Executive Summary

The most significant opportunity available to Bristol Myers is to position a new product in analgesics market in order to win a share in the rapidly growing acetaminophen market. The $680 million analgesic market was divided into two market segments: aspirin and acetaminophen. Acetaminophen sales were growing at an annual rate of 50%, while those of aspirin were growing at a rate of only 9% per annum. Bristol-Myers should consider promoting Datril as a substitute to Tylenol in order to capture a share in the acetaminophen market. This would make sales of  Datril increase gradually as it expands its market share.

Situation Overview

The key challenge faced by the Company is to promote growth in the market share of analgesics in a highly competitive aspirin market segment. The opportunity is to focus on acetaminophen market segment, which has an annual growth rate of 50%. The rise in the popularity of acetaminophen-based analgesics resulted from the perception that it had fewer side effects compared to aspirin. The only competitor is Johnson & Johnson who is a leader in acetaminophen market. The company has captured 8% of analgesic market share. It is reported that Tylenol brand has been in the market for about 20 years (mid 1950’s to 1974) with a strong brand value. Hence, it is extremely difficult for Bristol-Myers to increase its market share without product differentiation. The primary solution to this problem is to define the principal customer segment in order to create a new positioning statement that would differentiate the product value proposition among acetaminophen and aspirin brands (see Exhibit). This is why Bristol-Myers needs to communicate Datril’s brand value to its target audience.

Action Overview

Bristol Myers and Bayer aspirin have a 90% share in the analgesic market.  Therefore, Bristol Myers should take advantage and use its current market position to promote Datril as a substitute for Tylenol at the same price. Acetaminophen COGS is 60 cents, which represents 35% of $1.69 target price for a 100-tablet bottle. This is in line with Bristol-Myers’ current COGS of $ 600 mln, which represents 37% of the overall sales of $1.6 bln. This move is vital as it will protect Bristol-Myers’ analgesics market share in a long run by introducing products that are better than the existing ones.


Bristol-Myers should first gain in-depth knowledge about its target consumers in order to influence them to change their purchase behavior in favor of its new strategic and valuable products. The strategic marketing focus should be principally put on existing aspirin customers. Success would be achieved through informing 1% of aspirin users about a benefit of the acetaminophen i.e. no stomach dysfunction or side effects for 99 out of 100 people compared to aspirin. The introduction of better products than the existing ones by the company is preemptive in relation to similar moves by its competitors. This strategy will prevent price cuts by Johnson & Johnson who is the leader in acetaminophen market. Mass advertising of the aspirin brand directly to consumers would strategically position it in the market hence enabling it to achieve 50% annual growth. This implies that Bristol-Myers should target 2% of acetaminophen market and 1% of the customers who experience stomach dysfunction during the first year. The second proposed change is that Bristol-Myers should improve its contextual positioning statement as a brand in the marketplace. This will require a strong communication plan that will help elevate Datril’s value proposition.


Bristol-Myers should invest heavily in understanding its customer base as this will help to sub-segment the market place and protect its leadership position in the aspirin segment while positioning the Datril brand in acetaminophen market. It should adopt a communication plan that educates consumers directly on the benefits they would derive from using Datril brand compared to aspirin unlike its competitor Johnson & Johnson, who promoted Tylenol through Physicians. This tactic will help Bristol-Myers increase its direct market reach and capture the growing acetaminophen market. Despite the fact that this strategy cannibalizes aspirin-based analgesic products Buffering and Excedrin, it helps to protect the market share in the end. Thus, Bristol-Myers will equally compete in the acetaminophen market and achieve 50% annual growth. Bristol-Myers should price Datril at par with Tylenol at $2.85 at trade price of $1.69.

Action Rationale

The proposed course of action is the best approach to solving Bristol-Myers’ identified problems. The reasons for this is that the current market scenario presents a limited opportunity for growth in volume within the aspirin segment given its market share position of 90% between Brystol-Myers and Bayer Aspirin.  In addition, the current strategic scenario identified by Brystol-Myers to position Datril as low-price alternative compared to Tylenol does not address the potential price cut by Johnson & Johnson, which has the strong brand recognition in acetaminophen market. The proposed strategic market-response presented above accounts for a change in consumers’ preferences for acetaminophen. Although this cannibalizes aspirin sales, acetaminophen market growth will help increase the volume of sales and lead to higher profits due to higher prices. The key challenge emerging from the proposed changes in Bristol-Myers’ strategy is to identify the maximum number of aspirin consumers that will switch to Datril before diminishing Buffering and Excetrin profitability. This threat can lead to the reduction of competitor entry barriers within the segment, hence giving competitors an opportunity to capitalize from Bristol-Myers’ brand fragmented offerings.


The key challenge faced by Bristol-Myers is to promote growth in the market share in analgesics market due to a saturated aspirin market segment. The company should use the available opportunity and focus on acetaminophen market segment, which is growing at an annual rate of 50%. The only competitor is Johnson & Johnson, who is a leader in acetaminophen market and has currently captured 8% of the overall analgesic market share.

Order now

Related essays