Metabical Case

Introduction

Cambridge Science Pharmaceuticals (CSP) was an International health care company with a focus on developing, manufacturing, and marketing products that treat metabolic disorders, gastrointestinal diseases, immune deficiencies, as well as other chronic and acute medical conditions. The company captured over $25 billion in sales in 2007. Barbara Printup is the senior director of marketing of CSP who is responsible for the most successful product by CSP, Zimistat. CSP had assigned Printup to be in-charged of the upcoming U.S product launch of CSPs newest prescription drug, Metabical. Barbara Printup, Senior Director of marketing for Cambridge Sciences Pharmaceuticals (CSP) will be the person who is responsible in the product launch of Metabical which scheduled for January 2009. It was now February 2008, and Printups first order of business was to develop a viable positioning strategy and associated marketing communications plan for Metabical.

Executive Summary

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Cambridge Science Pharmaceuticals (CSP) came out with the first prescription drug approved by the FDA specifically for overweight individuals called Metabical.

The majority of Metabical trials participants reached their weight-loss goals by week 12. Although pricing had not been finalized, CSP estimated the retail price for the drug would be approximately $3 to $5 per day, with the average course treatment lasting 12 weeks. In this report, we will conduct an analysis for CSP¶s product, Metabical starting from the analysis of the industry. We will then elaborate the issues regarding overweight and obesity in the United States and analyse the market survey done by the company regarding overweight issues in order for us to decide which is the best market segmentation that we should target.

The second focus in this report would be the positioning strategy which we will state the point of parity and point of differences of Metabical and come out with the positioning strategy and target market. The third focus will be the the SWOT analysis of the product which we will state the strengths, weaknesses, opportunities, and threats of Metabical which lead us in deciding which marketing communication strategy need to be taken next. Finally, we will discuss on marketing communication strategy which best suit with the product so that CSP able to communicate well with the target consumer.

To decide the best positioning strategy and marketing communication plan, CSP had spent so much time and money in R&D and on FDA trials for Metabical. Printup was well aware that in order to recoup this massive investment, the drug need not only a successful launch, but also long term, steady demand. If Metabical were not successful with initial consumers, credibility of the drug would be in question and FDA approval would mean little. Printup still needed to flesh out the optimal segmentation, targeting and positioning of the drug, Then she could move on to assessing her current marketing 2 ommunications strategy and developing a timeline for the key activities. The case study had led us in analysing and deciding who was the ideal target consumer? How should each participant in the decision-making process to be addressed? How could these participant best be reached? What was the appropriate message to convey to one of them? What was the role of the support program? What was the optimal rollout schedule for the key marketing communications activities? In this report, Printup will provide all recommendations for the successfull marketing communication strategy and to ensure the long-term steady demand for Metabical.

Identification of the Problem Overview of Overweight Issues in the United State

Excess weight is considered a public health crisis in the U. S, with approximately 65% of the entire adult population categorized as overweight, obese, or severely obese. Being overweight is related to a number of serious health complications, and according to the American Obesity Association in 2005, ? the second leading cause of preventable death in U. S. In addition to health risks, overweight individuals endure a significant social stigma as well as outright discrimination.

Laziness and self indulgence are common stereotypes associated with this group. Many overweight people feel like social outcasts. The professional life of an overweight individual could also be negatively affected, as excess weight has been found to adversely influence, hiring decisions, wages, and promotions. Researchers and health care professionals measure excess weight using the Body Mass Index (BMI) scale. The BMI scale, which calculates the relationship between weight and height associated with body fat and health risk, is appropriate for both men and women.

It has three BMI categories of excess weight for adults: overweight (25 to 30); obese (30 to 40); and severely, or morbidly obese (over 40). According to CDC National Centre for Health Statistics in 2002, 65% adults age 20-74 are overweight. Overweight can give negative impact to the peoples life such as coronary heart disease, endometrial, breast and colon cancer, gynecological problem, stroke, liver disease, sleep apnea and respiratory problems, hyper tension and many other diseases. People are getting fatter almost everywhere in the world. In 2005, 1. 6 billion adults in the world are overweight while 400 million are obese.

