In early 1990, Warner-Lambert Ireland planned to launch an innovative new product named Niconil, which was made for people who would like to quit smoking. Niconil would be the first patch-type product in the smoking cessation market in Ireland. While existing smoking cessation products of the other companies had not been successful due to the concerns about negative side effects, Warner-Lambert executives had an optimistic view that Niconil would be recognized as a safe and effective product by prospective consumers. In fact, results obtained through preliminary market research seemed to support their optimistic views. Nevertheless, there were critical problems that should be solved before launching the product as follows:
Which pricing strategy would be appropriate for the new product?
What would be the most effective marketing communication strategy for the new product?
Because effective pricing strategy would be directly related to the companies' actual sales and profits, in this case, two questions raised above will be mainly discussed.
Advertising and other marketing strategies, such as public relations and sales promotions, will be examined closely related with the discussion of pricing strategies.
As known generally, it was nicotine that resulted in addictive behavior to smoking. In other words, stopping smoking reduced the amount of nicotine, and made the smokers desire cigarettes to compensate for nicotine needed for maintaining the level of it. Warner-Lambert's Niconil was the product focusing on the addictive aspect of smoking. That is, Niconil was a nicotine-replacement product, and could be used as a substitute for cigarettes. Although there had already been another nicotine-replacement product, Niconil would be the first patch-type product in this market. Compared with competitor's chewing gum type product, Niconil could be recognized safer from negative side effects, because nicotine of this patch type product was released indirectly through skin,