METABICAL CASE STUDY

METABICAL CASE STUDY
1) How does Metabical compare to current weight-loss options?
There are just a few other weight reduction alternatives in the market contending with Metabical. The first is prescribed drugs. These are endorsed for utilize just by obese and extremely fat people. This was the use of appetite suppressants and fat-absorbing blockers in people with a BMI greater than 30 and weight loss medications. At the same time there were serious side effects, which meant that only one doctor could approve. However, this prescription drug option did not account for the overweight segment of BMI between the ages of 25 and 30 seeking weight loss solutions. The second option was a non-prescription weight loss medication. However, Alli was the only true over-the-counter weight loss solution approved by the FDA. Nevertheless, Alli's problem was that he had many negative side effects with more than 30 reports of liver damage. Other over-the-counter solutions were accepted by the FDA as herbal or dietary supplements, so they were not regulated. The subject of these supplements was the adverse side effects that the product has not been discovered since it was widely used. The final weight loss option was a diet plan, exercise plan, mealy replacement products, weight management support programs, or pre-packaged food distribution services. Metabolic, on the other hand, would be the first prescription drug specifically approved for hard-bodied individuals. The current weight loss options have not been lost in this market, so Metabical had a good chance. These were individuals who had hopes of losing about 10 to 30 pounds but did not need to prescribe to obese weight-loss solutions or commit to a diet/exercise plan.
2) What are the pros and cons of the forecasting methods presented by Printup? If you had to estimate demand for this product, how would you go about it? What would your demand (unit) forecast look like for the first five years?
Forecasting Method 1:
Pros: The Method is very structured. The whole over-weight market is considered in the forecast and very little data is assumed. Most data comes from market research.
Cons: Considering it is the first of its kind, full value is not being leveraged. The estimate is spread very broad. It is hard to predict the behavior of such a broad segment of customers. May not be accepted as easily by the low-income groups as compared to the high-income groups. Hard to create a brand across multiple demographics.
Forecasting Method 2:
Pros: The Method is aggressively priced and estimated. Leverages the uniqueness of the product. Will create an image of uniqueness and something that works outstanding.
Cons: May not be able to meet forecasted results due to aggressive pricing. The estimate is still spread very broad. It is hard to predict the behavior of such a broad segment of customers.
Forecasting Method 3:
Pros: The Method is aimed at a particular segment i.e. women above 35. Aggressively priced, but portrayed as a niche brand. A clear picture of the market they are targeting and attractive pricing in relation to the benefits the product is delivering.
Cons: There is very small room for failure as it is being promoted as a niche product. Gender bias may mean loss of half the segment in a single shot.
There is very small room for failure as it is being promoted as a niche product. Gender bias may mean loss of half the segment in a single shot?
A new package can make a difference in a new marketing strategy. The packaging can link the product to the remaining marketing strategy. The packaging is sending a message. Packaging Metabical had two critical launch strategy decisions. Factors to be considered during packaging; Consumer Usage and Payment Capacity, Price of the Drug, Number of Pills in the Shot, Effective Dose, Easy Tracking. I would recommend package size for 12 weeks (84 pills). The target market is women with relatively low price flexibility. So, no matter what the price, they do not pay. Generally, if the consumer pays so high, he or she will want to try the medicine for 12 weeks and the effect will be noticeable; Which allows them to come back and buy them again. Since the customer does not forget to buy back or buy a recipe, the dropout rate is lower.
4) What pricing strategy approaches would you suggest Printup explore? What are the advantages and disadvantages of each strategy? What price would you recommend?
5) What impact does your pricing decision have on profitability? What is the ROI over the first five years for each of the pricing strategies identified?
Keeping Alli as a benchmark, Metabical should be sold at a premium price. In my opinion approach 2 ($125) is the best option.
1) Approach 1 - $75: ​Advantages are; Low price, high demand and high market penetration. On the other hand, disadvantages are; Pricing nearer to Alli, and therefore less predictable, financially less able to distinguish himself as a FDA-approved prescription drug. Competitive pricing can be reversed. A metabolic consumer does not have to compete at all price points he wants. It does not comply with CSP's corporate strategy. It's not attractive. Return on Investment (ROI) is -25%.
2) Approach 2 - $ 125: ​Advantages are; better market penetration, better ROI,  priced above Alli, premium factoring prescription drug with FDA approval and higher financial forecast. Disadvantage are chance of missing out on getting maximum price. Aligns with corporate strategy Pricing is just right to compete in unique market segments while communicating value of the product Pricing makes Metabical a premium. Fits well with company strategy. Although revenues are lower in the short term, Metabical will be able to project itself as a premium product over the long term. I do recommend this pricing strategy. ROI is close to 75%, which surpasses the expected minimum ROI of 5% by a large margin. Pricing is sensible, in line with market expectations.

3) Approach 3 - $ 150: ​Advantage is maximum profit. Disadvantage is lower demand due to high price. Pricing is too high as market research indicates. This pricing may alienate many consumers from considering Metabical. Given the high starting price, the product may not attain required market share. Although ROI is 126%, pricing is unrealistic. Pricing a new product at $150 a per week could be a non-starter in a highly competitive marketplace.

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