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    Metabical Case Study Solution

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    Cambridge Sciences Pharmaceuticals (CSP) is an international health care company. They captured over $25 billions in sales in 2007. CSP is planning to launch a new prescription drug in the weight loss market called Metabical in January, 2009. Metabical would be the first prescription drug in the overweight segment approved by FDA. From the clinical trials, the drug comes out as very effective with minimal side-effects. The planned retail price is approximately $3-$5 per customer per day, which would amount to a maximum of $420 treatment (assuming a 12 week treatment). CSP plans to promote Metabical with a heavy marketing budget of approx. $23mn. Since CSP has invested a lot of time (10 years) and R&D funds(~$400mn) on Metabical, they want to have a viable positioning strategy and marketing communications plan, so that the drug is not just successful but also has a long term and steady demand in the market.

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    Metabical Case Study Solution

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    paroengineer
    7K views4 pages
    Cambridge Sciences Pharmaceuticals (CSP) is an international health care company. They captured over $25 billions in sales in 2007. CSP is planning to launch a new prescription drug in the weight loss market called Metabical in January, 2009. Metabical would be the first prescription drug in the overweight segment approved by FDA. From the clinical trials, the drug comes out as very effective with minimal side-effects. The planned retail price is approximately $3-$5 per customer per day, which would amount to a maximum of $420 treatment (assuming a 12 week treatment). CSP plans to promote Metabical with a heavy marketing budget of approx. $23mn. Since CSP has invested a lot of time (10 years) and R&D funds(~$400mn) on Metabical, they want to have a viable positioning strategy and marketing communications plan, so that the drug is not just successful but also has a long term and steady demand in the market.

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    Cambridge Sciences Pharmaceuticals (CSP) is an international health care company. They captured over $25 billions in sales in 2007. CSP is planning to launch a new prescription drug in the weight loss market called Metabical in January, 2009. Metabical would be the first prescription drug in the overweight segment approved by FDA. From the clinical trials, the drug comes out as very effective with minimal side-effects. The planned retail price is approximately $3-$5 per customer per day, which would amount to a maximum of $420 treatment (assuming a 12 week treatment). CSP plans to promote Metabical with a heavy marketing budget of approx. $23mn. Since CSP has invested a lot of time (10 years) and R&D funds(~$400mn) on Metabical, they want to have a viable positioning strategy and marketing communications plan, so that the drug is not just successful but also has a long term and steady demand in the market.

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    Download as DOCX, PDF, TXT or read online from Scribd
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    7K views4 pages

    Metabical Case Study Solution

    Uploaded by

    paroengineer
    Cambridge Sciences Pharmaceuticals (CSP) is an international health care company. They captured over $25 billions in sales in 2007. CSP is planning to launch a new prescription drug in the weight loss market called Metabical in January, 2009. Metabical would be the first prescription drug in the overweight segment approved by FDA. From the clinical trials, the drug comes out as very effective with minimal side-effects. The planned retail price is approximately $3-$5 per customer per day, which would amount to a maximum of $420 treatment (assuming a 12 week treatment). CSP plans to promote Metabical with a heavy marketing budget of approx. $23mn. Since CSP has invested a lot of time (10 years) and R&D funds(~$400mn) on Metabical, they want to have a viable positioning strategy and marketing communications plan, so that the drug is not just successful but also has a long term and steady demand in the market.

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    The key takeaways are that CSP is launching a new weight loss drug called Metabical and is planning a heavy marketing budget to promote it. They have segmented the potential customer base and developed a positioning and communication strategy.

    The target customer group for Metabical are overweight adults aged 18-35 and 35+ who are dissatisfied with their current weight and options, with a focus on those looking to improve their health.

    Metabical will be positioned as a health-improving drug that is effective, safe, and helps develop healthier habits. It will target the large base of customers looking to improve their health.

    Introduction Cambridge Sciences Pharmaceuticals (CSP) is an international health care company.

    They captured over $25 billions in sales in 2007. CSP is planning to launch a new prescription drug in the weight loss market called Metabical in January, 2009. Metabical would be the first prescription drug in the overweight segment approved by FDA. From the clinical trials, the drug comes out as very effective with minimal side-effects. The planned retail price is approximately $3-$5 per customer per day, which would amount to a maximum of $420 treatment (assuming a 12 week treatment). CSP plans to promote Metabical with a heavy marketing budget of approx. $23mn. Since CSP has invested a lot of time (10 years) and R&D funds(~$400mn) on Metabical, they want to have a viable positioning strategy and marketing communications plan, so that the drug is not just successful but also has a long term and steady demand in the market. Decision Making Unit: 1. Doctor/Health Care Provider

