A B C D E F G H I J K L M N O P

1 Women added change to OTC

2
3 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
4 Male heads affected by bolding 31,576,369 32,523,660 33,499,370 34,504,351 35,539,482 36,605,666 37,703,836 38,834,951 40000000 41,200,000 42,436,000 43,709,080 45,020,352 46,370,963
5 !! the age group we are interested in grew by average 3% - higher than overall population
6 % of boldness product works for 29,997,551 30,897,477 31,824,402 32,779,134 33,762,508 34,775,383 35,818,645 36,893,204 38000000 41,200,000 42,436,000 43,709,080 45,020,352 46,370,963
7 since doctors do not "filter" I assume that every person with boldness with try
8 9.9% cumulative willing to buy 2,969,758 3,058,850 3,150,616 3,245,134 3,342,488 3,442,763 3,546,046 3,652,427 3762000 4,078,800 4,201,164 4,327,199 4,457,015 4,590,725
9 New buyers due to fast growing age segment 0 89,093 91,766 94,518 97,354 100,275 103,283 106,381 109,573 316,800 122,364 126,035 129,816 133,710
10 Number changes, since price falls !
11 New market share reached who will try 445,464 443,533 441,086 438,093 447,893 447,559 457,440 547,864 564,300 579,190 588,163 584,172 579,412 592,204
12 Willing & have not tried yet (new base) n/a 2,169,853 1,820,533 1,476,958 1,126,419 779,134 424,977 negative! Means we reached whole potential market with our current "constraints"
13 cumulative who have tried 445,464 888,997 1,330,083 1,768,176 2,216,070 2,663,629 3,121,069 3,668,933 4,233,233 4,812,422 5,400,585 5,984,757 6,564,169 7,156,373
14 = (25% of new buyers from growing age segment * 37.93% able to buy) + previously won loyal buyers
15 loyal full-time buyers (25% try) 111,366 222,249 332,521 442,044 554,017 665,907 780,267 917,233 1,058,308 1,203,106 1,350,146 1,496,189 1,641,042 1,789,093
16 one year try people for 4 month 334,098 332,650 330,815 328,570 335,920 335,669 343,080 410,898 423,225 434,392 441,122 438,129 434,559 444,153
17 abs. max revenue from above (4month + year)* ($660-20%)$117,602,399 ### ### ### ### $410,676,821 ### ### $633,274,336 $355,846,395 $395,257,392 $433,549,322 $471,476,355 $511,406,038
18 20% is the margin for reseller $660 was taken as average of annual cost: $600 - $720 !new price base $330
19 abs.max. of people of have the money (men 8.68%) $10,207,888 $15,267,598 $20,293,350 $25,278,552 $30,522,624 $35,646,748 $41,001,121 $48,314,372 $54,968,212 $113,159,154 $125,691,851 $137,868,684 $149,929,481 $162,627,120
20 % goes from 8.68% to 31.8%
21 New Marketshare (Exhibit 3) men so far 11.3% + 7.1% willing to buy if > $ 600, now additional 13.5% = 73% increase Forcast $195,765,336 $217,446,902 $238,512,824 $259,378,002 $281,344,918
22 Sales company had in the U.S. (men & women) $2,000,000 $34,000,000 $70,000,000 $95,000,000 ### $122,000,000 $84,000,000 $96,000,000 $96,000,000
23 market share captured of conditional maximum market (US) 510% 45% 29% 27% 30% 29% 49% 50% 57%
24 total sales world-wide $32,000,000 $88,000,000 ### ### ### $165,000,000 ### ### $124,000,000
25 marketing spend on men (based on world-data) $45,000,000 $45,000,000 $45,000,000 $45,000,000 $45,000,000 $30,000,000 $34,580,000 $32,400,000 $75,000,000 $52,856,641 $58,710,663 $64,398,462 $70,032,060 $75,963,128
26 marketing cost as % of sales 141% 51% 39% 32% 30% 18% 30% 27% 60%
27
28 Women heads affected by bolding 18,302,833 18,851,918 19,417,476 20,000,000 20,600,000 21,218,000 21,854,540 22,510,176 23,185,481
29 % of boldness the product works for 17,387,692 17,909,322 18,446,602 19,000,000 20,600,000 21,218,000 21,854,540 22,510,176 23,185,481
30 13.2% cumulative willing to buy 2,295,175 2,364,031 2,434,951 2,508,000 2,719,200 2,800,776 2,884,799 2,971,343 3,060,484
31 % Women who have the money (2.52%) 57,838 59,574 60,874 55,176 568,313 585,362 602,923 621,011 639,641
32 % goes from 2.52% to 20.9%
33 New buyers due to fast growing age segment 549,085 565,558 582,524 600,000 618,000 636,540 655,636 675,305
34 New market share reached who will try 5,784 60,866 62,643 63,770 116,831 120,336 123,946 127,665 373,579
35 cumulative who have tried 5,784 14,720 23,851 32,127 117,374 205,179 295,617 388,769 484,715
36 loyal full-time buyers (20% try) 1,157 2,944 4,770 6,425 23,475 41,036 59,123 77,754 96,943
37 since meaningful regrowth only 20% for women, I assume this is the loyal rate
38 one year try people for 4 month 4,338 11,040 17,888 24,096 88,031 153,884 221,713 291,576 363,536
39 abs. max revenue from above (4month + year)* ($660-20%) $1,374,241 $3,497,443 $5,666,985 $7,633,457 $13,944,063 $24,375,217 $35,119,306 $46,185,717 $57,584,121
40 total share with women 30% 53% 56% 65% !new price base $330
41 New Marketshare (Exh. 3) women so far 11.1% + 5.3% willing to buy if > $ 600, now additional 9.7% = 59% increase Forcast $22,171,060 $38,756,595 $55,839,696 $73,435,290 $91,558,752
42 Weights
43 Forcast under old model / new price $200,000,000 ### $200,000,000 $200,000,000 $200,000,000 30%
44 Revenue expectation (1 billion in 4-5 years) estimate was $250,000 possible per year / or 1 billion in 5 years
45 Analyst "think 400-500 million possible per year" $450,000,000 ### $450,000,000 $450,000,000 $450,000,000 10%
46 Total max forcast $217,936,395 $256,203,496 $294,352,520 $332,813,292 $372,903,670 60%
47 US Weighted forcast $235,761,837 ### $281,611,512 ### $328,742,202
48 without progaine World forcast (ratio average 1.55)$365,430,848 $401,019,252 $436,497,843 $472,266,361 $509,550,413
million men % of total % of $25,000- % of $50,000+% of $ 75,000+
21.3 23.0% age 25-34 34.40% 4.70% 1.70%
29 31.3% age 35-44 41.80% 11.80% 6%
6.2 11.0% age 45-54 (half) 19.60% 6.95% 8.10%
56.5
million women% of total
21.6 45.1% age 25-34 17.20% 1.20% 0.40%
19.6 41.0% age 35-44 22.20% 2.70% 1%
6.65 13.9% age 45-54 (half) 11.10% 1.50% 0.50%
47.85
under old price % with new price %
1.47% 9.4%
5.56% 18.6%
1.65% 3.8%
8.68% 31.8%