The World Health Organization predicts there will be 2. 3 billion overweight adults in the world by 2015 and more than 700 million of them will be obese.

Market Analysis

Marketing survey An extensive market survey had been conducted in 2007 which included 1,000 men and 1,000 women age ranging from 18 to 70 with BMIs of 25 to 29. 9 from various socioeconomics levels. The objective of the market survey is for CSP to understand the consumers behaviour and what they actually want. 3. 2 3 At first 70% of respondents surveyed were not satisfied with their current weight. 5% 0f them said were actively trying to lose weight but just 15% of them mentioned that were comfortable using drugs to help their weight-loss goals. When we described the benefits of Metabical to participants, 12 % of them immediately ask us to make an appointment with health care providers and request a prescription. In terms of satisfaction with their current weight in each gender, 75% of women and 65% of men mentioned were dissatisfied with their current weight and appearance, whereas 50% of women and just 30% of men visited a health care provider for annual physical test.

Base on survey which respondents mentioned 55% of women and 40% of men wanted to change their behavior to live a healthy lifestyle. While 60% of women and 30% of men said tried and failed to lose weight in past five years. The survey results reveal 65% and 35% of respondents were dissatisfied with current weight-loss options on the market for women and men respectively. In our data pool educational level of respondents as they mentioned was that 75% hold a college degree and 45% hold high school diploma and they were aware of the health risks associated with being moderately overweight.

Based on respondentsreport, 65% of 18 to 35 years old respondents said that they wish to lose weight to look better and the rest (35%) of the same age group respondents said that they wish to lose weight to improve their overall health. While respondents with 35 years old and above have percentages 40% answers for good looks and 60% for better health. According to survey results 5%, 11% and 20% of respondents who have income level less than $40000, between $40,000 and more than$80,000 respectively mention that they would be willing to pay  ut of pocket  for a prescription weight-loss drug. Therefore according to the survey there is a need for a better weight loss drug which is proven and safe to lead a health lifestyle. Market Research Based on statistic on adult population in United States between 1976 and 2000 obviously we can see the percentage of obese and overweight steadily increasing. The percentage of overweight population who had BMI between 25 and 30 which categorized in overweight group was 34% in year 2000. while in the same year 25. % of U. S. populations categorized as obese and 4. 7% into severely obese. Also the percentage of obesity were rise steadily with age in both gender with the highest occurrence among men age 65 to 74 and women age of 55 to 64 and with overall more prevalence in men rather than women. As we can see the percentage of obese had inversely related with education level and income level. The highest obesity percentages were in less than $25,000 with 32. 5% and level of education less than high school with 27. 4%.

Through this experience and strong need to cater the moderately overweight people, health care providers saw their potential customers in them who want to lose unhealthy pounds. Health care providers went ahead to produce the drug and recommend them to use it besides getting help from diet and 4 exercise schedules. Based on reports which were obtained from health care providers one of their major concerns about weight-loss drug was that patients would get back weight when they stopped taking pills. We try to achieve psychographic segmentation of overweight.

According to research which was done on females, they have verity of aims to lose weight. In age 18 to 30 with high school education and under $40000 income have low self-esteem and unrealistic expectation to look like a movie star. And in age group between 25 to 40 with college education and income level $50,000$80,000 said willing to alter current behavior to get back to their old physic. While age 35 to 65 with college education plus and more than $80,000 income mentioned ready to make change to be healthier. In age group 45 to 65 with some college education and income $40,000 to $60,000 want to lose weight but if it is easy.

In age group 40 to 65 with some college education and income $30,000-$50,000 they accepted their overweight and they don¶t want to change the lifestyle. Printup also commissioned a study to analyse psychographic segmentation of overweight individuals. The study revealed that women demonstrated the most distinct segmentation. Out of five psychographic profiles, we feel that CSP should focus into two of it segmentation which is as follows. Want to lose weight to feel better and live longer.

