Metabical Harvard Case Solution & Analysis

PROBLEM STATEMENT:

What pricing, marketing and positioning strategy should be developed in order to strengthen the overall market position of the company?

metabical case solution

metabical case solution

CASE ANALYSIS:

COMPANY:

Cambridge Science Pharmaceutical (CSP) is a well renowned pharmaceutical company, which has earned the confidence and satisfaction of the customers of the company over the period of time by providing its customers with excellent quality products as well as exceptional customer care services.

The company has launched a new product, Metabical, which is a weight reducing drug. The top management of the company is highly concerned about launching this product efficiently and effectively as the management thinks that this product has the potential to enable the company to earn high profitability as well as to fuel up the overall growth of the company.

CUSTOMERS:

Metabical has been targeted to the overweighted individuals having BMI between 25 and 30 as it is highly effective for the people having BMI between 25 and 30. The top management of the company has not targeted the customers having BMI above 30 as this product would not be effective for these types of customers.

In addition to this, the targeted customer segment of the company is highly concerned for their health and visited health care centres regarding their frequent weight loss. A survey identified that 70% of the respondents were not satisfied with their current weight as well as 35% were actively trying to lose weight and 15% of the customers were satisfied with their prescribed drug as they were able to achieve their desired goals efficiently and effectively.

Meanwhile, 12% of the respondents are ready for consuming the drug upon the prescription of the doctor. In addition to this, the survey results also showed that men are more overweighted than women as the results of survey depict that 67% of men are overweight whereas, only 62% of the women are overweight.

Furthermore, the survey results also suggested that the most potential target customer segment of the customers includes those customers who do not chase diet. The top management of the company considers this segment as the most potential segment as they are highly considered about their health and they are more interested in raising their self-esteem.

COMPETITORS:

The competitors of the company include a wide range of prescription drugs and over the counter remedies. In addition to this, it also includes various diets and exercise plans. The main competitors in the prescription weight loss drugs are Meridia, Xenical, and Alli.

Meridia:

Meridia is a sibutramine hydrochloride monohydrate drug that increases the level ofserotonin and catecholamine in the body, which decreases the overall diet of the person. However, Meridia has serious potential side effects, which include hypertension, tachycardia, serotonin syndrome, seizures and heart palpitations.

Xenical

Xenical reduces the fat of the person by blocking the body’s absorption of fat. These are used by the customers who have BMI level above than or equal to 30. There are many potential side effects of Xenical, which include liver damage, kidney stones and severe stomach pain. Due to the serious side effects of the product, these are not prescribed to the patients having BMI level below 30.

Alli:

Alli is also a weight reducing drug, which is used by the consumers on a daily basis in order to reduce the fat. However, this drug also contains a number of side effects due to which it was unable to secure a huge market share in the entire market. Alli is basically a reduced strength version of Orlistal, which was also a fat reducing drug however it had failed to capture the market due to its harmful side effects.

RECOMMENDED STRATEGIES:

Following are the recommended strategies, which could allow the company to successfully launch its product.

Pricing Strategy:

A comprehensive calculation has been made in the exhibit regarding the optimal pricing of Metabical. The calculations show that ROI in segment 1 is negative, which depicts that customers in segment 1 have low potential of generating profitability.

On the other hand, the calculations also show that in segment 2 and 3, the ROI is positive, which shows high potential of generating the profitability for the company.The calculations show that by targeting the third segment at a price of $150, it would allow the top management of the company to earn a ROI of 71%.

In addition to this, it is also recommended that the company should charge $125 in both segments as it would allow the company to generate 53% ROI in segment 3 and the 35% ROI in the segment 2. Thus, there is a possibility that the customers would not be attracted towards the product if the product is offered at $150 as it is higher than the products of the competitors...........................

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