Vicks Health Care

The issue with the Vicks Health Care Divison of Richardson-Merrell, Inc. is two-fold. It consists primarily of determining whether a market opportunity exists for Project Scorpio, which is the code name used to refer to the development of a solid-form cold tablet used to treat multiple symptoms. In addition, the company is also faced with determining how to position Project Scorpio assuming that a market opportunity actually exists. Vicks has earned one of the most recognized names in the colds care product market through a strong market position attained through its liquid-form product offering. Recognizing that Vicks needed to diversify its product line to remain competitive, top managers decided to develop a tablet that could treat multiple symptoms simultaneously.

Vicks already has a competitive advantage and core competency in providing liquid-based colds care products. Entrance into the industry is difficult since there are already so many key competitors, most of whom are well-diversified companies. In addition to a highly competitive market, consumer and ethical product lines are heavily regulated by the Food and Drug Administration. Any changes made to the ingredient content of consumer products results in an outlay of time and money, therefore, the industry does not change its ingredient content often. Among Vicks' competition are Contac, Dristan, Comtrex, Coricidin, and Sudafed, among others. Of the rivals, Contac and Dristan are the most competitive in the head-cold, solid-form market segment. There is little differentiation among the rivals and switching costs are relatively low. Most consumers tend to purchase more than one brand on an annual basis, therefore, brand loyalty is not necessarily important. Few of the rivals have made an effort to market a flu product leaving consumers to improperly use cold and cough products or seek out prescriptions from physicians. Because the Food and Drug Administration places limits on the ingredients of the over-the-counter products, many consumers seek out a physician so they may be prescribed medication with a higher concentration of an active ingredient.

Top managers at Vicks believed that the ingredients and physical content for the original Project Slex were not flawed, therefore, they opted to instead reshape its positioning. This included a new product name, packaging, and advertising claims from which to work from. By creating a distinct and valued perceptual difference between Project Scorpio and its competitors, Vicks seeks to improve on its prior test market of the same physical product. It is the perception by consumers of products effectively relieving symptoms that is correlated with sales revenues. For example, Aspirin products are most heavily perceived to relieve headaches, body aches, and fever, despite Vicks marketing NyQuil as also providing effective relief. Therefore, studies show that when one experiences such symptoms they tend to buy