0.72% 8.5%
1.52% 10.6%
0.28% 1.8%
2.52% 20.9%
m 4.7 34.4
11.8 41.8
6.95 19.65
4.05
6 95.85
1.7
35.2

92.8

0.38
ForeCast
men women total
estimated people affected 40,000,000 20,000,000 60,000,000
bolding pattern it works for 38,000,000 19,000,000 57,000,000
subtract % willing to pay
% of people who effectively sought treatment 9.90% 13.30% cumulative ! Taking place over time
thus spread it over the years ! trial rate
possible people seeking treatment 3,762,000 2,527,000 57,000,000 1988 1619418 404854 1214563
1989 1799353 449838 1349515
% people willing to spend 31.90% 26.10% ! Exhibit 5 falsch gerechnet 1990 1999281 499820 1499461
people available to buy 1,200,078 659,547 1,859,625 1991 2221423 555356 1666068
Annual OTC sales / year $320 $320 since new price is roughly half of previous price 1992 2468248 617062 1851186
potential max sales $384,024,960 $211,055,040 ### 1993 2742498 685625 2056874
% people who see moderate success 26% 19% 4.7 1994 3047220 761805 2285415
people who might stay with the product 312,020 125,314 437,334 1.7 1995 3385800 846450 2539350
sales that might stay $99,846,490 $40,100,458 ### 11.8 1996 3762000 here I end up with the cummulative of 9.9%
6 1997
% people who have the money 37.93% 7.25% correct now 6.95 13.9 1998
people who would have the money to buy 1,426,966 183,189 1,610,154 4.05 8.1 1999
potential max sales $456,628,966 $58,620,377 ### 35.2 2000
% people who see moderate success 26% 19%
people who might stay with the product 371,011 34,806 405,817
sales that might stay $118,723,531 $11,137,872 ### 1.2
0.4
trial 2.7
repeat are 25% of trial 1
1.5
HOW LONG WILL THEY TRY IT 4month 4month 0.5
7.3

4 month supply cost 213.33

full year 640 35.2
7.3
Survey data - is max population
do not start at 9 that is the max

