Mateo Bird

Business

20 March, 23:10

2. A vitamin company, Pro Health (PH), was preparing to launch a new product called ProBio. It had produced 20,000 units of ProBio at a cost of $5 per unit and had packaged the product in bottles with labels that prominently displayed the ProBio name. At the last minute, PH learned that an established drug company already sells a product named ProBio. FDA regulations prohibit drugs with identical names from being sold on the market, with the penalty for noncompliance being full product recall. Rather than face product recall, PH decided to comply with the regulation voluntarily. As a result, the product had to be renamed and rebranded, the label had to be redesigned, and a new advertising campaign had to be formulated and launched. What were the likely outcomes of this decision? What might have happened if the company had not voluntarily changed its product?