Bayer Schering Pharma AG, Germany owns Alka-Seltzer, which was launched
in 1931 and was meant for relief of minor aches, pains, inflammation,
fever, headache, heartburn, sour stomach, indigestion, and hangovers.
Alka-Seltzer Plus was a spin-off of the original medicine, meant to
relieve colds and flu.
The company has recently introduced a new and improved Alka-Seltzer Plus, as described in this TV ad.
The ad shows that Alka-Seltzer Plus can fight congestion, unlike NyQuil.
Explain how Alka-Seltzer Plus has been quality and price-positioned in
an existing market. In your opinion, has Bayer positioned their product
appropriately in the market for cold and flu symptoms relief products?
Would you advise Bayer to use a skimming or a penetration pricing
strategy? Explain your reasoning.
How do you think Proctor and Gamble, the company who produces Vicks NyQuil, would respond to the ad?
Guided Response:
In 300 words or more, please, provide your response to the above
discussion question. If Bayer is currently making normal profits on most
of the products in its product line, but is making pure profits on its
new Alka-Seltzer Plus with decongestant, what should Bayer do to
increase its profits?
