©2005-2009 by Alexander Chernev. Professor Alexander Chernev (Kellogg School of Management, Northwestern University) prepared this case solely as the basis for class discussion. This case 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 materials, e-mail [email protected] No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without a written permission of the author. Rev. 11/1/2009 Case 0804 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 acetaminophen1 drug branded as Datril, which was to be launched later in the spring of 1975. Despite many hours of deliberation, a clear solu- tion failed to emerge. The main unresolved issue was how to position Bristol-Myers’ new drug to the general public and, in particular, how to price and promote Datril. Bristol-Myers was one of the nation’s leading marketers of pharmaceutical and consumer prod- ucts, with a portfolio of well-known brands such as Bufferin, Excedrin, Windex, Drano, Vitalis, Be- hold, and Clairol. Bristol-Myers was comprised of three major product groups: the Consumer Prod- ucts 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 compa- ny’s total sales in 1974. In 1974, Bristol-Myers reported net earnings exceeding $120 million on $1.6 billion in net sales. The cost of goods sold accounted for more than $600 million of the expenditures: marketing, sales, and administration expenses were in excess of $420 million, advertising and pro- motion 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 ace- taminophen. 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 mar- keted with heavy consumer advertising and extensive point-of-purchase displays. Bristol-Myers spent more than $30 million advertising Bufferin and Excedrin in 1974 (see Exhibits 1, 2 for examples of print advertisements). In contrast, acetaminophen-based analgesics, initially available only by pre- scription, were advertised primarily to medical professionals. Acetaminophen products were rapidl.

1. ©2005-2009 by Alexander Chernev. Professor Alexander
Chernev (Kellogg School of Management, Northwestern
University) prepared this
case solely as the basis for class discussion. This case 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 materials, e-mail [email protected] No part of this
publication may be reproduced, stored in a retrieval system,
used in a spreadsheet, or transmitted in any form or by any
means—electronic,
mechanical, photocopying, recording, or otherwise—without a
written permission of the author. Rev. 11/1/2009 Case 0804
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
acetaminophen1 drug branded as Datril, which
was to be launched later in the spring of 1975. Despite many
hours of deliberation, a clear solu-
tion failed to emerge. The main unresolved issue was how to
position Bristol-Myers’ new drug to
the general public and, in particular, how to price and promote

2. Datril.
Bristol-Myers was one of the nation’s leading marketers of
pharmaceutical and consumer prod-
ucts, with a portfolio of well-known brands such as Bufferin,
Excedrin, Windex, Drano, Vitalis, Be-
hold, and Clairol. Bristol-Myers was comprised of three major
product groups: the Consumer Prod-
ucts 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 compa-
ny’s total sales in 1974. In 1974, Bristol-Myers reported net
earnings exceeding $120 million on $1.6
billion in net sales. The cost of goods sold accounted for more
than $600 million of the expenditures:
marketing, sales, and administration expenses were in excess of
$420 million, advertising and pro-
motion 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 ace-
taminophen. 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 mar-
keted with heavy consumer advertising and extensive point-of-
purchase displays. Bristol-Myers spent
more than $30 million advertising Bufferin and Excedrin in
1974 (see Exhibits 1, 2 for examples of
print advertisements). In contrast, acetaminophen-based
analgesics, initially available only by pre-

3. scription, 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 acetaminophen-based analgesics
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,
acetaminophen analgesics raised the pain thre-
shold 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, manu-
factured 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 pharmacies. 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 recommenda-
tion. Tylenol was so successful that even after it became a non-
prescription drug, McNeil Labs continued

4. This document is authorized for use by Deviprasad Chabukswar,
from 8/26/2012 to 12/27/2012, in the course:
BUS 540p: Marketing Management - Tripathi (Fall 2012),
Emory University.
Any unauthorized use or reproduction of this document is
strictly prohibited.
DATRIL: PIONEERING THE ACETAMINOPHEN MARKET
2
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 Tyle-
nol, it seemed natural to promote Datril by comparing it with
Tylenol. The question was how to dif-
ferentiate 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 le-

5. veraging 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 re-
tail 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 dis-
cussion 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 similari-
ties 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

6. products in Peoria, Illinois, and Albany, New York, two cities
they traditionally used as test mar-
kets. The non-price positioning was tested by introducing Datril
to test markets with an advertise-
ment campaign promoting Datril’s functional benefits, an
approach similar to the one used to pro-
mote 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 Ty-
lenol. 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 and 20 cents for packaging (bottle, box,
and instruction sheets).

7. This document is authorized for use by Deviprasad Chabukswar,
from 8/26/2012 to 12/27/2012, in the course:
BUS 540p: Marketing Management - Tripathi (Fall 2012),
Emory University.
Any unauthorized use or reproduction of this document is
strictly prohibited.
DATRIL: PIONEERING THE ACETAMINOPHEN MARKET
3
Exhibit 1: Bufferin Advertisement (1974)
Exhibit 2: Excederin Advertisement (1974)
This document is authorized for use by Deviprasad Chabukswar,
from 8/26/2012 to 12/27/2012, in the course:
BUS 540p: Marketing Management - Tripathi (Fall 2012),
Emory University.
Any unauthorized use or reproduction of this document is
strictly prohibited.
DATRIL: PIONEERING THE ACETAMINOPHEN MARKET

8. 4
Exhibit 3: Proposed Datril Advertisement
This document is authorized for use by Deviprasad Chabukswar,
from 8/26/2012 to 12/27/2012, in the course:
BUS 540p: Marketing Management - Tripathi (Fall 2012),
Emory University.
Any unauthorized use or reproduction of this document is
strictly prohibited.