Case Study – Cialis – Ready to Market Essay Example

several options to choose from in terms of their marketing strategy for the pharmaceutical product. One option was to directly compete with Pfizer's Viagra. Another option was to develop a different positioning to reach a larger market. The marketers faced a number of challenges. Firstly, they needed to determine their target market, specifically whether they should focus on the six to seven million former users of Viagra or their current three million users in the U.S.

) On the basis that Cialas is a longer duration medicine and is not affected by high-fat meals, it was necessary to consider different marketing strategies for the United States and Europe due to their different eating habits. In addition, limited resources required a decision on how to target marketing efforts towards physicians and patients. One option was to target both groups equally, while another option considered including the men's partners in the marketing approach to avoid alienation. With Viagra's five-year market advantage, there was growing doctor satisfaction and potential unease with a new product. Furthermore, the company had to determine the theme for their television advertisement, including whether or not to use celebrities and sports figures. Cialis recognized that Viagra's marketing approach was dominating, utilizing a massive sales force of 30,000 personnel visiting approximately 700,000 physicians to promote the name, brand, and product.

The sales strategy of Viagra has achieved great success in the United States and globally by targeting physicians and using humorous advertisements. This played a crucial role in the brand's tremendous success. In 2000, Pfizer's net sales were $30 billion, three times higher than Eli Lilly's (see exhibit 11). Given this level of achievement, Cialis' marketers

and executives needed to address time constraints and develop a strategy to swiftly introduce their new preferred product. To do so, they conducted a SWOT analysis to identify opportunities and threats in the external environment.

Opportunities identified included a potential market of 150 million people worldwide, with an additional 30 million in the United States. It was also discovered that 50% of men between ages 40 and 70 experience some form of erectile dysfunction (ED). Interestingly, it was found that 76% of men taking medication for ED expressed willingness to try new medications. What sets Cialis apart from its competitors is its longer window of opportunity for treatment as well as being unaffected by food intake. Moreover, there is a growing number of aging individuals who may require ED treatment, particularly among baby boomers. Additionally, a large percentage (87%) of dissatisfied Viagra users are open to trying Cialis.Despite the fact that there is a dropout rate of 77%, worldwide users of Viagra still show interest in experimenting with Cialis.

There are multiple opportunities for expansion into various market segments. Roughly 25% of individuals who use Viagra renew their prescriptions, indicating that a significant 75% do not, creating a substantial opportunity for Cialis. It is advisable to target Cialis towards doctors because 90% of all prescriptions from doctors come from patients initiating the request for treatment. The majority of the 150 million patients with erectile dysfunction (ED) fall within the age group of 60 and above. Spouses and sex partners play a significant role in this matter, accounting for 43% of the main drivers for men seeking treatment.

Pfizer's Viagra brand generates over $1 billion in revenue annually for

three consecutive years. Pfizer has a large and increasing research and development (R&D) budget, as well as an extensive marketing sales force consisting of 30,000 sales representatives. Among all pharmaceutical drugs worldwide, Viagra boasts the highest brand recognition.

Bayer's Levitra offers a differentiated product with lower dosages that are equally effective. Competition in the market allows easy entry and exit. Both Viagra and Levitra have potential to offer cheaper products.On the other hand, Cialis distinguishes itself from its competitors by offering a larger window of opportunity for sexual intercourse and being unaffected by food consumption.This benefit is particularly advantageous for individuals with high blood pressure and high cholesterol levels.With the increasing market size, Cialis needs to set itself apart to attract different segments. The recent launch of this product has intrigued men who are unhappy with current or past treatments. Thus, it is vital for the company to amplify promotional efforts and boost brand recognition, as this market segment tends to be loyal to specific brands.

The target market for Cialis consists of men who suffer from chronic ED, which presents a potential opportunity of around 150 million men globally. Within this population, there are specific submarkets that a company can focus on, such as individuals with various conditions that increase the risk of ED. Targeting their spouses or partners, who also experience sexual frustration, can be crucial in motivating ED patients to seek treatment. Considering age groups, Cialis may choose to target individuals aged 50-59 or those aged 60 and above. The age to population ratio indicates a growing number of aging individuals who will soon reach 50 years and above. This expanding market segment should

be recognized as a promising opportunity. By adopting a niche strategy, a company can effectively market to these specific segments, similar to competitor Levitra, which targets people with diabetes.

