Thursday, March 8, 2012

Metabical: Positioning and Communications Strategy for a New Weight-Loss Drug Case Study






Questions  for Analysis
Metabical is faced with the task of positioning their product in the marketplace.  Using the information from the case and your assigned readings, who are the key target segments for Metabical and what points of difference should be directed to each segment?
        
     Key Segments for Metabical are 



1   End consumer(the patient) - Over weight adults in US (BMI 25-30)
2   Health care providers.



Based on the drug’s design, the market survey and demographic data, key consumer target segments (given already that everyone targeted has a Body Mass Index between 25 and 30)  appear to be women, those aged 35+, those making greater than $40,000 a year, and those with at least some college education.  In addition, key business segments are health care providers (doctors,physicians) and insurance companies .


For women, they represent a large portion of those that are overweight (62% - Exhibit 1 breaks down by age), those that are unhappy with their weight (75%) and those that have previously tried to lose weight via another means and failed (60%), making it measureable and accessible.  This segment would be interested in the clinically proven success of Metabical and the ease of taking the drug versus competitors (one pill a day as opposed to one pill per meal).  In addition, the design of the pill and the subsequent comprehensive support program (that is more detailed and runs for a greater duration than the competition) re-enforces the idea of a change in behavior to lead a healthier lifestyle (desired by 55% of women and is identified as 1 of 5 psychographic segments of women).  Finally, the presentation of Metabical as a new, physician-endorsed, FDA-approved weight-loss option reaches out to the majority of women who visit the doctor annually (55%) and are currently dissatisfied with current weight-loss options (65 %).
For those aged 35+, Metabical encompasses 3 of the 5 female psychographic groups:” I want to be healthier, I want to wear my skinny jeans, I want to lose weight only if it’s easy .”  The previously mentioned changes to behavior and the support group capture the first and the single-pill-per-day advantage caters to the third.  The second psychographic group can be included by Metabical’s clinical proof of modest weight loss (15 to 26 pounds), which is realistic for women looking to lose just enough to get back in to their “skinny jeans” (as opposed to women 18-30 that have the unrealistic belief of easily being able to look like a movie star).  As the functionality of Metabical is more geared towards improving the overall health, the larger target segment is those 35+ versus those 18-35 (60% to 35 %).



Consider the following bullets and click each of them to see
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Despite the fact the target segment of those making over $40,000 has a smaller occurrence of obesity, it is still vital due to the cost of the drug.  Metabical can be viewed as relatively inexpensive compared to the benefit.  The $3-$5 a day (for 12 weeks) could be likened to giving up a hamburger combo. In addition, extra value can be created via access to the support program.  Regardless, there is a very small percentage of survey respondents with incomes below $40,000 that said they would be willing to pay for the drug “out of pocket” (5%).  Insurance companies have not yet agreed to pay for the costs, so it is more substantial to target the two other income groups sampled ($40,000 to $80,000 and above $80,000), as their likelihood of buying the drug “out of pocket” is double and quadruple (11% and 20% respectively – Exhibit 2 pertains).  Finally, the income group of those making more than $40,000 a year includes the 3 female psychographic groups previously identified as most likely to react to a change in lifestyle (I want to be healthier - $80,000+); the proven, modest loss of weight (I want to wear my skinny jeans - $50,000-$80,000); and the ease of the taking the pill only once a day (I want to lose weight only if it’s easy - $40,000-$60,000 ).
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The last consumer segment, the one with at least some college, though it has a smaller percentage of overweight adults, it includes those female psychographic segments that make greater than $40,000 a year (Exhibit 3).  In addition, from those surveyed, a strong majority of those with a college degree (75%) stated they were aware of the health risks associated with being overweight, compared to a far smaller percentage stating they are aware and having only a high school diploma (45%).  The knowledge of the health aspect to obesity plays into the strength of Metabical as a something that is not just a weight-loss drug, but a life-changing experience .
Moving to the business segments, the first target should be the healthcare professionals.  Healthcare professionals should be concerned with the well-being of their patients, and in Metabical, they have a new weight-loss drug with compelling data from clinical trials that highlights drug effectiveness, ease and safety when viewed against the competition.  In addition, as the drug is engineered toward not just losing weight but changing an unhealthy lifestyle, healthcare professionals should be enthused by the added health benefits of the drug and the comprehensive support program designed to help keep their patients healthy .


