Case Study CLAMOXYL MARKETING STRATEGIES BETWEEN BRANDED AND GENERIC ANTIBIOTICS (A) Name: Madan Subramanian PGXPM

PM 8 1. Why should a doctor prescribe Clamoxyl rather than generic Amoxilin? What should SB do? The options are 1. Milk Clamoxyl and divert promotional investments Augmentin 2. Strengthen Clamoxyls brand equity among doctors but how? 3. Reduce price of Clamoxyl despite SBs corporate philosophy, how much? 4. Change nothing and count on the resistance of French doctors towards generics. One of the first amoxicillin which had very little side effects than other medicines and its efficiency against the most common bacteria, Clamoxyl had an immense success in France. During 1986 Clamoxyl was the highest selling antibiotic, despite losing its patent protection in 1980. Although Clamoxyl decline is sales was partly due to competition from generics, part of it was also due to increased competition from other families of antibiotics, helped by their higher promotional investments. Despite this competitive environment, Clamoxyl remained the most prescribed antibiotic in France, capturing about 34% of the amoxicillin market and 8.8% of the total antibiotic market. The competition exists mainly in two ways. Due to commercializing amoxicillin generics which is similar to that of Clamoxyl and copies who all appeared on the market after 1980 when Clamoxyl lost its patent and other due to other successful competing families of antibiotics that heal the same kind of infections: cephalosporins and macrolides, but when compared to Clamoxyl they dont act as quickly and as efficiently as Clamoxyl. Why should a doctor prescribe Clamoxyl rather than generic Amoxilin? Why doctors mainly prescribe Clamoxyl than generic drug is mainly due to the following reason. The doctor prescribes a drug, the patient goes to the pharmacy, and the pharmacist gives what is written on the paper, whatever the patient says. If the doctor prescribes Clamoxyl, it is very unlikely that the patient will ask him a generic by himself, since people are usually not aware of drug prices and not accustomed to the idea of price haggling over medical products. And if the doctor prescribes a generic, it could worry the patient who is already sick, has probably never heard its name and needs to be comforted for both his illness and the weird drug he doesnt know. So it will take more time to the doctor to get rid of that patient, and could even damage his image. It is easier to prescribe Clamoxyl, but financial penalties and/or social responsibility toward the social security system could help changing their habits and spend more time with the patient to explain that generics are therapeutically similar to Clamoxyl.

For the patient, the difficulty is that he doesnt pay for drugs and is not aware of the price differences. All that he knows is that Clamoxyl is efficient and has already healed many of his relatives, if not he. But once he will be convinced that generics are totally equivalent to Clamoxyl, it will no longer be a problem for them to accept generics and forget about Clamoxyl and doctors wont hesitate anymore to prescribe them. To address the decline in Sales 4 different marketing strategies can be followed. Milk Clamoxyl and divert promotional investments Augmentin Strengthen Clamoxyls brand equity among doctors but how? Reduce price of Clamoxyl despite SBs corporate philosophy, how much? Change nothing and count on the resistance of French doctors towards generics.

Milk Clamoxyl and divert promotional investments Augmentin: It high time to invest more in Clamoxyl and we can start investing in the freed resources in Augmentin, which is still patent-protected one when compared to Clamoxyl. Augmentin was launched in 1984, a combination of amoxicillin with an inhibitor that neutralizes the most prevalent mechanism of bacterial resistance to amoxicillin. It is used for special infections which was positioned and sold as an improved version of Clamoxyl, but as an advanced cure for specialized problems. Because of this specialized positioning, market reach and tapping was limited, but it enabled SB to keep Clamoxyls positioning as the antibiotic for the majority of common infections. Though it requires a proper price negotiation and has some more side effects when compared to Clamoxyl this can be used as a way to boost the declining sales. Strengthen Clamoxyls brand equity among doctors: Increasing betterment in Packaging and promotional support to Clamoxyl will strengthen the brand. Direct to customer is better option for the same as Doctors are aware of Clamoxyl which has fetched already, highest brand awareness and best image of all amoxicillin. Since Clamoxyl is available in many forms in the market, adopting new packaging strategy will be bad idea as if done; obtaining the license for the same and launching a new dosage or form can take up to 18 months and can be easily copied by generics, once authorized. Reduce price of Clamoxyl despite SBs corporate philosophy: The Price of Clamoxyl was nominal already in the market. To attract additional prospective market share if they tend to reduce the prices, chances are there for the generics also to reduce their prices to compete with Clamoxyl and this could infact will lead to price war. Let us assume we decide to go in far price cut. If we do a small price cut, it could reduce the price gap to the level of the brand equity gap. This can be applied only on the forms that are copied by the generics. If a large price cut is done in order to align Clamoxyl

with the cheapest generic, it will be easier to propagate this to the doctors and consumers. Since, Clamoxyl is having high brand equity and considered to be one of the highest selling brands among amoxicillin. Doctors prescribe the same as people are much aware of Clamoxyl than any other generic drug is still the highest-selling antibiotic, far before its competitors. We can recommend for a small price cut this in turn can be propagated and advertised to reach the doctors as they are aware of the same. By this we can put amoxicillin first when it comes to antibiotics prescription and when it comes to amoxicillin, Clamoxyl need to be put first and prescribed by doctors to consumers as they are already aware of the brand and its price, it would be easy for the doctor to gain the patients confidence and can increase his image. Also in future when pharmacy can sell drugs without prescription, Clamoxyl can be put in shelves so that the consumers can easily ask for the same. Infact the problem of deficit of the social security system is bound to increase with the aging population, so it is very important with all the media exposure to show that SB feels concerned by this issue and reducing the price of Clamoxyl will help keeping a good image of the brand.