Value Drugs considered several options for adding another discount pharmaceutical product to it’s product mix. However, the company chose to introduce a product that will have the greatest similarities to it’s existing stomach-relief medication in terms of production requirements, marketability, and consumer demand.  The company has decided to add a cough syrup medication, thus, limiting it’s product mix to two:  liquid stomach-relief medicine and cough syrup.  

These two products are believed to be the ones with the highest profit margin within the pharmaceuticals industry, based on the market research Joe Formulary has performed.  As well, the liquid forms of these two products make them suited to the same production equipment and similar processes.  Both products can also be produced economically on a small scale.  Finally, the consumer demand appears to be increasing for both of these products even faster than the market average for over-the-counter pharmaceutical products in general.

While each of these two products fill an important medical need, they do not compete against each other since they are designed to remedy ailments associated with different parts of the body, the stomach and throat.  These areas also have different seasonal patterns of illness.  Market research shows that cough syrup sales are skewed toward the winter months when throat symptoms due to cold and flu are much more prevalent.  By contrast, sales of stomach-relief medications, while more consistent, are skewed slightly toward the summer months when indigestion tends to be more common (possibly from the greater number of picnics and barbecues).

Since most pharmaceutical products can be easily reproduced, Value Drugs has the potential to expand it’s business by moving into other related product lines.  Similarly, Value Drugs has the capability to use it’s manufacturing equipment and laboratories in a flexible manner, adapting it’s production processes and manufacturing focus accordingly.