3 case talks about others COULD launch

it could be that we are in the market place without competition
lower price
only work pattern boldness 95% and could lower again

if they launch - they go down to 40%

market potential

Assumption: 1 year higher try rate

then assume decrease since lack of doctor
cumulative levels off

Q2
conclusion the market for rogaine is what rogaine made it to be, since there is NO competition
thus market share I have "100%" for prescription
thus analyze if we did a good job
TIP : they did WELL
 sales sales Marketing sales per marketing $ Sales-Marketing consumer measure meadia SALES Amount of users worldiwdetotal market % market sharetotal market women Marketing as percentag of sales % of market
world us men women advertising ($ in million) next slide (600-720) men men
1987 $32 $2 $45.00 $0.71 -$13 16.00 $4.91 110 48,485 40,000,000 0.12% 20,000,000 140.6%
1988 $88 $34 $45.00 $1.96 $43 2.59 $9.35 110 133,333 40,000,000 0.33% 20,000,000 51.1%
1989 $115 $70 $45.00 $2.56 $70 1.64 $3.44 110 174,242 40,000,000 0.44% 20,000,000 39.1%
1990 $140 $95 $45.00 $3.11 $95 1.47 110 212,121 40,000,000 0.53% 20,000,000 32.1%
1991 $148 $103 $45.00 $3.29 $103 1.44 110 224,242 40,000,000 0.56% 20,000,000 30.4%
1992 $165 $122 $30.00 $5.50 $135 1.35 women were added 110 250,000 40,000,000 0.63% 20,000,000 18.2%
1993 $115 $84 $34.58 $3.33 $80 1.37 110 174,242 40,000,000 0.44% 20,000,000 30.1%
1994 $122 $96 $32.40 $3.77 $90 1.27 110 184,848 40,000,000 0.46% 20,000,000 26.6%
1995 $124 $96 $75.00 $1.65 $49 1.29 110 187,879 40,000,000 0.47% 20,000,000 60.5%
! Text is confusing about what the marketing expenditure is!

12.43 1.55

believed $250
Q2: has Rogaine been able to capture enough market share
25% of existing consumers will continue to buy product
75% will go to alternative (find the number) Segments number of heads
male
female
total

What is your assessment of the revenue performance for Rogaine from 1988 to 1995? How do you support your assessment? (20 points)
 1987 1988
Male heads affected by bolding 40000000 40000000

% of boldness product works for 38,000,000 38,000,000

9.9% cumulative willing to buy 3,762,000 3,762,000

New buyers due to fast growing age segment 0 0

New market share reached who will try 564,300 545,490

Willing & have not tried yet (new base) n/a 2,652,210
cumulative who have tried 564,300 1,109,790
= (25% of new buyers from growing ag
loyal full-time buyers (25% try) 141,075 277,448
one year try people for 4 month 423,225 409,118
abs. max revenue from above (4month + year)* ($660-20%)$148,975,200 ###
20% is the margin for reseller $660 was taken as average of annual cost: $600 - $720
abs.max. of people of have the money (men 8.68%) $12,931,047 $18,965,536

New Marketshare (Exhibit 3) men so far 11.3% + 7.1% willing to buy if > $ 600, now additional
Sales company had in the U.S. (men & women) $2,000,000 $34,000,000
market share captured of conditional maximum market (US) 647% 56%
total sales world-wide $32,000,000 $88,000,000
marketing spend on men (based on world-data) $45,000,000 $45,000,000
marketing cost as % of sales 141% 51%

Women heads affected by bolding

% of boldness the product works for
13.2% cumulative willing to buy
% Women who have the money (2.52%)

New buyers due to fast growing age segment

New market share reached who will try
cumulative who have tried
loyal full-time buyers (20% try)
since meaningful regrowth only 20% for women, I assume this is the loyal rate
one year try people for 4 month
abs. max revenue from above (4month + year)* ($660-20%)

New Marketshare (Exh. 3) women so far 11.1% + 5.3% willing to buy if > $ 600, now additional

Forcast under old model / new price

Revenue expectation (1 billion in 4-5 years)
Analyst "think 400-500 million possible per year"

hands attached to heads potentially buging (Gessner formula)

average amount of wallets - weighted spending
average single hands paying * $620 ( - 20% to company)
5
 Women added

1989 1990 1991 1992 1993 1994

40000000 40000000 40000000 40000000 40000000 40000000
!! the age group we are interested
38,000,000 38,000,000 38,000,000 38,000,000 38,000,000 38,000,000

