ANALYSIS: Marketing - Nationalism rears head in Aussie drug war. Can local brands succeed by playing the nationalist card?
<p>The gloves are off in Australia's world of pain relief </p><p>marketing. </p><p><BR><BR> </p><p>Battered by a series of extortion attempts which saw sales slide and </p><p>forced some product repositioning, major brands Herron and Panadol are </p><p>keen to wrest back control. In the process, the brands have launched </p><p>into a marketing war of the kind rarely seen in the grocery analgesic </p><p>category. </p><p><BR><BR> </p><p>Boldly bypassing the standard brand equity communiques, Panadol and </p><p>Herron have plunged the category into a new regime of comparative </p><p>advertising, publicly and starkly airing their differences. </p><p><BR><BR> </p><p>Australian-owned Herron took the first stab, launching a campaign, which </p><p>stated that market leader Panadol was foreign-owned. Unusually, the </p><p>advertisements encouraged consumer participation, featuring a polling </p><p>device which invited viewers to ring in and vote on whether they thought </p><p>Australian ownership was important. "We were overwhelmed to receive </p><p>3,000 calls from Australian consumers in the first 24 hours the </p><p>commercial aired," Herron chief executive officer Euan Murdoch said. </p><p><BR><BR> </p><p>"Of the 3,000 calls, 84 per cent were for the yes number, indicating </p><p>Australian consumers are as passionate about Australian ownership as we </p><p>are." </p><p><BR><BR> </p><p>Panadol took the issue to court. But, thwarted by a failed injunction, </p><p>Panadol's parent GlaxoSmithKline opted instead to redress the balance </p><p>through its own marketing attack. </p><p><BR><BR> </p><p>The response was a campaign, which claimed that Herron's top-selling </p><p>product Capseals was made in America - a move, which pushed Herron to </p><p>complain to the Australian Competition and Consumer Commission </p><p>(ACCC). </p><p><BR><BR> </p><p>Herron is still awaiting a response from the commission. "We said, well </p><p>fine, let's take the advertising message that we want and air it to get </p><p>rid of the confusion that has been created," GlaxoSmithKline chief </p><p>executive Alan Schaefer said. "What we found out was that going to court </p><p>was a very unpopular battlefield - we would be portrayed as a </p><p>multinational trying to put a local out of business. </p><p><BR><BR> </p><p>"While it can be effective between two multinationals, it can still get </p><p>pretty messy. For us, we're going to wage war in the marketplace." </p><p><BR><BR> </p><p>Herron's Murdoch is equally determined. However, he claims his intent is </p><p>more benevolent. "I believe it's a debate that we as a country need to </p><p>have: whether something is Australian-made or foreign-owned," he </p><p>says. </p><p><BR><BR> </p><p>"Herron isn't anti-foreign investment; our country is built on it. But </p><p>our perception is that, all things being equal, we think people will </p><p>support their home team." </p><p><BR><BR> </p><p>He is not alone. Numerous major brands have seized upon the concept of </p><p>local heritage to kick up their sales of late. </p><p><BR><BR> </p><p>Examples include Golden Circle which recently launched a campaign </p><p>highlighting competitive products that were not Australian-owned brands. </p><p>And, Aussie pizza chain Eagle Boys was taken to court recently when </p><p>Pizza Hut took objection to an Eagle Boys ad, which made statements </p><p>about Pizza Hut's foreign parent. </p><p><BR><BR> </p><p>In the case of Herron versus Panadol, the approach seems to have hit its </p><p>target. Panadol's share slipped five points to 42 per cent on the basis </p><p>of the first Herron attack. </p><p><BR><BR> </p><p>By contrast, Herron, which spent 14 years edging up its share to 18 per </p><p>cent, has seen its slice bulge to 32 per cent. Panadol then managed to </p><p>claw back two-thirds of its market share when it tested its </p><p>anti-Capseals ad in Adelaide. The changes are magnified by the fact that </p><p>every share point in Australia's grocery analgesic market is worth </p><p>A$1 million (US$519,490). </p><p><BR><BR> </p><p>But amid the scuffle, other brands have also taken the opportunity to </p><p>try and steal some of the ground for themselves. </p><p><BR><BR> </p><p>Last month, Reckitt Benckiser launched a new commercial designed to </p><p>re-focus its Disprin brand for the youth market. The strategy is also a </p><p>play to regain market share after languishing at a share of around 10 </p><p>per cent. </p><p><BR><BR> </p><p>Meanwhile, neither Panadol nor Herron were prepared to concede to each </p><p>other, but Herron's Murdoch believed the campaign had reached an </p><p>end. </p><p><BR><BR> </p><p>"Our next campaign won't necessarily be competitive. I think that it has </p><p>just about run its course," he says. </p><p><BR><BR> </p><p>But Panadol's Schaefer remains poised to retaliate if necessary. </p><p><BR><BR> </p><p>"As long as they put the message out in the marketplace (implying we are </p><p>foreign-made), it will be met with an immediate and swift response." </p><p><BR><BR> </p>
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