EFFECTIVENESS OF OTC DRUG ADVERTISING AND ITS IMPACT ON CONSUMER BEHAVIOR Tejas Shah Assistant Professor, Chimanbhai Patel

Institute of Management and Research, India tejasmgmt27@gmail.com Amit Jain Associate Professor, JK Lakshmipat University, India amit_pjain@yahoo.com ABSTRACT The pharmaceutical industry is a high-technology, high investment and high-risk industry. Information and awareness plays a crucial role in marketing Pharmaceutical products. A consumers information originates from their existing knowledge or experience (internal sources) and from a variety of external sources, i.e., pharmacists, interpersonal communication, advertising and the media. The trend towards self-medication is likely to grow as consumers are becoming familiar with OTC drugs, due to extensive advertising by companies. The present study intends to explore advertising effectiveness of OTC drugs amongst consumers as well as antecedents of OTC drug purchase. A structured questionnaire was prepared by interaction with doctors, pharmacists and consumers of OTC drugs to identify important variables influencing OTC drug advertising effectiveness and purchase behavior towards OTC drugs. A study was conducted on 200 respondents who have seen the OTC advertisements. The advertisement of OTC drug was found to be persuasive. The study also reveals importance of seeking family members while buying OTC drugs. The study has given good insights for marketers and advertisers of OTC drugs and suggests including elements in the advertisement that increase believability and trust of the advertisement. Results of regression analysis revealed the view that Awareness, education and similarity component in terms of showing similar symptoms in the OTC drug advertisement had positive significant impact on consumer persuasion to buy a particular drug. The view regarding accurate nature of advertisement in terms of showing of side effect and ability of advertisement to develop a specific brand preference were found to be having negative significant impact on consumer persuasion for a particular OTC drug. Key Words: Pharmaceutical Marketing, OTC Drug, Advertising Effectiveness, Reference Group Influence

1.INTRODUCTION
The pharmaceutical industry is a high-technology, high investment and high-risk industry. It is also a highly competitive research based industry and a dedicated and demanding user of information. A consumers information originates from their existing knowledge or experience (internal sources) and from a variety of external sources, i.e., pharmacists, interpersonal communication, advertising and the media (Strutton and Pelton, 1992). Advertising/promotion is one of the important sources, which improves the information content of the consumers significantly. (Kalyanaram, 2008) Pharmaceutical products include both prescription and non-prescription over the counter drugs. OTC products are somewhat similar to consumer goods, while the prescription drugs share some characteristics of industrial goods and other characteristics of consumer goods (Mortanges et al., 1997). Liu (1995) is also of the view that in pharmaceutical industry, prescription products are considered to be organizational buying, whereas over the counter preparations are categorized as consumer buying. Due to changes in the category of many drugs from prescription to over the counter drugs, more self care information is available (Westerlund et

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al., 2001). Concern over the healthcare has resulted in greater consumer engagement and knowledge (Chewing and Sleath, 1996). Generally, OTC drugs are available without prescription and in most cases are advertised directly to the public. Consumers are becoming familiar with OTC drugs, due to extensive advertising by companies. The trend towards selfmedication is likely to grow towards these products (Nies, 1982). There is low financial and social risk involved while purchasing OTC drugs and it results in low involvement purchases. But, there are identifiable psychological risks with the potentially harmful effects of medication causing unease, which requires high involvement of consumers (Dholakia, 2000 and Charupatanapog, 1994). Risk influences the extent and nature of information search that occurs (Urbany et al, 1989). Information can ease the risk perceptions associated with medication (Bissel et al.) The consumer with greater knowledge can distinguish safe and normal use from misuse. Whilst risk of side effects increases with usage, less knowledgeable consumers were not as recognizant of risk. General marketing studies in the area of the relative importance of promotional tools have considered personal selling and advertising (Levitt, 1983). Since a considerable time ago, in the specific area of pharmaceutical marketing, consideration was given to the influence of advertising in medical journals (Wegner, 1960), direct mail advertising (Feber, 1958) and intra firm and inter-firm communications on purchase decisions (Martillar, 1971). Some of the research claimed that advertising did not influence their pharmaceutical choices with its role being one of reinforcement rather than conversion or contributed to knowledge (Kavanoor et al., 1997). Sometimes, information is contributing in reducing the risk, but there are some perceptual barriers to the effectiveness of gathering information from advertising (Bissell et al, 2001). In market development, a firm has to make the consumers aware of its products and educate them about the product, particularly in the drug market and persuade the distributors to carry the product. The firm has to educate and persuade not only the end consumers but also the physicians and pharmacists in pharmaceutical drugs market (Kalyanaram, 2008). Product evaluation follows information search. There are number of evaluative influences: product qualities and attributes, a consumers loyalty and knowledge, demographic factors and temporary pressures induced by symptoms immediately (Peddison and Olsen, 2008).

