Zantac: Case Discussion Questions

Problem for Zantac: To continue being the market leader, and protect
its market share against rivals.

1) How did Zantac become number one? What role did product, price,
advertising/promotion/sales force, etc. play?
Ans:
 Glaxo re-engineered the drug by launching one time in a day
regimen based on the fact that acidity levels during the night
mattered the most. Patients had to take 300 mg tablet only once
in a day.
 Glaxo did not promote more than two of its products during a
single visit.
 There were 3 different dedicated salesforce of Glaxo, each
emphasizing a different aspect of Zantac – peptic ulcer,
maintenance treatment and reflux. Hospitals were targeted by a
separate dedicated sales force.
 A variety of visual aids as per sales force was developed. When
the competitors emulated this, doctors developed strong
negative reactions towards them.
 To monitor the frequency of sales visit, doctors were surveyed
to recall visits, brand names, important messages of the
meetings.
 To monitor sales impact, Glaxo checked the how sales force
share impacted the market share.
 Glaxo developed the advertisements effectively. Eg. In
Germany it focused on the hamburger and acidity. People no
need to go to hospitals for ulcers. Prevention is better than
cure.
 Glaxo had moved from an UK company to a being a global
company by bringing people on the board of directors from
different nationalities.
 2) Discuss the pre-launch assessment of Zantac’s sales potential by Glaxo
and industry analysts:
a. What was the potential?
They believed that Zantac’s sale would not be more than 100
million pounds world-wide.
b. Gow did they arrive at that estimate?
 Economies of scale would support Tagamet, hence
Zantac would be difficult to market at attractive price.
 Tagamet had a very long track record hence doctors
would prefer to prescribe it.
 Tagamet had the first mover advantage and hence fared
a better chance at dominating the market.

c. What do you think about these assumptions?

Ans: the above assumptions are fair, as they were based on market
research and data. But, the strategies adopted by Zantac to penetrate the global market
and take on Tagamet was phenomenal.

3) What was the key benefit offered by Zantac? Discuss its importance
relative to other factors

 Zantac had to be taken only once a day whereas Tagamet had to be

taken thrice a day. This made it easier for Zantac to be taken by the
patients.
 Zantac had less side effects compared to its competitor Tagamet.
 The results given by intake of Zantac was very fast, specific & simple
to take. It was also safe.
 Glaxo UK had a very good reputation for its research, study and well
known for launching quality drugs.

4) What is Losec’s strategy in attacking the acid blocking market?

 On short-term basis Losec intended to get approval for ulcer &

reflux treatment whereas in the long-term Losec looked at
maintenance treatment also.
 It was priced somewhere in mid of 50% to 100% higher to Zantac
for regular treatment cost.
 Losec focused on projecting itself as a – breakthrough product,
exact mechanism of action & faster pain relief.
 They involved opinion leaders in trails & conferences to create
awareness for Losec.
 Astra targeted hospitals initially then moved onto the GP’s.
 5) What should Astro do about Losec?
 As per the data, it is seen that 75% of the prescription of Losec
came from reflux. Hence, it should project Losec as a reflux drug
so as to enhance more sales in the market.
 Losec should communicate the fact that during maintenance usage,
when the acid in the stomach is over, other substances increase
which cause carcinoids in rats but not so in human beings.
 Astro should enter into partnerships with other companies to launch
the drug just like Zantac did.

6) Where are future growth opportunities for Zantac? Be prepared to

make specific recommendations to Zantac concerning the timing and
approach that Zantac should take related a possible entry into the over-
the-counter (OTC) market.
 It is seen that more resources of Glaxo are being diverted towards newer
drugs than Zantac.
 Galxo should make sure that since Zantac is the market leader in the acid
blocking market. It must milk the existing product ziz. Zantac by aligning
more sales force.
 Also, when the market for acid blocking drugs matures. Zantac should get
approval from the regulatory bodies to market the drug as OTC. As
already, the brand image of Zantac is established and this can be
leveraged by identifying appropriate distributor channels in the market.