Metabical Price

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Marketing Assignment YP53B – Metabical Price
M. Ray Akbar Mutalibov

For the case study of Metabical Price, I would recommend Option 2 ($125 in 4-week supply) as the price recommendation. This recommendation decision was mostly made of target return pricing, but combined with a little bit element of value-based pricing and psychological pricing. The reason I would choose the target return pricing as a main tools to pick the price is because the CSP’s Metabical informed us that they wanted to achieve a minimum 5% ROI within five years of the new product’s launch. Thus, target return pricing was picked since this kind of pricing would set a price based on the achieved target of ROI. The reason why I include value-based and psychological pricing would be explained later in paragraph below.
Based on the calculations from Metabical Worksheet, I get several different results of ROI in 5 years, based on different method and different manufacturer gross margin. For the ROI’s manufacturer gross margin of $24,8, I have 210% (Method 1) and -26% (Method 2). For the ROI’s manufacturer gross margin of $58,13, I have 627% (Method 1) and 74% (Method 2). For the ROI’s manufacturer gross margin of $74,8, I have 835% (Method 1) and 124% (Method 2).
There were 2 different method in my worksheet calculation, the first one is Method 1 which taken the US’s overweight population who actively trying to lose weight and comfortable using diet pills into potential customer. The second one is Method 2, which taken the US’s overweight population who would go to a doctor to request prescription. Since Metabical is a prescription drug, I do not consider Method 1 is an appropriate choice in this case, thus making Method 2 into my prioritization. Since ‘prescription drug’ is one of the value that Metabical had offered, I include value-based pricing into consideration, regardless of…...

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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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...for 3 months | | | 4. The following are the criteria used to evaluate the alternatives in the following order. a. Safety b. Effectiveness c. Price d. Social influence As per the 5Cs propounding under marketing strategy, firsts C represent customers. we would have the following categories of people involved: 1. Initiator: Friends, Self or family 2. Decider: Health care practitioner or Self 3. Influencer: Friends, Family, Role model or Healthcare practitioner 4. Purchaser: Self or family 5. User: Self Answer 2 Segmentation scheme given in the case can be broadly classified into demographic and psychographic - Demographic(age, gender, family size, lifecycle, income, religion)- 1. BMI - Broadly over Answer 3 1st Basis of Segmentation is BMI 34% of people 2nd Basis of Segmentation - Gender As per exibit 1, 67% of Men and 62% of Women are in Now to further get a segmentation we went back to exhibit 2. Points 5 to point 9 tell us that women is what we need to target. 3rd Basis of segmentation is education 3rd last point of exhbit 2, 75% with college degree are aware of health risks associated with being overweight. 4th Basis of segmentation - psychographic (Page 78) - when a psychographic analysis was carried out, 'I want to be 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......

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...------------------------------------------------- 1. ¿Cómo se compara Metabical con las actuales opciones de pérdida de peso? Es un medicamento por prescripción médica que se concentra en un nicho de mercado, que son las personas que quieren perder peso en forma moderada. No está prometiendo que atacara la obesidad se enfoca en tratar desordenes metabólicos. Además está ofreciendo ser el medicamento que validada por la FDA y ocasiones daños o efectos secundarios pequeños, y no está dirigido en una persona con altos niveles de obesidad, como ha pasado con la otras soluciones del mercado, Que no son validados por la FDA y que son clasificados como suplementos alimenticios. Metabical, será el primero en su ramo de medicamentos ya que está diseñado para gente con un índice de masa muscular entre 25 y 30 (sobre peso) aprobado por la FDA ya que para estos rangos no existe ningún tipo de medicamento, todos estaban enfocados a Obesidad y Obesidad Extrema entre 30 y 40 de índice de masa muscular; los medicamentos de los rangos altos (Sibutramina y Orlistat), han presentado con contraindicaciones importantes de hígado y vesícula por lo cual solo estaban autorizados a un rango distinto de Índice de masa muscular. Este será un medicamento que ataque dos puntos al suprimir el apetito por un lado y por otro contará con un bloqueador de absorción de grasa. Meta bical ha dado resultados en 12 semanas perdiendo las personas de 10 a 30 libras. Se estima que además de enfocarse a la......

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...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......

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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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... BETTER SOLUTION – Group 7 -AJINKYA-DIVYANGANA-KETAKI-SUHAIL-TEAM- OBJECTIVES: – ™ Product benefits ™ Target customers ™ Packaging strategy ™ Forecasting demand ™ Pricing strategy ™ Profitability and ROI Metabical – only through a ™ FDA approved and can be bought prescription ™ Lesser negative effects as compared to other available drugs ™ Only 1 tablet per day ™ Promotes a healthier lifestyle (behavioural modifications) ™ Came with a support plan ™ First drug in the overweight segment Our priority – ™ Overweight females (BMI 25-30) ™ Age group of 35-65 years ™ Income level of $50,000 - $80,000 ™ College-educated ™ The group of women wanted to lose 10- 30 pounds ™ Ready to change their lifestyle to stay healthy “ I want to make a difference to my life.” Factors affecting packaging – ™ To ensure the value addition of the consumer is maximum ™ Target customers’ willingness to spend ™ Likelihood of the completion of the program ™ Customer perception of the brand ™ Cost benefits in packaging cost ™ Reaching breakeven point ™Package size decision : 12 weeks (84 pills) Why the 12 week program – ™ The target market is women who are relatively price inelastic. So, they don’t mind paying whatever price is set ™ Usually when the consumer pays so high she is willing to try the drug for 12 weeks and thereby the impact that she will notice will be higher, which will make them come and buy again ™ The drop out......

