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Brand salience of OTC pharmaceuticals through package appearance ArticleinInternational Journal of Pharmaceutical and Healthcare Marketing · August 2012 DOI: 10.1108/17506121211259403

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3 authors: Hannele Kauppinen-Räisänen

Richard A. Owusu

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Linnaeus University

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International Journal of Pharmaceutical and Healthcare Marketing Emerald Article: Brand salience of OTC pharmaceuticals through package appearance Hannele Kauppinen-Räisänen, Richard A. Owusu, Bylon Abeeku Bamfo

Article information: To cite this document: Hannele Kauppinen-Räisänen, Richard A. Owusu, Bylon Abeeku Bamfo, (2012),"Brand salience of OTC pharmaceuticals through package appearance", International Journal of Pharmaceutical and Healthcare Marketing, Vol. 6 Iss: 3 pp. 230 - 249 Permanent link to this document: http://dx.doi.org/10.1108/17506121211259403 Downloaded on: 25-08-2012 References: This document contains references to 83 other documents To copy this document: [email protected]

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Hannele Kauppinen-Ra ¨isa¨nen Department of Marketing, Hanken School of Economics, Helsinki, Finland

Richard A. Owusu School of Business and Economics, Linnaeus University, Kalmar, Sweden, and

Bylon Abeeku Bamfo Department of Marketing & Corporate Strategy, KNUST School of Business, Kumasi, Ghana Abstract Purpose – The changing health care market is affecting consumers who are now expected to take greater responsibility for their health. Their means for doing this include purchasing self-medication and medical self-service, which coincides neatly with an increase in the number of over-the-counter (OTC) pharmaceuticals. Additionally, OTC pharmaceuticals are progressively becoming available in a wider range of stores, where the pharmacists’ knowledge of the OTC products is absent. This study aims to examine packaging as media that conveys the product message at the point of purchase, and to explore the impact of its extrinsic verbal and visual product cues. Design/methodology/approach – An exploratory conjoint analysis was conducted in Finland, the USA, and Ghana. In total, 89 respondents conducted conjoint tasks for two product types, i.e. a painkiller and sore throat medicine. Findings – The results showed differences and similarities in the impact of the packaging product cues across Finland, the USA, and Ghana. Differences and similarities were also detected across the two different, but related, product types. The study found that the impact of product cues is contextual, varying across the samples and product types. Practical implications – The results are limited by the exploratory nature of the conjoint analysis. They highlight that medical marketers should recognize the varying impact of salient cues on consumers’ product preferences and choices. Originality/value – The study deals with a mostly unexplored issue and provides exploratory insights into the phenomenon. Keywords Extrinsic cues, Package appearance, Over-the-counter pharmaceuticals, Drug administration, Health services sector, Cross-cultural studies, Packaging materials Paper type Research paper

International Journal of Pharmaceutical and Healthcare Marketing The authors thank the two anonymous reviewers for the constructive feedback. The authors also Vol. 6 No. 3, 2012 pp. 230-249 want to thank Professor Paul N. Buatsi, Ghana, for his contribution to data collection and q Emerald Group Publishing Limited comments on an early draft of the paper. Funding for data collection was provided by the 1750-6123 Foundation for Economic Education, Finland. DOI 10.1108/17506121211259403

Introduction Brand salience of The health care industry is different from many other markets (Kay, 2007), and current pharmaceuticals societal changes only serve to highlight its distinctive nature. Life expectancy is increasing, consumers are showing more interest in their health, and they are spending more on medication than ever before, with the result that the pharmaceutical industry is being placed under increasing pressure (DeLorme et al., 2007; Moschis and Friend, 2008; Sansgiry and Cady, 1996). At the same time, a structural change is occurring as 231 an increased number of generic OTC pharmaceuticals are being released and prescription pharmaceuticals are being converted to non-prescription pharmaceuticals (e.g. DeLorme et al., 2010). Further, in some countries, the sale of pharmaceuticals is undergoing a change as pharmacies are turning into self-service retailers. This means that they offer wide-ranging product lines. In a similar vein, certain countries allow the sale of non-prescription pharmaceuticals not only as restricted OTC pharmaceuticals, but as unrestricted OTC-products in grocery stores as well. Other countries have stricter regulations, but are heading in the same direction (e.g. DeLorme et al., 2010). And all these challenges do not include the increasing sale of pharmaceuticals over the internet (Semin et al., 2007). The health care industry is facing changing trends from within the market itself. For example, preventive health activities are moving the responsibility of health care from the authorities to individual consumers by means of consumer self-medication and medical self-service (Kay, 2007). Yet, at the same time, research shows that health illiteracy and a lack of pharmaceutical product knowledge appear among consumers (e.g. Adkins and Corus, 2009; Chisolm and Buchanan, 2007; Kay, 2007; Kickbusch, 2008). It has even been found that consumers sometimes have difficulty distinguishing between various brands within the same product group (Heath, 1999; Stoll et al., 2008). This is a matter of concern for OTC pharmaceutical companies, as not only do their brand names appear similar, but their products as well (Adkins and Corus, 2009). This means that the core products behind many pharmaceuticals are substitutable, and in the eyes of the consumer, indistinguishable (Moss and Schuiling, 2004). This does not take into account the high-risk characteristics of pharmaceuticals (de Mortanges et al., 1997). From a consumer perspective, it would be unreasonable to expect many consumers to have the expert knowledge necessary to understand how drugs work (Kay, 2007; Ross and Canan, 2009). Despite the increasing volume of health-related information available on the internet (e.g. Yasin and ¨Ozen, 2011), it still appears that many health care consumers need the expert assistance of pharmacists. But, rather than having this need fulfilled, consumers are increasingly having to evaluate and choose OTC pharmaceuticals by themselves. Against this backdrop, the question that surfaces as a focal issue is: what influences consumers’ choices of OTC pharmaceuticals at the point of purchase? ´ndez et al., Brand packaging is commonly viewed as an extrinsic product cue (e.g. Me 2011; Sanyal and Datta, 2011), i.e. a product cue that does not have any impact on product performance, yet is used to assess product quality and make choices (e.g. Miyazaki et al., 2005). Packaging could also be referred to as a form of media that conveys the product message at the point of purchase through its extrinsic verbal/numerical and visual cues. Extrinsic verbal/numerical cues include the brand name, manufacturer, country of origin and price, whereas the visual cues are those usually referred to as the design elements, i.e. color, shape, material, picture, and letter

