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CSP Metabical
24
Metabical
Cambridge Sciences Phamacueticals
August 1, 2017
Lee Herko
JWMI 580
Dr. J. Anderson
Problem
How will Metabical distribute the product, determine the carton material and package size to meet consumers needs and wants?
Stakeholders
Consumer / Product user
Food and Drug Administration (FDA)
Manufacturing
Marketing and Advertising
Key Variables
- Formula amount
- Quantity - 28, 30, 60 or 90 count
- Size of Blister pack
- 3 rows of 10 pills
- 4 rows of 7 pills
- 5 rows of 6 pills
- 1, 2 or 3 blister packs at time of purchase
Possible Solutions
Consumers may want :
- One month supply 28, 30 or 31 count
- Half of the twelve week amount 45 count
- Full twelve week supply 90, 91 or 92 count
Metabical Story
Metabical Story
The Survey Story
The data provided in the exhibits of Metabical should be expanded on through the use of surveys. The survey story would offer what has happened or is happening now. These surveys will uphold existing data for demand, pricing and packaging. Since the product is targeted toward woman who visit their doctor to prescribe a weight control drug, the physicians could offer a short survey to patients who fall within the target audience. The survey story could offer additional insight if women aged 35 to 65 are still concerned about weight loss in 2008 as depicted in 2000. The results could also indicate if the target audience would be willing to purchase a prescription for the full twelve-week supply, half of the regime or a one month supply to determine frequency and income thresholds.
Previous Findings
Alli - FDA approved OTC
3x per day once with each meal
Side effects of increased defecation, gastrointestinal pain and loose stools
Supplements - Non FDA approved
unknown ingredients and potency
normally one month supply
Jenny Craig / Weight Watchers programs
prepackaged meals
support groups
weigh in meetings
Local Gym membership
cost low end $25 - $50, high end $100s
time and effort to use the gym
Demand
Demand
Forecast One: 60% Percent of US Adults
Overweight and Obese
Forecast Two: Overall Men 67% and Women 62%
BMI > 25
Forecast Three: Target Market Educated Women
Age 35 - 65
Forecast One
Forecast One
Men and Women Sixty Percent of US Adults Overwight and Obese
Estimated 35% actively trying to lose weight
Potential to reach 48 million adults
Year 1
5 million
Year 2
7.5 million
Year 3
10 million
Year 4
12.5 million
14 million
Year 5
Demand One: Number of Packages
Year 1 Total purchase of 9 million packs of Metabical
Year 2 Total purchase of 13.5 million packs of Metabical
Year 3 Total purchase of 18 million packs of Metabical
Year 4 Total purchase of 22.5 million packs of Metabical
Year 5 Total purchase of 24.5 million packs of Metabical
Forecast Two
Forecast Two
Overall Men 67% and Women 62% BMI > 25
Estimated 12% actively trying to lose weight
Potential to reach 18 million adults
Year 1
2 million
Year 2
3 million
Year 3
4 million
Year 4
5 million
Year 5
6 million
Demand Two: Number of Packages
Year 1 Total purchase of 3.6 million packs of Metabical
Year 2 Total purchase of 5.4 million packs of Metabical
Year 3 Total purchase of 7.2 million packs of Metabical
Year 4 Total purchase of 9 million packs of Metabical
Year 5 Total purchase of 10.8 million packs of Metabical
Forecast Three
Forecast Three
Educated Women, Age 35 - 65 BMI 25 - 30
Estimated to reach 4.3 million adults
2.1 million
1.9 million
1.7 million
1.5 million
1.3 million
Year 3
Year 5
Year 1
Year 2
Year 4
Demand Three: Number of Packages
Year 1 Total purchase of 2.2 million packs of Metabical
Year 2 Total purchase of 2.7 million packs of Metabical
Year 3 Total purchase of 3.0 million packs of Metabical
Year 4 Total purchase of 3.4 million packs of Metabical
Year 5 Total purchase of 3.8 million packs of Metabical
Recomendation
Forecast Three
- Very Conservative numbers
- Focus on target market
- Maximum supplies between three million and four million packs per year to meet demand
- Costs will not spiral out of control
- Pricing options should provide expected ROI
Pricing
Pice per package of Metabical
Pricing
Recommend Pricing Option 2
Recommend Pricing Option 2
Median price of competition
Retail price of $125.00 per package
Retail price $125.00
Retail Gross Margin $41.67
Manufacturing Price $83.33
Variable cost $25.20
Manufacture GM $58.13
70%
$158.3 million
KEY RESULTS
Retail Gross Margin reaching yearly sales targets
$141.6 million
$125 million
$112.5 million
$91.6 million
2009 through 2013
Packaging
Metabical package will vary on formula
- size of pill
- liquid gel versus tablet
Packaging
Metabical Blister Pack
Retail price of $125 per pack
Monthly supply 30 count
Blister pack 5 rows of 6 tabs
ROI
Return on Investment
5 Years 2009 - 2013
ROI 47%
$158.3 million
$200 million
Profit after 5 years
$141.6 million
$125 million
$112.5 million
$91.6 million
2012
2013
2011
2009
2010
Break Even Point
4.5 years
Appendix
Appendix
Demand figures
4.3 x 30% = 1.29 4.3 x 5% = .215
Year 1 - 2.2 million packages 1.3 + (12.3 x 60%) + (1.3 x 20%)
ROI
Fixed Costs 1.2 million
Marketing Costs 23 million
R & D Costs 400 million
Total Costs 424.2 million
References
Davenport, T., Kim, J. (2013). Keeping up with the Quants: Your Guide to Understanding and Using Analytics. Boston: Harvard Business Publishing.
Metabical. (2000). Metabical: Pricing, packaging and Demand Forecasting for a New Weight-Loss Drug. Retrieved from https://services.hbsp.harvard.edu/lti/links/4183-PDF-ENG