Cialis

Fall Term 2008
Marketing I - Block seminar 2

Product team Cialis: Getting ready to market
Dr. Martin Wallin
Jan Henrik Sieg
Peter Jger
Renato Sydler
Fall Term 2008 Martin Wallin | Strategic Management & Innovation | mwallin@ethz.ch
Course Overview
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Guest
Lecture 1: EA
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1 Introduction
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2 Segmentation-
Targeting-
Positioning
3 Product
Block
Seminar 1
Block
Seminar 2
4 Promotion
Guest
Lecture 2:
UBS 5 Place
Guest
Lecture 3:
Hilti
6 Price &
Summary
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Agenda
Introduction and practicalities
Case work
Wrap-up (in HG F3 at 16.15)

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Introduction and practicalities
Product Team Cialis: Getting Ready to Market
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Background: Viagra
Pfizer launched Viagra 1998
Treatment of erectile dysfunction (ED)

(male impotence)
150 million men worldwide suffer

(50% of all between age 40 and 70)
Immediate success - 600 000 prescriptions

filled in first month
Viagra set back - deaths reported
Viagra regained confidence
$ 1.8 billion sales (2007)

7
Background: New entrants
Cialis from Lilly ICOS LLC
Levitra from Bayer

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Background: First mover vs. Second mover
Introducing a new product on a market dominated by one player
First mover advantage

Technological leadership
Preemption of assets
Buyer switching costs
First mover disadvantage

Free rider effects
Resolution of technological or market uncertainty
Shift in technology or customer needs
Incumbent inertia
9
The Cialis case
How to segment the market and position a

follower product
Viagra well positioned and well-known
Cialis unknown
How to communicate to target audience

Patients
Partners
Doctors
How to price the new product
Competitive response from Pfizer

10
Case practicalities
Agenda
13.15 Introduction & Grouping
13.40 Case work
Group 1: HG F3 (Martin Wallin)
Group 2: HG F33.5 (Jan Henrik Sieg)
Group 3: LFO G 25 (Peter Jger)
Group 4: ETZ E81 (Renato Sydler)
15.20 Case presentation (5 min / group)
16.15 Wrap-up (in HG F3)
16.30 End (around)
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Solving a case (90 minutes)
10 minutes: browse the case (individual)
10 minutes: read questions, think about solution (individual)
10 minutes: identify information (individual)
20 minutes: information sharing (group)
10 minutes: identify information (individual)
15 minutes: information sharing (group)
15 minutes: prepare presentation (individual/group)

12
Case practicalities
Agenda
13.15 Introduction & Grouping
13.40 Case work
Group 1: HG F3 (Martin Wallin)
Group 2: HG F33.5 (Jan Henrik Sieg)
Group 3: LFO G 25 (Peter Jger)
Group 4: ETZ E81 (Renato Sydler)
15.20 Case presentation (5 min / group)
16.15 Wrap-up (in HG F3)
16.30 End (around)
13
Marketing
analysis
Customer
Company
Competition
Collaboration
Context
The 5 Cs
Wrap-up
Market
segmentation
Target market
selection
Product and
service
positioning
Adopted from Silk (2006)
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Marketing mix
Product
Place
Promotion
The 4 Ps
Price
Customer
acquisition
Customer
retention
P
r
o
f
i
t
s
Creating
value
Capturing
value
Sustaining
value
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Launching a new drug as a second mover on a
market dominated by one main player
Segmenting the market
Positioning the product
Communicating the product value
Pricing the product
Competitive response from Pfizer

16
What have we learnt?
What criteria to use when segmenting a market for a new product
Market with existing player introduces new layer of segmentation:

familiarity and usage of existing brand
Objective product attribute improvements do not directly translate

into perceived benefit in all target segments
Question traditional thinking that product dissatisfaction opens up

for switching products
What data can be relevant to make informed marketing decisions

17
Segmentation criteria
Demographics
Age
Income
Education
Viagra usage status

Current Viagra users
Viagra dropouts
Never tried Viagra
Benefit of duration
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Segmentation: Age
Strong correlate between

age and reason for not
seeking treatment
Young patients: Temporary
condition
Old patients: Natural aging
process
The rest: Embarrassed and
temporary condition
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!"##$%#&'()'&%%*$+,'(#%"(-%+('./01'
Age 20-39
Age 40-49
Age 30-39
Age 30+
Segmentation: Usage status
Current Viagra users

Experience with ED
Good grasp of duration attribute
Most willing to try new drugs that offer improvement in key dimension
Smallest segment
Viagra dropouts
Some experience with ED
Duration probably not key dimension for dropout
Maybe hard to treat group
Viagra never used

Very large segment, but no usage familiarity
Duration not important, but safety important
20
Positioning and Pricing
Vertical positioning
36 is much better than 4?
Horizontal positioning
Attitude towards sex: Wild, naughty activity vs. romance
Viagra is priced at $10 (without health coverage)
Pay more for better performance?
If benefit is positioned more horizontally than vertically, unclear if

higher charge is appropriate
If affluent consumer are targeted, higher price OK
If going for broad appeal, consider lower price

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Communication strategy
Communicate to whom?
Patients
Partners
Doctors
Insurance companies
Regulators
Media
22
Summing up
How to segment the market and position a follower product
How to communicate to target customers
How to price the new product
Competitive response from the first mover

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Bottom line
Positioning is not what you do to the product but what you do to

the mind of the consumer!
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Course Overview
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Guest
Lecture 1: EA
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1 Introduction
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2 Segmentation-
Targeting-
Positioning
3 Product
Block
Seminar 1
Block
Seminar 2
4 Promotion
Guest
Lecture 2:
UBS 5 Place
Guest
Lecture 3:
Hilti
6 Price &
Summary
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Fall Term 2008

Marketing I - Block seminar 2

Introduction and practicalities

Wrap-up (in HG F3 at 16.15)

Pfizer launched Viagra 1998

Treatment of erectile dysfunction (ED)

150 million men worldwide suffer

Immediate success - 600 000 prescriptions

Viagra set back - deaths reported

Viagra regained confidence

$ 1.8 billion sales (2007)

Cialis from Lilly ICOS LLC

Levitra from Bayer

Introducing a new product on a market dominated by one player

First mover advantage

First mover disadvantage

How to segment the market and position a

How to communicate to target audience

How to price the new product

Competitive response from Pfizer

10 minutes: browse the case (individual)

10 minutes: read questions, think about solution (individual)

10 minutes: identify information (individual)

20 minutes: information sharing (group)

10 minutes: identify information (individual)

15 minutes: information sharing (group)

15 minutes: prepare presentation (individual/group)

Segmenting the market

Positioning the product

Communicating the product value

Pricing the product

Competitive response from Pfizer

What criteria to use when segmenting a market for a new product

Market with existing player introduces new layer of segmentation:

Objective product attribute improvements do not directly translate

Question traditional thinking that product dissatisfaction opens up

What data can be relevant to make informed marketing decisions

Viagra usage status

Strong correlate between

Current Viagra users

Viagra never used

Viagra is priced at $10 (without health coverage)

Pay more for better performance?

If benefit is positioned more horizontally than vertically, unclear if

If affluent consumer are targeted, higher price OK

If going for broad appeal, consider lower price

How to segment the market and position a follower product

How to communicate to target customers

How to price the new product

Competitive response from the first mover

Positioning is not what you do to the product but what you do to

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