighter is chancy, say critics, because getting consumers to buy a preventative typically is harder than selling them a remedy for a problem they already have.
Even if Bayer succeeds in expanding the market for aspirin,
it will continue to be hurt by private-label products that sell for one-third the price. Bayer says it will resist slashing prices to buy market share. It also will introduce new formulations: An aspirin/sleep aid combination, for one, is coming this summer.
Bayer's big edge: After 100 years of use, it has nearly universal name recognition. Analysts, furthermore, say the U.S. operations generate plenty of cash. For the boost to its corporate ego, this may be one headache Bayer can afford.By Mary Kuntz in New York, with bureau reports