Product Team Cialis Summary

Week 2, EWMBA 206

Ganesh Iyer

Part 1: Product Positioning Execution Toolkit

Product Managers Positioning Strategy Toolkit 1: For whom am I? Identify the Target Consumer Segment. For _____________, (Target Market)

2: Who am I? (value proposition, usp) our product/service is ______________________________________________ (Most Important Claim/Unique Selling Proposition)

3: Why buy me? (support) because ___________________ (Single Most Important Support)

4: And not the competition? (competitive set) among all ___________________ (Competitive Set)
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The Four Positioning Questions

For whom am I? (Target customer segment) Who am I? (Value proposition, USP) Why buy me? (Support) And not the competition? (Competitive Advantage)

1.

2.

3.

4.

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Positioning a New Product in a Market with an Incumbent



Where will demand come from?

increase primary category demand (new customers) steal from competitors (existing customers of rival) re-capture dissatisfied customers (not happy with existing brand/solution)

Which of the above segments are able to perceive as relevant a given way of positioning benefit/improvement? (Learning, Self-selection) With whom can we leverage dimensions that are objectively measurable? With whom can we leverage dimensions that are not objectively measurable? Evolution of Positioning:
In what phase to target each segment? (Build category vs. build brand vs. protect brand)

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Erectile Dysfunction Drugs Vertical Positioning

A benefit associated with a performance or quality Attribute, typically objective, for which consumers differ in valuation. Examples in Automobiles, PC, Retail Markets

36h

4h Viagra (Pfizer)

~4h Levitra (Bayer/GSK)

Cialis (Lilly/Icos)

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Erectile Dysfunction Drugs Horizontal Positioning

A benefit that is a matter of taste or attitude often associated with psychographics, lifestyle, or underlying attitude

Naughty/Mischievous Attitude towards sexual relationship

Romantic

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Competition & Vertical vs. Horizontal Positioning of New Products

- Well defined objective benefit where more of is better One firm at high end -Consumers know how much improvement is worth to them -Difference in willingness to pay for improvement -Segmentation based on tradeoff between particular benefit(s) and willingness to pay One firm at low end One firm offers benefit B

One firm offers benefit A

- Price sensitivity not a primary issue - More is not necessarily better for everyone
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-Heterogeneity in tastes, attitudes

Leverage Unquantifiable Dimensions- Vertical

Reliability/Consistency/Count on it

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Target Market Selection and the Incumbent Firm

Presence of Incumbent firm creates a new layer of segmentation (users, drop outs, never tried but aware, never tried not aware) = Behavior- based segmentation.


Does dis-satisfaction with existing = high willingness to try something new? User of incumbent brand = hard to switch = last resort? Who has advantage with those that never tried? How do other relevant parties/influencers factor in?
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Evolving Positioning

Courage Sympathy Fight condition

Macho Winning Success

Excitement Wild Naughty

Building Category

Building Brand

Protecting Brand

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Importance of Positioning

 

Becoming more important in pharmaceuticals: 78% of drugs that entered the market in past six years were classified by FDA:
not likely to be improvements over drugs already sold to treat the same condition. Prevalence of lifestyle/Quality of life drugs

Positioning is not what you do to the product but what you do to the mind of the consumer!

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Positioning Strategies
Product Quality: (Ford: Quality is job 1) Class of Users: (Pepsi generation). Owning the category (Coke: The Real thing) Against a Competitor (Avis)
Repositioning Hertz

   

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Positioning Strategies


Away from Competition (7-Up the Uncola)

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Customer Analysis: Market Research Study

ATTRIBUTE Good for snacks Good with meals For active people For mixing Good for indigestion Thirst quenching Good tasting

7Up 39 32 38 66 60 60 58

Coke 62 47 60 18 17 30 62

Pepsi 61 44 66 4 8 28 59

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Options


Tell consumers 7Up possesses soft drink attributes

point of parity (see also K&K p. 312-314).

Emphasize fresh, clean taste (and no caffeine)

point of difference

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7Up: The Uncola

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Positioning Traps (1)

Positioning on unimportant/irrelevant attributes

1992

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Positioning Traps (2)

Positioning with the wrong attributes Diet Beer  Gablingers  Introduced in 1967 as a low calorie diet beer Lite beer by Miller  Less fillingmeans you can drink more!
Everything you wanted in a beer (like getting drunk)and less. 1/3 calories means you can drink 2 extra and call it even!

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Positioning Traps (3)

Positioning on someone elses benefitspositioning is sticky Burger King unable to claim fast. Already taken by McDonalds. Mercedes Benz and General Motors unable to claim safety. Already taken by Volvo.

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Part 2: ED Market Updates: Global Performance

Is Cialis better off with or without DTC in the launch phase?
Country Cialis Launch Date 2003 February February March February March August May November November February

Share of PDE5 Market Dec 2005

Cialis 26% 35% 36% 48% 29% 36% 38% 23% 31% 41%

Viagra 66% 46% 47% 37% 48% 42% 45% 65% 62% 51%

Levitra 8% 19% 17% 15% 23% 22% 17% 12% 7% 8% 20

U.K. Germany Italy France Spain Mexico Brazil USA Canada Australia
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Cialis and ED Market- An Update

In the US 2004 ($1.03Billion) Viagra 65% ($672 million) Cialis 20% ($206.6million) Levitra 11% ($112 million) In the US 2005 ($1.1Billion) Viagra 61% ($665 million) Cialis 25% ($273million) Levitra 14% ($140 million) Worldwide 2004 Viagra $1.7Billion Cialis $552million Levitra $265 million Cialis in 2005 $746.6million
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ED Market Competitive Reactions



Advertising in the US first 11 months of 2004:

Viagra $98million Cialis $151million Levitra $147million

The Cialis Promise Lilly gives men three free tablets of Cialis. If not satisfied Lilly will pay for three free tablets of Levitra or Viagra. If satisfied another round of Cialis. A Comparative Trial (92% ask for Cialis again) Viagra loyalty program for every six prescriptions- get seventh free

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ED Market Further Updates:

Medical Experts: Men with ED problems = 30 million in US. Men who are interested in being treated probably half of that. Worldwide (a modest 5-10% increase in 2004, likewise in 2005) Number of new prescriptions is going down in US: 10% fewer in October 05 compared to October 04 GlaxoSmithKline sold marketing rights outside the US back to Bayer The ED market hadnt grown as fast as the company had hopedtough to sell the drugs without the help of consumer ads (in most of Europe direct-toconsumer advertising is prohibited) Sexual performance drugs likely to be covered by Medicares new prescription benefit beginning next year (limited quantities, only when medically necessary). Lilly sets deal to acquire ICOS for $ 2.1 Bn.
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Competitive Advantages
First-Mover Advantages Lock customers in. Association with category Network effects (among influencers, consumers) Economies of scale Second-Mover Advantages Free-ride on first-movers costs of educating the market Learn from leaders mistakes Learn the market size

Parallel Entry Market may pay more attention when two companies are entering together. Benefit from increased category awareness

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Learning

Positioning is not what you do to the product but what you do to the mind of the consumer! Good Positioning is an integrated answer to 4 questions
1. 2. 3. 4. For whom am I? (Target customer segment) Who am I? (value proposition, usp). Why buy me? (support) And not the competition? (competitive advantage)

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