nellfinancial consultant stephenrisk consultant amymarketing consultant fevzigeneral consultant...

Nell Financial ConsultantStephen Risk ConsultantAmy Marketing ConsultantFevzi General ConsultantTuba Marketing ConsultantHye Young Chief ConsultantHakan Marketing Consultant

Berkeley Consultant Group

• Introduction

Marketing BA 160

Content

• Dimensions

• Decision

• Marketing Strategy

• Financial Analysis

• Conclusion

Company background

• Privately owned biopharmaceutical firm• Potential products:

Hemopure

For Human usage

Awaiting approval by FDA

Oxyglobin

For animal usage

Ready to launch

Marketing BA 160

Content

• Introduction

Company Background

Problem

Recommen- dation

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

• Should we launch Oxyglobin?• If we launch Oxyglobin, at what price?• How should we market Oxyglobin?

Marketing BA 160

Content

• Introduction

Company background

Problem

Recommen- dation

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Problem

Recommendation

Marketing BA 160

Content

• Introduction

Company background

Problem

Recommen- dation

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Retail priced at $200 !

Launch Oxyglobin now !

• Product-analysis• Market-analysis• Consumer behaviour• Competitors

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Dimensions to consider

-„universal“ blood substitute

- reliable and stable suppliers

- free of contamination- storable up to 2 years at

room temperature- 100% efficient at

transporting oxygen

Strengths Weaknesses

- short half-life

- potential for higher toxicity

Marketing BA 160

Content

• Company background

• Problem

• Dimensions Product- Analysis

Market Analysis

Consumer Behavior

Competition Analysis

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Product-Analysis

Human- 40% of the market is for individuals over 65- 65 and over cohort is expected to double by 2030- Risk of disease transmission discouraged rates of donation

Decreasing number of donors but increasing number of recipients

Animal- 15,000 veterinary practices are present- Approx. 350,000 units per year just for dogs- alternatives priced $ 80 - $120 for primary care practices- alterantives priced $130 - $ 170 for emergency care practices- 84% of veterinarians are dissatisfied with the current process

Marketing BA 160

Content

• Company background

• Problem

• Dimensions Product- Analysis

Market Analysis

Consumer Behavior

Competition Analysis

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Market-Analysis

• High price sensitivity for animal market

• Low price sensitivity for human market

• Fear of contracting diseases• In critical cases, 85% of owners are

willing to pay $200/unit of Oxyglobin

Marketing BA 160

Content

• Company background

• Problem

• Dimensions Product- Analysis

Market Analysis

Consumer Behavior

Competition Analysis

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Consumer Behavior

• Human Market– Competitors

• Baxter International • Northfield Labs

– Cost advantage (raw material)– Independent from human blood– Does not require refrigeration

• Animal Market– No competition in terms of blood substitutes

Marketing BA 160

Content

• Company background

• Problem

• Dimensions Product- Analysis

Market Analysis

Consumer Behavior

Competition Analysis

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Competition Analysis

• Establish „Biopure“• Test out the marketing strategy• Test out the manufacturing machines• Create revenue• Avoid negative press• Gain experiences with the blood

substitute market

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

Reasons

Risks

• Marketing strategy

• Financial Analysis

• Conclusion

Reasons to launch now

• Unrealistic price expectations for Hemopure

• Solution: Communicate the difference between Oxyglobin and Hemopure

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

Reasons

Risks

• Marketing strategy

• Financial Analysis

• Conclusion

Risk: Price Difference

• Oxyglobin fails

• Solution: The lack of competition and sufficient demand minimizes the risk of failure

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

Reasons

Risks

• Marketing strategy

• Financial Analysis

• Conclusion

Risk: Product Failure

• Stereotyped as animal care supplier

• Solution: Well tailored marketing strategy

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

Reasons

Risks

• Marketing strategy

• Financial Analysis

• Conclusion

Risk: Image Stereotyped

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Marketing strategy overview

• Image

• Mediums

• Distribution channel

Image

• Life saver, not just pet saver

• Revolutionary practice of medicine

• Innovative, first mover

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

Image

Mediums

Distribution Channel

• Financial Analysis

• Conclusion

• Trade publications• Journals• Pamphlets• Web site

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

Image

Mediums

Distribution Channel

• Financial Analysis

• Conclusion

Mediums

- 30% of price per unit

- Settled distribution system

- Experienced- Economies of scale

Distributors

- 30% of price per unit

- Settled distribution system

- Experienced- Economies of scale

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

Image

Medium

Distribution Channel

• Financial Analysis

• Conclusion

Distribution channels

Manufacturer direct

- $10 - $15 per unit + expenses for sales force

- Better for well established and high volume products

Financial Analysis

Price of $200

unit price $100.00 unit variable cost

distributors $ 30.00 raw material $ 1.50

unit contribution $ 68.50

Fixed costproduction $ 15 mmarketing budget $ 1 m

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

0

10

20

30

40

0 100000 200000 300000

units sold

m $

revenues costs

Marketing BA 160

Content

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

Break even

• Conclusion

Break-even

234,000

• Use Distributors• Marketing activities• Implementation of company sales

force, after products are established• Use profits from Oxyglobin to

expand capacity• Launch Oxyglobin, retail-priced at

$200

Marketing BA 160

ConclusionContent

• Company background

• Problem

• Dimensions

• Decision

• Marketing strategy

• Financial Analysis

• Conclusion

Questions ?

Calculation for dogs

14,250 (95% of 15,000 practices) x 17(units per practices) x 0.4 + 750(5% of 15,000 practices) x 150(units per emergency practice) x 0.85 = 192,525 192,525 x 4.5 / 2.5 = 346,545 unitsAssumptions:4.5 of acute blood loss get a transfusion (84% of veterinarians are dissatisfied with current process)

Appendix