    Problem Recognition: Patient comes with the problem of overweight or related diseases like heart disease, blood pressure, diabetes etc. Information search: Healthcare magazines, advertisements, other doctors, drug reps Evaluation of alternatives: Metabical(Only prescription drug for overweight segment, least side-effects, support program for 24 months) vs Alli (OTC drug, gastrointestinal side-effects (under review), 12 months support program) Purchase decision: Its proven effective and has a 24 months support program along with helping develop healthier lifestyle 2. Consumer

    Problem Recognition: Patient realises overweight issues by themselves or awareness by advertisement Information search: Doctors, friends, internet, pharmacist Evaluation of alternatives: Only for overweight segment, least side-effects, support program for 24 months Alli, OTC drug, gastrointestinal side-effects (under review), 12 months support program

    Purchase decision: Although it would be a maximum of $420 ($5 X 7days X 12 weeks) treatment, it will be doctor prescribed, functional(proven effective), will develop healthier lifestyle and has a 24 months support program

    Segmentation of potential customers: (all numbers are in millions)

    US Population (2008) (230)

    Over weight1 (80)

    Men2 (40)

    Women2 (40)

    Dissatisfied with current weight3 (26)

    Satisfied with current weight (14)

    Dissatisfied with current weight4 (30)

    Satisfied with current weight (10)

    Dissatisfied with current options5 (14)

    Satisfied with current options (12)

    Satisfied with current options (4)

    Dissatisfied with current options6 (26)

    Age group 18-35 (more looks conscious) (5*)

    Age group 35+ (more health conscious) (9*)

    Age group 18-35 (more looks conscious) (9*)

    Age group 35+ (more health conscious) (17*)

    * based on demographic division of 1:2 (age groups ratio 18-35 : 35+) - Source: Centres for Disease Control and Prevention (http://www.cdc.gov/nchs/data/statnt/statnt20.pdf)

    Age Group
    Men Women

    Target Customer Group (40mn) 18-35


    5mn 9mn 9mn 17mn

    35+

    Assumptions
    1. Overweight 35% of total population of 230mn=80mn (approx.) 2. Men: Women ratio 1:1 = 40 mn men and 40 mn women 3. Men dissatisfied with current weight 65% of 40mn = 26mn 4. Women dissatisfied with current weight 75% of 40mn = 30mn 5. Men dissatisfied with current options 35% of 40mn = 14mn 6. Women dissatisfied with current options 65% of 40mn = 26mn

    Positioning strategy: As per our suggestion, Metabical should be positioned as a health improving drug for adults (both men and women). The health conscious segment constitutes the majority of the market, looks being our secondary segment. We plan to position Metabical using the following attributes:

    Metabical USPs: o o o o Effective (weight loss upto 26 pounds) and efficient (in 12 weeks) as per clinical trials Helps with behaviour modification and healthier eating habits Safe to use with minimal side-effects 1st prescription drug approved by FDA in overweight market

    CSPs brand name CSP being a recognized brand, leverage CSPs brand name in positioning Metabical Tie ups with leading Health Insurance Companies to include Metabical in their health coverage plans. Accompanied by a 24 months Support Program to ensure patients do not gain weight after completion of medication

    Communication strategy:

    DTC Advertisements For customers: Advertising heavily through television, radio, online and print media (the ads like Losing weight is tough and Those extra 20 pounds could be killing you would be given more priority and Look your best given next priority) For doctors and health care providers: Sales force visits to health care providers detailing them about Metabical, offering samples and adding Metabical in their existing portfolio Print ads in leading medical publications and interactive ads adjacent to online physician-resource information to raise awareness Mailing information kits and samples to various health care providers Lunch and learn seminars

    Public relations Pre-launch and At-launch press releases and promotion of the same through leading news organisations. Two high profile medical education events at launch

    Break Even Analysis (conservative approach) Marketing budget over 10 years = $230mn R&D expenditure = $400mn Overall expenditure (Fixed Costs) = $630mn Per customer revenue ($3 per day per for 12 weeks) = $336 Contribution per customer (assuming 25% as variable costs like cost of producing drug) = $252 Number of customers required for Break-even - 630mn/252 = 2.5 mn customers Over the period of 10 yrs

    Potential buyers (based on positioning) 20.5 mn Age Group 18-35 35+


    Men Women Total People interested to improve health Customer base as per our positioning 5mn 9mn 14mn 35% 5mn 9mn 17mn 26mn 60% 15.5mn

    Conclusion Based on current market segmentation and strategy, CSP can do the breakeven of the cost even if only 12.5% of the potential buyers buy the product. We are positioning Metabical as a health product because of a large customer base in overweight segment with needs for health improvement. The promotional strategy includes active promotion to the doctors and health care providers through sales force detailing, sampling and lunch seminars, since Metabical is a prescription drug and these health care providers are the main decision makers. The promotional strategy also includes heavy investments in aggressive DTC advertisements to increase awareness among the overweight adults about efficacy of Metabical and budget to promote public relations especially at the time of launch. Overall, Metabical seems to be a blockbuster drug for CSP over 10 years.

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