metabical

METABICALPricing, Packaging and Demand

Forecasting

Group -2:Prajakta Talathi

Aryan BhojnagarwalaChinmal Athavle

Gautam SachdevManoj Megotia

Demand Forecast• Process: Time series regression analysis used to forecast total

population and target population of overweight people

2008 2009 2010 2011 2012 2013

224

228

232

236

240

Total Population in millions

2008 2009 2010 2011 2012 2013

34.634.8

3535.235.435.635.8

% of overweight population

Demand Forecast – Approach 1

2009 2010 2011 2012 2013

0.000.501.001.502.002.50

Approach 1 - Demand Forecast

• Focused on target consumers who were comfortable with weight loss drugs


2009 2010 2011 2012 2013

0.001.002.003.004.005.006.00

Approach 2 - Demand Forecast in Millions

• Focused on individuals who were immediately willing to go to the health care providers for a prescription


2009 2010 2011 2012 2013

012345

Approach 3 - Demand Forecast in Millions

• Focused on the ideal target consumer: educated females, 35-65 of age with BMIs between 25 and 30

Preferred Approach

• Maximum demand in Approach-2

• Consumers are in more advanced state of readiness

1 2 3

7.59

17.36 16.856

Comparison of total de-mand for 5 years for the 3

approaches (Millions)

Packaging

Attributes of Packaging

Why Packaging

• A new package can make an important difference in a new marketing strategy

• Packaging can tie the product to the rest of the marketing strategy

• Packaging sends a message

Factors to be considered while Packaging

• Consumer Usage and Payment capacity

• Unit Price of the pill

• Number of pills in a strip

• Effective Dose

• Easy Tracking

Recommended Package Size

• 12 weeks dose• Pinch in the Pocket• Smaller packages• Noticeable results in 4 weeks• Consumer happy • Willing to complete the dose• Busy-bee: whole 12 weeks dose

Typical 4 weeks strip

• For effective and easy to understand

– Blister style packaging– Days-of-the-week packaging

Pricing Strategy

• Keeping Alli as a benchmark, Metabical should be sold at a premium price

• Pricing is done in such a manner so that the company is not only able to achieve the desired ROI but also is able to capture a larger market base

• Concentrated on the value to consumers who successfully complete the program

The Price Strategy

• $ 75 for 4 weeks



Approach 1 - $ 75 for 4 weeks

• Advantage1. Low price2. High demand

• Disadvantage1. Priced near Alli and hence unable to differentiate itself to

being a FDA approved prescription drug 2. Financially lower returns forecast

Approach 2- $ 125 for 4 weeks

• Advantage1. Priced above Alli2. Premium factoring Prescription drug with FDA

approval3. Higher financial forecast

• Disadvantage1. Chance of missing out on getting maximum price

Approach 3 - $ 150 for 4 weeks

• Advantage1. Maximum profit

• Disadvantage1. Lower demand due to high price

Finalised Price - $125• Option 1 shows lower

profit margin while Option 3 shows higher profit margin which is not .

• Therefore we will go for Option 2 having a retail price $125 and Manufacturing Price $83.33.

20092010

20112012

20130

50100150200250300350400450

$50 $83.33 $100

Impact of Pricing on Profitability

ROI

• Formula:

Earnings = Total Revenue – Fixed Cost – Variable Cost

Initial Investment = Research and Development cost & Preliminary Marketing Budget.

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