Cialis could choose to directly compete with Viagra by targeting all users of ED treatment, or they could differentiate their product to capture a broader market without directly competing with their main competitor. There are also opportunities with different physicians, so Cialis should focus on family doctors to support their brand. Physicians are the number one advisors people consult about their symptoms. High drop out rates and unsatisfied ED patients with their current treatment indicate a willingness to try new options, which ICOS and Lilly should consider as opportunities. However, Viagra poses a significant threat due to its market capabilities, including large budgets and a massive marketing campaign that has captured a considerable market share.

It is challenging for new companies to establish their brand in the market due to the strong presence of Viagra. Gaining the support of doctors, who prescribe treatment, is an important marketing strategy. However, this can be difficult because Viagra has a large workforce. In order to increase brand awareness and compete with other emerging competitors like Bayer's Levitra, Cialis should focus on its key strengths. Cialis is a partnership between Eli Lilly, a pharmaceutical giant, and ICOS, a biotech company that developed IC351 - the chemical name for Cialis.

Lilly, a reputable pharmaceutical company, has implemented a unique marketing strategy and business model that focuses on developing innovative drugs for enhancing patients' quality of life. This approach has helped them establish a niche in the market and collaborate with ICOS to create GMSO,

which subsequently established GMR, GMP, and GMST. With affiliates worldwide, Lilly benefits from a network that aids local promotion, sales, and distribution. In contrast to competitors, Lilly offers distinct products. Both ICOS and Lilly have skilled management teams; however, ICOS lacks marketing capabilities and clinical development expertise due to being a new company with limited FDA registration experience. Despite this discrepancy, their collaborative partnership capitalizes on their respective strengths while underscoring the importance of accurate market research in the pharmaceutical industry where resources are scarce for Lilly ICOS.Despite ICOS's lack of experience in certain areas, their partnership with Eli Lilly led to the successful establishment of Cialis as an outstanding product in the market. ICOS recognized the uniqueness of their product but lacked the ability to effectively promote it. In order to ensure that their extensive efforts on Cialis (IC351) did not go to waste, ICOS sought a partner who had expertise in marketing and FDA registration. Fortunately, Eli Lilly, a seasoned pharmaceutical company, possessed the necessary knowledge and resources to successfully launch Cialis.

The product created by the two firms can benefit ED patients more than Viagra. Men can still achieve an erection up to 36 hours after taking Cialis, provided that they receive sexual stimulation. Additionally, Cialis is not influenced by food intake, which may be more appealing to ED patients with high blood pressure and high cholesterol. Lilly is a reputable pharmaceutical company with a strong track record in developing profitable drugs, earning an annual profit of at least $500 million.

Lilly/ICOS differentiates itself from competitors by focusing on the quality of its medicine and the discovery and development of innovative drugs, rather than

risky high-return tactics or pursuing "blockbuster" drugs. They also prioritize creating "quality-of-life" products for non-life-threatening illnesses. To ensure ethical compliance and enhance marketing involvement in product development, Lilly/ICOS established GMO (Global Marketing Sales Organization), which later led to GMR, GMP, and GMT. This system guarantees thorough attention to every step of Cialis's production process and ensures successful market launch.

This partnership between Cialis, ICOS, and Lilly is beneficial as it allows for continuous communication with ICOS and Lilly management to ensure satisfaction for both parties. Additionally, both companies contribute their experienced and knowledgeable managers and staff to successfully complete the project. There is a mutual understanding of the objectives that need to be accomplished, which further aids in their achievement. However, it should be acknowledged that ICOS has limited familiarity with the FDA registration process and has not produced any goods in the past decade.

Lilly's weakness lies in their limited resources for bringing their product to market, which puts pressure on them to handle all the marketing tasks. This limitation may hinder the accomplishment of their goals. Another weakness is that the success of their entire marketing strategy relies on doctors' approval. Without doctor support, patients cannot be prescribed Cialis and it cannot be sold. If Cialis is priced higher than Viagra, sales may not meet expectations and the product could fail. Furthermore, inaccurate market research could result in no demand for Cialis and its failure. However, despite these potential weaknesses, strong company leadership and solid market research give Cialis a significant competitive advantage over its rivals.