Peddison and Olsen, (2008) has found that the majority of consumers perceive OTCs to be safe and risk free. Demographic factors have an impact on OTC evaluations (Schufeldt et al., 1998). One study on the use of generic OTCs showed a difference between adopters and non-adopters (Strutton and Pelton, 1992). The adopters rated medical experts (doctors and pharmacists), interpersonal sources (family, friends and personal experience) and outlet sources (packaging, sales people and price) as significantly more important factor influencing their decision to actually purchase generic OTCs than nonadopters (Schufeldt et al., 1998). Brand choice can be determined through packaging and retailer information. This can improve consumers ability to information where a plethora of brands exists (Kavanoor et al, 1997). Brands with similar perceptions can be difficult to distinguish if consumer lacks specialized knowledge and may fail to optimize brand choice due to variety and ambiguity (Mitchell and Papavassiliou, 1999). It affects information assimilation and transparency. Brand proliferation has resulted in segments being targeted with different positioning strategies. Related OTC research has looked at information routed through one source or else directed to a particular demographic group (Peddison and Olsen, 2008). An extension of OTC market could mean an enhancement of pharmacists professional role as a medical advisor (Pioch et al., 1992). Pharmacists (retailers) may occupy an important role in providing not only advice but also a level of information that is sufficient for product use. (Bissell et al., 2000 and Tully et al., 1997) A study conducted by Peddison and Olsen (2008) found that many consumers indicated that they used the pharmacist as a medical advisor and they revealed a considerable amount of loyalty to particular pharmacist. Pharmacists can be pivotal in ensuring consumer safety together with product efficacy (Prayler and Brazier, 1998). Pioch and Schmidt (2004) found that a selected number of pharmacists who had established credibility and rapport with consumers were consulted frequently. Brand familiarity and trust is an important factor for pharmacists to be consulted by consumers (Peddison and Olsen, 2008). Pioch and Schmidt (2004) have found that pharmacists have simultaneous roles; they have commercial interest in selling and also providing impartial advice. So, a conflict may exist between commercial roles and professional duties. The majority of the consumers believed that pharmacists seldom have the time to provide medication services.

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Peddison and Olsen (2008) noted that interpersonal communication from family and friends is crucial in purchase decision making due to its credibility and empathy. Interpersonal communication can be instrumental as a substitute of pharmacists if it is deemed trustworthy. It would be beneficial for companies to identify the structure and strength of the influences of interpersonal/organizational exchange of information, which could gain synergistic effect (Holmes and Lett, 1977). MinkusMckenna et al. (2006) has explored the importance of OTC communications amongst older consumers for decision-making. Demographic factors have an impact on OTC evaluations (Schufeldt et al., 1998). The elderly tend to be very store loyal with regard to the purchase of drugs. Elderly consumers use OTCs in preference to prescriptions and they are more engaged in purchase deliberations than youngsters (Sansgiry and Cady, 1996). Lumpkin and Greenberg (1982) found that the elderly rated every information source, i.e., newspaper, magazines, radio, TV, etc. lower in importance than their younger counterparts. A more adept consumers can also deviate from pharmacists advice and make purchases on their own personal experiences. Kay (2007) found that family physician is one of the most trusted sources of getting the information for healthcare services for the most of the consumers. Sleath et al. (2001) centered around the doctors as an important source of communication for consumers. Ganther et al. (2001) found that older segments have greater faith in doctors and are less skeptical towards healthcare. Regardless of whether prescription or OTCs are concerned, medical practitioners have a unique and often multiple roles in the purchasing process of pharmaceutical products. They may be the deciders who make the buying decision for their patients when prescribing drugs or they may play the role of influencer or gatekeepers in the case of OTCs or hospitals dispensaries. (Liu, 1995) Finally, consumers acquire information through various media sources. Direct advertising impacts upon symptoms awareness and pertinent treatments (Creyer et al, 2001) with comparative adverts being the most persuasive (Kavanoor et al, 1997). Temporal factors centering around immediate symptoms are significant. Since the nature and immediacy may preclude rational thought, the consumer is spurred on by emotional and physiological triggers. 2. NEED FOR THE STUDY