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...METABICAL CASE ANALYSIS Metabical is a prescription drug produced by Cambridge Sciences Pharmaceuticals (CSP) for weight loss, which was the first and only prescription drug to obtain FDA approval. The drug was developed to help aid people in the overweight segment to lose 10 to 30 pounds. Barbara Printup is the marketing director in charge of selecting a price for the new prescription drug. In a study CSP did with Metabical, people with a body mass index (BMI) of 28 to 30 had an average weight loss of 26 pounds over a 12 week period. At the same time, people with a BMI of 25-28 had an average weight loss of 15 pounds. This study found the new prescription drug to be useful and effective. Through research, Printup decided to target female consumers in the 35 to 65 age range with a college education. Metabical was also basing pricing and packaging compared to their main competitors in this particular market. CSP wanted to base their new product comparable to Alli, but felt Metabical could be priced at a premium due to the need of a prescription to get the drug, and the fact that they were the only FDA approved weight loss drug on the market. Pricing was a main concern with this product and several scenarios were run to try and project and forecast where the pricing would make the best return on investment (ROI). In order for the drug to be able to show positive results it is recommended that it should be taken daily for 12 weeks, without a single miss just like birth......

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...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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...A Case Write Up – Metabical Case Q1. Upon careful analysis of the case study we can summarise the current standing of the Metabical as a snapshot using the 5 Cs before deep-diving into the specific questions posed as follows: A. CUSTOMER: Metabical is a unique prescribed drug for overweight individuals with a BMI of 25 to 30. Essentially this group makes for our customers and consumers. More details of the target segment will follow as we discuss the case B. COMPANY: Metabical is wholly owned by by Cambridge Sciences Pharmaceuticals (CSI) an international pharmaceutical company of repute with a turnover of 25 billion dollars in 2007. C. COMPETITERS: The health and weight loss industry is cluttered with various weight loss drug options available - both prescribed and OTC, herbal remedies and dietary supplements. Meal and diet plans, exercise regimes and weight loss programmes also form the competitive landscape. D. COLLABORATORS: Doctors who prescribe the drug are influencers and we enlist them as our partners and collaborators E. CONTEXT: United States (the market) has an alarming percentage of excess weight population – 65% across ages. It is also a fairly mature market where there is high awareness for weight loss remedies. In fact, the weight loss drug industry is also tarnished by some deceptive media campaigns. There is however a defined need gap for a FDA approved prescribed drug......

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...Case Background Cambridge Science Pharmaceuticals (CSP) is an international health care company that develops, manufactures and markets products that treat metabolic disorders, gastrointestinal diseases, immune deficiencies and other chronic and acute medical conditions. In April of 2008, CSP’s latest product Metabical, which was a new drug that had been clinically proven to be effective at achieving weight-loss in moderately overweight individuals, had just received FDA approval as the first prescriptive drug of its kind. At the time of Metabical’s FDA approval, the only other prescription drug approved by the FDA for treating overweight individuals was Orlistat, which blocks the body’s absorption of fat; however, Orlistat has many undesirable side effects which may lead to serious medical conditions. Metabical, on the other hand, has a less dangerous, dual layer, controlled-release formulation which acts as an appetite suppressant and also contains a fat blocker as well as a calorie absorption agent. During its clinical trials, Metabical did not exhibit many of negative side effects that Orlistat has, leading to judgments that it is a superior treatment for achieving weight-loss and resulting in strong endorsements from the medical community. Weight-loss supplements can be classified as either prescriptive drugs or over-the-counter (OTC) remedies, and in general, OTC remedies are not as popular with consumers as prescription drugs for stimulating weight-loss in......

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...METABICAL CASE STUDY REPORT INTRODUCTION Excess weight had become a big crisis in the US, affecting about 65% of the adult population leading to different kinds of health complications. In the past, several manufacturers had introduced various weight loss products like over-the-counter (OTC) drugs, herbal products, supplementary fad diets, etc. All of these have proven to be unsuccessful because of their ineffectiveness, severe side effects and lack of credibility among consumers. At this juncture, Barbara Printup, the Senior Marketing Director of Cambridge Sciences Pharmaceuticals (CSP) wants to introduce CSP’s newest revolutionary prescription drug, Metabical. It is the only FDA approved prescription drug for overweight people, which has minimal side effects and long term benefits. PURCHASING DECISION MAKING PROCESS (Q1) The communication strategy of Metabical targets both the health care provider and the consumer. Depending on the initiators there are two different purchase decision processes in the purchase of Metabical for the overweight problem. 1. For Customer: a. Problem identification: The various health awareness programs, BMI table etc help a health conscious or beauty conscious individual to identify the overweight problem. b. Information search: Once the problem is identified the individual decides on the course of action. He/She may decide to either ignore the problem or work on it. Metabical is interested in the group of individuals who are ready......

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