Market Analysis for Tums Brand

Individual Project for Product Tums
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Individual Project for Product Tums
Part 5: Executive Summary
The report focuses on the market analysis, segmentation, targeting, positioning, brand analysis, and brand recommendations of Tums antacids. Using the marketing mix of price, place, promotion, product, and SWOT analysis, one can tell that Tums is competitive and that many Americans use its products. However, the antacid industry is rapidly changing due to increased competition. Notably, Tums needs to improve its core competencies to sustain its competitive advantage. First, Tums should upgrade its supply chain to Triple-A, which emphasizes agility, alignment, and adaptability. By using Triple-A, it will be possible for Tums to enter new countries and territories to expand its market coverage and benefit from the economies of scale. Second, Tums need to embrace open innovation to improve its products and services. In other words, the company should interact and borrow ideas, innovations, and inventions from internal and external stakeholders. Third, Tums should stop over-relying on its tangible resources and start enhancing its intangible resources. The company can use the VRIO framework to ensure that its resources, capabilities, and core competencies are valuable, rare, costly to imitate and that the firm is well-organized to capture the economic value. The report portrays that Tums is in the right direction, but it should reinvest, hone, and upgrade its resources and capabilities to avoid organizational inertia. My report has been reviewed by the Center for Business Communication (CBC), and changes have been done accordingly.
Part 1: Market Analysis of Product Category
Industry Analysis
According to Market Data Forecast, North America's antacid market is worth about $4.92 billion as of 2020. The market for antacid drugs is expected to grow at a compound annual growth rate (CAGR) of 4.6%, which means it will be worth approximately $6.15 billion by the end of 2025 (Market Data Forecast, 2020). Some factors will contribute to the high consumption of Tums and other antacid brands. They include the increase of geriatric population with Gastroesophageal Reflux Disease (GERD) and side effects of medicines, such as anti-inflammatory and non-steroidal drugs. Additionally, poor lifestyles in the current and upcoming generations might lead to higher cases of stomach acidity. Currently, Tums is the leading and most preferred antacid brand in the United States of America (USA). Over 60 million rolls and bottles of Tums are sold annually, which is almost twice the amount sold by Tums' closest competitor (Tums.com, 2020).
Tums is an over-the-counter (OTC) medicine that treats symptoms that occur due to a high level of stomach acids, such as indigestion, upset stomach, and heartburn. The medicine contains calcium carbonate. Tums was created by James Howe, a pharmacist, in 1928 to treat his wife's stomach issue of indigestion (Tums.com, 2020). In particular, it lowers the acid level in the stomach. The medicine should be taken as directed on its package or by a physician. Tums come in different forms, namely liquid and solid. For chewable form, users are advised to chew the medicine properly before swallowing it (WebMD.com, n.d.). When it is in liquid form, users should shake well before using it. The prescription on how to take Tums is indicated on the medicine's package. Moreover, the ingredients are also listed on the package for people to read. Users are strongly advised to follow the prescriptions and avoid under or overdosing. If the stomach issue persists after taking Tums for about two weeks, individuals are advised to seek medical attention. The following graph shows the sales growth of different antacid brands in the USA in 2019 (Ridder, 2020).
Figure 1: Growth Sales of Leading Antacid Brands in the USA in 2019.


