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Memo

To: Bernard Long, Chief Market Officer


From: Barbara Printup
Date: 11/01/14
RE: Metabical Pricing, Packaging and Demand Forecasting findings.

Below you can find my decisions regarding pricing, packaging, target demographic
among other aspects of introducing Metabical into the prescription weightloss market

Problem
After 10 years of Research and Development and $400 million spent, there are several
obstacles that need to be overcome to ensure that Metabical is a success in the $3.74 billion
weight product market. Issues that need to be addressed is finding the right demographic,
adequate pricing, packaging, and forecasting 5 years into the future to ensure CSP has a positive
return on investment of at least 5%
Analysis
The growing obesity epidemic across the world is making health related products a
booming industry. Figure 1 graphically shows how Adults in the U.S fit within the BMI
spectrum. Using 2008 figures it shows that 149.5 million adults has a BMI 25. The target
consumer has a BMI of 25-30, as you can see in Exhibit 2, the adults in this range increase
.012% per year and is anticipated to grow. Survey done by CSP shows that 15% of individuals
would consider using drugs to help achieve their weight loss goals.
Metibical is unique in the way that it is the only prescription that targets overweight
people. Table 1 shows, various other options and their properties.
Forecasting can be done several ways. First option is to target every adult that falls into
the overweight range. In 2008 it is estimated that this number is 75.9 million, which was
achieved using historical data. Although this is the larger market there will be barriers facing
lower income individuals, and other demographics. With this large of a segment it will be hard to
predict their purchasing behavior.
Another method is using the data collected by CSP out of a sample of 2000, 15% would
consider using a drug to help them achieve their weight loss goals. This narrows down the
market to 9.8 million adults. Brand awareness would be higher and although this seems more
feasible you are still going to have the consumer who is price sensitive, and it will be hard to
predict future behavior.
The last method narrows it down to woman in the 35-65 range, have a college education
and
Being a prescription medication some insurance carriers will not cover this medication,
this is where there are several alternatives to the pricing and package size elements. CSP trials
show an average of 12 weeks for maximum product effectiveness. Anything from a weekly to a
3 month supply have been considered. Either way, packaging would be similar to birth control to
ensure maximum effectiveness. Packaging can either come from anywhere to a weekly supply
to a 12 week supply. The smaller package can work for the price sensitive consumer, but it
could also reduce the effectiveness of the overall product by the possibility of missed days due to
forgetting to pick up refills among other factors. Getting a 12 week supply all at once would
allow users to stay on track and achieve results.
Pricing is another aspect that needs to be looked into more closely. Exhibit 1 shows
various options in comparison to Metabical

Recommendation

BMI Percentage of Adults in


the U.S

BMI 24
35%

BMI 25
65%

Exhibit1: Percentages based on 2008 population.

85,000,000
80,000,000
75,000,000
70,000,000

Growth

65,000,000
60,000,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Amount of Adults with BMI 25-30

Projected Growth

Year

Exhibit 2: Above you can see projected growth for the demographic of adults that fall within the
BMI of 25-30.

Weight Loss Options


Negatives

Weight
Loss Drug
OTC drugs

Positives
Many Varieties

Lack of Regulation, Safety Concerns, Not


backed by FDA

Alli-OTC

Powerful OTC-Contains
Orilstat

Many Negative Side Effects, Liver Damange,


Stomach Pain

Other
Prescription
Metabical

Recommended for
Not available to people that are overweight,
Obese/Morbidly Obese
negative side effects
Prescription Strength, Dual
Lower Side Effects that other prescription
Layer Control Releasedweight loss drugs. Not effective for Obese or
Clinically Proven
Morbidly Obese individuals
Table 1: Describes various weight loss alternatives and their positive and negative aspects