The final business segment could be considered the most important as it has the potential to be the most lucrative: the almighty insurance company.  Many insurance companies do not cover obesity drugs, forcing consumers to purchase the drugs on their own, and the vast majority of those surveyed said they would not.  In order to capture that segment of consumers (those making below $40,000 a year), it is necessary to target insurance companies to convince them to pay for Metabical.  Though the clinical trial data can be compelling, insurance companies would require substantial proof that the drug really does reduce health problems/costs among the moderately obese.  As better health translates to less healthcare costs in the form of doctor visits, surgeries and prescriptions for the insurance companies, further evidence of drug success should go a long way in convincing health insurance companies to pay for the drug .

2. Problem Recognition: 

Every decision process begins with a problem being recognized or a need being triggered via stimuli.  In the case of consumers, there needs to be a recognition that if their BMI is over 25 that they are considered overweight; that continuing to live their life without confronting the issue is not enjoyable/fulfilling; that being overweight could lead to serious health problems later in life; and that there is a new, safe drug available that is proven to help with weight-loss.  This can prove challenging because while a majority of adults surveyed with a BMI in the overweight category said they were unhappy with their weight (70%), only half that amount were actively trying to lose weight (35%) and even less were comfortable using drugs to help (5.25% of the total sample).  The best way to communicate with consumers at this stage is via their health care professionals (provided they visit the doctor regularly) and via print/tv/online ads to create an awareness geared toward educating target segmentsthat evokes the questions “am I overweight?  Do I want to lose weight?  What is available to me to help me lose weight and be healthier ?”  For healthcare professionals, the recognition is a bit simpler, as they see the problem whenever an overweight patient comes to see them.  The challenge is in getting doctors to see the need to provide their overweight patients with a weight-loss method beyond mere diet and exercise.  The public relations launch campaign proposed by CSP is a good start.  The expert panels and the cogent clinical data will help greatly with the decision process provided CSP makes it available via sales reps, medical journals, professional magazines and online databases.
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Information Search: With the information search, it needs to be understood that those that buy a product often times search for only a limited amount of data (Kotler and Keller, pg 75) and that while commercial means is the broadest and easiest to employ, it is often the least effective.  Since Metabical is new, there will not likely be a lot of personal information available (unless family members encourage an overweight adult to consider visiting a doctor for Metabical), nor will there be large amounts of experimental information, but that could change in 12 weeks, namely in the forum of the viral “Metabical Challenge” proposed by CSP. However, in the short term, the best way to communicate with consumers in this phase is via public information.  Metabical has a lot that can be provided in the public realm, such as the facts from the clinical trials and the FDA approval.  In educating the consumer during the information phase, they could also highlight the safety and ease of use of the drug relative to the competition.  While the experimental and public information can be effective, there still needs to be commercial information presented in order to ensure Metabical makes it into the overweight adults’ awareness group.  For healthcare professionals, the information will inevitably be brought right to their door via sales reps, samples, journals, forums and expert panels.  One area that CSP needs to ensure they communicate is the comprehensive support group.  This could ease the burden on healthcare professionals and predicate a greater likelihood for patient success (prescribing the right drug makes a doctor look good).  The strong data should facilitate Metabical’s entrance into a doctor’s consideration set, provided the drug is right for the patient based on their BMI.
Evaluation of Alternatives: This is a crucial area for CSP, as it’s vital to bundle Metabical’s positive attributes for the consumer and overcome any attitudes or beliefs they may have against taking a prescription drug for weight-loss.  In this area, re-emphasizing the safety of the drug, the lack of severe side-effects and the FDA’s stamp of approval can create difference over Xenical (less safe) or OTC herbal supplements (that are not regulated by the FDA nor backed by clinical trials). With respect to the healthcare professionals, it’s just as important to present Metabical’s attribute bundle while overcoming any attitudes or beliefs from doctors that may have been burned when prescribing Xenical caused liver failure in their patients.  The communication should be based around the results versus the competition while again mentioning the support program.
Purchase Decision and Postpurchase Behavior: Much in the same way Viagra markets itself as a drug for those who are taking charge of their lives, CSP needs to communicate to consumers, and more importantly their family members, to congratulate and support these adults for taking charge of their weight as theydecide to visit their doctors.  Using the support website to create a social network to share success stories and anecdotes of encouragement can positively and profoundly influence the opinions of family members and ensure those taking Metabical lose weight and spread the word.  The site could even be used for referrals.
                In the healthcare professional segment, there is already a prevalence of attitudes of other to ponder in making the prescription decision.  That being said, the support site could just as easily include a section for doctors to exchange best practices, as well as any data collected by CSP regarding the number of successful patients








