Datril

1346 WordsMar 12, 20136 Pages
Executive Summary 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 figure out how to successfully price and promote Datril as it launched in the analgesics market. Two main options are available (1) whether to promote Datril as a direct point of sale towards the consumer or (2) to adopt the traditional and more conservative route as that of Tylenol and promote Datril towards the trade only. Ultimately, to establish a price point that allows Datril to compete with Tylenol given like functionality. The company should target aspirin…show more content…
Pricing • Consumers do not always evaluate prices objectively. Often a referenced price is a known and available price, like that of a competitor. Pricing Datril at par with Tylenol and advertising it as a new substitute with same features may have been a fraught tactic in a short-run test environment. Market penetration and share take time and is unknown. Additionally, a price war could have ensued with Tylenol due to cost differences especially in advertising. • Lowering price as Datril did in the test markets resulted in it capturing almost half of the acetaminophen market. Furthermore, margin per unit revenue (see Exhibit 2) at a retail price of $1.85 and a trade price of $1.05 was still positive, with the introductory retailers deal at $0.70 - cost-plus price. This strategy involved an advertising costing $6 million over 6 months. If Tylenol matched Datril’s price apart from the price war, the advertising campaign would be moot and if changed, require additional expense. Consumer switch • The market for acetaminophen was growing at a rate of 5:1 to that of aspirin. Studies had shown that the side-effects from acetaminophen were less than aspirin. Bristol-Myers could have used the change in consumer consumption pattern and the shifting demand between the 2 analgesic variants as a means for positioning Datril using an effective campaign strategy.

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