Oxyglobin and Hemopure: Biopure Corporation Dilemma
There is no doubt that one of the main challenges facing Chief Executive Officers (CEOs) of major corporations is making the right marketing decisions. An archetype of this reality is the dilemma facing Carl Rausch, the CEO and president of Biopure Corporation. He is torn between either releasing Oxyglobin into the market before its sister product Hemopure can be unveiled; or wait until after the latter product is released (Gourville 1). The proponents of the first alternative think that immediate release of Oxyglobin will help the company generate its first revenue. They also argue that it will help the company learn new marketing tricks that will help in the future marketing of the sister product. In contrast, supporters of the latter alternative think that releasing Oxyglobin, a product for animals will discourage setting of premium prices for Hemopure, a product meant for humans.
My first recommendation to the CEO in this case is that he should be aware of both the short-term and long-term consequences of each alternative. For example, immediate release of the veterinary product will in the short term give the company an impetus in three core fronts: first revenue, marketing experience, and stakeholder confidence. Furthermore, since the company wants to launch an Initial Public Offer (IPO) in a short while, Oxyglobin’s release will attract more investors. The only visible long-term effect of this alternative is the possibility of a negative influence on the premium prices of Hemopure.
On the other hand, the second option’s immediate short-term consequences is that it will deny the company the opportunities presented by the first alternative. For instance, delaying the release of Oxyglobin will automatically mean that the company will continue operating on a deficit. Secondly, there will be no incentive to attract investors during the IPO. Due to market fluctuations, this option will also delay the company’s marketing experience. However, in the long-term this option will give the company the freedom to set premium prices for its products.
Evidently, the first option has more advantages than the second alternative. As a result, I will recommend to the CEO that marketing of the veterinary product should commence immediately. Even though the main argument made by this option’s opponents is valid, the company’s marketing team should devise strategies that ensure the prices of the two related commodities do not affect each other negatively. For example, the company should insist on premium prices for both of its products. Of course, the premium price will hurt the marketing of Oxyglobin. However, the marketing team can offset this discrepancy by using direct marketing strategies that establish contact with animal owners, rather than veterinaries.
Gourville, John Timothy. Biopure corporation. Harvard Business School Pub., 1999.
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