marketing
Background
Biopure Corporation a company founded in 1984 with the primary goal of developing a human blood substitute; a product that has oxygen-carrying property of blood without the harmful effects of donated blood. The company currently has two new products: Oxyglobin and Hemopure. Oxyglobin, blood substitute for the veterinary market and is ready for launch. Hemopure, another blood substitute but for the human market and it will take two years to launch the product; provided they get FDA approval (no blood substitute has received approval - Currently). There is an ongoing debate amongst the management team about the timing to launch Oxyglobin. Carl Rausch, the president and CEO of Biopure Corporation, has to decide if the release of Oxyglobin would be beneficial for the company without jeopardizing the potential of Hemopure.
Recommendation
Oxyglobin solves a serious deficiency in the veterinary blood market. As such, I would recommend that Biopure immediately launch Oxyglobin even though the market is small and price sensitive, being the first in any market will make a huge difference and impact the company’s reputation in a positive way if the product satisfies the needs and wants of the consumers. Waiting for Hemopure and to launch both products at the same time will also put the company in a risk because of the possibility of competitors’ entrance to the veterinary market. Pricing Strategy: Even though the surveys show that veterinarians recommend less-expensive treatments over more-expensive, 90% of pet owners are willing to be informed about all the available alternatives to treat their pets. For this reason, giving the many advantages of Oxyglobin, it should carry a premium price of up to $200 per unit. Distribution Strategy: In order to distribute Oxyglobin, Biopure should use several non-overlapping regional distributors as the cost of maintaining a full sales force, plus the $10-15 per unit distribution cost would be more.
Basis for
Biopure Corporation a company founded in 1984 with the primary goal of developing a human blood substitute; a product that has oxygen-carrying property of blood without the harmful effects of donated blood. The company currently has two new products: Oxyglobin and Hemopure. Oxyglobin, blood substitute for the veterinary market and is ready for launch. Hemopure, another blood substitute but for the human market and it will take two years to launch the product; provided they get FDA approval (no blood substitute has received approval - Currently). There is an ongoing debate amongst the management team about the timing to launch Oxyglobin. Carl Rausch, the president and CEO of Biopure Corporation, has to decide if the release of Oxyglobin would be beneficial for the company without jeopardizing the potential of Hemopure.
Recommendation
Oxyglobin solves a serious deficiency in the veterinary blood market. As such, I would recommend that Biopure immediately launch Oxyglobin even though the market is small and price sensitive, being the first in any market will make a huge difference and impact the company’s reputation in a positive way if the product satisfies the needs and wants of the consumers. Waiting for Hemopure and to launch both products at the same time will also put the company in a risk because of the possibility of competitors’ entrance to the veterinary market. Pricing Strategy: Even though the surveys show that veterinarians recommend less-expensive treatments over more-expensive, 90% of pet owners are willing to be informed about all the available alternatives to treat their pets. For this reason, giving the many advantages of Oxyglobin, it should carry a premium price of up to $200 per unit. Distribution Strategy: In order to distribute Oxyglobin, Biopure should use several non-overlapping regional distributors as the cost of maintaining a full sales force, plus the $10-15 per unit distribution cost would be more.
Basis for