Metabical is a revolutionary weight loss drug, which Cambridge Sciences Pharmaceuticals expects to be finally approved soon. Upon FDA approval, Metabical will be the only weight loss drug that is clinically proven to be effective for moderately obese individuals. Barbara Printup, the Senior Marketing Director for Cambridge Sciences Pharmaceuticals, is responsible for creating the positioning strategy and marketing communications plan in preparation for the introduction of Metabical. It is her task to carefully consider the decision-making process of consumers as well as the interaction between the health care provider who prescribes Metabical and the consumer who purchases Metabical. There is a high risk of spelling disaster, if Metabical is – despite promising medical studies and extensive research, poorly positioned in the highly competitive drug market for weight-loss solutions.
Quelch, John A. and Heather Beckham. “Metabical: Positioning and Communications Strategy for a New Weight Loss Drug. HBS Brief Cases 4240, Jul 22, 2010.
Addressed questions in case study solution:
- What are the key consumer characteristics of Metabical’s target market?
- Which end consumer segment(s) do you suggest the Metabical campaign should focus on as a target market? Why?
- Given the target market selected by you, how would you position Metabical against its competitors?
- Which communication channel strategies (i.e., push and pull approaches) to promote Metabical seem appropriate to you?
- Which communication program do you propose, that is, how would you deploy promotional mix elements to advocate Metabical in the prelaunch, launch, and post-launch phases?
Metabical – Case study analysis
Positioning and Communications Strategy for a New Weight Loss Drug – Executive Summary
Cambridge Sciences Pharmaceuticals (CSP) is preparing the upcoming US-launch for its newest prescription drug. Metabical is a weight loss drug that has been proven to be safe and effective for moderately overweight individuals in clinical trials. FDA approval is expected for January 2009, which gives the Marketing team around Barbara Printup a little less than a year to develop an effective positioning strategy for Metabical, as well as a full marketing communications plan to be ready for the launch. It is clear that the product will have to amortize extensive R&D costs and secure excess profits in order to be a success for CSP, all that in a market environment characterized by diverse competition and low consumer trust. Based on previous experiences and extensive research by Barbara Printup and her team, the following actuality for target group, competitive situation and the product itself is evident.
Two target groups have been identified to market Metabical to: consumers and medical professionals. Due to the nature and limits of its medical effects, Metabical is targeted specifically at overweight individuals (BMI of 25 to 30) as end users of the drug. By the year 2000 34% of US adults (ca. 71 million) had been considered to be overweight according to research. While the percentage of overweights increases with age, it prevails an equal phenomenon across all income-, and to a lesser extend, education-levels.
To find out more about end consumers as a target group, CSP has commissioned a survey amongst overweight individuals as well as a study to analyze psychographic segmentation. According to the survey 70% of respondents are dissatisfied with their current weight, while only 15% of those actively trying to lose weight are comfortable with using drugs to do so. Women are considerably more active in weight loss activities than men, more willing to change behaviors to live healthier, and disproportionately unsatisfied with current weight loss options. On a similar note the study about psychographic segmentation found women to be the most distinct segment, while a focus group expressed demand for a proven and safe way to lose weight. A decision on the targeted segments, promotional mix and messaging based on these findings is however still pending. Health care providers, the second target group that has to be addressed, are enthusiastic about Metabical according to interviews conducted. Since excess weight is considered a public health crisis in the U.S., the new drug is qualified to prevent direct effects like heart disease or diabetes by a far extent. Health care providers remain concerned about the likelihood of a short longevity of weight losses once the treatment has stopped. Medical professionals will be targeted with a dedicated advertising campaign and CSP’s sales force. Proposals for a messaging strategy have been developed but not yet decided upon.
The market for weight loss products and treatments in an extended sense is diverse and characterized by a manifold of market participants. Although no prescription drug specifically targeted at the weight-loss segment exists, many over the counter (OTC) weight-loss drugs are available for purchase. Most OTC solutions are being categorized as “herbal” or “dietary supplements” by the FDA and are therefore unregulated. With the drug Alli only one OTC drug is FDA approved, but is under investigation for causing hefty side effects as serious as liver damage. Similar health risk issues with weight loss drugs (in one incident a unregulated “dietary supplement” had been connected to cardiac death) and accusations of deceptive marketing tactics hurt the credibility of the product category.
CSP has monopoly rights secured through a utility patent for its own prescription drug and has a time window of at least 10 years before generics are likely to enter the market.
CSP believes Metabical to be far superior to any weight-loss solution currently on the market. The drug is close to its FDA approval and has other advantages compared to competitive offerings. It is combining an appetite-suppressant compound with a fat-blocking and calorie-absorption agent and manages to produce dramatic weight loss results. In trials a majority of patients reached their weight loss goals within 12 weeks (losing in average between 26 and 15 pounds). For the treatment to work, only one pill per day has to be taken, although it will only show effect for individuals with a BMI of 25-30 (obese) and not above.
