Late entrant over‐the‐counter and Rx market entry strategies: An investigation in the pharmaceutical industry

Abstract

Purpose

This paper aims to explore market dynamics and strategic issues that contribute to a late entrant's success in achieving market leadership in the prescription (Rx) and over‐the‐counter (OTC) markets. In the Rx market, consumers must receive physicians' approval before purchasing the product. In the OTC market, consumers make the final drug choice.

Design/methodology/approach

Data on sales (both Rx and OTC) and direct‐to‐consumer advertising expenditures for nine gastrointestinal drug products were obtained covering a 17‐year period. Ordinary least squares regression was employed.

Findings

The findings show that late‐market entrants, despite existing challenges, can become market leaders. This applies to both the Rx and OTC markets, via varying mechanisms.

Originality/value

This study is unique in demonstrating the differential mechanism in achieving market success for late entrants in the Rx and OTC markets.

Citation

Cavusgil, E., Seyda Deligonul, Z. and Calantone, R. (2011), "Late entrant over‐the‐counter and Rx market entry strategies: An investigation in the pharmaceutical industry", International Journal of Pharmaceutical and Healthcare Marketing, Vol. 5 No. 2, pp. 79-98. https://doi.org/10.1108/17506121111149217