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font of the brand name (e.g. Gofman et al., 2010). Despite the recognition of the impact of these extrinsic product cues at the point of purchase for consumer goods (e.g. Limon et al., 2009), there is a limited volume of research explicitly investigating their impact ¨isa¨nen, 2010; Kauppinen-Ra ¨isa¨nen, 2011; for OTC pharmaceuticals (e.g. Kauppinen-Ra Moss and Schuiling, 2004; Sanyal and Datta, 2011). The current study aims to contribute to the field by examining the impact of extrinsic verbal and visual cues of OTC pharmaceutical packaging, with an emphasis on the visual cues. By taking a cross-cultural approach, the study not only brings substantial knowledge to companies marketing OTC pharmaceuticals locally, but also to those marketing OTC-products internationally. To meet this objective, a background is set for the empirical study through the discussion of the impact of verbally and visually expressed product cues on packages, with an emphasis on the latter, which has received less attention in scholarly research. Then, the findings of an experimental conjoint study are used to demonstrate the impact of various attributes. Research findings for consumer goods show that the impact of product cues is contextual (e.g. Jacobs et al., 1991; Pappu et al., 2007). Therefore, the study was conducted in three countries with two different, but related, product types – in Finland, the USA, and Ghana for painkillers and sore throat medicines. This paper is structured as follows: first, the theoretical foundation of the study is described, beginning with an introduction to the health care context. Second, the method, data collection, and sample are introduced, followed by analyzes of the exploratory study. The paper concludes with a general discussion of the implications and limitations of the study, as well as suggestions for future research. The challenges of OTC pharmaceuticals Marketers use several means to attract consumers’ attention to their products. For example, the use of the internet as a medium to convey health-related information has increased lately (e.g. Yasin and ¨Ozen, 2011). At the same time, marketers promote their products through other media, like TV, radio, and newspapers, and in-store through various marketing activities, like in-store advertisements, product demonstrations, and product leaflets. Interestingly, it appears that pharmaceutical advertising, for example, in the USA, has increased (Kay, 2007), while DeLorme et al. (2010) claim that, although Americans use advertising to gain product information, it has a limited impact on pharmaceutical brand choices in-store. As a result of consumer uncertainty regarding quality and products at choice situations, scholarly research has detected two types of influential attributes that have an impact on consumers’ choice behavior. First, consumers’ choices are influenced by intrinsic product attributes, such as taste and fragrance, which are inherent to a product (Espejel et al., 2007). Second, consumers use extrinsic product cues to assess product quality and make choices, i.e. cues that can be altered without changing the product in contrast to the intrinsic cues (e.g. Miyazaki et al., 2005). Based on the influential impact of these product cues, previous research has showed, on the one hand, that consumers use extrinsic cues in choice situations when they lack time to evaluate intrinsic cues, and compare products and brands as intrinsic cues require more time (Ferguson et al., 2008; Miyazaki et al., 2005; Veale and Quester, 2009). On the other hand, extrinsic cues are used when intrinsic cues are perceived as

