Case Study Guide for Vicks Health Care Division Project Scorpio (a) Essay
Vicks has earned one of the most recognized names in the colds care product market through a strong market position attained through its liquid-form product offering, but in the year of February 1979, Richardson-Merrell Corporation, its Vicks Health Care Division describes a new product marketing campaign in its division. Project Scorpio begins describing in detail the markets for colds care products and products for related conditions – sinusitis, allergy, coughs, and headaches.
The greatest issues within the Vick’s case (A) are whether or not there is an opportunity for Scorpio’s Vick Vapor Rub to enter the market and, if so then how it should be positioned against the already numerous established brands. The greatest issue Vicks Health Care Division of Richardson-Merrell, Inc. has is that it consists primarily of determining whether a market opportunity exists for Vicks. In addition, the company is also confronted by having to determine how to position Project Scorpio the right way, assuming that a market opportunity actually exists.
Recognizing that Vicks needed to diversify its product line to remain competitive, top managers decided to develop a tablet that could treat multiple symptoms simultaneously which put it at a cross roads of product categories. Vicks already has a competitive advantage and core competency in providing liquid-based colds care products. The new entrance into the industry has much concern since there are already so many key competitors like cold, flu, sinusitis and allergy care products whose respected companies all have well-diversified portfolios and established brands.
In addition to a highly competitive market, consumer and ethical product lines are heavily regulated by the Food and Drug Administration. Any changes made to the ingredient content of consumer products results in an outlay of time and money, therefore, the industry does not change its ingredient content often. To a feel for where the product might be sold within stores the case Table B shows the 1979 Estimate of Sales by Outlets for Selected OTC Medications. 55% of Allergy relief products are within drugstores and 35% in Food stores and the rest of the 10% in Mass Merchandisers.
Among Vicks’ competition are Contac, Dristan, Comtrex, Coricidin, and Sudafed, among others from the rivals. Contac and Dristan are the most competitive in the head-cold, solid-form market segment. Much little differentiation among the rivals and switching costs are relatively low which make it very easy for Vick’s to enter as an entirely new and cross reaching product. Another point is that most customers are very inclined to purchase more than one brand on a yearly base which gives reason that brand loyalty is not necessarily important within this case or can provide an opportunity for Vicks to establish brand loyalty as they move forward.
Some rivals have made an attempt to market a flu product leaving customers to incorrectly use cold and cough products or seek out other or worse prescriptions from physicians. This is due to the fact that the Food and Drug Administration requires a cut off limit on its counter products, many consumers instead seek out physicians so that they may be prescribed medication with a higher concentration of an active ingredient. In conclusion many fulfilling and reasons present a potential market future for this Vick’s Rub case due to many quantitative and qualitative reasons.