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CASE

STUDY ANALYSIS REPORT


METABICAL: POSITIONING AND COMMUNICATIONS STRATEGY FOR A NEW
WEIGHT-LOSS DRUG

I. Case Synopsis
Cambridge Science Pharmaceuticals (CSP) is an international health care company that 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 senior
director of marketing of CSP, Barbara Printup, is responsible for one of the most successful products
by CSP, Zimistat. CSP has assigned Printup to be in-charged of the upcoming U.S product launch of
CSPs newest prescription drug called Metabical. He was appointed in February 2008 to be responsible
in developing a viable positioning strategy and associated marketing communications plan for the new
product that the scheduled launch was in January 2009. Metabical was the first prescription drug
approved by the FDA that targeted specifically for overweight individual. The majority of Metabical
trial participants reached their weight-loss goals by week 12. Even though the pricing had not been
finalised, CSP estimated the retail price would be approximately $3 to $5 per day, with the average
course of treatment lasting for 12 weeks.
Meanwhile, excess weight is considered as a public health crisis in the U.S, with approximately
65% of the entire adult population categorised as overweight, obese or severely obese. Being
overweight often related to a number of serious health problems which become one of the top leading
causes of death in U.S. (according to the American Obesity Association in 2005). In addition to health
risks, overweight individuals always feel like social outcasts. They endure a significant social stigma as
well as discrimination. Laziness and self-indulgence are common stereotypes associated with this
group. Their professional life 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. It calculates the relationship between weight and height associated with body fat and
health risk. There are three BMI categories of excess weight for adults: overweight (25 to 30); obese
(30 to 40); and severely, or morbid obese (over 40). There was no prescription-drug targeted
specifically for overweight segment (BMI of 25 to 30) was available in 2008. Though, Alli was the only
one over-the-counter (OTC) weight-loss drug was approved by FDA, it has a lot of negative side effects.
These side effects include gastrointestinal conditions such as loose stools, increased defecation,
incontinence, and abdominal pain. The effects will get worsened when the patients diet included too
much fat. The drug industry faced safety concerns when about 30 reports of liver damaged came into

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surfaced; including six cased of liver failure were testified. This had dampened the production for the
weight-loss products. Other OTC solutions such as green tea extract, conjugated linoleic acid, bitter
orange, etc. were categorised as herbal or dietary supplement which did not require stringent FDA
approvals. Thus complications from these would only be discovered until individual consumed it. One
serious case, ephedra was linked to several cases of sudden cardiac death and other serious health
problems. This hurt the industry credibility as a whole. CSP believed that Metabical could be the only
superior product in the market at that time.

II. Problem Statement
Who was the ideal target consumer?
How should each participant in the decision-making process be addressed?
How could these participants best be reached?
What was the appropriate message to convey to each one of them?
What was the role of the support program?
What was the optimal rollout schedule for key marketing communications activities?

III. Theories / Framework
SWOT
STRENGTHS WEAKNESSES

1. FDA approved 1. Negative side effect, such as


2. Safe, secured and effective drug in Gastrointestinal discomfort while
achieving significant weight loss customer consumed high level of fat and
3. Less harmful in comparison with the other calories
products 2. Properly not effective for the people
4. Minimum dose requires with BMI > 30
5. Average course treatment lasts for 12
weeks
6. Combination of Calosera and Meditanan
generated dramatic result for weight loss
7. Strong and comprehensive marketing
strategy
8. Experience R&D and marketing team
9. Assign considerable amount of money in
the marketing budget

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OPPORTUNITIES THREATS

1. Comprehensive support program 1. FDA imposed strict regulation due to the


2. Health care policies to include Metabical in negative side-effect scenarios
their medical treatment and prescription 2. Increasing herbal or dietary
drug of weight-loss program supplements
3. 65% of the adult population is considered as 3. Misleading marketing claims
overweight, or severely obese
4. No medicinal instruction drug options for
the overweight section (BMI 25-30)
available in the year 2008 except drug Alli
approved by FDA
5. Market research shows there is a high
growth opportunity of this medicine due to
wide acceptance by the people

STP

Segmentation: Targeting:

Geographic : Man and woman aged between 45 to 65 who have
Urban and rural people.
some college education level, have a household
Demographic :
and woman aged between 17 to 70 years old, income between $40,000-$60,000, live in urban area,
Man
education level are less than high school, high school, want to lose weight with eazy way, have BMIs score
between 25-30 which is overweight, and choose
some college, and college.
Pscyhographic :
drugs to help reach their weight-loss goals based on
People who want to look like a movie star, people who advice.

want to be healthier, people who want to wear skinny
jeans, people who want to lose weight with eazy way,

and people with BMIs score which are overweight (25-
30), obese (30-40), and severely obese (over 40).