complicated or they are unavailable; consumers lack the ability or opportunity toBrand salience of evaluate intrinsic product attributes, and consumers lack knowledge of the product pharmaceuticals type (Ferguson et al., 2008; Miyazaki et al., 2005; Veale and Quester, 2009). This also concerns choice situations in which consumers cannot evaluate intrinsic product cues (Ferguson et al., 2008; Miyazaki et al., 2005; Veale and Quester, 2009). Interestingly, research has found that, even if intrinsic attributes are perceived as more credible than extrinsic cues, the latter cues are used both as a means to reduce 233 perceived product risk and to infer product quality (Miyazaki et al., 2005). This aspect is particularly essential for pharmaceuticals as consumers’ behavior in health-related issues is partly explained by their risk perception (Carvalho et al., 2008), and since pharmaceuticals are related to health, they are perceived to have a higher risk than regular consumer goods (de Mortanges et al., 1997). Further, research findings suggest that extrinsic attributes are most likely to have an effect on choices where consumers have either low literacy or functional illiteracy, as well as health illiteracy (e.g. Steenkamp and Burgess, 2002). Indeed, the findings with consumer goods emphasize that consumers use extrinsic product cues to reduce the sense of product risk, assess product quality, state a product preference, and make a product choice (e.g. Aqueveque, 2006). The fact that 70 percent of all brand decisions of consumer goods are made in-store (Inman et al., 2009), implies that the brand package and its extrinsic product cues serve an essential function at the point of purchase not only for consumer goods, but for OTC pharmaceuticals as well. Brand salience through packages’ verbal and visual cues The metaphor of brand packages as a silent salesman appeared in 1950s when self-service retailers were introduced. Packaging had to mediate the packaged product at the point of purchase when no one else could. Since those days, brand challenges have proliferated, not only for consumer goods, but for pharmaceuticals as well. Today, the brand has to be salient and stand out in an ever-increasingly crowded and cluttered brand race. This realization has channeled interest in packaging, which now serves multi-functions and has a focal role in consumers’ brand decisions: packaging influences consumer decisions on the spot, while also interacting explicitly at the point of purchase (Madzharov and Block, 2010; Silayoi and Speece, 2007). Research shows that brand packaging influences consumers’ product preferences and choices (e.g. Deng and Kahn, 2009; Madzharov and Block, 2010; Silayoi and Speece, 2007). Indeed, while packaging appearance is composed of both verbal/numerical and visual cues, study findings support the claim that one means to capture consumers at the point of purchase is the strategic use of these extrinsic cues on packaging (e.g. Grossman and Wisenblit, 1999). This is an essential claim as up to 90 percent of consumers make a purchase decision based on a visual examination of the front of a package (Clement, 2007). Most studies concerning brand packaging, its appearance, and extrinsic cues concern consumer goods, but the findings of these studies are also relevant for pharmaceutical packaging design, and not least have implications for their visual appearance. The impact of packaging’s verbal cues The effect of price and brand name as extrinsic product cues on consumer’s choices is well documented (e.g. Aqueveque, 2006; Miyazaki et al., 2005), e.g. studies suggest that

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an interaction exists between price, brand name, and quality perception (Anselmsson et al., 2007; Miyazaki et al., 2005). In addition to price and brand name, previous research on consumer goods acknowledges the impact of manufacturer and country of origin (COO) as a means of inferring product quality and to state a brand preference (e.g. Miyazaki et al., 2005; Renee, 2008; Srinivasan et al., 2004; Veale and Quester, 2009). These findings are supported in the context of pharmaceuticals as well (Ladha, 2007). Firstly, the manufacturer effect is demonstrated by research that found that consumers use well-known brands or manufacturers, and rely on their reputation to rationalize a reduction in product risk (Mitchell and Creatorex, 1989). This is supported by Tse (1999), who concluded that known brands connote product safety information. Furthermore, known brands and manufacturers are found to be highly related to consumer perceptions of product quality (Purohit and Srivastava, 2001). Second, research stresses the impact of the COO, and has concluded that domestic brands are favored in general (Pecotich and Ward, 2007). The reason for this behavior is their presumed associated benefits for local economic wealth and employment (Pecotich and Ward, 2007). The preference for these products is also explained by familiarity. For example, for high-risk products such as pharmaceuticals, domestic brand names and manufacturers are, through familiarity, found to be associated with a perceived reduction of risk (Yeung and Yee, 2003). Thus, it can be concluded that COO is used in cases where consumers aim at reducing perceived product risk. Third, studies show that COO is related to product quality; the relation is contextual as it varies across countries and is particularly related to the level of a country’s development (Pappu et al., 2007). Accordingly, previous studies agree that there is generally a preference for products from more developed countries, rather than for products from less developed countries ( Josiassen et al., 2008; Pappu et al., 2007; Pecotich and Ward, 2007). This is explained by these products having higher prestige and being associated with quality. Previous research also acknowledges that the impact of extrinsic product cues is related to product involvement and product type. For example, Ahmed et al. (2004) determined that brand name was more important than COO when Singaporean consumers evaluated low involvement consumer products, such as in cases of habitual choices of daily consumer goods. Notably, the importance of COO increased for slightly higher involvement products. This is supported by Okechuku and Onyemah (1999), who found that Nigerian consumers avoided domestic brands for high involvement products, and instead preferred similar products from developed countries. Okechuku and Onyemah (1999) also showed that COO was the most important attribute in the evaluation of cars, while the impact of COO was equal to brand impact in the evaluation of TVs. However, Ferguson et al. (2008) included motivation and product knowledge in their study, and concluded that the more motivated and knowledgeable consumers were about a product, the less impact extrinsic cues such as COO had. As it appears, increase...