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METABICAL:
Pricing, Packaging, And Demand Forecasting
For A New Weight-Loss Drug
Submitted by:
Metabical
Prescription
weight loss drugs
(Meridia and
Xenical)
Alli
Herbal or dietary
supplements
Other Options:
Weight Watchers,
Jenny Craig Direct,
Gym membership
Unregulated by FDA
Faced safety concerns
Deceptive marketing claims
In limited use publicly- difficult to determine related health
complications
$ 300 for 3 months supply
2. What are the advantages/ disadvantages of the forecasting methods presented? How
would you go about forecasting the demand? Calculate the forecasted demand for first
five years in units.
Forecasting Method 1: From the number of overweight individuals in the US, narrow down to
those comfortable with weight loss drugs
Pros:
1. The Method is very structured.
2. The whole over-weight market is considered in the forecast and very little data is
assumed. This data is available from existing market research.
Cons:
1. Considering Metabical as a first of its kind, full value is not being leveraged.
2. There is no distinction in acceptance by different consumer groups. For example, it
may not be accepted as easily by the low-income groups as compared to the high-
income groups.
3. It is difficult to create a brand across multiple demographics.
Forecasting Method 2: From the number of overweight individuals in the US, narrow down to
those immediately looking for a prescription.
Pros:
1. The Method is aggressively priced and estimated.
2. Leverages the uniqueness of the product.
3. Targets the customers who will most likely consider a trial.
Cons:
1. May not be able to meet forecasted results due to aggressive pricing.
2. The estimate is still spread very broad. It is hard to predict the behaviour of such a
broad segment of customers without knowing their reaction to their product.
Forecasting Method 3: Focus on ideal target consumer- educated females, 35-65 of age with
BMI 25-30
Pros:
1. The Method is aimed at the ideal target segment who will most likely purchase.
2. Aggressively priced, but portrayed as a niche brand for a particular segment.
3. Provides a clear picture of the market they are targeting and attractive pricing in
relation to the benefits the product is delivering.
Cons:
1. There is very small room for failure as it is being promoted as a niche product.
2. Gender bias may mean loss of half the segment in a single shot.
Forecast
Summary
Year
Option 1
Option 2
Option 3
1
0.706146
1.614048
2.2188
2
1.059219
2.421072
2.5886
3
1.412292
3.228096
2.9584
4
1.765365
4.03512
3.3282
5
2.118438
4.842144
3.698
Total
7.06146
16.14048
14.792
3. What price would you recommend to Printup? What is the ROI for the first five years
for the recommended price?
Retail Price $75 Being more of necessity, people might be ready to pay more prices
Advantages:
Disadvantages:
Disadvantages:
Disadvantages:
Calculation of ROI
$75
$125
$150
Forecast Method 1
-0.663869083
-0.212125394
0.013814219
Method 2
-0.23170076
0.800856243
1.317289643
Method 3
-0.295889443
0.650401075
1.123688292
4. What pack size would you recommend? What are the considerations to arrive at this
decision?
Reasons:
The 12 week supply will capture those customers who have higher income levels and
are willing to pay the full price at the outset or might not visit the doctor periodically
The 12 week supply will be bought by the customers who are too busy to get their
prescription refilled