Marketing Channels & Going Global

Market Entry Strategies

Analyzing whether to be a market pioneer or follower leads to several important questions, with no easy answers. Questions such as: Is it better to be first into the marketplace and lead the way? Or, is it better to be a follower, learning from and correcting pioneer mistakes? According to Kaličanin (2008). “Pioneers often have higher profitability, greater market share, and a longer business life….However, there are companies that consciously choose to follow, rather than innovate, believing this to be a more advantageous strategy” (p. 90).

Zantac – Successful Follower Strategy

In 2001, GlaxoWellcome merged with SmithKline to become GlaxoSmithKline. However, originally, they were competitors. In 1977, SmithKline Corporation introduced Tagamet in the U.S. as a revolutionary new treatment for peptic ulcers. The product quickly captured the market and became a $1 billion dollar seller – which was a sales milestone during that time period (GSK, 2011).

In 1983, Zantac was launched in the United States. Glaxo developed a superior product to Tagamet and heavily promoted the product, first to specialists and then, to the general physician population. Glaxo’s marketing of the product piggy-backed on Tagamet’s product leader reputation and capitalized on the fact that the current market leader had potential side effects. Zantac was positioned as an improvement over the existing treatment option. According to Corsig, Soloway, and Stanaro (1995), “…these side effects proved to be Zantac’s window of opportunity and Tagamet’s ‘Achilles Heel’’ (p. 246). Zantac quickly achieved fame as the “best selling prescription drug in the world” and catapulted Glaxo’s “market value from $4 billion to $36 billion” (p. 242).

This is an example of a market strategy where the company examined the opportunities that still existed after an innovative product was launched. As noted, Tagamet was an effective product, but was not without side effects. The Glaxo research and development department focused on creating a product with the same efficacy and an improved side effect profile. Bolton (1993) offered two key lessons that are as relevant today as when they were first written 18 years ago: "When technology changes quickly, imitators who learn-by-watching will leapfrog pioneers" and "Imitators in industries with extensive information flow can outperform innovators" (p. 38).

Imitrex – Successful Pioneer Strategy

“In the United States, more than 30 million people have one or more migraine headaches per year. Approximately 75% of all persons who experience migraines are women” (Medscape, 2012, para 1). In 1991, Glaxo launched Imitrex – an innovative product for the treatment of migraine headaches. Up to that point, patients were taking other medications that were not specifically indicated for migraines and many of these drugs were not effective. Imitrex was specifically designed and approved for migraine treatment. As soon as Imitrex was introduced into the market, patients saw an incredible difference. “Horrible throbbing, pounding pain was now alleviated with one dose of a miracle medication” (Betz, 2012, ¶. 1).  As a pioneer product, Imitrex has increased awareness of migraines and has encouraged followers to develop additional treatments.

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