Cialis Case Study

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Product Team Cialis
MBA Level Marketing

Segmentation and Targeting:

1. What are the most relevant dimensions along which to segment the patient market for ED treatment (i.e., what are the different ways you could divide it up)? Of the segments identified, which would you target initially with Cialis?

With a potential total of 150M men worldwide (30M in the United States alone) suffering from medical Erectile Dysfunction, there is a wide range of factors identified as the potential causes:

* Caused my other medications
* Medical diseases
* Lifestyle factors (Smoking, Obesity, Alcohol)
* Psychological effects (Stress, Depression are 20% of ED cases) * Age

With the launch of Cialis, the focus should be put on targeting the two groups who can most benefit from the product in more than a single way. While solving the primary purpose of Cialis holds the key to the drug’s release and sustained success, the impact at release can have a greater impact to increase brand awareness. 50% of men between ages 40-70 suffer from ED, and this age bracket should be the primary target upon release. Unlike other segment groups who may be difficult to target such as those with Lifestyle factors involved, seeking out men in a particular age bracket is fairly straight forward. In addition, those with Psychological Effects also make up 20% of the market for ED medication, and the fear of interference with drug interactions is not nearly as high as those with Medical Diseases or ED caused by Medication itself. The positive effects being caused by successful sexual stimulation will also presumably positively affect stress and depression as well in these cases. The low-risk and high-reward associated with these two segment groups make them the most favorable targets for the release of Cialis to market.

Pfizer’s Viagra:

2. What is Viagra’s positioning in the marketplace in 2002? How would you characterize the Viagra brand?

United States Viagra Sales by Quarter (Millions) 1999-2002| | | | | | |
Quarter| 1998| 1999| 2000| 2001| 2002|
1|  | 147.3| 183.1| 216.8| 246.5|
2|  | 164.4| 193.5| 214.7| 238|
3| 157.7| 156.7| 201.1| 221.3|  |
4| 144.6| 175.2| 202.7| 246.5|  |

It was evident in the United States by the end of the 2nd quarter 2002 that Viagra sales are not slowing down, with gross margins topping 90%. Pfizer employing more than 30,000 salespeople to push their products with a budget of over $100M for Viagra alone is testament to their focus on marketing. Part of the failure of their intense marketing is their seemingly inability to target their market effectively, as the following statistics show a weak point in their planning:

Per every million medical patients who inquire about the use of Viagra: * 30,000 had untreated diabetes
* 140,000 had untreated high blood pressure
* 50,000 had untreated heart disease

Whether intentionally or not Pfizer seems to be marketing Viagra to the masses through their marketing machine, as opposed to targeting healthy adults who suffer from ED. In addition, after one year of treatment with Viagra only 25% of patients continue to refill their prescriptions. This may correlate to Viagra being a short-term fix with patients, as opposed to a true treatment of ED for an extended period of time. I would characterize the Viagra brand as being one in which the patients clearly are looking for a different alternative, but are simply overwhelmed by the Pfizer branding and household name Viagra comes with at this point.

Positioning:

3. What would be the most effective way to position Cialis in the marketplace, relative to its competitors?

While Viagra was first to market and its total sales have been enormous, they are hampered by reports that 76% of ED patients would be open to a new treatment. While they continue to find more patients effectively, they are not able to keep them for...
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