Glaxo Antiulcerants Market Share
...the product and the intended use (indication, presentation, dosage, & length of treatment). Strategically, this makes the selection of countries for product introduction very important since it can contribute to the future growth in other dominant markets. Within each country there are distributor as well as the company/strategic alliance sales reps who promote the product to general practioners and gastro intestinal specialists at hospitals. At this time, the end user “patient” has limited exposure to the product until a prescription is provided. Thus the general practioner (GP) is the gatekeeper for the anti ulcerant product. Targeting this group (GP) does not position the pharmaceutical company in close contact with the end user “ patient” market. 1-2% of the adult population in western society have ulcers. More specifically smokers, those patients using non-steroidal anti inflammatories for arthritic conditions and people over 60 represent the three-target market segments. For Glaxo to get its products to the identified market segment, three or four channels are involved. They are the distributor, the hospital/ GP and the pharmacy. This complexity adds costs to the final product. By targeting the actual patient in the three listed market segments with advertising related to symptoms and how Zantac is the cure for those symptoms, Glaxo can start to shift some of its marketing tools away from the physicians and toward the actual end user. Product Positioning Glaxo needs to develop two positioning strategies to further the success of Zantac. First, Zantac has generated significant brand awareness as a product. Glaxo must leverage this brand awareness onto the company. Marketing efforts must shift glaxo’s notability for research, effective products and quality of medical information provided to distributors / GP to a public relation effort regarding Glaxo as the pharmaceutical company that brings innovative medicines and services to patients throughout the world. The development of a general public corporate image will enhance Glaxo’s current and future products. Secondly, Zantac was positioned as a superior replacement product to Tagamet. This was based on three benefits: easier to use, faster treatment, and reduced side affects. These strong arguments shifted the product from a “me to” status and justified the higher entry price. Currently the product is being pushed on a technical level to the GP and needs to shift to a pull strategy using the patient. Patients want to know the benefits and how it fixes their symptoms. By mass marketing according to the symptoms, patients will start to ask for the drug by brand name. Hence, developing a pull strategy. Now that Zantac has market share, it needs to preserve this through maintenance program strategies. These strategies include conducting further clinical studies that emphasize superiority on a shorter treatment basis with less sided effects. Also, introduce long term prevention/ maintain dosages to minimize the reoccurrence of the medical condition. Glaxo can also seek further approvals for related ailments that might benefit from treatment with Zantac (i.e. approval in the US for Reflux). At the same time, competitors new products must be watched to make sure their positions are less than or equal to Zantac. Any that are differentiated, need to be examined for risk to the product line. The “me to” product introduced at a slightly lower price of 10% will not convert market share. Glaxo can learn from the miscues of Smith Kline Beecham. Major changes in indication, presentation, dosage, and length of treatment can cause confusion on the original brand. It may be better to offer a new formulation as an improved Zantac rather than the same product but more effective due to research studies. Glaxo needs to minimize any confusion in product, replacement product and line extensions to prevent the backlash that Tagamet suffered Most important, all new drugs being introduced against Zantac need to be qualified against the following questions: Are therapeutic benefits noteworthy? Are known side effects reduced or eliminated? Can it be marketed competitively? What is the amount of representation in the market place? How is it differentiated against the market leader? Is it priced to justify the differentiation? With regard to Tagamet, which only has 3 more years left on its patent. Zantac will need to seriously consider positioning strategies against price. SmithKline Beecham started a trend by discounting during the initial war with Zantac. The generic manufacturers will be even more aggressive. As the product moves further along in its life cycle, Zantac line extensions for the OTC market must be considered for future revenue sources along with the development of a generic brand to capture the low-end margin market. Profitability A number of factors contribute to the profitability of the Zantac product line. One of the unanticipated areas was the doctors who previously prescribed Tagamet. They continued to prescribe Zantac for the 6-week cycle instead of the recommended four weeks. This indirect sale resulted in additional sales revenue without any marketing effort. At the time of introduction, Zantac was priced higher due to a shorter treatment time, less side effects and lower dosage regiment. Zantac’s superiority due to easily identifiable benefits justified the higher price. Yet we know new drugs have a limited product life cycle. Zantac has nearly reached the mature stage of this life cycle. This cash cow must be maintained, but at the same time being dependent on this one drug for 50% of the revenues can limit future profitability. Tagamet’s patent expires in three years and Zantac’s will expire in seven. These future patent expirations will affect future sales. Glaxo needs to be working a Zantac II. In theory, Zantac II will cannibalize the original Zantac prior to any attack by the generic replacements. As Zantac sales start to flatten, marketing efforts should be redirected to those new drugs in the pipeline that have proven successful in clinical studies. Glaxo can control the rate of sales revenue exchange from Zantac to the other drugs, by carefully shifting promotional efforts. This can occur slowly over time so as to not alert other pharmaceutical companies of the Zantac saturation point. Glaxo needs to investigating the development of an over the counter product that can use the brand recognition of Zantac to capture sales for those people who have not sought medical help for more mild stomach ailments. Future profitability will also be affected by the reimbursement systems and health care systems in each country. As these entities start to work togehter they will use their purchasing power to drive down prices. When this occurs Glaxo’s manufacturing process needs to become more efficient to meet the erosion in product prices. Promotion Currently, pharmaceutical promotion is highly regulated in what can and cannot be said. As Zantac gains further marketing advantages and ancillary applications, Glaxo will need to utilize conference forums and doctor retreats to educate and increase product loyalty. These conferences, with opinion leader doctors stating the latest developments from further clinical studies, offer a way to engage the physician in an environment outside of the hectic office. In addition, Glaxo needs to investigate whether the brand multiplication strategy is starting to overload the GP, causing negativism for the product. Under this strategy the manufacturers reps main sales force was broken into three teams. Each team makes a sales call that may last from 5 to 15 minutes with the office manager. All teams had a carefully scripted visual aids presentation representing different aspects of Zantac. In an e...