Consumers of stomach-relief and cough syrup products are similar enough that a simultaneous product launch makes good sense from a marketing perspective, apart from economic reasons.  According to Industry Week magazine, the two largest customer segments for each product are parents (who make purchases for themselves and their children) and single individuals.  For stomach-relief medicine, there are also substantial sales to people with high stress occupations and those who are accustomed to eating quickly.  Busy executives, cab drivers, and air traffic controllers were cited as examples of individuals in this market segment.

More importantly, the company’s market research has determined that the fastest growing market segment is the niche market of those individuals who prefer, and who give priority in their purchasing decisions, to discount products.  This segment of the market for pharmaceuticals has been identified as those consumers whose primary consideration in purchasing decisions is the lowest available price.  Further, the market segment consisting of those individuals whose primary purchasing decision revolves around value (i.e. the best quality for the best price) is also showing an upward growth trend as a percentage of the total market.

These two growing market segments have been reflected in the trend in consumer preferences with regard to point-of-purchase decisions.  While supermarkets and drug store chains continued to be the major sellers of pharmaceutical products, their market share shown a declining trend.  This decline is accelerating and is predicted to more substantially undercut their position in the market over the coming years.  Discount stores, in the meantime, have shown a rapid increase in gross sales and a corresponding upward trend in their market share in contrast with the larger supermarket and drug store retailers. 

Value Drugs expects to capitalize on this regional and nationwide trend toward the discount end of the product spectrum by expanding it’s capability to provide low cost products that meet the needs of low income and value conscious consumers, the two market segments the company intends to target.  The following table (Target Markets) illustrates these market segments in the context of the total market for pharmaceutical products: