Declan Dixon, director of marketing for Warner-Lambert Ireland (WLI), examined two very different sales forecasts as he considered the upcoming launch of Niconil®, scheduled For January 1990. Niconil was an innovative new product that promised to help the thou-sands of smokers who attempted to quit smoking each year. More commonly known simply as "the patch," Niconil was a transdermal skin patch that gradually released nicotine into the bloodstream to alleviate the physical symptoms of nicotine withdrawal. Now in October of 1989, Dixon and his staff had to decide several key aspects of the product launch. There were different opinions about how Niconil should be priced and in what quantities it would sell. Pricing deci-sions would directly impact product profitability as well as sales volume, and accurate sales forecasts were vital to planning adequate production capacity. Finally, the product team needed to reach consensus on the Niconil communications campaign to meet advertising dead-lines and to ensure an integrated product launch. Company Background
Warner-Lambert was an international pharmaceutical and consumer products company with over $4 billion in worldwide revenues expected in 1989. Warner-Lambert consumer products (50% of worldwide sales) included such brands as Dentyne chewing gum, Listerine mouth wash, and Hall's cough drops. Its pharmaceutical prod-ucts, marketed through the Parke Davis Division, included drugs for treating a wide variety of ailments, including heart disease and bronchial disorders. Research Associate Susan P. Smith prepared this case under the supervi-sion of-Professor John A. Quelch as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administra-tive situation. Copyright © 1992 by the President and Fellows of Harvard College. Harvard Business School Case 9-593-008. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Har-vard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used ¡n a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
Warner-Lambert's Irish subsidiary was expected t( generate £30 million in sales revenues in 1989:' £22 mil lion from exports of manufactured products to othe Warner-Lambert subsidiaries in Europe and £4 millioi each from pharmaceutical and consumer products sale: within Ireland. The Irish drug market was estimated a £155 million (in manufacturer sales) in 1989. Warned Lambert was the sixteenth-largest pharmaceutical com-pany in worldwide revenues; in Ireland, it ranked sixth. Dixon was confident that WLI's position in the Irish
market would ensure market acceptance, of Niconil. The
Parke Davis Division had launched two new drugs suc-
cessfully within the past nine months: Dilzem, a treat-
ment for heart disease, and Accupro, a blood pressure
medication. The momentum was expected to continue.
The Irish market would be the first country launch for
Niconil and thus serve as a test market for all of Warner-
Lambert. The companywide significance of the Niconil
launch was not lost on Dixon as he pondered the mar-
keting decisions before him..,
Smoking ¡n the Republio of Ireland
Almost £600 million would be spent by Irish smokers on 300 million packs of cigarettes in 1989; this included government revenues from the tobacco sales tax of £441 million. Of 3.5 million Irish citizens, 30% of the 2.5 mil-lion adults smoked cigarettes (compared with 40% of adults in continental Europe and 20% in the United States).2 The number of smokers in Ireland had peaked -in the late 1970s and had been declining steadily since. Table A presents data from a 1989 survey that WLI had commissioned of a demographically...