Datril case

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 & 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, physician’s 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 doctor’s recommendation, patients with regular visit to the doctors tend to show strong attributes towards less side effects and doctor’s 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, Tylenol’s 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 Doctor’s 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 & 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 Datril’s positioning with Bristol-Myers brand may not work. Although Bristol-Myers is a one of the nation’s leading marketers of pharmaceutical and consumer products, “Bristol-Myers” name may not be so familiar to consumers. Rather, product names like Excedrin & Bufferin are more familiar to consumers. Therefore, advertising campaign should emphasize that Datril is made by makers of Excedrin & Bufferin, which are famous 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 Tylenol’s. 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 this 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 Tylenol’s 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.

Decision Marvin Koslow, vice president for marketing services at Bristol-Myers is going to choose a positioning strategy for Datril, an acetaminophen based analgesic, in order to solidify Bristol-Myers’ position in the analgesics market and gain share in the rapidly growing …

My recommendation to Marvin Koslow is to follow the first approach of pricing Datril at par with Tylenol ($2. 85 retail price, $1. 69 trade cost), leveraging Bristol-Myers’ brand name, and positioning Datril as an analgesic with similar relief effects …

Recommendations: Datril is suggested to position Datril as the alternative to aspirin. Such a positioning will be able to attract current aspirin customers to Datril. The marketing campaign should focus on physicians, trade and patients. It should stress the information …

The single most rewarding opportunity faced by the company is how to position Datril to the general public in 1975 and gain substantial and sustainable market share in the analgesics market. This situation is an opportunity because Bristol-Myers needed to …

David from Healtheappointments:

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy