Glaxo Italia S.p.A. is introducing the new drug, Zinnat, into the market. Glaxo has the option to directly sell or co-market the pharmaceutical. If the company were to sell the product directly, Glaxo’s sales force would be the sole distributors of the drug. Using co-marketing, Glaxo would allow another company to sell the same product under a different brand name for a fee. We have compared the two options to determine which marketing strategy would be in the best interest of Glaxo Italia in terms of net present value, rather than the IRR or payback period used previously. We have decided that co-marketing with another company would be the best option for Glaxo Italia as it has the higher net present value.
Forecasting and Analysis
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An increased dissuasion to directly sell can also be attributed to Glaxo’s recent success in co-marketing comparable products. This large co-marketing success strongly suggests that their brand’s initially sacrificed market share does not have to be a detriment to the project, and can be greatly overshadowed by faster product integration in the market.
Increased penetration speed from co-marketing can predictably lead to further advantages, such as higher product volumes and faster market share growth. Significantly increased word-of-mouth advertising within the medical field and expected lower introduction costs both provide a fostering environment for quick and sustained market share accessibility. The predicted increase in market occupancy with the co-marketing strategy is also expected to cause competing firms difficulty with integrating their brands into the market. Relative to the increased control in the market, Glaxo also expects increased lobbying leverage in regulatory environments by establishing close relationships with similar companies. In general, co-marketers typically benefit from increased sales productivity and stability.
The disadvantages of co-marketing are typically related to competition and friction between the partner companies. Glaxo is anticipating the need to