Zantac Case Study

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Initial Success In the year 1980 GlaxoWellcome entered the pharmaceutical industry with their product Zantac, an H2 receptor antagonist. Zantac achieved greater success over competing medications such as Tagamet for various reasons. Zantac seemed an attractive alternative to Tagamet as it was available as a single daily dose that could be taken before going to sleep. Tagamet had to be administered three times a day before meals. Zantac was also slightly more effective than Tagamet in reducing symptoms and suppressing the secretion of stomach acid. The healing speed and healing efficacy were also marginally higher in comparison to Tagamet. (Collen, 1984) The official labelling on Zantacs packaging stated fewer side effects than SmithKline’s Tagamet and Zantac could also be used by children and pregnant woman. Tagamets labelling indicated otherwise. This led many to believe that Glaxowellcomes Zantac was a safer, healthier option. Certain characteristics of a new product affect its rate of adoption. Relative advantage is the degree to which the new product appears better than an existing product (Kotler & Armstrong, 2013). Glaxowellcomes product only needs to be taken once per day and the fact that Zantac required a lower total dose made the product appear more potent and longer acting than competing medications. This added advantage created the perception that Zantac was vastly superior to Tagamet when in fact the differences are minimal in comparison. A customer will always buy from a company that offers the highest customer perceived value. Another key characteristic that influences the rate of spread or diffusion of a new product is complexity. This is the degree to which the new product is easy to understand or use. (Kotler & A... ... middle of paper ... ...and the negative image poor social responsibility creates. Poor corporate social responsibility can be detrimental to the success of any business and this variable often poses a significant threat to large pharmaceutical companies. I would address this issue by investing money into promotional strategies that sponsor and support sustainable practices. Supporting “green” initiatives and appearing environmentally friendly generates positive publicity and a favourable image in the eyes of the consumer. Investing into programmes such as these would display GlaxoWellcome in a positive light and would destroy the negative stigma often attached to companies in the pharmaceutical industry. The implementation of these strategies although costly, may swing consumer preference for the drug and increase market share, brand awareness and the overall profitability of the business

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