11 - 12 September 2017 | Boston, MA

Tuesday, July 01, 2008

New alli Plan to Gain Market Share: Eliminate the Competition!

Yesterday, I said that I opted out of my alli challenge and won't be trying it (see "I Opt-Out of My alli Challenge!"). I felt it required just too much effort and expense.

I neglected to mention that the diet aisle at my local CVS was crowded with other weight loss products -- mostly dietary supplements, which are loosely regulated: they are considered foods and do not have to go through safety and efficacy testing to gain FDA approval. Supplements can make "structure and function" claims -- such as "calcium builds strong bones" -- but they cannot claim to treat disease.

GSK, the marketer of the weight-loss OTC drug alli, according to this story in the NJ Star-Ledger, has filed a petition with the FDA "to require supplement companies making weight-loss claims to conduct clinical studies to prove their products work, then win government approval before they can be marketed."

Obviously, GSK has failed to win as much market share as it would like and instead of gaining share based on the debatable merits of alli has opted to try and eliminate the competition.

As reported by the NJ Star-Ledger, "Glaxo reported $315 million in sales for Alli from its launch last July through March of this year. Information Resources, a Chicago-based market research firm, said the top 19 over-the-counter weight control brands other than Alli had $227 million in sales, excluding Wal-Mart stores, during the 52 weeks ending May 18."

In other words, alli already has about 58% of the OTC weight control market, but would like more and wants it by default rather than by outcomes!

I noted in yesterday's post that alli had a prime, top-of-the-shelf position in the diet supplement aisle of my CVS store. It stood alone in terms of its advanced, expensive-looking point-of-sale display; no other weight loss product bothered to do anything like it. I doubt if any other OTC weight loss product on that shelf spent 1% as much on advertising as did alli to gain its 58% market share. alli marketing, in fact, may be in negative territory considering all the TV ads, web sites, blogs, PR, fancy packaging, and in-store advertising that it is doing.

So it's not that alli sales are weak. Sales just have not been enough to cover the marketing nut!

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