Marketing and Burroughs
Finding the Alternatives There was continuous pressure from sectors of the government and nonprofit organizations to reduce the price of the Retrovir product. This was followed by the negative reaction from the management team to reduce the price of the drug. There are three possible alternatives to fix the problem: 1. Maintain status quo This alternative implies that Burroughs will maintain current prices unaltered. The company would have to invest more in marketing programs in order to communicate this to its customers. The government and nonprofit organizations already cut the price by 20% in 1987 and 1989. Also the marketing campaign has to communicate that by maintaining the current prices it will not only allow the company to
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Maintain status quo By taking this alternative Burroughs will maintain the current price and profit margin. This alternative will allow them to increase the research and development in order to improve the current product and develop new treatments and the possible cure for HIV. Burroughs was the first company in 1987 to provide a product (Retrovir) to in the market against HIV. After Retrovir was in the market, the company was pressured by different groups, including government agencies against the high price of the drug. Burroughs was forced to cut the sale price of Retrovir by 20% twice over the last couple of years. Burroughs decision to reduce the price of the drug was a consequence of the high demand of Retrovir from AIDS patients, as well as the social pressure.
If the company continues cutting the price, it is uncertain if the price polemic will end or not; due to the exponential increasing demand for HIV treatments. The company management concludes that if they reduce the price of Retrovir, people will still ask for lower prices. Every pharmaceutical company relies on its research and development department to succeed. If the company keeps their current price, it will continue to finance more research to find the cure for AIDS or continue the research to develop new treatments for different fatal diseases such as cancer. However if the company keeps their current prices, the reaction from