Pros:
- Fulfilling a niche
- Medical investigators found Cialis more effective than Viagra after a fatty meal
- Large percentage of

ED patients also suffered from high blood pressure or high cholesterol, indicating diet may be an issue. (Exhibit 1)
- Competitive advantage differentiating Cialis from Viagra or Levitra

Cons:
- Some people may not be concerned with the effects after food intake
- May not be reaching a large segment of ED users

3. Market to patients: marketing to only the males affected by ED.
Pros:
- Large percentage of males claim that they are unsatisfied with the drug (Table A)
- Research found a high willingness to try Cialis (Table B)
- Men are the buyer, decider and users of the product, therefore very important in the marketing scheme.
- Studies found 90% of men are first to initiate a conversation with doctors

Cons:
- A questionnaire sent to those screened to have ED found older men believe the condition is natural, and therefore don’t seek treatment
- If no marketing is reaching doctors, they will not be prescribing it to potential patients

4.

Market to Viagra Drop-Outs by targeting current and drop-out Viagra patients who were dissatisfied or willing to try a new product. The advantages of Cialis over Viagra include longer duration, no blue vision, and not being affected by food intake. Viagra has already marketed erectile dysfunction as a fixable, known condition and has made it a subject of "dinner-table conversations," making many patients more open about the problem. However, Cialis may be seen as safer than Viagra due to death reports received by the Food and Drug Administration following its initial launch.

Many consumers are dissatisfied with Viagra and are willing to try a new product according to Tables A ; B. The GMR study tracked sales and

found that after one year of treatment, only about 25% of patients were still using Viagra. However, Viagra has had success in the market for five years and doctors are generally content with its effectiveness and its short duration in the body. On the other hand, Lilly ICOS is a new company and their first product launch in ten years may make them fairly unknown.

The 2000 annual report of Pfizer revealed that Viagra currently holds the biggest market share and has the largest sales team in the pharmaceutical sector. Another marketing tactic employed is celebrity endorsements, which involve using a celebrity to connect with the desired target market. The advantages of this strategy include allowing the celebrity to convey the desired brand image and positioning them as an opinion leader or a member of a reference group. This can be particularly effective in aspirational groups, where consumers are influenced to purchase the product because they aspire to be like the celebrity.

- One advantage is that using celebrities may attract more consumers. However, it may not be possible to get all desired celebrities to admit to having an eating disorder (ED), making them unavailable. Additionally, if the wrong celebrity is chosen, it could create a negative brand image or alienate certain consumer groups. It is worth noting that competitors have already utilized this method.
- Another approach is to market the product based on duration. This involves targeting individuals who are looking for a longer window of time to use the product. Some advantages of this strategy include allowing patients to choose the right moment for intimacy, being more flexible for busy schedules, addressing complaints from Viagra

users about short duration, and differentiating Cialis from Viagra. On the other hand, a downside of this method is that Cialis will remain in the body for a longer period.

In a preliminary conjoint study of 350 doctors, it was found that the duration factor had low importance to physicians 7. Marketing to physicians should be targeted specifically towards those who are prescribing the drug to the patients. Interviews conducted at several medical conferences showed that urologists are very familiar with ED. These interviews also revealed that doctors were in search of a safe, yet effective product. Cialis, unlike Viagra, is not affected by food intake and does not cause blue tinted vision.

Doctors play a significant role in influencing the brand choice of patients. However, during interviews, it was found that primary care physicians were uncomfortable with prescribing ED drugs. They viewed these drugs as a "quality of life" medication, not worth the associated health risks. Additionally, doctors rarely followed up on the success of these drugs. Recent discussions have indicated that doctors are somewhat satisfied with Viagra. Duration of effectiveness was not considered an important factor by physicians, which is a distinguishing feature of Cialis according to a preliminary study. It was also observed that marketing efforts do not directly reach patients, who often initiate conversations about ED with their physicians. Targeting the 50+ age group appears to have advantages as ED is more prevalent in this age range and marketing can focus on rejuvenation and improved self-confidence. These individuals generally have higher income levels and can afford Cialis more easily. However, the drawback of this strategy is that it excludes the 20-50

age group. Questionnaires sent to men in this age group revealed that many believe ED is a natural part of aging and therefore do not seek treatment. Based on this analysis, it is clear that Cialis needs to develop a well-defined strategic plan to surpass its main competitor, Viagra.

