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The case of Fran W Horner Ltd

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  1. Summary
  2. Concerns related to accuracy
  3. Initial communication strategy
  4. Competition
  5. The 1978-79-communication strategy
  6. Conclusion

Frank W Horner Ltd was founded in 1912; Horner distributed a variety of ethical and OTC (over the counter) pharmaceutical products to 4000 pharmacies across Canada through a sales force of 65 persons. Only 10% of sales volume was distributed through wholesales. By 1977, sales in Canada had reached $ 15 million.

In 1976, Horner executives were investigating acquisition of the Canadian distribution rights to a new type of fever indicator developed by Eurand. The indicator consisted of a thin strip, which when applied to the forehead for 15 seconds, shows ?N? if the persons temperature is normal and ?F? if the person had a fever.

Horner executives conducted technical and market research. The important outcomes are listed below.

[...] Another thing is that the widespread use of Fever tests in hospitals could be used to distinguish it from the competitors Deciding about four additional options - i. Television advertising. ii. Co-operative advertising. iii. Tie in promotion. iv. Point of sale display. Out of the above, television advertising is very important, once the target market and distribution is broadened. When we consider the results of previous television advertising test, in Vancouver during the eight-week period after advertisement started cases were sold and once the advertisement campaign is stopped the sales had returned to the pre advertising level of 40 cases per week. [...]

[...] Another concern was that, the poorer quality of competitors might reduce the credibility of the product concept and adversely affect the sales of Fever test. There is a need to differentiate Fever test on the basis of micro encapsulation, which is a difficult communication task. The 1978-79-communication strategy: 1.Whether or not to broaden distribution of product beyond pharmacies? Super market was another option. This channel could forestall potential competition and generates substantial sales volume. But there was a concern about Horner's reputation in pharmacy and the degree to which they would withdraw support, if the supermarket starts selling at lower price. [...]

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