Datril Case free essay sample

Datril Bristol-Myers have been very successful in analgesic market for many years with Aspirin type pain relievers marketed as Bufferin and Excedrin. Together with Bayer Aspirin by Sterling Drug Company, three aforementioned aspirin type pain relievers comprised of 90% of Analgesic market. One other type of pain relievers, Acetaminophen, have emerged into the market and its growth in the market seemed quite significant compared to that of aspirin type pain relievers. Although acetaminophen comprised of less than 10% Analgesic market, its Sales were growing at a rate of 50% where Aspirin was only growing at a rate of 9%. Bristol-Myers clearly saw an opportunity in Acetaminophen market and hence they are planning to launch Datril, acetaminophen type pain reliever. Acetaminophen pain reliever has the advantage over aspirin type with less side effects such as upset stomach. Acetaminophen was first-introduced in mid-1950s and it was not until early 1960s when it became available as over the counter drug. It was first launched as an over the counter drug by McNeil Labs, a subsidiary of Johnson amp; Johnson, namely Tylenol. Tylenol has captured 8% of analgesic market, which implies that Tylenol has been dominating the Acetaminophen market. Tylenol, compared to Aspirin type pain relievers, had a very different approach in targeting its market. Since acetaminophen was first considered as a prescription-only drugs, Tylenol was advertised only to the trade and to the medical profession. As a result, doctors were recommending Tylenol to patients. Although the price of Tylenol was almost double the price of Aspirin type pain relievers, physicians recommendation and perception of prescription-only drug provided Tylenol a premium feel compared to Aspirin type drugs. By simply segmenting the market by profile of patients who visit doctors and who do not visit doctors with attributes such as less side effects, brand-name and doctors recommendation, patients with regular visit to the doctors tend to show strong attributes towards less side effects and doctors recommendation. We can assume that Tylenol target segment will have insurance and be considered higher income. If a doctor recommends a safer drug, this particular segment will not hesitate to spend an extra dollar. By targeting medical professions, Tylenols promotion strategy turned out to be extremely effective with very low marketing expenditures. Since Datril will be entering into a market that is already dominated by Tylenol, its strategy must differ, targeting different segments of the market. If Tylenol was targeting people with higher income and with regular doctor visits, Datril should be targeted towards others with lower income and with less regular doctor visits, who are price-sensitive when choosing the drug. Since the segment has less exposure to Doctors recommendation, Datril should be promoted in more friendlier medium such as TV ads, newspaper ads and highly visible OTC display. By targeting this segment of the market, Datril may eat up market shares of Bristol-Myers Aspirin type products. Therefore, pricing should be differentiated from Excedrin and Bufferin, possibly pricing Datril little higher than Aspirin products. The case states two possible strategies for Bristol-Myers: one positioning with the value of Bristol-Myers brand and the other positioning with lower price than Tylenol. The first approach involves pricing Datril at par with Tylenol and promoting it as a Tylenol substitute. By comparing Tylenol and Datril by categories of features, points of parity are: Safety amp; performance of the drug (same ingredient), and Price. With the price being at par with Tylenol, Datril has no points of differentiation to offer. Tylenol has a long history of Acetaminophen in the market and the trade name Tylenol is used to refer a particular drug, not by its medical name of the drug. For this aspect, Tylenol is certainly a brand name with great value and the value may exceed that of Bristol-Myers. Tylenol brand is also so dominant that Datrils positioning with Bristol-Myers brand may not work. Although Bristol-Myers is a one of the nations leading marketers of pharmaceutical and consumer products, Bristol-Myers name may not be so familiar to consumers. Rather, product names like Excedrin amp; Bufferin are more familiar to consumers. Therefore, advertising campaign should emphasize that Datril is made by makers of Excedrin amp; Bufferin, which are amous for pain relievers. If we were to look at the analgesic market as a whole, I think Excedrin and Bufferin are also of equal brand value to Tylenols. The second approach involves pricing Datril a dollar less than Tylenol. I believe this strategy would provide Datril with a point of differentiation, which is Price. Having a point of differentiation will provide a competitive advantage. Also, test markets proved that t his strategy was successful. My suggested approach should be combination of two strategies. I believe that Bristol-Myers Excedrin and Bufferin are of equal brand value to Tylenols in pain reliever market. This will overcome the point of differentiation of brand name Tylenol offered, turning the brand name into a point of parity. Since lowering the price of Datril will offer a point of differentiation to Tylenol, this approach should be taken. When taking this approach, Datril may still enjoy this point of differentiation with slightly lower price difference. Rather than the difference of a dollar, difference may be reduced in half.