When I was living on the East Coast, traveling to the West Coast posed no problems for productivity and alertness. Flying across country one would lose very little time, and due to the three-hour time difference, getting up early in the morning was also a cinch.

Now I live on West Coast time. AZ doesn’t play that Daylight Saving Time game, meaning, that for most of the year (March 10th to November 3rd; or as I call it, Conference Season) our time is actually equivalent to PDT, because we are always on MST, while the rest of you waffle back and forth.

Traveling to the East Coast is a chore. Often meetings and conferences start at 7:00 AM—especially when you are an exhibitor—meaning you have to get up at 6:00 AM, which is 3:00 AM your body clock.

That means, in order to get a good night’s sleep one also needs to go to bed [relatively] early. Going to bed between 9:00 to 10:00 PM East Coast time means my body thinks I’m trying to go to sleep between 6:00 to 7:00 PM per my body clock. That takes some coaxing.

I’ve never take prescription sleep aids, but do purchase “non-habit forming” OTC pills to help me get to sleep on those trips. So when my wife handed me a $3-off coupon for ZzzQuil (from the makers of NyQuil!) I thought I could save some money. I stopped taking NyQuil when they took out the sleepy stuff, and was excited to see I could get the sleepy stuff again from a brand that has previously served me well.

Here I was at the store holding a 24-count box of ZzzQuil (suggested retail price of $11.99) when I decided to look at the active ingredient: Diphenhydramine HCL. That sounded familiar… So I acted on a hunch, turned around and grabbed a box of Benadryl to look at it’s active ingredient: Diphenhydramine HCL. And at the exact same dosage: 25mg. Except that a 48-count box of Benadryl has a suggested retail price of $8.99.

It’s not difficult to figure out which the better deal is.

The question, however, is which is the stronger brand? Benadryl is definitely a strong brand name. It comes to mind immediately (unaided recall) when considering an allergy remedy, and the ingredient Diphenhydramine HCL is often simply referred to as Benadryl.

But why would Vicks be able to command a better than 150% price premium, when brand differentiation typically tops out at a 25-30% price premium for like products? Does it really have that much better brand recognition than Benadryl?

The answer to the question probably isn’t brand, but positioning. Without any empirical research I simply have to assume that Vicks plays in a market that solves short-term problems (e.g. flu symptoms) to which immediate solutions are needed, vs Benadryl, which handles long[er]-term problems (e.g., seasonal allergies) that also require a longer-term investment. I’ll pay just about anything to get over this cold quickly, but since there is no way to control the weather, seasons, and pollen, I’ll pay as little as necessary to remedy problems that will recur not matter what.

Additionally, I can tell you that OTC sleep aids are not cheap, so Vicks should be able to easily maintain pricing power with this brand extension. It’ll be worth watching how Vicks fares in that arena over time, and if enough people might catch on to the cheaper alternative. Benadryl (McNEIL-PPC, Inc., actually) might not be able to do anything—can’t openly compete against ZzzQuil—because they can’t jeopardize the positioning they’ve created for themselves.

Vicks’ only problem might be that if consumers learn of this and feel taken advantage they might vote with their wallets and pocketbooks against Vicks’ other brands as well.

At play is a possibly risky pricing strategy that has a chance to blow up and do larger damage than just cutting into ZzzQuil’s profit margin. On the other hand, Vicks might just be raking it in until then, and they might never get found out. And if Vicks does need to drop ZzzQuil’s price, that just might set off a price war in OTC sleep aids. Hallelujah.

Let’s get ready to rumble.

Lesson to marketers: know the risks you are taking and plan for the various scenarios.

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