pharmaceutical marketing, the research has been restricted to the influence of advertising, direct mail advertising and intra firm and inter-firm communications on purchase decisions. Although consumer perceptions and usage patterns of OTC products have been researched, there is a lack of research on consumer views of OTC medication. Also there is lack of research on impact of reference group on effectiveness of OTC advertising and consumer purchase behavior. The present study intends to explore advertising effectiveness of OTC drugs amongst consumers as well as antecedents of OTC drug purchase. Thus study aims to resolve major research question that whether OTC drug advertising is effective enough to persuade consumers to buy the drug or not. The hypothesized relationships are shown in Figure 1: Conceptual Model.

Advertising effectiveness factors

Impact of Doctor
-

Consumer Persuasion to Purchase

Impact of Family Impact of Retailer

Figure 1: Conceptual Framework

3. RESEARCH OBJECTIVES 1. 2. To identify key variables influencing OTC drug advertising effectiveness. To identify the impact of Over-The-Counter (OTC) drug advertising on consumers purchase behaviour.

Advertising has been recognized as one of the important tool of marketing. In the specific area of

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3.

To explore the impact of reference group influence on buying behaviour of OTC drugs.

conducted on 200 respondents who have seen the OTC advertising. 6. FINDINGS AND DISCUSSION Table 1: Mean and Standard Deviation of advertising effectiveness variables

4. RESEARCH HYPOTHESIS Based on the literature reviewed and conceptual model following hypotheses are generated to be verified with statistical analysis. H1: Particular drug advertisements Awareness factor creates significant impact on consumer persuasion to buy a particular drug. H2: Particular drug advertisements Educate factor creates significant impact on consumer persuasion to buy a particular drug. H3: Particular drug advertisements Effective factor creates significant impact on consumer persuasion to buy a particular drug H4: Particular drug advertisements accurate factor creates significant impact on consumer persuasion to buy a particular drug H5: Particular drug advertisements Information factor creates significant impact on consumer persuasion to buy a particular drug H6: Particular drug advertisements Knowledge factor creates significant impact on consumer persuasion to buy a particular drug H7: Particular drug advertisements Similar factor creates significant positive impact on consumer persuasion to buy a particular drug. H8: Particular drug advertisements Preference factor creates significant impact on consumer persuasion to buy a particular drug H9: Pharmacist (retailer) creates significant impact on consumer persuasion to buy a particular drug H10: Family members create significant impact on consumer persuasion to buy a particular drug H11: Doctors advice creates significant impact on consumer persuasion to buy a particular drug

No. Statements Awareness Particular drug advertising increases my awareness for that drug Particular drug ads are educational to the public I believe that pharmaceutical advertising is an effective way to bring product awareness to potential patients Particular drug advertising accurately portrays side effects and risks I believe that particular drug advertising presents accurate information to the public I feel particular drug advertising make me equally knowledgeable as compared to a retailer/doctor A particular drug advertisement has persuaded me to buy the drug because I

Mean 3.78

Standard Deviation 0.80

Educate

2.77

0.92

Effective

3.82

0.78

Accurate

2.13

0.15

Information

3.61

0.80

5. RESEARCH METHODOLOGY Structured questionnaire was used having closeended questions. The questionnaire used was adopted and modified from the earlier research conducted on DTC advertising by Spake et al. (2007). The questionnaire was customized for OTC drug marketing environment based on interaction with retailers, doctors, industry experts and literature reviewed. The questionnaire was administered through personal interaction with the respondents. The sample was drawn using non-probability convenience sampling method. A study was Knowledge

