Published on March 7, 2014
Do you remember…
CURRENT SOLUTIONS WEIGHT LOSS DRUGS DIET PLAN EXERCISE PLAN WEIGHT MANAGEMENT SUPPORT PROGRAM
BETTER SOLUTION METABICAL Group 7 -AJINKYA-DIVYANGANA-KETAKI-SUHAIL-TEAM-
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
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