Knowledgeable about the importance of nutrition and exercise. Ready to make a change. Focused on gold of reclaiming former weight. Motivated and willing to alter current behaviour.

Typical Demorgragphic Profile

Age 35 to 65, college education plus, household income $80,000+ ?I want to wear my skinny jeans? Age 25 to 40, college education, household income $50,000 - $60,000 To support the above findings, in February 2008 focus group study revealed their dissatisfaction with current weight-loss options and the desire for a proven and safe way to drop excess weight.

This focus group participants also expressed the desire for a prescription±strength drug with FDA approval and clinical result to back up weight-loss claim.

SWOT Analysis

Analysis is a Strategic Planning method that is used to evaluate the strengths, weaknesses, opportunities and threats of a business. It involves monitoring the internal and external marketing environment.

FDA approval Safe and effective in achieving significant weight loss. Less harmful compared to other products.

One pill per day Average course treatment lasting12 weeks Combination of Calosera and meditanan created dramatic effect for weight loss. Strong and Comprehensive marketing strategy Experience marketing and R&D team Allocate substantial amount of money in marketing budget .

 Comprehensive support program Health care plans to include Metabical in their prescription drug program 65% of adult population categorized as over weight, obese or severely obese.

No prescription ± drug options for overweight segment (BMI 25-30) available in 2008 except drug Alli approved by FDA Market research indicated of high indication of people wanting to loss weight. THREATS FDA imposed stringent regulation due to negative side-effect cases. Increasing herbal / dietary supplements Deceptive marketing claims.  STRENGTH CSP believed that its prescription drug, Metabical, is far more superior than any weight-loss solution on the market because Metabical would be the first prescription drug approved by the FDA specifically for overweight individuals (i. . , those with BMI of 25 to 30). The combination of calosera and meditonan produced dramatic weight loss for overweight individuals and it is find to be less harmful as compared to other weight loss drugs. It worked in a low dose formulation, thereby reducing stress on heart or liver function than other weight loss drugs tended to produce. Metabical also contained a controlled release feature that required only one pill to be taken per day with average course of treatment lasting 12 weeks. It also helps in changing people behavior to a healthier eating habits.

CSP is an international company with a strong and experienced marketing and R&D team. CSP has developed a comprehensive marketing strategies and have allocated substantial amount of money in marketing budget.

Weaknesses

Despite of its strength, Metabical has few negative side effects associated with excess fat and calories in the diet. It occurs when users consumed high level of fat and calories. These side effects were similar to the gastrointestinal discomfort caused by Alli, only less severe.

Metabicals formulation however is not very effective in helping individuals with BMIs of 30 or greater and was, therefore, not recommended for this group.

Opportunies

Excess weight is considered a public health crisis in the U. S and approximately 65% of the entire adult population categorized as overweight, obese or severely obese. With these large population, it creates an even bigger market share for Metabical. In addition, no prescription drug option specifically for the overweight segment (BMI of 25 to 30) were available in 2008 except for drug Alli had been approved by the FDA for weight loss used.

Meaning there will be no strong competitor for Metabical for the time being. From the market survey and market research conducted by CSP, it showed high indication of people actively wanting to lose weight and live a healthy life style with comprehensive support program will enable individuals to achieve better results than they would from the pill alone. In addition, the support program would teach lifestyle skills for healthy weight maintenance after the initial weight loss was achieved.

Threat

The drug industry faced several safety concerns with regard to weight-loss drugs and had been accused of deceptive marketing claims that dempened enthusiasm for the products. This deceptive marketing claim had damaged the industry credibility and to regain consumers confidence would be another big challenge to the drug industries. The rising in the numbers of dietary supplements and herbal products had worsened the situation due to its unregulated condition by the FDA and the products negative side effect such as sudden cardiac death and other serous health risks had reduse people confidence in weight loss drugs.

