Cialis †Harvard Business School Case Essay

1.Problem StatementLilly- ICOS LLC is about to launch a new and innovative product intended to help men suffering from Erectile Dysfunction (ED). Because of the unique product features, Cialis – the product – has good chances of becoming successful even though it is entering a segment, where Pfizer’s Viagra is the undisputed market leader. In this context, Lilly- ICOS LLC must decide on a marketing strategy, in particular which groups to target and which positioning thus which communication strategy to choose. 2. Situation Analysis (refer to Exhibit 1+2)Lilly- ICOS LLC is a joint venture between ICOS, a small biotechnological start up (no FDA registration experience and no marketing capabilities) and Elli Lilly Company, a large pharmaceutical company with strong competencies in developing innovative quality of life medicines. Competitive product Viagra has strongest brand recognition of any pharmaceutical brand in the world, practically the synonym for ED (product well established in market, dissolved taboo). Pfizer also known for fierce and sustained marketing campaigns post launch (exceptionally high marketing budget) and largest sales force in industry. Competition from Bayer’s Levitra not relevant, expected to mainly target niche market of diabetics. Promotion: Communication focus on classic media; print/ billboard advertising: mainstream magazines (i.e. news magazines) to target couples, female magazines to address partners and (conservative) male magazines (careful selection not to tap in â€Å"playboy drug† trap); TV prime time shows that reach target audience, male specific i.e. sports advertising; no celebrities, average couples as centre of communication. Communication message should focus on communication/ dialogue as the key to a healthy sex life + relationship, ED is treatable, encourage couples to talk openly about the condition and see a doctor/ seek treatment; Cialis as the pill for couples can help to rediscover intimacy and endearment in a mature relationship; furthermore multifaceted below the line marketing actions; physician approach: take advantage of trained sales force (help dissolve insecurities about addressing condition), show distinct advantages of Cialis from medical point of view (almost no side effects), make sure approach is differentiated from Pfizer sales force (soft strategy ≠  aggressive), distribute POS material + free samplesPlace: as Cialis is a prescription drug it will be available at pharmacies and local drug stores. Ensure stock before campaign launch, so demand can be met and potential buyers aren’t driven away by unavailability. Free samples at doctors and hospitals, issue voucher through website redeemable at pharmacies/ drug stores. 5.ImplementationWe believe in the advantages of our product and therefore are confident that we can have a strong market entry in the US market. Considering our potential target segment and relying on past Viagra sales and market share we believe that we can initially gain a 15% market share within 1st year and are expecting to grow 10% annually over the next 5 yrs. With an initial price of $12 per pill (bundled in packs of 6 reflecting current customer consumption habits) we remain affordable to the average customer but we are clarifying our premium status. Thus we expect sales of $700Mn and a profit of $630Mn (margins = Viagra) (see exhibit 4). In order to reach our ambitious goals we are convinced that a strong marketing budget is essential for reaching immediate market penetration and gaining market share. We want to allocate $100Mn for launch and first year (distribution negotiable, 50% classical advertising). Below the line marketing measures: internet – launch specific online portal that provides information about medical condition and possible treatments (especially for patients who have recently been diagnosed, offers privacy + anonymity), include physician finder to easily access treatment close to home; direct mailing to households resembling target group, establish customer loyalty club who get discounts on prescription + are informed about newest research development of condition but also life style news e.g. travel and restaurant tips; incentives i.e. offer weekend- couple hideaways to revitalize relationship to i.e. Cialis Mountain Cabin, Cialis Yacht etc.