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Cialis:Getting	
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Cialis:Getting	
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Cialis:Getting	
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Cialis Go To Market (HBS 9-505 038)

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Cialis Go To Market (HBS 9-505 038)

  1. 1.             Cialis:Getting  Ready  to  Market     Case  Study     Case  Analysis  by  Taposh  Dutta  Roy     HBS  9-­‐505  038    
  2. 2. Cialis:Getting  Ready  to  Market     HBS  9-­‐505  038     Case  Analysis  submitted  by:  Taposh  Dutta  Roy     Mark   Barbato,   the   executive   director   and   global   product   team   leader   had   to   launch   a   new   male   impotence   medicine   in   a   market   with   an   established   leader   “Viagra”.   Rob   Brown,   Global   Marketing   director  for  Cialis(Lily),  Leonard  Blum,  vice  president  of  sales  and  marketing,  ICOS  and  Beebe  (US  Brand   Leader)   were   responsible   to   come   up   with   recommendation   on   the   Go   To   Market,   strategy   for   Cialis.     The  main  task  was  to  identify  the  target  market  and  position  it  against  the  competition.     The   total   market   was   estimated   to   be   around   30   million   men   in   US   and   150   million   men   worldwide.     The   world   wide   focus   was   segmented   into   5   affliliate   groups   –   US,   Europe   (   France,   Germany,  Italy,  Spain  and  UK),  Mexico,  Canada,  Australia  and  Brazil.    Each  affiliate  group  was  given  the   ability  to  take  tactical  decisions.  The  main  decisions  to  be  made  were  –  determining  how  to  segment  the   market,  tactical  allocation  of  marketing  budget  for  affiliates,  competitive  positioning  and  pricing.     Recommentation  #1  :  Market  Segmentation     I  would  recommend  targeting  Cialis  to  current  users  of  Viagra  and  Viagra  Dropouts  for  US  and   European  countries.  This  is  based  on  the  analysis  below.   At   a   strategy   level,   the   market   was   segmented   to   five   affiliate   groups   –   US,   Europe   (   France,   Germany,   Italy,   Spain   and   UK),   Mexico,   Canada,   Australia   and   Brazil   –   to   divide   the   global   market   of   150   million   men.     At   a   tactical   level,   there   was   still   a   need   to   segment   the   market   on   the   basis   of   demographic,   patient,   physican   and/or   current   Viagara   usage.   Viagra   had   a   monopoly   and   was   available   for  all  segments,  being  the  only  player  in  the  market.  Further,  there  were  heart  related  issues  on  using   Viagara  and  around  130  deaths  were  associated  to  it.  Product  comparision  between  Viagra  and  Cialis  is   given   below.   Consumer   research   found   that   efficacy,   safety   and   duration   were   important   considerations.  Cialis  is  a  better  product  based  on  the  features  needed  by  the  consumers.  Segmentation   of  users,  based  on  current  Viagra  users,  Viagra  Dropouts  and  not  had  used  Viagra  was  done.    This  was  
  3. 3. Cialis:Getting  Ready  to  Market     HBS  9-­‐505  038     Case  Analysis  submitted  by:  Taposh  Dutta  Roy   done   across   US   and   Europe.   The   results   indicated   that   people   who   were   currently   using   Viagra   were   more   eager   to   try   the   new   Cialis   than   the   ones   that   had   never   taken   any   drug   for   ED.   Thus,   targeting   current  Viagra  users  and  dropouts  made  sense  for  the  initial  launch.         Recommentation  #2  :  Sales  and  Marketing  Budget  Allocation  with  a  revenue  goal  of  $500M  or  higher  is   below.        This  is  based  on  the  analysis  below.     The   revenue   goal   for   Cialis   was   atleast     $500   million.     Further,   based   on   their   company   financials,  for  year  2000,  about  48%  was  their  Sales  and  General  Administrative  expenses.      Considering   this  to  be  a  new  block  buster  product  for  Eli  Lily,  I  would  assume  the  total  spend  for  Sales  and  Marketing   to   be   around   $240   million.     Pifzer   spent   around     $108   million   in   advertising   for   Viagra   in   2000.     Entering   as   an   incumbent   to   Viagra,   Cialis   product   team   should   spend   atleat     $120   million   for   advertising   and   remaining  $120  million  for  total  world  wide  sales.  Sales  force  could  be  divided  depending  on  market  cap   of  various  countries.    About  33%  (1/3)  of  the  adults  that  saw  about  the  drug  on  TV,  discussed  the  drug   with  their  doctors.  Around  44%  of  these  patients,  who  discussed  with  their  doctor  were  recomeneded   with  a  prescription  drug.    This  means  advertising  should  be  two  fold.  I  would  recommend  spending  $80   million  on  advertising  on  TV,  print  and  web.  Various  goal  driven  campaigns  could  be  made  and  reaction  
  4. 4. Cialis:Getting  Ready  to  Market     HBS  9-­‐505  038     Case  Analysis  submitted  by:  Taposh  Dutta  Roy   should  be  measured.  Around  $40  million  should  be  spend  on  marketing  drugs  to  doctors.  Free  samples   should  be  provided  for  the  doctors  to  give  patients.  This  will  enable  our  target  segment  that  currently   uses  Viagra  to  give  a  test  drive  to  Cialis.     Recommentation  #3  :  Launch  Strategy     Cialis   should   launch   at   a   price   of   $12/pill,   slightly   higher   than   Viagra,   but   gives   a   36   hour   window.   Also,   TV   ads   should   highlight  the  extra  duration,  with  real  people  active  in  sports.  TV  ad  should   highlight  that  this  drug  is  safe  for  heart  and  the  patient  can  wait  for  the  right  time.    Physicians  should  be   given  free  samples  and  more  guidance  about  the  benefits  of  the  drug  and  any  results  of  tests  done  by   FDA.   This  is  based  on  the  analysis  -­‐     Viagra  had  a  five  year  lead  and  many  physicans  and  patients  were  used  to  it.  Also,  there  was  a   history  of  side  effects  generated.  When  Cialis  comes,  there  will  be  no  history.  Further,  Cialis  remains  in   the  system  for  a  longer  duration,  which  is  good  for  the  product,  but  there  is  a  chance  of  side  effects  for  a   longer   duration.   In   order   to   launch   Cialis,   the   doctors   should   be   first   convinced   and   given   the   right   direction   to   decide   what   is   right   for   their   patients.   Given,   the   clinical   trials   did   not   produce   any   side   effects,  the  TV  ads  should  highlight  the  duration  –  “time  is  right”  within  the  36  hour  window.  This  will   give  a  competitive  edge  over  Viagra.    Celebraties  always  have  impact  on  the  audience.  However,  since   Viagra  already  did  this,  Cialis  should  show  regular  people  engaging  in  sports  and  are  active.        

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