3,762,000 3,762,000 3,762,000 3,762,000 3,762,000 3,762,000

0 0 0 0 0 0

526,680 507,870 504,108 489,060 485,298 564,300

2,125,530 1,617,660 1,113,552 624,492 139,194 negative! Means we reached whole potential
1,636,470 2,144,340 2,648,448 3,137,508 3,622,806 4,187,106
25% of new buyers from growing age segment * 37.93% able to buy) + previously won loyal buyers
409,118 536,085 662,112 784,377 905,702 1,046,777
395,010 380,903 378,081 366,795 363,974 423,225
### ### ### $478,706,976 ### ###
erage of annual cost: $600 - $720
$24,784,507 $30,387,961 $36,120,726 $41,551,766 $47,069,012 $54,439,709

= 73% increase
ng to buy if > $ 600, now additional 13.5%
$70,000,000 $95,000,000 ### $122,000,000 $84,000,000 $96,000,000
35% 32% 35% 34% 56% 57%
### ### ### $165,000,000 ### ###
$45,000,000 $45,000,000 $45,000,000 $30,000,000 $34,580,000 $32,400,000
39% 32% 30% 18% 30% 27%

18,302,833 18,851,918 19,417,476

17,387,692 17,909,322 18,446,602
2,295,175 2,364,031 2,434,951
57,838 59,574 60,874

549,085 565,558
229,518 291,312 300,051
229,518 238,454 247,585
45,904 47,691 49,517

172,138 178,840 185,688

$54,533,365 $56,656,567 $58,826,108
total share with women 79% 123% 118%
ng to buy if > $ 600, now additional 9.7% = 59% increase

Total max forcast

US Weighted forcast
World forcast (ratio average)

7 8 8 8.5 9 9.45
 change to OTC

1995 1996 1997 1998 1999 2000

40000000 40000000 40000000 40000000 40000000 40000000
e age group we are interested in grew by average 3% - higher than overall population
38000000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000
since doctors do not "filter" I assume that every person with boldness with try
3762000 3,960,000 3,960,000 3,960,000 3,960,000 3,960,000
0 198,000 0 0 0 0
Number changes, since price falls !
564,300 562,320 554,400 534,600 514,800 510,840
ative! Means we reached whole potential market with our current "constraints"
4,751,406 5,313,726 5,868,126 6,402,726 6,917,526 7,428,366

1,187,852 1,328,432 1,467,032 1,600,682 1,729,382 1,857,092

423,225 421,740 415,800 400,950 386,100 383,130
$701,673,192 $387,819,036 $423,886,716 $457,863,516 $490,533,516 $523,987,596
!new price base $330
$60,905,233 $123,326,453 $134,795,976 $145,600,598 $155,989,658 $166,628,056
% goes from 8.68% to 31.8%
Forcast $213,354,764 $233,197,038 $251,889,035 $269,862,108 $288,266,536
$96,000,000
63%
$124,000,000
$75,000,000
60%

20,000,000 20,600,000 21,218,000 21,854,540 22,510,176 23,185,481

19,000,000 20,600,000 21,218,000 21,854,540 22,510,176 23,185,481
2,508,000 2,719,200 2,800,776 2,884,799 2,971,343 3,060,484
55,176 568,313 585,362 602,923 621,011 639,641
% goes from 2.52% to 20.9%
582,524 600,000 618,000 636,540 655,636 675,305
309,052 331,920 341,878 352,134 362,698 373,579
255,861 341,108 428,912 519,351 612,502 708,449
51,172 68,222 85,782 103,870 122,500 141,690

191,896 255,831 321,684 389,513 459,377 531,336

$60,792,581 $40,523,625 $50,954,779 $61,698,868 $72,765,279 $84,163,683
127% !new price base $330
Forcast $64,432,563 $81,018,098 $98,101,199 $115,696,793 $133,820,255

$200,000,000 ### $200,000,000 $200,000,000 $200,000,000

estimate was $250,000 possible per year / or 1 billion in 5 years
$450,000,000 ### $450,000,000 $450,000,000 $450,000,000
al max forcast $277,787,328 $314,215,136 $349,990,234 $385,558,902 $422,086,791
Weighted forcast $271,672,397 ### $314,994,140 ### $358,252,075
rld forcast (ratio average)

9.9
under old price w
%ith new price %
0.00% 0.0%
0.00% 0.0%
0.00% 0.0%
0.00% 0.0%

0.00% 0.0%
0.00% 0.0%
0.00% 0.0%
0.00% 0.0%
 Laura

he sais that using 40m everywhere is fine, but I like it correct

this is the 95% for men and women

this probably is the difficult part, 9.9% commulative

this you can ignore if you take the 40m everywhere

this is the max forecast for Q3

green is Q2

Weights
30%

10%
60%
new price %