Metabical has fewer negative side effects than current weight loss drugs. Most side effects are associated with intake of excess fat and calories, which facilitates the adoption of healthier eating habits. Additional effectiveness and longer lasting results are expected to be achieved by a complementing support program, consisting of various educational content, like reference materials, community forums, meal and exercise plans, as well as a number of weight-control tools. The program would amount to $2.2 million fix costs in year one (just under 10% of the US-Marketing budget for Metabical). It is intended to be available to customers for a duration of 24 months. The drugs pricing is however not finalized yet. Between $3 and $5 retail price per day (avg. treatment 12 weeks) will most likely have to be paid “out of pocket” by consumers, with only a few description drug plans expected to cover the drugs’ cost. Depending on the final retail price, the total lifetime value of an average customer will be between $252 and $420. CSP is considering a campaign to persuade health care providers to include Metabical in their programs (decision after first 6-month sales review).
Marketing communication strategy
The marketing communication strategy for Metabical is aimed to focus on both end consumers and medical professionals. Roughly 65% percent of the dedicated marketing budget of 23.1 mio. USD is assigned to direct-to-consumer (DTC) marketing measures. The budget is set based on CSP’s recent drug launch budget, but is intended to be fine-tuned after actual campaign data is available.
Direct-to-consumer marketing is a relatively new phenomenon in the industry and will be utilized via TV, online, radio and print media. Reaching a high product and brand awareness is the number one priority for the launch. Metabical would be marketed via social media, on blogs and through a contest with viral elements in addition to more traditional channels. No internal experience exists about the optimal utilization of these measures. The marketing agency had already prepared three initial concepts for the DTC advertisements, which should serve as a basis for further activities. Furthermore Printup is considering to get a female celebrity who has struggled with her weight in the past as a prominent spokeswomen for the product. This tactic is not recognized in the current marketing budget, but it had been very effective for similar campaigns. One best practice suggests a positive effect to counteract customer price sensitivity to some extent. To target healthcare professionals CSP would rely on proven tactics from its past launch campaigns. Direct mailings and extensive PR efforts, like press releases, medical education events and a symposium would support the launch, as well as a dedicated CSP sales team of 32 agents, responsible for the company’s gastrointestinal drugs. Their task would be to visit doctors directly in their offices to discuss the drug and provide samples. One sales representative is responsible for 100 medical offices. In addition to usual sales materials they would work with promotional Lunch & Learn seminars that were proven to work well in the past.
The team around Barbara Printup will have to work out its strategy in the coming year to ensure a successful product launch of Metabical. The launch will have to recoup R&D costs, ensure the longevity of the drug and shape Metabical into a brand and product offering that resonates with the target group.
Key Challenges for Positioning and Communications Strategy
For a successful launch and long-term return CSP faces multiple challenges that would have to be addressed. Most of the project’s key challenges have already been considered by the marketing team, while some other challenges can be derived from the given facts.
- Selecting segments to target – Identifying ideal customer segments amongst consumers and/or health care professionals can’t be easily achieved with high precision in a target group that is so diverse (34% of US Americans).
- Choosing the right messaging – Positioning Metabical appropriately to the segmented target groups will be equally complex and characterized by uncertainty. Additional challenges arise by the need to communicate the drug’s lack of effects on obese patients (BMI 30+) and a certain consumer distrust for weight loss drugs in general.
- Targeting efficiently through the right channels – Selection and fine-tuning of the campaigns promotional mix will be crucial. Especially when using new and untested methods like social media. The underlying problem here is to where and how to reach the target audience.
- Timing the different measures – An optimal roll-out schedule is depending on multiple factors and assumptions. For instance the issue of when to start targeting health care professionals (before, after or at the same time as consumers) has to be solved. While one of the bigger challenges will constitute the timing of social media activity. Moreover, it should be decided when to carry out the research on support program’s impact.
- Pricing and marketing budget – The price for Metabical will affect its demand and is a function of the targeted end consumers combined utility. Pricing can either render the best marketing campaign ineffective (when too high) or have a negative but lasting effect on the company’s profitability.
- Adjusting the organizational structure – How to utilize the allocated sales team effectively will be vital to success amongst health care providers and affect budget allocatable to DTC measures. In addition will the slight shift from pharmaceuticals to service and content demand organizational adjustments.
- External expertise – The lack of internal experience could be a big obstacle on the way to a successful implementation. A cost-benefit analysis for using external agencies for implementing a social media strategy might be adequate.
Challenges that do not influence the launch directly (e.g. due to their exclusively long term relevance), but are still to be considered, are decisions about an internationalization strategy and a plan to secure returns of Metabical after its monopoly rights expire.