Behavioral : Positioning:

Choose drugs to lose their weight based on advice, love To the overweight man and women aged between
to do sport, loyal while using a brand, health treatment 45 to 65 who want to lose weight with eazy way,

oriented, value oriented. Metabical is a prescription drug that help people to
reach their weight-loss goals effectively and safely


Positioning Statement
Level 1
TO Overweight man and woman aged between 45 to 65 who live in urban area and have
(target) some college education level,
METABICAL IS
Prescription drug
(category)
THAT IS THE
Drug which help people to lose their weight easily
(benefit)
THATS
Metabical is proved by clinical to be effective and safe in achieving significant weight loss
BECAUSE
for overweight individuals
(supporting)
Level 2
Overweight man and woman aged between 45 to 65 who live in urban area and
TARGET PERSONA
have some college education level,
PRODUCT NAME Metabical is the first prescription drug which approved by the FDA
CATEGORY That help people to reach their weight-loss goals effectively and safely

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KEY CUSTOMER
For people who want to lose weight with eazy way unlike
BENEFIT
NEAREST Alli which has high medical risk
COMPETITIVE ALT Xenical which has more negative side effects of the drug

Level 3
To the overweight man Effective and safe
and women aged Metabical is the first prescription drug which approved by the FDA which
between 45 to 65who proved by clinical to be effective and safe in achieving significant weight loss
want to lose weight with for overweight individuals with BMIs of 25 to 30. Metabical has less negative
eazy way, Metabical is a side effects when users consumed high levels of fat and calories.
prescription drug that
Eazy way
help people to reach their
Metabical provide as health care which start people on the road to a healthy
weight-loss goals
weight and better life with eazy way.
effectively and safely

Marketing Mix
a) Product
Metabical is a prescription weight-loss drug that would be the first prescription drug approved
by FDA specifically for overweight individuals. The feature that Metabical has required only one pill be
take per day. The dramatic weight loss power from Metabical is derived from combination of calosera,
a new appetite-suppressant compound, and meditonan, a revolutionary fat-blocking and calorie-
absorption agent. The negative side effects of the drug are similar to the gastrointestinal discomfort
caused by Alli, only less severe.
b) Promotion
The plan for Metabicals promotion is focused heavily on both the end consumer and healthcare
providers. The strategy included direct-to-consumer advertising by television, online, radio, and print
media blitz at the time of the drugs launch and in order to create brand awareness the company relies
on heavy advertising throughout the first year. Other measures of promotion include education about
the drug and its benefits through interactive ads in online physician-resource information (e.g.,
PDR.net) and print ads in leading medical publications. Metabical also heavily relies on internet for
promotions. One measure is by creating an online contest which Metabical users compete to reduce
their BMIs by the highest percentage, which called Metabical Challenge. Another plan is to create a
buzz about metabical through social networking sites. Other than those, Metabical also promote them
through mailing pamphlets to 100,000 health care providers and offer them a sample of the product.
c) Place
It is important to note that Metabical is a prescription weight-loss drug. The promotion of
Metabical is focused heavily on health care providers such as pharmacists and pharmacy technicians.
Therefore, the distribution of Metabical heavily relies on places selling drugs like drug stores,
pharmacies, and dispensaries.

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d) Price
Pricing is very critical to determine the success of Metabical product. The first step to determine
the price of Metabical is comparing with its closest competitors pricing model which is Alli. We set
higher price than Alli by assuming that consumers will be ready to pay more for prescription drugs.

Metabical
Estimated Retail Price $3 to $5 per pill
Dosage 1 pill per day
Days of Treatment 84 days

Estimated Retail Price


$3 per pill $4 per pill $5 per pill
Customer Spending per Package $252 $336 $420
Revenue per Month $84 $112 $140
Revenue per Year $1,008 $1,334 $1,680

Our target market are man and women who have a household income between between
$40,000-$60,000 per year or $3,333-$5,000 per month. Based on estimated retail price, selling
prescription drug at $252 per package is to low because it is only takes 2.52% of income per month of
customer. To capture a larger society, the price should not as high as $420 per package. So we set
retail price at $336 per package that will take 3.36% of income per month of customer.
In pricing strategy, the demand forecast and sales forecast should be calculated in order to
estimate how much CSP earn from metabical sales.

