In: Business and Management

Submitted By maggienorina
Words 984
Pages 4
Problem statement
Pricing must be decided for Metabical that captures the accurately forecasted demand of the target market. Because of heavy competition such as Alli , it is important to create a package that can be priced accurately to drive up sales and consistency of a 12 week drug.
Situation Analysis
Cambridge Sciences Pharmaceuticals’ (CSP) is international health care company. Their focus is on developing, manufacturing and marketing products that treat various diseases.
They want to enter the market for weight-control products in the US. Metabical was part of a strategic initiative that allows CSP to enter $3.74 billion market for weight control products in the United States.

Metabical’s competitors are Alli and Xenical and are FDA approved. In utilizing the SWOT analysis, it was determined Metabical had positive results in the clinical trials and is decent in comparison to other competitors in the market place. It also has dual layer controlled release formulation. Opportunities for this product would be a potential large market, constant rise of obese adults and a substitute for other weight loss methods.
“In principle, Metabical would be attractive to all overweight individuals” however, Barbara Printup established a more focused plan of approach:
First, the approach completed by Printup is the forecasted demand by considering the number of overweight individuals in the United States and focusing down that population to those who were actively trying to lose weight. She felt those potential users should be narrowed to the 15% of those who were comfortable with weight-loss drugs.

Second, she specified consumer interest in a prescription weight-loss drug for the overweight and saw that 12% were ready to go to their health care provider to request a prescription.

Third, she surveyed the target market. Printup wanted a primary target for the…...

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Metabical use skimming pricing strategy and thus we suggest pricing the Metabical at $150 for 1 months supply, with this price Metabical will be able to achieve their objective to enter $ 3.74 billion market for weight control products in the United states and more than 5% ROI within 5 years. For ROI refer (Ex-8(a)(b)(c)(d)) and for pricing and Economic Value Analysis (Ex 7). This recommendation is based on the economic value comparison against other competitors such as Alli and OTC Orlistat. In addition to selling a monthly supply of Metabical for $150, we recommend selling a value pack consisting of 3 months supply – One complete 12 week course for $300, with a notion – “Get 3 for the price of 2”; without compromising net revenue –(Ex 7-pkging- pricing). We also recommend using Blister packaging with numbers so that people do not forget taking their pills. In order to achieve their objective CSP should use new product development and market differentiation as their Product Marketing strategy. With a positioning statement --“THE RIGHT PRODUCT FOR RIGHT YOU”. Metabical should target college educated, heath conscious females ages 35-65 looking to shed few extra pounds and thereby raising their self-esteem. Each product in the weight control market has a unique product and marking strategy, strengths and weaknesses (Ex-5) including Metabical, e.g. Alli- Product Differentiation, 1st OTC, FDA approved product VS, Metabical: Product and Marketing differentiation, 1st FDA approved,......

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...healthier' is the kind of proposition Metabical wants to make. It is a healthy drug, better than its predecessors, going to be FDA approved. Thus, this is the target audience we expect to be drawn to us and stick with us. Thus, as per Page 78, the group corresponding to this tagline - 35-65, college education plus, household income $80,000+ As on Page 78, we want to go with target group no. 2 i.e. the one who abide by the tagline 'I want to be healthier'. Metabical is a healthy drug. It promises to be better than its predecessors, it has less side effects and will be FDA approved soon. So, it looks for consumers who value health benefits and make that the cause of wanting to do something about their weight. Metabical looks for consumers who don't chase every fad diet and look to protect their health and raising self-esteem. Cons of the other segments on Page 78, Segment 1 - Unrealistic expectations - so might get disheartened and fall short of 12 weeks -Household income < $40,000 - pricing becomes tricky for Metabical -Influence by a celebrity spokesperson won't be possible as senior executives wont sanction it right now due to budget constraints - senior executives (Page 73) Segment 3 - Since this target group weren't obese and are motivated and focused, they would not be the repeat customer. Segment 4: One of the descriptions of this group is 'Dont want to be deprivsed of indulgences'. This won't work for Metabical at all because its side effects......

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...Metabical: Pricing, Packaging, and Demand Forecasting for a New Weight-Loss Drug 1- Discuss Metabical’s points of differentiation compared to current weight-loss options? After 10 years of testing and spending a significant amount in research and development. Cambridge Sciences Pharmaceuticals (CSP) discovered one of the best weight- loss drug that called Metabical. Metabical has unique characteristics that make it different in market. People are always concerned about the side effect of any drug and sometime they preclude taking drug just because they are doubtful. Metabicals is differentiated by the Food and Drug Administration (FDA) approval. It is the first and only prescription drug that received FDA approval to meet the needs of consumer. Negative side effects disgrace many previous prescription weight loss drugs and most people become more cautious of using any weight loss drugs. While, metabicals has very minor side effects, it becomes the optimum option to who are concerned about the negative consequences. Metabicals gained consumers’ confidence who are looking to effective method to reach a desirable weight and improve their overall health. Metabical effectiveness is one of the keys that drive the product to success. The study shows people who are taking Metabical loss an average of 26 pounds, while other who is using a placebo loss an average of 6 pounds. One of the differences is Metabical maintained weight loss levels within 10% of the clinical......

