Case Analysis Pepcid Ac Racing to the Otc Market

1255 WordsOct 16, 20126 Pages
MBA 560 – Marketing Principles Case Analysis Pepcid AC Racing to the OTC Market The managers at Johnson & Johnson/Merck Consumer Pharmaceuticals Co. (JJM) have two options regarding their newest over-the-counter (OTC) drug Pepcid AC. The first option would be to pursue both claims of treatment and prevention, which would help differentiate their drug from other competitors OTC drugs that are also pending FDA approval. The first option could require up to 9 months of additional studies and investments to provide further evidence to the advisory committee and FDA. Conversely, they could choose the second option, to bypass the recommendations of the advisory committee and take their case directly to the FDA with the goal of…show more content…
However, in the short run being first is more important than differentiation and JJM is fully aware of the intense OTC market from previous experience. Based on historical experience, JJM’s management “believed that the battle for market share would be over quickly, within a year of the first products entry.” (King, et al. 2003) JJM research (consumer usage behavior, concept testing, Bases I and II analysis, etc.) indicated that the distinct difference between antacid users and prescription drug users was that antacid users took their product in “treatment” mode, yet another reason JJM should try to secure FDA approval for the treatment claim. Their concept testing resulted in value placement on long lasting benefits, 8 hours verses 4 hours of the average antacid. JJM believed its largest competitor, SmithKline Beecham, would focus on loyalty and patronage of their prescription counterpart. If JJM could secure the FDA approval faster with the treatment only claim they could focus their marketing campaign on Pepcid AC’s outperformance/long lasting benefits and added convenience over the current antacid competition. JJM’s follow-on campaign could then focus on the additional benefit of prevention, pending FDA approval. Their

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