Other competitors, like Bayer's Levitra, do not pose a threat to Cialis because they focus on targeting diabetic consumers, which is not Cialis' intended market. Cialis aims to target men aged 45 years and older, but it would be beneficial to also expose the product to slightly younger men so that future erectile dysfunction (ED) patients are aware of available treatments. Additionally, Cialis should consider marketing to men with busy lifestyles who would prefer to take the drug in advance of planned weekend sexual activity. This would offer flexibility to this consumer group by alleviating concerns about needing immediate sexual performance after taking the medication.

Although Lilly ICOS's studies (Exhibit 7b) have shown that the primary motivation for consumers seeking treatment for erectile dysfunction is their spouse or partner, it is crucial for Cialis not to exclude or embarrass male individuals in their advertising efforts. Instead, Cialis should promote open sexual communication between couples to foster a satisfying and improved sexual relationship. Furthermore, it is important for the pharmaceutical company to prioritize their primary and secondary markets wisely. In our opinion, targeting men and doctors as the primary market and women and couples as the secondary market would be most effective. By focusing on men as the primary market, Cialis can benefit from patients who are already familiar with the product and can subsequently consult their doctors, who

are pivotal in prescribing the drug. To ensure success, it is crucial for doctors to support the product, as they play a vital role in distributing it to patients. Thus, the key to successful marketing lies in appealing to both doctors and patients.

Targeting the product to women and couples involves reinforcing the desire to refill prescriptions. Cialis should focus on promoting its key advantages over Viagra. These advantages include its longer duration, three times that of Viagra, as well as its ability to maintain its full effect after high fat meals, unlike Viagra. Thus, Cialis should position itself as a superior and preferred product to Viagra in order to succeed in the market. Despite Viagra's five-year advantage in the market, Cialis can leverage the Viagra brand.

Using the concept that there is a solution to erectile dysfunction (ED) as evidenced by the introduction of Viagra, Cialis can position itself as the preferred remedy for ED. To determine an appropriate pricing strategy for Cialis, we suggest pricing the product slightly higher than Viagra at $12 per pill. This reflects the fact that Cialis has a longer duration of action than its competitor, lasting three times as long. By doing so, Cialis can establish itself as a higher-quality alternative. It is essential to avoid setting an exorbitant price for this pharmaceutical product, given that studies mentioned in (exhibit *) indicate that most patients pay for these life-enhancing medications out-of-pocket, with no health insurance coverage. Additionally, since Cialis requires a prescription, it is crucial not to overinflate the product's price. However, selling a slightly more expensive medicine aligns with the notion of providing a higher-quality medication.

Finally, this comprehensive marketing

strategy aims to target multiple demographics. Firstly, the company plans to appeal to its main target customers, specifically men over 45, while also targeting individuals who are likely to benefit from the use of the pharmaceutical product. Additionally, it is crucial for Cialas to ensure that doctors are aware and well-informed about this product and are motivated to promote it, even in situations where addressing erectile dysfunction may be uncomfortable for patients. Lastly, Cialas should include advertising that appeals to couples in order to reach all identified target markets.

Suggested Plan of Implementation 1. 6th Month action plan compete/beat strategy Objectives

In the first 6 months, the objectives include creating brand awareness amongst doctors and patients. Cialis will compete with Viagra using comparative techniques and by taking advantage of Viagra’s familiarity and brand success. The brand name Viagra has almost become the common noun for the symptom it said it would treat- erectile dysfunction. Furthermore, Cialis will let patients know that if they have a hectic life, they can take Cialis anytime and have up to 36 hours to respond to their partner, without planning or rushing. Also an objective is to prove that Cialis is a worthy competitor against Viagra because Cialis offers flexibility to choose when the moment is right.

Finally, Cialis aims to destigmatize Erectile Dysfunction and encourage open discussions among doctors and couples. The primary target market includes men aged 45 and over, as well as individuals who are dissatisfied with Viagra or have dropped its usage. The drug is also intended for men in relationships and those leading busy and hectic lifestyles. Doctors hold the power to prescribe Cialis, making them a secondary

target market. Women partners of male patients are also considered secondary targets.

The positioning strategy involves presenting Cialis as a drug suitable for both men and couples with busy lives. It emphasizes that Cialis allows for up to 36 hours of intimate moments without the need for prior planning or rushing. This appeals to individuals who cannot always determine the right timing for intimacy due to their busy lifestyles. By positioning Cialis as a flexible option, patients are more likely to choose it since they can select the appropriate moment for intimacy.

