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 acetaminophen market. There are two possible options: Pricing at par with Tylenol and it as a Tylenol substitute, featuring Bristol-Myers product and low Priced alternative to Tylenol. I strongly recommend that Bristol-Myers choose the former option with a modification.
Reasons for the Decision
First of all, this option gives the company a chance to effectively target. The target customer of Datril should not be overlapped with those of Tylenol. Tylenol was a dominant and well established brand in the acetaminophen market, and was used for a long time by loyal customers who get recommendations from medical professions. It means the existing customers were likely not price-sensitive compared to aspirin customers. Datril is not able to offer an effective differentiated value to these customers compared to Tylenol. Therefore Marvin Koslow should target at aspirin users who were lightly suffering from irritation of stomach lining and who didnt visit doctors. No side effect is more valuable to these customers. As we target these customers, Bristol-Myers offering could give an optimal value proposition between customers and the companys value.
Also, this option is more effective to positioning. The company should suggest benefits of pain relief as a category membership to aspirin and acetaminophen based analgesics users. As a differentiation, the company should appeal to the customers hearts with its functional value, no side effect. In addition, the company should use the companys another offerings competitive edge, well established brand of Bristol-Myers. This well established brand equity gives a psychological value, emotional relief to target customers who were afraid of transferring from aspirin based analgesics to acetaminophen based analgesics. For those customers, Tylenol
was unfamiliar not only because its advertising focused on physicians and the trade but because it is generally used patients who contacted with doctors.
Grounds for Excluding Alternative
Lowering price is not sustainable, because it is easily replicable by its competitors. If the company lowers the price of Datril and the company takes significant portion of Tylenols market share. In order to respond to the company, Tylenol could cut down its price. At this point, the company could lose its only competitive edge. In fact, Tylenol likely has a cost advantage due to the economy of scale and its efficiency due to its experience.
Low Priced alternative to Tylenol option seems to target Tylenols existing customers who seem to be loyal to Tylenol because it is recommended by doctors, so these customers are not likely price sensitive which means the monetary value is not valuable to these customers.
Exhibit 1: 5C Frame
Customer | * 90% of customers uses aspirin based analgesics * Many of them are suffering from side effects such as upset stomach, irritation of the stomach lining, or an allergic reaction. * 10% of customers who generally visited doctors and who get prescription use acetaminophen thorough doctors recommendation.| Company| * 3 Major business Units: Consumer Product Group (25.8%), Clairol (22.4%) Group and Pharmaceutical, Healthcare, and International Group accounted for 51.8% of Sales. * Sales Revenue is $1.6 billion and the net income is more than $ 120 million * Have Major Brand of Aspirin based Analgesics (Bufferin and Excederin) * Have a capability to manufacture Acetaminophen business| Competitor| * Aspirin based Analgesics * 90% of Analgesics market * Major is Bayer * Heavy users * Tylenol (Johnson and Johnson) * 80% Market share of acetaminophen market * 2.85, 1.69 100tablet bottle * considered prescription only drug * advertised only to the trade and to medical profession * familiar and used primarily by patients who had
received a doctor recommendation * marketing expenditures less than $2 million a year * target customer is a patients who had received a doctors recommendation * advertised to the trade and to the medical profession| Collaborator| * Physicians recommended acetaminophen to patients * Trade & distributors | Context| * Acetaminophen Analgesics drastically grow at annual rate 50% because its fewer side effect * Analgesic market grows at annual rate 9%.|
Exhibit 2: Positioning Frame
1) Positioning Frame in whole Analgesics customer
| Aspirin Based analgesics| Tylenol| Datril| Comment|
Benefit| Pain Relieving| âˆš| âˆš| âˆš.| Point of Parity| | No irritation of stomach lining| | âˆš| âˆš| No Point of differentiation| | Higher pain threshold| | âˆš| âˆš| No Point of differentiation|
2) Positioning Frame in case of target customer is existing Tylenols customer | Tylenol| Datril| Comment|
Benefit| Pain Relieving| âˆš| âˆš.| Point of Parity|
| No irritation of stomach lining| âˆš| âˆš| Point of Parity| | Higher pain threshold| âˆš| âˆš| Point of Parity|
| Emotional Relief due to doctors recommendation| âˆš| | No Point of differentiation and even competitive disadvantage|
3) Positioning Frame in case of target customer is aspirin customer who are suffering from its side effect | Aspirin Based analgesics| Datril| Comment|
Benefit| Pain Relieving| âˆš| âˆš.| Point of Parity|
| No irritation of stomach lining| | âˆš| Point of differentiation| | Higher pain threshold| | âˆš| Point of differentiation|
[ 1 ]. Refer to the Exhibit 1. 5C Frame Analysis, customer and context [ 2 ]. Refer to the Exhibit 2. Positioning Frame 2) Positioning Frame in case of target customer is existing Tylenols customer [ 3 ]. Refer to the Exhibit
2. Positioning Frame 3) Positioning Frame in case of target customer is aspirin customer who are suffering from its side effect