ALEXANDER CHERNEV

Datril: Pioneering the Acetaminophen Market

Marvin Koslow, vice president for marketing services at Bristol-Myers, had just finished a strategic
planning meeting with his staff. The meeting was supposed to delineate a strategy for Bristol-Myers’
newest offering: a non-prescription acetaminophen 1 drug branded as Datril, which was to be launched
later in the spring of 1975. Despite many hours of deliberation, a clear solution failed to emerge. The
main unresolved issue was how to position Bristol-Myers’ new drug to the general public and, in particu-
lar, how to price and promote Datril.

Bristol-Myers was one of the nation’s leading marketers of pharmaceutical and consumer products, with
a portfolio of well-known brands such as Bufferin, Excedrin, Windex, Drano, Vitalis, Behold, and Clairol.
Bristol-Myers was comprised of three major product groups: the Consumer Products Group, which accounted
for 25.8% of the company’s total sales in 1974; the Clairol Group; and the Pharmaceutical, Health Care, and
International Group, which accounted for 51.8% of the company’s total sales in 1974. In 1974, Bristol-Myers
reported net earnings exceeding $120 million on $1.6 billion in net sales. The company’s balance sheet at the
time indicated that the cost of goods sold accounted for more than $600 million of the expenditures: market-
ing, sales, and administration expenses were in excess of $420 million, advertising and promotion expenses
were nearly $300 million, and research and development expenses were close to $50 million.

The $680 million analgesic market was divided into two types of pain-relievers: aspirin and acetaminophen.
Aspirin-based products, such as the market leader Bayer Aspirin, distributed by Sterling Drug Company, and
Bufferin and Excedrin, both distributed by Bristol-Myers, comprised 90% of the analgesic market. Most of the
aspirin-based products were proprietary drugs and were typically marketed with heavy consumer advertising and
extensive point-of-purchase displays. Bristol-Myers spent more than $30 million advertising Bufferin and Exced-
rin in 1974 (see Exhibits 1, 2 for examples of print advertisements). In contrast, acetaminophen-based analgesics,
initially available only by prescription, were advertised primarily to medical professionals.

Acetaminophen products were rapidly gaining market share. In 1974, acetaminophen sales were growing
at a rate of 50%, while the sales of aspirin-based analgesics increased by only 9%. The mounting popularity
of acetaminophens stemmed in part from the perception that it had fewer side effects than aspirin. In the early
1970s, several well-publicized studies showed that one of every hundred people who took aspirin was likely
to experience an upset stomach, irritation of the stomach lining, or an allergic reaction. In contrast, aceta-
minophen analgesics raised the pain threshold and reduced fever without having the anti-inflammatory effect
of aspirin, thus meeting the needs of those who suffered from upset stomach.

The only non-prescription acetaminophen brand on the analgesic market in 1974 was Tylenol, manufactured
and marketed by Johnson & Johnson subsidiary, McNeil Labs. McNeil introduced Tylenol in the mid-1950s as a
prescription analgesic, and it was not until the early 1960s that Tylenol became an over-the-counter drug. By 1974,
the Tylenol brand had captured 8% of the analgesic market and was widely available in grocery stores and phar-

©2005-2008 by Alexander Chernev. This case has been developed solely as the basis for class discussion and is not intended to serve as an endorsement, source of primary
data, or an illustration of effective or ineffective management. To request permission to reproduce this case, e-mail [email protected]. No part of this
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-[Credit Line - Reproduced with permission from the copyright holder for use only in “Marketing Management_ Term 2 : Course : 4 [PGPpro]”
taught by Professor Philip Zerrillo at Indian School of Business, Bangalore July 31st - August 2nd & August 7th - August 9th , 2020]
 DATRIL: PIONEERING THE ACETAMINOPHEN MARKET

macies. At $2.85, Tylenol’s retail price was about twice the price of aspirin; Tylenol’s price to the trade was $1.69
for a 100-tablet bottle.2 Because it was initially considered a prescription-only drug, Tylenol was advertised only to
the trade and to the medical profession. As a result, acetaminophens were familiar and used primarily by patients
who had received a doctor’s recommendation. Tylenol was so successful that even after it became a non-
prescription drug, McNeil Labs continued its current promotion strategy focused on physicians and trade. This
strategy proved highly effective for Tylenol since it required marketing expenditures of less than $2 million a year.