Target Market

In developing a viable positioning strategy in order to determine the right target market, CSP had conducted an extensive market survey of overweight individuals in the year 2007. Under the market analysis, Barbara Printup also carried out a study to analyze psychographic segmentation of the overweight individuals and they found out that women demonstrated the most distinct segmentation. Based on these findings from the market survey, market research and the psychographic segmentation, we suggest that the target market for Metabical are as the following. Specifically for overweight individuals with BMI of 25 to 30. Women with age ranging from 25-65 Women with household income between $50,000 - $80,000 Women with college education and above Concern with health issues caused by overweight and actively trying to lose weight Willing to change current behavior and to live healthy lifestyle

Marketing Communication Strategy

The communication strategy of a prescription weight loss drug such as Metabical had to address all participants in the decision making process.

Therefore, the communication strategy must focus on two main targets firstly, the Healthcare Providers and secondly direct to consumers who would be prescribing the medication. The marketing communication strategy should also address the concern of the healthcare providers which is µthe patient would regain weight after they stop taking the pills and to include in the communication process by providing solution through Metabical and its continuous support program.

As far the end consumers the communication process must address their concern which is µwant to lose weight to feel better and live longer.

Total Budget

It is also very important for the marketing communication strategy to have the timeline for the key marketing activities and we proposed the optimal roll out schedule for key marketing communications activities to be as follows.

The first year, CSP should aggressively spend on the advertising activities to DTC in order to create product knowledge and brand awareness which include television, online (website), radio advertisements and press conference during the product launch in January 2009. In order to meet its objective we propose that the advertisement strategy must go with the tagline ? Losing weight is tough, You dont have to do it alone. Let Metabical and your healthcare provider start you on the road to a healthy weight and better lifestyle.

The Senior Executive of CSP did not agree with the idea of celebrity endorser but we strongly believe that this celebrity spokesperson idea is a great idea and able to attract more customers to buy Metabical. As we know that celebrities have become the trend setter and very influential in terms of their style of dressing, hairstyle, cosmetic that they are wearing, their car model and even what they eat. Thus, a celebrity like Oprah Winfrey can be very influential in attracting more customers especially when she endorse Metabical in her talk show program.

Metabicals advertising strategy should also target the professional medical community which is the healthcare provider. For example, they could create a campaign by print ads in leading medical publications and interactive ads online related to health issues in order to raise awareness about the drug and its benefits. 9 This advertising concepts which aimed to healthcare provider must go along with the tagline ? Empower your patients to lose excess weight. Change their unhealthy eating habits and achieve long term success.

Introducing Metabical short-term drug therapy and comprehensive support program for overweight patients. It gets results?

Promotion and Public Relations

The promotion and public relations budget also included campaign aimed at both healthcare providers and the end consumers. The total budget allocated for this campaign is $4. 3 mil with $1. 3 mil was allocated for promotional campaign in the first year. Before the Metabical launch, pamphlets and reply card for sample of support program should be mailed to 100,000 health care providers as a direct mail campaign.

These pamphlets contain information about Metabical. The next best campaign that the marketing communication strategy should focus heavily on is the viral marketing campaign in order to reach the market globally. This viral marketing involves internet sales, social network such as facebook, twitter and blogs in order to create buzz for Metabical. Infact, CSP should set up a team on this viral marketing campaign in order to reach customers faster and cheaper globally.

The plan to launch an online contest during Metabical launching day is a good idea whereby Metabical users would have the chance to compete who could reduce their BMI¶s by the highest percentage. Normally in the weight loss industry, people want to see results and testimonial on the drugs. ` We consider the Public Relations efforts to include pre-launch and atlaunch press release is a good more because it can act as a teaser ad and to inform the public at large that Metabical is the newly safe weight loss drug in the market.

The roundtable discussion involving prominent leaders member of media and medical professional in the medical community and medical research symposium to members of media and medical professional, is an important strategy because in order for the weight loss products to be successful, an endorsement by expert is very likely to increase the confidence level of the customers. In addition, the coverage of these high profile events in the leading news organization shall enhance the marketing communication strategy of Metabical.

A series of breakout sessions focusing on health issues for overweight patients shall further strengthening the communication strategy in product effectiveness and awareness.

Sales Force

The Metabical sales team consisted of 32 sales representatives who service approximately 3,200 medical offices. These sales team had been instructed to give product detail of Metabical to the healthcare providers.

