The case deals with the market penetration and share by positioning. Bristol-Myers wants Datril to penetrate into Tylenol’s market. There are two positioning alternatives. In my opinion, the first one is better than second one since the second approach carries too much risk.
The first approach is Datril’s position as substitute of Tylenol at the same price. I think this strategy has less risk than the other one since, at least, this approach could make Datril stay in the market. People could become familiar with Datril by the leveraging effects from Bristol-Myers’ other analgesic brand such as Bufferin and Excedrin. People who are using those brands would trust and try to use Datril. However, this approach could not give a big impression to customers and the company could not get a huge market share. Therefore, Datril would not have a big market power.
On the other hand, the second approach would give a great success to the company if this strategy works well. Datril will penetrate the market well and gain a great amount of market share. People would try Datril and become familiar with the product in a short time. However, the risk of this approach is huge. If the Tylenol changed its price as low as Datril’s, the brand would lose its competitive advantage. Moreover, every promotion, such as advertising campaign in magazine, newspapers commercial on TV and so on, will become useless. They have to change all of its commercial advertisement, make a new strategy, and train workers with the new strategy. Datril would fail to penetrate and might leave the market.
Therefore, I think the first alternative is better strategy with less risk than the second one. This way, the company could penetrate into the market and stay. The company could make other moves with other strategies such as flanking attack or Guerilla attack to gain more market share in the future. [continues]
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