Decision-Making at Bristol-Myers: Datril Positioning Strategy

Introduction: Decision Overview

Marvin Koslow, Bristol-Myers' vice president for marketing services, faces a crucial decision regarding the positioning strategy for Datril, an acetaminophen-based analgesic. The options on the table are 'Pricing at par with Tylenol and positioning it as a Tylenol substitute, featuring Bristol-Myers product' and 'low Priced alternative to Tylenol.' This essay aims to delve into the reasons behind the chosen strategy and the grounds for excluding the alternative.

Reasons for the Decision

Target Customer Differentiation

The key to the success of Datril's positioning lies in effectively targeting the right customer base.

The target customer for Datril should be distinct from those loyal to Tylenol. Tylenol, being a dominant and well-established brand in the acetaminophen market, caters to customers who are less price-sensitive, often relying on medical recommendations. Datril's strategic move is to target aspirin users, specifically those not prone to severe stomach irritation and who don't frequently consult doctors.

For these aspirin users, the emphasis on "no side effects" becomes a valuable proposition.

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Datril, by focusing on offering a pain relief option with minimal side effects, aims to strike a balance between customer needs and the company's value.

Effective Positioning

Positioning Datril effectively in the market involves aligning its value proposition with the needs and preferences of its target customers. The company should position Datril as a pain relief solution for both aspirin and acetaminophen users. The unique selling point lies in emphasizing the functional value of "no side effects."

Additionally, leveraging Bristol-Myers' well-established brand equity becomes crucial for providing emotional relief to customers transitioning from aspirin-based analgesics to acetaminophen.

By doing so, Datril aims to address the psychological concerns of these customers, making the brand more familiar and trustworthy than competitors like Tylenol.

Grounds for Excluding Alternative

Unsustainability of Lowering Price

The alternative of lowering the price of Datril to position it as a low-priced alternative to Tylenol is not deemed sustainable. Lowering prices might initially attract customers, but it is a strategy easily replicable by competitors. Tylenol, as a well-established brand with cost advantages, could respond to market shifts by cutting down its own prices. This could result in a price war where Datril risks losing its only competitive edge.

Ineffectiveness of Low-Priced Alternative

Targeting Tylenol's existing customers with a low-priced alternative might not yield the desired results. Tylenol customers, often loyal due to doctor recommendations, are not typically price-sensitive. Monetary value is not the primary driver for these customers; instead, their loyalty is built on the trust established through medical endorsements. Attempting to lure these customers with a lower price may not be effective in capturing market share.

Conclusion and Recommendation

In conclusion, the optimal positioning strategy for Datril involves targeting aspirin users with a focus on "no side effects" as a key differentiator. Aligning with Bristol-Myers' brand equity for emotional relief is essential in gaining the trust of customers transitioning from aspirin-based analgesics to acetaminophen. This comprehensive strategy aims to penetrate the market effectively while avoiding the pitfalls associated with unsustainable price reduction.

Marvin Koslow's decision to position Datril at par with Tylenol, emphasizing aspirin users and minimizing side effects, offers a nuanced approach that aligns with the unique needs of the target customer base. By adopting this strategy, Bristol-Myers seeks not only to solidify its position in the analgesics market but also to gain a competitive edge in the rapidly growing acetaminophen market.