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Fall Term 2008
Marketing I - Block seminar 2 Product team Cialis: Getting ready to marketDr. Martin WallinJan Henrik SiegPeter JägerRenato Sydler
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Course Overview
2
Exam
09.12
.200
8
25.11
.200
8
11.11.
2008
28.10
.200
8
14.10
.200
8
Guest Lecture 1: EA
30.0
9.20
08
1 Introduction
16.9
.200
8
23.0
9.20
08
21.10
.200
8
04.11
.200
8
18.11
.200
8
2 Segmentation-Targeting-Positioning
3 ProductBlock Seminar 1
Block Seminar 2
4 Promotion
Guest Lecture 2: UBS 5 Place
Guest Lecture 3: Hilti
6 Price & Summary
07.10
.200
8
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected] 3
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected] 4
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Agenda
Introduction and practicalities
Case work
Wrap-up (in HG F3 at 16.15)
5
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Introduction and practicalities
Product Team Cialis: Getting Ready to Market
6
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Background: Viagra
Pfizer launched Viagra 1998
Treatment of erectile dysfunction (ED) (male impotence)
150 million men worldwide suffer(50% of all between age 40 and 70)
Immediate success - 600 000 prescriptions filled in first month
Viagra set back - deaths reported
Viagra regained confidence
$ 1.8 billion sales (2007)7
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Background: New entrants
Cialis from Lilly ICOS LLC
Levitra from Bayer
8
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Background: First mover vs. Second mover
Introducing a new product on a market dominated by one player
First mover advantage Technological leadership Preemption of assets Buyer switching costs
First mover disadvantage Free rider effects Resolution of technological or market uncertainty Shift in technology or customer needs Incumbent inertia
9
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
The Cialis case
How to segment the market and position a follower product Viagra well positioned and well-known Cialis unknown
How to communicate to target audience Patients Partners Doctors
How to price the new product
Competitive response from Pfizer
10
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Case practicalities
Agenda13.15 Introduction & Grouping13.40 Case workGroup 1: HG F3 (Martin Wallin)Group 2: HG F33.5 (Jan Henrik Sieg)Group 3: LFO G 25 (Peter Jäger) Group 4: ETZ E81 (Renato Sydler)
15.20 Case presentation (5 min / group)16.15 Wrap-up (in HG F3)16.30 End (around)
11
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Solving a case (90 minutes)
10 minutes: browse the case (individual)
10 minutes: read questions, think about solution (individual)
10 minutes: identify information (individual)
20 minutes: information sharing (group)
10 minutes: identify information (individual)
15 minutes: information sharing (group)
15 minutes: prepare presentation (individual/group)
12
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Case practicalities
Agenda13.15 Introduction & Grouping13.40 Case workGroup 1: HG F3 (Martin Wallin)Group 2: HG F33.5 (Jan Henrik Sieg)Group 3: LFO G 25 (Peter Jäger) Group 4: ETZ E81 (Renato Sydler)
15.20 Case presentation (5 min / group)16.15 Wrap-up (in HG F3)16.30 End (around)
13
Marketing analysis
‣ Customer
‣ Company
‣ Competition
‣ Collaboration
‣ Context
The 5 Cs
Wrap-up
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Market segmentation
Target market selection
Product and service positioning
Adopted from Silk (2006)14
Marketing mix
‣ Product
‣ Place
‣ Promotion
The 4 Ps
‣ Price
Customer acquisition
Customer retention Pr
ofits
Creatingvalue
Capturingvalue
Sustainingvalue
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected] 15
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Launching a new drug as a second mover on a market dominated by one main player
Segmenting the market
Positioning the product
Communicating the product value
Pricing the product
Competitive response from Pfizer
16
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
What have we learnt?
What criteria to use when segmenting a market for a new product
Market with existing player introduces new layer of segmentation: familiarity and usage of existing brand
Objective product attribute improvements do not directly translate into perceived benefit in all target segments
Question traditional thinking that product dissatisfaction opens up for switching products
What data can be relevant to make informed marketing decisions
17
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Segmentation criteria
Demographics Age Income Education
Viagra usage status Current Viagra users Viagra dropouts Never tried Viagra
Benefit of duration
18
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Segmentation: Age
Strong correlate between age and reason for not seeking treatment Young patients: Temporary
condition Old patients: Natural aging
process The rest: Embarrassed and
temporary condition
19
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Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Segmentation: Usage status
Current Viagra users Experience with ED Good grasp of duration attribute Most willing to try new drugs that offer improvement in key dimension Smallest segment
Viagra dropouts Some experience with ED Duration probably not key dimension for dropout Maybe hard to treat group
Viagra never used Very large segment, but no usage familiarity Duration not important, but safety important
20
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Positioning and Pricing
Vertical positioning 36 is much better than 4?
Horizontal positioning Attitude towards sex: Wild, naughty activity vs. romance
Viagra is priced at $10 (without health coverage)
Pay more for better performance?
If benefit is positioned more horizontally than vertically, unclear if higher charge is appropriate
If affluent consumer are targeted, higher price OK
If going for broad appeal, consider lower price
21
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Communication strategy
Communicate to whom? Patients Partners Doctors Insurance companies Regulators Media
22
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Summing up
How to segment the market and position a follower product
How to communicate to target customers
How to price the new product
Competitive response from the first mover
23
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Bottom line
Positioning is not what you do to the product but what you do to the mind of the consumer!
24
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | [email protected]
Course Overview
25
Exam
09.12
.200
8
25.11
.200
8
11.11.
2008
28.10
.200
8
14.10
.200
8
Guest Lecture 1: EA
30.0
9.20
08
1 Introduction
16.9
.200
8
23.0
9.20
08
21.10
.200
8
04.11
.200
8
18.11
.200
8
2 Segmentation-Targeting-Positioning
3 ProductBlock Seminar 1
Block Seminar 2
4 Promotion
Guest Lecture 2: UBS 5 Place
Guest Lecture 3: Hilti
6 Price & Summary
07.10
.200
8