 Exhibit 1

Same Case study different point of view on what to conentrate Answer 2

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Questions  for Analysis
1.       Metabical is faced with the task of positioning their product in the marketplace.  Using the information from the case and your assigned readings, who are the key target segments for Metabical and what points of difference should be directed to each segment?
2.       What is the decision process for 1) consumers and 2) health care providers, and how should CSP target their communications to each group?

1.        

Key targets
Points of Difference

Medical Community      


     Doctors
Medical benefits for 25 to 30 BMI

     Nurses
Reduce workload – care for sick

     Care Providers
No more lifting/moving obese patients

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     Hospital Administrators
Free up Hospital space for sick and injured

     Nursing Homes
Reduced stays

US Government


     Medicare
Reduce costs / taxes

     Medicaid
Reduce number on welfare

Insurance Companies


     Life
Live longer
               
     Health
Reduce premiums

Patients (65% of the US Adult population)


     Male
More enjoyment out of life

     Female
Feel/look better

Pharmacies


     Pharmacist
Recommend to their Customers / works fast

     Drug Stores
Big Profits

Drug Sales Representatives


     US Reps
Easy Sell

     International Reps
US Made – could be overseas





 


2.        Decision Process

Consumers:

Are you overweight?                                     Yes continue or No exit
Care about being overweight?                   Yes continue or No exit
Need help losing weight               ?                              Yes continue or No exit

OTC supplements don’t work                     Yes continue or No exit
OTC Programs don’t work                            Yes continue or No exit
Need Doctor / prescription                          Yes continue or No exit

Best/Guaranteed Solution                           Metabical

Health Care Providers:

Patient overweight?                                       Yes continue or No exit
Care about being overweight?                   Yes continue or No exit
Need help losing weight               ?                              Yes continue or No exit

OTC supplements don’t work                     Yes continue or No exit
OTC Programs don’t work                            Yes continue or No exit
Need Doctor / prescription                          Yes continue or No exit

Best/Guaranteed Solution                           Metabical

Same Case study different point of view on what to conentrate Answer 3 a different approach

Questions  for Analysis
1.      Metabical is faced with the task of positioning their product in the marketplace.  Using the information from the case and your assigned readings, who are the key target segments for Metabical and what points of difference should be directed to each segment?
Key target segments:
            CSP’s Metabical was approved by the FDA for use in overweight individuals (the overweight segment is identified as those with a BMI of 25 to 30).  Based on the “American Obesity Association Fact Sheet” referenced in exhibit 1, from 1999 to 2000 34% of the adult U.S. population was considered overweight. This translates to 209 million US adults in 2000.  Additionally, while the highest incident was among men age 65 to 74 and women age 55 to 64 there is still a very large prevalence among all of the other age groups.  This information suggests that we should not exclude men or women based on age due to the high prevalence across age groups.