When targeting Viagra dropouts, one common complaint was the short duration of its effects. To win them over, we can promote Cialis' long-lasting effect. We can announce Cialis' place in the erectile dysfunction market by highlighting its benefits: it improves the ability of up to 81% of men with male impotence to respond to sexual stimulation for an extended period, even up to 36 hours after taking the drug. Additionally, Cialis' absorption is not affected by food intake. To further emphasize its category membership, we can compare it to the well-known Viagra brand.

By relying on the product descriptor, a unique position can be created for Cialis in relation to erectile Dysfunction. This can be achieved by highlighting Cialis' attributes and benefits, and positioning it against Viagra through Points-of-Difference. One key point to emphasize is Cialis' longevity, as it lasts up to 36 hours compared to Viagra's 4-hour duration. Additionally, it is important to highlight Cialis' ability to be mixed with various foods, unlike Viagra which cannot be taken with high-fat foods. It should be noted that the effectiveness of Viagra is reduced when taken during

or after a high-fat meal.

Price analysis takes into account competitors’ prices and offers. Viagra, priced at $10/pill, does not provide the same benefits as Cialis. Therefore, considering these benefits, Cialis should have a higher price to reflect its added advantages. However, since it is considered a quality of life medicine, most health insurances do not cover it. Consequently, customers would have to pay out of their own pocket, so the price should not be too high to avoid reduced interest. Additionally, Cialis is a new and unfamiliar brand to patients.

To consider switching from Viagra to Cialis, the cost difference should not be significant. A higher price for Cialis may attract consumers who associate it with better quality. Additionally, representatives of Cialis could provide free samples to physicians, who can then pass them on to patients. This allows patients to try Cialis at a low cost without purchasing a complete prescription. The primary target market for promotion includes men typically in their 50s, mainly in relationships and leading busy lifestyles. These men require a longer-lasting drug because they do not know when the opportune moment will arise due to their hectic schedules.

These men require a significant opportunity timeframe so that when the moment arrives, they are ready. The print advertisements can be found in magazines like Men’s Health Magazine and Globe and Mail Newspapers. These print ads can emphasize that Cialis offers a window of opportunity lasting up to 36 hours, indicating there is no need to hurry or feel time pressured. The page will include the note "Talk to your doctors," suggesting a prescription is necessary and encouraging patients to seek additional information from their

doctor. The TV commercials should be aired during prime-time programming and news broadcasts. This is the time when the target audience is most likely to have hurried home from work and desires a brief moment of tranquility to catch up on current events.

The TV ad presents two men conversing in a country club locker room, highlighting that Cialis provides a 36-hour effect compared to Viagra's four hours. It emphasizes that with Cialis, one of the men can now decide when the right moment is for him. In Doctor’s offices, posters can be displayed to educate the target market about Erectile Dysfunction, prominently featuring the Cialis logo. The posters should include the message, “Talk to your doctors,” and provide essential facts to alleviate the discomfort of discussing ED. For instance, it could mention "How to talk to your doctor" and explain that doctors are professionals who understand that erectile dysfunction is a medical condition. Additionally, doctors have the option to offer free samples of Cialis to the target market.

Free samples can help increase brand loyalty and reduce the likelihood of switching from Viagra. While doctors are an important target market as they have the power to prescribe Cialis, they are hesitant due to concerns about patient safety and the negative effects associated with Viagra. Doctors emphasize the need to consider potential risks from the medication. Among doctors who do prescribe drugs for erectile dysfunction (ED), nearly 90% reported that patients initiate the request. Given doctors' resistance and doubts, it is crucial for Cialis to focus on their advertising campaigns and appeal to their primary target market.

When targeting physicians as a secondary market, the use of personal

selling can be effective. Personal selling involves direct interaction, such as face-to-face meetings, with potential buyers. This allows for presentations, answering questions, and obtaining orders. A successful approach could involve wining and dining, as it gives the impression that Cialis is confident in its product's success. Additionally, marketing to doctors can be done during medical conferences and events. Cialis can participate as a sponsor, setting up a booth to encourage inquiries and provide information about the product. Alternatively, Cialis could also play a prominent role at the conference, delivering all necessary details to persuade doctors to switch prescribing to Cialis. Furthermore, Lilly could organize their own seminars about Cialis held in an exotic location, offering doctors a luxurious weekend in Bermuda, for example.

This event includes an incredible, fully paid weekend getaway and an informational session promoting Cialis.