In order for the sales team to be effective in meeting objective of creating product knowledge and its benefits, they providing clinical information and to arrange for a visit to at least four medical offices per day in order to finish up the 3,200 medical offices which are already in their data base. CSP also need to increase the number of their sales force team in order to cover the other 100,000 healthcare providers which are still untapped by them. This additional sales force team need to attend all the inquiries that they might receive after the mailing of pamphlets and sample to the said 100,000 healthcare providers. .

Comprehensive Support Program

The most common problem among the weight loss drug company is that people will start regaining weight once they stop taking the pill and in some cases, these people will gain even more weight then their initial weight. Realising this issue, CSP planned to create a comprehensive support program to complement the Metabical pill. Its goal is to enable individuals to achieve better results than they would from the pill alone. In addition, the support program would teach lifestyle skills for healthy weight maintenance after the initial weight loss was achieved. 200,000 will be spent on the development of the support program and the cost in Year 1 associated with producing the program is approximately $2 million. It is recommended that CSP to add this comprehensive support program in their packaging in the form of a CD in each pack so as to enhance the ability of Metabical users to reach and maintain their weight-loss goals. They can also put it in their website and to other form of social network. The sales force team also need to include this support program in their presentation in order to convey its benefits to the healthcare providers.

It must also be well stated in the pamphlets and flyers which they are distributing.

Product Strategy

Metabical is the first prescription drug approved by FDA specifically for overweight individual with BMI of 25 to 30. Clinical trials proved Metabical to be safe and effective in achieving significant weight loss for overweight individuals. The majority of trial participants reached their weight-loss goals by week 12. Thus, CSP need to decide on the best form of packaging by considering what is the number of pills that would be included in each pack. 11

Packing the whole twelve week supply in one package will cause higher pricing and it will effect the number of potential customers. Even though the twelve-week supply will enable the customers to complete the twelve-week cycle in 3 months in a row but it will limit the potential customers only to those who can afford the entire medication program with one-time pay. Therefore, it is advisable to pack Metabical with one pack for four week supply which can make it affordable for everyone. However, there is risk to this one-month packaging whereby there will be no guarantee that the consumers will complete the entire treatment.

As such, it is also suggested to have another packaging with 3 pack for 12 weeks supply and as value added, a CD contain comprehensive support program is attached to it. By attaching the comprehensive support program to the 3 pack of twelve week supply it can definitely attract more customers especially those with higher income bracket of more than $80,000.

Distribution Strategy

Being a prescribed weight loss drugs definitely the distribution channels are limited to places such as Drug store, healthcare Providers, Specialty Store uch as Watson, Pharmacy such as Guardian and the latest trend is the Internet Sales.

Pricing Strategy

Pricing is another important factor in determining the success of Metabical. In order to determine the price for Metabical, first we compare with its closest competitor which is Allis pricing model. We have to also come up with several other assumptions such as by assuming that consumers will be ready to pay more for a prescription drug and generally people trust prescribed drug rather than the non-prescribed drugs.

So, to set higher price for Metabical would not be a problem and would be acceptable by the consumers. Therefore, we come-up with price simulation as per Table 4 .

To sell at $90 per month is to low because Metabical is a prescription drug. To capture a larger group the price should not as high as $150 per month. $120 per month would be the right price for a four weeks supply. Based on Table 4 above, we set Metabical price at $120 per month which we assume would be the right price for a four week supply. 12 Pricing strategy is also directly ties with the demand forecast and sales forecast. Thus, based on Market Survey and Market research finding we come up with demand forecast as per Table 4 below.

Conclusion

Print-up had come up with a strong and comprehensive marketing communication strategy which focus on the brand awareness and Metabical benefits to the targeted group. Based on the extensive market survey and market research as well as the focus group findings, the marketing communication strategy of Metabical will be successfully creating demand for Metabical. Furthermore, being known as the only prescription drug with FDA approval and clinical results to back up weight-loss claims will definitely attract a lot more customers and steady demand in the future.

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