Overweight Population Potential User


Year
(25 < BMI < 30) (million) (million)
2008* 35.4 230 81
1999 - 2000 34 209 71
1988 - 1994 33 185 61
1976 - 1980 31.6 163 52

From market survey, 12% of respondents are interesting with metabical product and
immediately request a prescription to their health care provider. Demand forecast can be generated
by calculate year 2000 and year 2008.

Year 2000 Year 2008


71.06 Mill x 12% = 8.527 Mill 81.42 Mill x 12% = 9.77 Mill

We assume that 70% consumers can be reached in first year.

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Year 2000 Year 2008
8.527 Mill x 70% = 5.968 Mill 9.77 Mill x 70% = 6.839 Mill

From the above demand forecast, we can calculate the sales forecast.

From year 2000 To year 2008


Estimated Total Package Sold 17.904 Mill Packs 20.517 Mill Packs
(Demand forecast x 3 Packs)

As we consider to set the retail price at $112, we can calculate total potential revenue of CSP :

From year 2000 To year 2008


CSP Potential Revenue $2,005 Mill $2,297 Mill
(Total Package Sold x $112)

By using formulas of profit and loss, we can calculate the profit of CSP from selling Metabical :

Potential Revenue $ 2,297,998,080


Expenses :
Marketing Cost $ 23.146,000
RnD and FDA Cost $ 400,000,000
Production and Other Cost $ 1,148,999,040
Total Expenses $ 1,572,145,040
Potential Profit (Revenue - Expenses) $ 725,853,040

IV. Analysis of Alternatives
CSP believed that's 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.e., 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 drug
tended to produce.
Metabical also contained a controlled release feature that required only one pill to be taken per
day with everage 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.

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Despite of its strength, Metabical has few negative side effects associated with excess fat and
calories in the diet. In 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, therefor, not recommended for this group.
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 has 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 willing 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 weigh maintenance after the initial weight loss
was achieved.
The drug industry faced several safety concerns with regard to weight-loss drugs and had been
accused of deceptive marketing claims that dampened 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 serious health risks had reduce people confidance in weight loss
drugs.

V. Recommended Strategies
Metabical as a weight loss product should be addressed to all participants, not only consumers
but also doctors, personal trainers, and others participants who care more on healthy life.
Since, the budget of marketing is already mention in the pricing calculation, thus marketing
communication should be the key to achieve the right target. Firstly, in the one year prior, pre-launch
advertising campaign and marketing materials should be prepared. The purpose of advertising
campaign is to create brand awareness and knowledge. Advertising itself can use brand ambassador
or image as a representative person for having healthy lifestyle could lead for having good body shape.
The advertising can be on radio, television, or prints ads in leading medical publications. Also, it should

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include about the information of its benefit. Tag line is important too due the fact that it will help
people to be influenced by the product. For example, Metabical will help to kill your 20 pounds that
kill you.
Secondly, in the six-month prior, the marketing strategy develop to emphasis on focus group by
using collaboration with health care provider. The aim of this strategy is to know effectiveness of
Metabical weight loss product. Moreover, it can be place to see that in the first year period of
marketing strategy is really achieve the brand awareness or not. Then, direct communication can be
raised to discuss the result and testimonial of the product as a safe weight loss drug in the market.
The strategy can create the consumers desire to buy, then it will be strategy to pull from consumers
and minimize the push.
Thirdly, drugs have big relay on doctors and healthcare product. As a result, three-month priors
will be a direct marketing to those target. It is really important because doctors and healthacare can
give prescription to use Metabical. Patients, the potential consumers, have a tendency to believe what
is said by expert adviser. However, the real result of using Metabical has to be mentioned.
Finally, launch date. In this last timeline, the big intense to marketing the product use press
release, viral media campaign, and contest. The purpose is to show that Metabical is tested and proven
weight loss product, and the drugs is not made up lie because it is not afraid to be published to the
public.

VI. Lesson Learned
Metabical is one of the newest drug that used to lose weight specifically for the overweight
adults that have BMI less than 30%. Based on this study case, it could be concluded that the result
from consumer research showed a great potential market for Metabical. There would be a great
opportunity also for the company to launch this new product to the specific target. From this study
case, people could learn about how to make a positioning for the existing product with existing market
but using an easier way. In addition, by learning this study case, people also learned about how
segmenting and targeting the consumers that precisely fit into this kind of the product by analysing
the market. On the other hand, people also learned how to face many problems that a company get
in one time by using SWOT tools, to get the right strategy for marketing it. People also learned about
the marketing mix that contained of 4Ps, which are Price, Place, Product, and Promotion, by define
the right analysing based on the case analysis.
In addition, the pricing strategy would make the company know more about the preference
customer and the quickest thing to maximize the profit, and it absolutely would make the company
more sustainable.