Competitive Urges (Part 2)

Part 1 of this “Competitive Urges” series introduced you to the case study of the ball-point vs fountain pens.  In this second part, we will look at the case in detail and help shape it to apply to pharma products and services.

The substitution of ballpoint pens for fountain pens as writing instruments went through three distinct stages. Before the appearance of ballpoint pens, fountain pen sales grew undisturbed to fill the writing- instrument market. They were following an S-shaped curve when the ballpoint technology appeared in 1951.

As ballpoint sales picked up, those of fountain pens declined in the period 1951 to 1973. Fountain pens staged a counterattack by radically dropping prices. But that effort failed. Fountain pens kept losing market share and embarked on an extinction course. By 1973, their average price had dropped to as low as 72 cents, to no avail.

Eventually, however, the prices of fountain pens began rising. The fountain pen underwent what Darwin would have described as a character displacement to the luxury niche of the executive pen market. In the early 1970s, the strategy of fountain pens became a retreat into non-competition. By 1988, the price of some fountain pens in the United States had climbed to $400. The Lotka-Volterra model indicates that today the two species no longer interact but each follows a simple S-shaped growth pattern. As a consequence, fountain pens have secured a healthy and profitable market niche. Had they persisted in their competition with ballpoint pens, they would have perished.

What lesson can be learned for drugs and devices? The more distinct your Unique Selling Proposition (USP), the better off you are. Can your product be used effectively in more than one treatment area? Is your device ideally suited to a specific socio-economic, disease-state or other target audience?  These super-targeting tactics can help lift your product out of the competitive ring and into a standalone product category.

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Direct Choice Inc. is a full-service direct marketing agency that has worked with national and regional brands in a wide variety of vertical markets. In addition to this blog, you can also find us on Facebook, Twitter, YouTube and LinkedIn.

Competitive Urges (Part 1)

In this “Competitive Urges” series, we will take a look at a case study that contains the essence of market change and product adaptation to take a dwindling, struggling product and transplant it to a market where it can not only survive, but thrive.

One of the more interesting business school marketing competition studies is, strangely enough, one about fountain pens. Ever since the Belgian mathematician P. F. Verhulst formulated the natural growth equation to describe species populations back in 1845, his ubiquitous S-shaped curve has made its way into everyday life. Today, the predator–prey mathematical formulation has been used to describe competition outside biology and ecology. Indeed, the Volterra-Lotka model has opened the way to effectively managing competition in the marketplace. A set of elementary marketing actions has emerged that provide guidance when searching for a commercial image or an effective advertising message.

An intriguing aspect of the marketplace is that the nature of competition can change over time. A technology, company, or product does not need to remain prey to another forever. Competitive roles can be radically altered with technological advances or with the right marketing decisions.

The struggle between fountain pens and ballpoint pens is a case in point.

Fountain pen sales were following a classic S-shaped growth curve when ballpoint pens were introduced in 1951. Fountain pens counterattacked by undergoing a character displacement and entering a luxury niche between 1951 and 1973, and then they retreated into non-competition.

In Part 2, we will look into the details of the ball-point/fountain pen case study and see how this case can be applied to aid pharma firms in designing products that are flexible and have multiple uses so they have the needed latitude to adapt to changing market conditions.

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Direct Choice Inc. is a full-service direct marketing agency that has worked with national and regional brands in a wide variety of vertical markets. In addition to this blog, you can also find us on Facebook, Twitter, and LinkedIn.