            The prevalence between men and women is almost identical, but is there value in separating them into different segments? Or, potentially just marketing to a male or female segment? Based on results from a 2007 marketing survey among 1,000 men and 1,000 women age 18-70 with BMIs of 25 to 29.9 from various socioeconomic levels, men and women responded differently to a number of questions. Women state more often than men that they wanted to change their behavior to live a healthy lifestyle and that they are dissatisfied with current weight-loss options on the market.  These survey results begin to point in the direction of either only marketing to women, or marketing to both women and men – but as different segments.
            One aspect of Metabical that may limit utilization is the cost of the medication.  The approximate retail price of the drug, while not finalized, is $3 to $5 per day which works out to $90 to $150 per monthly prescription.  While this is a typical monthly prescription cost for a branded agent, the issue is that many health insurance plans exclude anti-obesity drugs from their coverage.  This means that the majority of potential patients will have to pay the full cash value of the drug.  This information supports segmenting the market towards those with a household income that would allow them to afford this drug. 
            Finally, a psychographic segmentation study of overweight individuals was completed.  While this study covered both males and females, the female group demonstrated the most distinct segmentation.  Of the five segments identified, two seem to be most relevant to Metabical; “I want to be healthier” and “I want to wear my skinny jeans”. 
            The “I want to be healthier” segment is relevant to Metabical’s offerings because these women are knowledgeable about the importance of nutrition and exercise, and are ready to make a change.  These women will not only want to use the support program, but they are also willing to work at this change.  Furthermore, these women are college educated and have a household income of $80,000+.  The “I want to wear my skinny jeans” segment is also motivated and willing to alter their current behavior and have a household income of $50,000 - $80,000.  Women ages 25 to 65 are represented across these two combines segments.
            The other three segments are not ideal for Metabical’s offerings because they either have unrealistic expectations, don’t see a need to change, or are not interested in change.  Additionally, of the five segments they hold the three lowest household income ranges
            In conclusion, based on the “American Obesity Association Fact Seet”, the 2007 marketing survey, Metabical’s cost and reimbursement issues, and the psychographic segmentation study, the key target segments are the women who fall into the “I want to be healthier” and “I want to wear my skinny jeans” segments.  These two segments represent a large group of women (ages 25 to 65)  who view weight loss similarly (so they can be communicated to via the same marketing messages which will save time and money), have the education to fully comprehend the benefits and risks of their situation, and have the ability to afford Metabical.

2.      What is the decision process for 1) consumers and 2) health care providers, and how should CSP target their communications to each group?
            Once the consumer has decided to take a weight-loss drug their decision process will center around whether to take an over-the-counter drug of Metabical.  Based on results from the 2007 marketing survey introduced in question one, 65% of women and 35% of men surveyed were dissatisfied with current weight-loss options on the market. As all other weight-loss option on the market are OTC products, CSP should target their communications to consumers by placing advertisements in the weight-loss OTC aisle.  Additionally, to attract those consumers not in the OTC isles, a strong DTC campaign focusing on product knowledge, awareness, and compliance should get their attention. As the two segments identified above are college educated, they are likely employed full-time, so television and radio pieces should focus on non-work hours.
            The decision process for all health care providers, similar to consumers, is to decide whether to suggest an OTC product versus writing a prescription for Metabical. Health care providers will undoubtedly base this decision on facts including safety and efficacy data, therefore CSP should target their communications to health care providers where they are currently looking for this type of information: both medical journals and online. Print ads in prominent medical journals can be very effective and provide the necessary space (multiple pages) to relay all of the clinical data physicians are looking for. Online physician-resource outlets can be used to raise awareness of the drug and its benefits (there will be much less space to work with here, so quick and to the point message).

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