3.69

0.82

Similar

2.60

0.96

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feel I have similar symptoms as shown in the particular drug advertisement Table 3: Consumer Persuasion to purchase Preference Particular drug advertisements have persuaded me to prefer a specific brand 3.69 0.77 No. Statements Purchase A particular drug advertisement has persuaded me to purchase a particular drug 2.77 Mean Standard Deviation 0.92

Table 2: Mean and Standard Deviation of Reference Group variables No. Statements Impact of Retailer R1 I believe my retailer suggests drugs on the basis of the effectiveness of the drug I believe that my retailer suggests drugs on the basis of incentives he/she receives The retailer supplied the same OTC drug I asked for The retailer offered other suggestions than the particular drug I requested I seek the opinion of my family members before buying a particular drug from my retailer I seek the opinion of my doctor 3.63 0.84 Awareness Educate Effective 3.63 0.80 Accurate Information Knowledge 3.65 0.81 Similar Preference 3.67 0.68 Mean Standard Deviation

Table 4: Regression analysis on Effectiveness of OTC drugs advertising and its impact on Consumers Persuasion to Purchase Variable Beta 0.192 0.194 -0.017 -0.188 -0.059 0.109 0.253 -0.164 t-value 2.596 2.630 -0.231 -2.700 0.837 1.510 3.667 -2.343 Significance Level 0.010* 0.009* 0.817 0.008* 0.404 0.133 0.000* 0.020*

R2

R3

R4

(* significant at 0.05 significance level) (Independent Variable: Awareness, Educate, Effective, Accurate, Information, Knowledge, Similar, Preference) (Dependent variable: Persuasion)

Impact of Family Members

3.82

0.78 Respondents were asked to rate 16 statements concerning their views on OTC drug advertising on a 5 point scale ranging from strongly disagree to strongly agree. The higher the number, the greater the agreement. Table 1 provides mean and standard deviation for each statement. Since the neutral point on scale was 3, those means above 3 suggests overall

Impact

4.53

0.80

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agreement with the statements and those with means below 3 reflects disagreement. As revealed from the mean scores, respondents disagreed (2.77) on the fact that particular drug ads are educational to the public. Similarly respondents had highest disagreement (2.13) regarding portrayal of side effects and risks in OTC drug advertising. Respondents disagreed (2.60) on the statement that particular drug advertisement has persuaded me to buy the drug because I feel I have similar symptoms as shown in the particular drug advertisement. It means that particular drug advertisement failed to persuade them to buy the drug by showing similar symptoms as they will have in actual similar situation. Regarding persuasive effect of advertisement, respondents disagreed (2.77) on the fact that, particular drug advertisement has persuaded them to ask for or purchase a particular drug. In terms of buying actions, questions were asked whether respondents would like to directly go and purchase the advertised drugs or they will seek opinion of doctor, family members or retailers before buying the advertised drug. Respondents showed disagreement (2.69) on the statement that they would directly ask for a particular drug after exposure to a pharmaceutical advertisement. Higher agreement was shown regarding seeking opinion of doctors (4.53), family members (3.82) and retailers (3.63). Regression analysis was done to check factors affecting effectiveness of OTC drugs advertisements and its impact on consumer persuasion. The results are shown in Table 2. As can be seen from table 2, the view that OTC drug advertising increases their awareness for that drug (AWARENESS), particular drug ads are educational to the public (EDUCATE), particular drug advertisement has persuaded me to buy the drug because I feel I have similar symptoms as shown in the particular drug advertisement (SIMILAR) had significant positive impact on consumer persuasion to buy a particular drug. The belief that particular drug advertising accurately portrays side effects and risks (ACCURATE) and particular drug advertisements have persuaded them to prefer a specific brand name (PREFERENCE) had significant negative impact on consumer persuasion to buy a particular drug. Thus we can say that showing of side effects and risks associated with particular drug in advertisements might reduce persuasiveness of the advertisement. Similarly harping too much on a specific brand rather than on symptoms of ailment in the advertisement might reduce persuasiveness of the advertisement. In order to make advertisement of OTC drugs more

persuasive focus should be on symptoms, educative and awareness building features of the advertisement.

