Economics: Other Economics Problems – #29494


Question: New Production Introduction – Due by Thursday, Aug. 7th. Bayer Schering Pharma AG, Germany owns the 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. The 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 the TV ad: “The Cold Truth”, (please, watch the ad listed in the Required Readings)

The ad shows that Alka-Seltzer Plus fights cough, body aches, runny nose, sneezing and fever, just like Vicks NyQuil does, but it also now can fight congestion, unlike NyQuil.

Explain how the new 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?

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