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...METABICAL Situational Analysis and SWOT Situational Analysis Item | Issues-Facts | Implications to Situation | SWOT | Organization Structure | | | | 1 | Barbara Printup has over 20 years of experience marketing prescription drugs | Experience helps in the marketing and launch strategy for s new product to market | S | Leadership | | | | 1 | $25B in sales in 2007 | Brand recognition is key | S | 2 | Clinical trials performed to show majority of individuals reached weight-loss goals by week 12 and minimal weight loss after that | By generating data through clinical trials, FDA clearance is a route which is an opportunity over its OTC and supplement competitors | S | Functional Areas | | | | 1 | 10 years of testing and $400 million in R&D costs | A great deal of time and resources invested into product | W | 2 | Researchers at CSP combined an appetite suppressant (calosera) with a fat-blocking agent (meditonan) to for Metabical | The strong R&D team at CSP gives the company a competitive advantage in inventing revolutionary products | S | 3 | Negative side effects occur when users consume high levels of fat and calories | People tend to eat "junk" because they believe diet pills will cancel it out | W | Political, Legal &Ethical | | | | 1 | No prescription-drug options available specifically for the overweight segment (BMI 25-30) | Entering the market first will undoubtedly come with a large market share in the future | O | ...

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...developing, manufacturing, and marketing products that treat metabolic disorders, gastrointestinal diseases, imm une deficiencies, and other chronic and acute medical conditions. The company captured over $25 billion in sales in 2007. CSP created Metabical, what would be the first prescription drug approved by the FDA specifically for overweight individuals (those with a BMI of 25 to 30). Its compounds produce dramatic weight loss for overweight individuals. It works on a low-dose formulation, therefore reducing damages to heart and liver functions. Negative effects of the drug occurred when taken while consuming high levels of calories and fat. Metabical is intended to be taken during a 12-week treatment. The estimated retail price for the drug would be approximately $3 to $5 per day, so that would sum up to $1,800. Many health care insurance companies don’t cover weight-loss drugs in their plans. Direct competition includes over-the-counter (OTC) drug Alli (a reduced-strength version of the prescription drug Xenical), approved by the FDA for weight-loss use. There are a number of liver damage reports of people who have been taking Alli and Xenical being currently investigated by the FDA. Because of its recommended intake treatment, Metabical helps with behavior modification and healthier eating habits. In order to take maximum advantage of this, its planned to create a comprehensive support program for patients. This would enable them not only to lose weight, but to......

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...METABICAL In this case, Cambridge Sciences Pharmaceuticals (CSP) developed a new weight-loss drug named Metabical. In order to manufacture Metabical and launch it into market successfully, CSP had made market research, product experiment, and market communications strategy. Based on my analysis, CSP’s plan should be a medium risk strategy. The reasons were, it would be a little difficult to target the right customers in overweight segmentation, and people did not have any measuring standards for Metabical. The first reason was it would be a little difficult to target the right customers in overweight segmentation. Metabical was the first prescription drug which targeted at overweight group. Before Metabical was developed, there was no drug for the Body Mass Index (BMI) between 25 and 30 (Gonzalez, 2014, p. 25). Until CSP noticed in this segment that would be a potential market, then they advanced Metabical. But there were different preference customers in the overweight group which could divide by age, gender, psychographic data and educational level. In other words, if CSP wanted to locate the right customers accurately, it would have to do amount market surveys. The second reason was people did not have any measuring standards for Metabical, which indicated they were not familiar with this new product that might lead people not to trust Metabical at the first place. To build credibility and good reputation always......

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...products for treating metabolic disorders, gastrointestinal diseases, immune deficiencies and other chronic and medical conditions. CSP's Metabical would be the first prescription drug approved specifically for overweight individuals (BMI 25 to 30). According to CSP R&D team, this product is far more superior comparing to other weight loss prescribed medicines, due to its low dose active ingredients. For this same reason, it is far less harmful to inner organs comparing to other drugs available for this purpose in the market. The main negative side affect is caused when users consume high level of fat and calories. CSP has invested 10 years of research and $400 million in the development of Metabical. Customers In principle, Metabical would be attractive to all overweight individuals, but a primary target audience was established to the purpose of developing a communication strategy: The ideal Metabical audience was found to be overweight women, age 35-65 who were college-educated. This audience is more health conscious and visited the doctor more often, and shall receive adequate-assuring information of the product from him. It was estimated that approximately 4.3 million women are included in this category. Unlike other drugs in CSP’s portfolio, most health insurance carriers were not expected to reimburse patients for Metabical costs, meaning the customers will carry the full price of the product....

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