Datril’s goal was to solidify Bristol-Myers’ position in the analgesic market and gain share in the rapidly
growing acetaminophen market. Because the acetaminophen market was dominated by Tylenol, it seemed
natural to promote Datril by comparing it with Tylenol. The question was how to differentiate Datril from the
market leader. Ultimately, it came down to two alternative strategies.

The first approach involved pricing Datril at par with Tylenol and promoting it as a Tylenol substitute.
This approach called for leveraging Bristol-Myers’ name to facilitate Datril’s rapid market penetration, for
example, by prominently featuring “a Bristol-Myers’ product” on the package and in media communications.
An alternative to using Bristol-Myers’ name to promote Datril, involved leveraging Bristol-Myers’ two other
analgesic brands: Bufferin and Excedrin. The goal was to gain customer trust by associating Datril with
brands already familiar to customers.

The second approach called for positioning Datril as a low-priced alternative to Tylenol. The retail price
for a 100-tablet bottle of Datril would be set at $1.85, with a price to the trade of $1.05.3 To entice retailers to
carry Datril, Bristol-Myers would offer introductory deals to bring the trade cost to as low as 70 cents for a
100-tablet bottle. The message to customers would be that Datril and Tylenol were identical on functional
benefits but that Datril was a dollar cheaper. Split-screen TV commercials would feature two women, one
holding a bottle of Datril and the other a bottle of Tylenol. After a discussion of the similarities between the
two products, the woman holding the bottle of Datril would point out the product’s lower price. Magazine and
newspaper ads would also emphasize the similarities of the two products, stressing price as the only difference.

Both the same-price and the low-price strategies involved a $6 million advertising campaign over the
following six months, consisting of ads in magazines and newspapers and commercials on all three TV
networks, with TV spots saturating the top 50 markets for consumer products. This approach was novel
because, up to that point, only aspirin analgesics had been promoted directly to the consumer while over-
the-counter acetaminophen products were mainly advertised to physicians.

Market research data unequivocally supported the latter option. Bristol-Myers had tested new products
in Peoria, Illinois, and Albany, New York, two cities they traditionally used as test markets. The non-price
positioning was tested by introducing Datril to test markets with an advertisement campaign promoting Dat-
ril’s functional benefits, an approach similar to the one used to promote Bufferin and Excedrin. A month
later, when Datril’s projected sales failed to materialize and it was clear that this approach was ineffective,
Datril was reintroduced as a cheaper alternative to Tylenol. Advertisements compared Datril’s price of
$1.85 with the $2.85 price of Tylenol for the same quantity of acetaminophen (see Exhibit 3 for an example
of the print advertisement). The result: Datril captured almost half of the acetaminophen market in these
areas, the highest introductory share of any analgesic in Bristol-Myers’ history.

After carefully considering the pros and cons of the two alternatives, Mr. Koslow was leaning toward
the second option, which seemed to best position Bristol-Myers to achieve its strategic goal of dominating
the acetaminophen market.

Notes

1
Pronounced: a-seet-a-MIN-oh-fen.
2
“A Painful Headache for Bristol-Myers?” (1975), Business Week, October 6, 78-80.
3
One hundred acetaminophen tablets cost approximately 40 cents for ingredients, with added costs for the packaging (bottle, box, and instruction
sheets), advertising, and sales, among others.

-[Credit Line - 2Reproduced with permission from the copyright holder for use only in “Marketing Management_ Term 2 : Course : 4 [PGPpro]”
taught by Professor Philip Zerrillo at Indian School of Business, Bangalore July 31st ]- August 2nd & August 7th - August 9th , 2020]
 DATRIL: PIONEERING THE ACETAMINOPHEN MARKET

Exhibit 1: Bufferin Advertisement (1974)

Exhibit 2: Excederin Advertisement (1974)

3
-[Credit Line - Reproduced with permission from the copyright holder for use only in “Marketing Management_ Term 2 : Course : 4
[PGPpro]” taught by Professor Philip Zerrillo at Indian School of Business, Bangalore July 31st
] - August 2nd & August 7th - August 9th ,
2020]
 DATRIL: PIONEERING THE ACETAMINOPHEN MARKET

Exhibit 3: Proposed Datril Advertisement

-[Credit Line - Reproduced with permission from the copyright holder for use only in “Marketing Management_ Term 2 : Course :
4 taught by Professor Philip Zerrillo at Indian School of Business, Bangalore July 31st - August 2nd & August 7th -
4 [PGPpro]” ]
August 9th , 2020]