Success Story of Renagel• Market share of Renagel in its category: 50%• Strongly recommended by K/DOQI as first-line therapy for patients with advanced CKD• Covered and supported by virtually all the PBMs in the country in a favorable tier that covered most of the costs• Sales increased by 23.4% in 2006 (Growth stage)• During the success of Renagel, no. of sales reps increased from 45 to 110
CHALLENGES• Right now, Renagel is the market leader, and it’s really very well accepted by nephrologists.• Nephrologists feel very comfortable with it because they like the degree of efficacy it brings to them in controlling phosphorus and also the fact that it’s non-absorbent, non-accumulating.• Self destruction of market leader
Cues from the Article: Eager Sellers, Stony Buyers• New products often require consumers to change their behaviour. As companies know, those behaviour changes entail learning, switching and obsolescence costs.• People irrationally overvalue benefits they currently possess relative to those they don’t. The bias leads consumers to value the advantages of products they own more than the benefits of new ones.• People evaluate the attractiveness of an alternative based not on its objective, or actual, value but on its subjective, or perceived, value.• Consumers evaluate new products or investments relative to a reference point, usually the products they already own or consume.• Losses have a far greater impact on people than similarly sized gains, a phenomenon that Kahneman and Tversky called “loss aversion.”• The endowment effect: Loss aversion leads people to value products that they already possess – those that are part of their endowment – more than those they don’t have.
Launch Decision Development in 2005 Concerns about bicarbonate levels Focus includes stage 3 and stage 4 CKD patients Clinical Trials - Satisfactory YES . The product should be launched as it worked equally well in controlling phosphorus and lowering cholesterol. In addition it maintained the bicarbonate levels in stage 3 and stage 4 CKD patients.
–• Cannibalization of sales of Renagel which is already the market leader• Chances of Inventory pile-up of Renagel due to the introduction of Renvela• Genzyme did not have the approval to discuss the benefits of Renvela for Stage 3 and 4 CKD Patients.• It would not also help with the problem of Patent expiration which was due in 2014• Potential advantage to competitors if side effects of Renagel are reminded to Nephrologists –• Increase in the consumer base – Stage 4 CKD patients 400,000 Stage 3 CKD patients 7500,000• Better growth prospects in terms of capturing other relevant markets, thereby contributing greatly to revenues
The product will bepositioned and marketedsuch that it will require leastchange in consumptionbehavior of the patients.Though the product is notgreatly different fromRenagel, it has a significantvalue to CKD 3,4 and 5 stagepatients.The idea is to sell thisproduct as an improvedversion of Renagel havingbetter efficacy, and not as acompletely new product.The product Renagel 2.0 willbe launched only after itgets approval for marketingits benefits for CKD 3 and 4stage patients
Marketing Obj. Situation Size-up Market Matching Product & Tech.Segmentation Possibilities Product concept & target Market (Positioning) Product strategy Marketing Sales force Communicat and ion & distribution service Pricing promotion Supporting Elements and Programs Marketing Planning – Creating your Market launch Plan
Marketing Objective :• To Launch a innovative product in line with the company’s strategy• To target wide range of consumers in CKD curing market• To effectively communicate efficacy of product for stage 3 and stage 4 patients.• The product is set to be launch at slightly higher price ; so promotions should be in line that portrays the benefits perceived to be more than price of the product.Market Segmentation :• Stage 3 , 4 and 5 CKD patientsProduct Concept :• Advanced version of Renagel• Maintains appropriate bi-carbonate level in stage 3 and 4 CKD patients• Positioned as elixir for CKD patientsPricing Strategy :• Objective : Product quality leadership• Method : Mark up pricing• Strategy : Price Skimming(slightly higher than Renagel)
Product Differentiation:Only product to cater all three CKD’s stages.Can continue with name Renagel with slight modification eg: Renagel2.0, Renagel PlusMarketing Communication and Promotion:Direct selling to expertsPromotion will be planned to minimize any apprehension due to increasedpricing.Both direct-to-consumer & physician promotionSales force & DistributionIncrease Sales forceTrain Sales force about new product
Suggestions :• Experienced and professional sales organization work with physician to make this transition as smooth as possible.• Renassist - handles reimbursement assistance for patients.• Direct-to-pharmacy awareness campaign that’s just getting off the ground and will bring additional awareness to patients.• Clinical consultant team - Group of individuals that works very closely with renal dietitians across the country.• Professional education materials as well as patient education materials.