Table: 5: Regression analysis on Effectiveness of OTC drugs advertising and its impact on Consumers Persuasion to Purchase Variable Family Doctor Retailer Beta 0.170 -0.087 0.079 t-value 2.431 -1.233 1.114 Significance Level 0.016* 0.219 0.267

(* significant at 0.05 significance level) (Independent Variable: Family, Doctor, Retailer) (Dependent variable: Persuasion) Regression analysis was also done to check impact of various reference groups on effectiveness of OTC drugs advertising and its impact on consumer persuasion. As can be seen in table 3, the opinions of family members create significant positive impact on effectiveness of OTC drugs advertising and its impact on consumer persuasion to buy. While, the impact of doctors and retailers opinions create insignificant impact on effectiveness of OTC drugs advertising and its impact on consumer persuasion to buy. But, it must be noted that though doctors opinion create insignificant negative impact on advertising effectiveness. Advertising effectiveness factors

0.210*

Consumer persuasion to purchase

0.170*

Impact of Family

Figure 2: Impact of advertising effectiveness factors and reference groups on consumer persuasion to purchase

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7. CONCLUSION Awarenes
0.192*

Educate Accurate Similar Preference

0.194* - 0.188*

Consumer persuasion to purchase

0.253* - 0.164*

The advertisement of OTC drug was found to be persuasive, but not high enough so that consumers can directly go and ask for the advertised drug. The study reveals importance of seeking family members and doctors opinion while buying OTC drugs. The study has given good insights for marketers and advertisers of OTC drugs and suggests including elements in the advertisement that increase believability and trust of the advertisement. 8. DIRECTION OF FUTURE RESEARCH Future research should focus on identifying relative importance of various advertising effectiveness components and role of various media option to increase effectiveness of OTC drug advertising. Research can also be conducted for exploring role of reference group influence while buying OTC drugs. 9. REFERENCES Bissell, P., Ward, P.R. and Noyce, P.R. (2001), The dependent consumer: reflections on accounts of the risks of non-prescription medicines, Health, Vol. 5 No. 1, pp. 5-30. Charupatanapong, N. (1994), Perceived likelihood of risks in self-medication practices, Journal of Social and Administrative Pharmacy, Vol. 11 No. 1, pp. 18-28 Chewning, B. and Sleath, B. (1996), Medication decision-making and management: a clientcentered model, Social Science & Medicine, Vol. 42 No. 3, pp. 389-98 Creyer, E.H., Hristodoulakis, I. and Cole, C.A. (2001), Changing a drug from Rx to OTC status: the consumer behaviour and public policy implications of switch drugs, Journal of Product & Brand Management, Vol. 10 No. 1, pp. 52-64 Dholakia, U.M. (2000), A motivational process model of product involvement and consumer risk perception, European Journal of Marketing, Vol. 35 Nos 11/12, pp. 1340-60 Ferber, R. (1958), "The Effectiveness of Pharmaceutical Advertising: A Case Study", Journal of Marketing, April Ganther, J.M., Wiederholt, J.B. and Kreling, D.H. (2001), Measuring patients medical care preferences: care seeking versus self-treating,

Figure 3: Impact of advertising effectiveness factors on consumer persuasion to purchase As discussed earlier, the persuasive effect of advertisement in general has been found significant, but consumers also prefer seeking advice of doctors, family members and retailers. These findings also suggest that trust in OTC drug advertising among the target audience regarding the effectiveness and utility of that drug advertised has been found moderate. As the highest agreement was shown regarding seeking opinion of family members, even while buying OTC drugs, it is recommended to have more involvement of family members in marketing of OTC drugs. Thus, Advertisements showing hypothetical family members like characters can also be effective in this regard and help to increase believability and trust on advertised OTC drug. Consumers also prefer seeking doctors advice while buying OTC drugs. One of the reasons for seeking doctors advice could be the psychological risks with the potentially harmful effects of medication causing unease, which requires high involvement of consumers. The findings are consistent with earlier research by Dholakia (2000) and Charupatanapog (1994). Responses regarding role of retailer while buying OTC drugs were ambiguous, as respondents agreed on both views that retailers suggest drug on the basis of effectiveness of the drug as well as on the basis of incentives that they get on a particular drug. Respondents also agree on the fact that sometimes retailers suggests a different brand than the brand that customer asked for. Since the responses are confusing, it is difficult to comment on role of retailers while buying OTC drugs.

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