Metabical: Positioning and Communications Strategy for a New Weight Loss Drug (Brief Case) – Case Solution

The product

CSP believes Metabical to be far superior to any weight-loss solution currently on the market. The drug is close to its FDA approval and has other advantages compared to competitive offerings. It combines an appetite-suppressant compound with a fat-blocking and calorie-absorption agent and manages to produce dramatic weight loss results.

In trials, most patients reached their weight loss goals within 12 weeks (losing, on average, between 26 and 15 pounds). Only one pill per day has to be taken for the treatment to work, although it will only show an effect for individuals with a BMI of 25-30 (obese) and not above.

Metabical has fewer negative side effects than current weight loss drugs. Most side effects are associated with the intake of excess fat and calories, which facilitates the adoption of healthier eating habits.

Additional effectiveness and longer-lasting results are expected to be achieved by a complementing support program consisting of various educational content, like reference materials, community forums, meal and exercise plans, as well as several weight-control tools.

The program would amount to $2.2 million in fixed costs in year one (just under 10% of the U.S. marketing budget for Metabical). It is intended to be available to customers for a duration of 24 months.

The drug pricing is, however, not finalized yet. Between $3 and $5 retail price per day (avg. treatment 12 weeks) will most likely have to be paid “out of pocket” by consumers, with only a few description drug plans expected to cover the drugs’ cost.

Depending on the final retail price, the total lifetime value of an average customer will be between $252 and $420. CSP is considering a campaign to persuade healthcare providers to include Metabical in their programs (decision after first 6-month sales review).

Marketing communication strategy

The marketing communication strategy for Metabical is aimed to focus on both end consumers and medical professionals. Roughly 65% percent of the dedicated marketing budget of 23.1 Mio. USD is assigned to direct-to-consumer (DTC) marketing measures. The budget is set based on CSP’s recent drug launch budget but is intended to be fine-tuned after actual campaign data is available.

Direct-to-consumer marketing is a relatively new phenomenon in the industry and will be utilized via TV, online, radio, and print media. Reaching a high product and brand awareness is the number one priority for the launch. Metabical would be marketed via social media, on blogs, and through a contest with viral elements in addition to more traditional channels.

No internal experience exists about the optimal utilization of these measures. The marketing agency had already prepared three initial concepts for the DTC advertisements, which should serve as a basis for further activities.

Furthermore, Printup is considering getting a female celebrity who has struggled with her weight in the past as a prominent spokeswoman for the product. This tactic is not recognized in the current marketing budget, but it has been very effective for similar campaigns.

One best practice suggests a positive effect to counteract customer price sensitivity to some extent. To target healthcare professionals, CSP would rely on proven tactics from its past launch campaigns.

Direct mailings and extensive PR efforts, like press releases, medical education events, and a symposium, would support the launch, as well as a dedicated CSP sales team of 32 agents responsible for the company’s gastrointestinal drugs. Their task would be to visit doctors directly in their offices to discuss the drug and provide samples.

One sales representative is responsible for 100 medical offices. In addition to usual sales materials, they would work with promotional Lunch & Learn seminars that were proven to work well in the past.

The team around Barbara Printup will have to work out its strategy in the coming year to ensure a successful product launch of Metabical. The launch will have to recoup R&D costs, ensure the longevity of the drug, and shape Metabical into a brand and product offering that resonates with the target group.

Key Challenges for Positioning and Communications Strategy

For a successful launch and long-term return, CSP faces multiple challenges that would have to be addressed. Most of the project’s key challenges have already been considered by the marketing team, while some other challenges can be derived from the given facts.

• Selecting segments to target – Identifying ideal customer segments amongst consumers and/or healthcare professionals can’t be easily achieved with high precision in a target group that is diverse (34% of US Americans).
• Choosing the right messaging – Positioning Metabical appropriately to the segmented target groups will be equally complex and characterized by uncertainty. Additional challenges arise from the need to communicate the drug’s lack of effects on obese patients (BMI 30+) and a certain consumer distrust for weight loss drugs in general.
• Targeting efficiently through the right channels – Selection and fine-tuning of the campaign’s promotional mix will be crucial, especially when using new and untested methods like social media. The underlying problem here is where and how to reach the target audience.
• Timing the different measures – An optimal roll-out schedule depends on multiple factors and assumptions. For instance, the issue of when to start targeting healthcare professionals (before, after, or at the same time as consumers) has to be solved. In contrast, one of the bigger challenges will constitute the timing of social media activity. Moreover, it should be decided when to carry out the research on the support programs’ impact.
• Pricing and marketing budget – The price for Metabical will affect its demand and is a function of the targeted end consumers’ combined utility. Pricing can either render the best marketing campaign ineffective (when too high) or have a negative but lasting effect on the company’s profitability.
• Adjusting the organizational structure – How to utilize the allocated sales team effectively will be vital to success amongst healthcare providers and affect the budget allocatable to DTC measures. In addition, it will the slight shift from pharmaceuticals to service and content demand organizational adjustments.
• External expertise – The lack of internal experience could be a big obstacle on the way to a successful implementation. A cost-benefit analysis for using external agencies to implement a social media strategy might be adequate.

Challenges that do not influence the launch directly (e.g., due to their exclusively long-term relevance) but are still to be considered are decisions about an internationalization strategy and a plan to secure returns of Metabical after its monopoly rights expire.