Source: Ridder, M. (2020). Sales growth of leading brands of antacid tablets in the United States in 2019. Retrieved from /statistics/194547/us-sales-growth-of-antacid-tablet-brands-in-2013/.
As shown in figure 1, Tums was among the antacid brands with a high rise in sales growth in 2019. Tums had a 14.3% increase in sales, which was followed by Private Label with 7%, Gas-X with 7%, Pepcid Complete with 7%, and Pepcid AC with 5.8% (Ridder, 2020). Notably, the Tums brand had doubled its second-largest competitor in sales in 2019. In that case, if Tums continues to sustain its competitive advantage in upcoming years, it will reap more benefits due to the projected increase of antacid consumption in the USA market in the next five years.
The market constraints caused by the coronavirus pandemic last year increased the sales of OTC drugs by approximately 30% in the second quarter of 2020. In reality, their sales toward the end of 2020 increased since some people said that an ingredient found in antacid treated COVID-19 disease (Creswell, 2020). However, although rumors contributed slightly to the sale of antacid tablets in the USA, it was not supported by any scholarly evidence. All in all, Tums has a significant market share in the American antacid industry. Due to the increase in demand for antacids in the future, Tums should improve its core competencies or intangible resources to maintain its competitive advantage (Kerin & Hartley, 2020). So far, Tums is a renowned brand in the USA. Many individuals take other types of antacids when they fail to get Tums from pharmacies. Nevertheless, it does not mean that Tums cannot be overtaken by other brands if it fails to gain and retain its competitive advantage.
Environmental Scan
Key Consumer Trends
The demand for OTC drugs has gradually been increasing due to the consumers' new trend toward self-medication. Based on a report published by the International Functional Foundation in 2017, whose research was conducted by the American Gastroenterological Association (AGA), it portrays that approximately 1/3 of Americans suffer from GERD (Market Data Forecast, 2020). The majority of individuals do not want to visit hospitals for minor stomach issues. Digestive products that treat gastrointestinal disorders are among the OTC medicines that are highly purchased by Americans to address health problems associated with increased acid levels in their stomachs. For this reason, the antacid brand that positions itself well in the USA industry is likely to attract many new customers and retain existing ones.
Crucial Political Issues
Politicians are responsible for developing and implementing policies that safeguard Americans' wellbeing. Tums has not been affected significantly by political factors since it complies with the government regulations in the production and sales of antacids. One of the ways they do that is by restricting the consumption of medicines that might jeopardize the health of the public (Kerin & Hartley, 2020). As such, the antacid brand that wants to succeed in the American market must adhere to various drug-related rules enacted and implemented by the government. Manufacturers should research to see that the ingredients they are using do not pose health challenges to consumers. In that case, Tums must restrain from breaking the USA's regulations if it wants to increase its market share in upcoming years.
Technological Changes
Technological advancement has significantly contributed to the increase in sales of antacid drugs. Sedentary lifestyles make individuals use antacids to relieve stomach upsets, indigestion, and GERD pain. Manufacturers and pharmacies are creating digital advertisements and health awareness campaigns on social media. Since many Americans own electronic devices that can connect to the Internet, they see ads on social media platforms, such as Facebook, Twitter, TikTok, and Instagram. As such, they know what to do when encountered with stomach issues. Moreover, technology has contributed to sedentary lifestyles. The percentage of Americans who stay long hours seated while working on their computers at home is increasing (Market Data Forecast, 2020). This lifestyle is associated with stomach acidity-related problems, which creates the need to use antacid drugs, such as Tums.
Legal/Regulatory Challenges
The sale of OTC drugs is highly monitored by the Food and Drugs Administration (FDA) for the safety of Americans. If these manufacturers of antacid and other medicines are not regulated, they can sell drugs that have short or long-term adverse effects on consumers. Besides, their primary objective is to make more profits by increasing the sale of antacid drugs. However, Tums has remained loyal to its customers in sustaining its products quality by using the right ingredients. Some of its competitors have been warned by the FDA for unsafe practices. For example, in April 2020, the FDA requested the manufacturers of ranitidine drugs to withdraw them from the market immediately. The FDA said that ranitidine drugs consisted of N-Nitrosodimethylamine (NDMA), which is a probable carcinogen to humans (U.S. Food & Drug Administration, 2020). Overall, the sale of antacid medicines is closely monitored to ensure that they are safe for consumption, which is crucial to public welfare.
The Shift in the Nature of Competitive Landscape Within the Antacid Industry
The competitive landscape in the antacid industry is significantly changing. The advancement in technology has interconnected countries and territories, appearing like a global village. For this reason, it has become easy for manufacturers and sellers of antacids to enter new markets overseas. The presence of large antacid manufacturers, such as Gaviscon, Rolaids, Zantac, Pepto-Bismol, and Alka-Seltzer has made competition in the USA antacid market intensive. On that note, companies that are likely to succeed are the ones with proper strategic decisions, such as partnerships, acquisitions, and collaborations, in selling their products (Kerin & Hartley, 2020). Consequently, the expansion of the geographical presence for Tums and other brands will bolster their business position.
Part 2: Segmentation, Targeting, and Positioning
(a) Segmentation and Targeting
Tums antacids are increasingly being used by different demographics, psychographics, and behavioral groups. Specifically, these OTC drugs are readily available in pharmacies, and people buy them to get relieved of indigestion, stomach upsets, or heartburn issues. In the USA, individuals aged between 12 and 40 years are the ones who use Tums regularly. The level of income, social status, occupation, and education do not significantly influence the consumption of Tums products. For many Americans, the primary determinant of purchasing OTC drugs is their side effects. Since Tums antacids are manufactured using calcium carbonate, they are safer for the majority of people. Children and adults aged 12 years and above can chew tablets to ease indigestion and stomach upsets. Tums antacids are affordable compared to competitor products, which is why they are highly consumed by many people regardless of their age differences. When it comes to psychographics, things like lifestyle, concerns, values, attitudes, and personality are considered in understanding how they influence people’s buying patterns of antacids. Due to the rapid advancement of technology, many individuals have sedentary lifestyles. People aged 17 to 35 years have a high likelihood of working using electronic devices and remain seated for an extended period. As such, they are likely to have Tums with them due to indigestion, stomach upset, and heartburn problems.
Additionally, Figure 2 below depicts that the market for Tums antacids will continue to grow in the future. For instance, these drugs are the most preferred antacids by pregnant mothers. Heartburn is usually a common problem during pregnancy since the uterus keeps pushing the stomach as the fetus grows. However, despite Tums helping this demographic to overcome stomach issues, it is a source of calcium. Expectant mothers need a lot of calcium during pregnancy to maintain their bone health and facilitate the proper development of their fetuses. Tums are favorable for different demographics in the USA. In that light, the primary target consumers of Tums in the USA are individuals in their early adulthoods. Due to the increased use of technology, the lifestyle change is likely to promote the consumption of Tums as individuals look for ways of relieving their stomach problems.
Figure 2: Antacid Market Size in the USA


Positioning
Although there are numerous antacids in the USA, such as Mylanta, Gaviscon, Pepto-Bismal, Rolaids, and Alka-Seltzer, Tums is one of the most preferred drugs by the majority of Americans aged 17 to 40 years. The antacid provides fast outcomes and helps individuals to overcome their stomach indigestion, upset, GERD pain, and heartburn problems. Another thing that makes Tums have a competitive advantage in the USA is that there are no generic products. Tums remain true to its consumers and is a favorite antacid drug for many Americans. Additionally, these drugs are advertised on social media to attract young adults who spend more time on the Internet. Since James Howe discovered tums antacids, the brand has remained loyal to its customers. Currently, Tums antacids come in different flavors. Smoking, certain medicati...