Metabical Case study

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Information about Metabical Case study

Published on March 7, 2014

Author: TeamPramkaew



Metabical case study

Do you remember… 



A choice to have the best of both worlds is finally in your hands 

OBJECTIVES:   Product benefits  Target customers  Packaging strategy  Forecasting demand  Pricing strategy  Profitability and ROI

Metabical   FDA approved and can be bought only through a 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 rate becomes lesser since the customer will not forget to repurchase or go get a prescription

Customer satisfaction is our priority  Completion of 12 weeks program Optimum result Customer satisfaction Brand value $$$

Demand outlooks  Approach Demand forecast(millions) 1 619 2 680 3 1242 A niche market can also give rise to a high demand

Pricing strategy  Option 2 is a good pricing strategy

Advantages of Option 2 of pricing   Price elasticity of demand- Target consumers are insensitive to price and their demand is relatively inelastic  Level of monopoly- Being the only company in the market that is offering drugs for the overweight category, we have monopoly in the market

Advantages of Option 2 of pricing   Freedom to set the price - To maintain the uniqueness of the product , we can set the price relatively high without it affecting our demand  Exploiting consumer surplus- Overweight consumers are willing to pay $450 out of pocket on health care. With that consumer surplus available, it should be used  Considering goodwill

Disadvantages of option 2 pricing   Prone to competition- Monopoly is prone to competition  Product value to customer is not equal to product priceThe consumer’s perception of the product might not match the actual product  Higher price might lead to lower demand- If competition enters the market , the pricing may lead to lower demand  Assuming customer preference does not change over 5 years

Advantages of other pricing options  Advantages: At $75:  Target market becomes bigger  Low price ,high demand At $150:  Brand image in the market is that the product is “premium” and high quality

Disadvantages of other pricing options  At $75:  The image of the product becomes that of it being a low quality product At $150  Exploitation of the consumer surplus  Target market being narrowed down too much

Profitability & ROI  Retail price ($) ROI ( with approach 3) (in %) 75 103.62 125 239.37 150 307.24

ROI-Advantages   Higher retail price, leads to higher estimated profit  Quicker recovery of costs incurred  Satisfied shareholders  Brand Value in the market is made  Reduced cost of new customer acquisition

 Thank you

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