Cialis:Getting

Ready to Market
Case Study
Case Analysis by Taposh Dutta Roy

HBS 9-505 038

 Cialis:Getting Ready to Market HBS 9-505 038
Case Analysis submitted by: Taposh Dutta Roy

Mark Barbato, the executive director and global product team leader had to launch a new male

impotence medicine in a market with an established leader Viagra. Rob Brown, Global Marketing

director for Cialis(Lily), Leonard Blum, vice president of sales and marketing, ICOS and Beebe (US Brand

Leader) were responsible to come up with recommendation on the Go To Market, strategy for Cialis.

The main task was to identify the target market and position it against the competition.

The total market was estimated to be around 30 million men in US and 150 million men

worldwide. The world wide focus was segmented into 5 affliliate groups US, Europe ( France,

Germany, Italy, Spain and UK), Mexico, Canada, Australia and Brazil. Each affiliate group was given the

ability to take tactical decisions. The main decisions to be made were determining how to segment the

market, tactical allocation of marketing budget for affiliates, competitive positioning and pricing.

Recommentation #1 : Market Segmentation

I would recommend targeting Cialis to current users of Viagra and Viagra Dropouts for US and

European countries. This is based on the analysis below.

At a strategy level, the market was segmented to five affiliate groups US, Europe ( France,

Germany, Italy, Spain and UK), Mexico, Canada, Australia and Brazil to divide the global market of 150

million men. At a tactical level, there was still a need to segment the market on the basis of

demographic, patient, physican and/or current Viagara usage. Viagra had a monopoly and was available

for all segments, being the only player in the market. Further, there were heart related issues on using

Viagara and around 130 deaths were associated to it. Product comparision between Viagra and Cialis is

given below. Consumer research found that efficacy, safety and duration were important

considerations. Cialis is a better product based on the features needed by the consumers. Segmentation

of users, based on current Viagra users, Viagra Dropouts and not had used Viagra was done. This was
 Cialis:Getting Ready to Market HBS 9-505 038
Case Analysis submitted by: Taposh Dutta Roy
done across US and Europe. The results indicated that people who were currently using Viagra were

more eager to try the new Cialis than the ones that had never taken any drug for ED. Thus, targeting

current Viagra users and dropouts made sense for the initial launch.

Recommentation #2 : Sales and Marketing Budget Allocation with a revenue goal of $500M or higher is

below.

This is based on the analysis below.

The revenue goal for Cialis was atleast $500 million. Further, based on their company

financials, for year 2000, about 48% was their Sales and General Administrative expenses. Considering

this to be a new block buster product for Eli Lily, I would assume the total spend for Sales and Marketing

to be around $240 million. Pifzer spent around $108 million in advertising for Viagra in 2000. Entering

as an incumbent to Viagra, Cialis product team should spend atleat $120 million for advertising and

remaining $120 million for total world wide sales. Sales force could be divided depending on market cap

of various countries. About 33% (1/3) of the adults that saw about the drug on TV, discussed the drug

with their doctors. Around 44% of these patients, who discussed with their doctor were recomeneded

with a prescription drug. This means advertising should be two fold. I would recommend spending $80

million on advertising on TV, print and web. Various goal driven campaigns could be made and reaction
 Cialis:Getting Ready to Market HBS 9-505 038
Case Analysis submitted by: Taposh Dutta Roy
should be measured. Around $40 million should be spend on marketing drugs to doctors. Free samples

should be provided for the doctors to give patients. This will enable our target segment that currently

uses Viagra to give a test drive to Cialis.

Recommentation #3 : Launch Strategy

Cialis should launch at a price of $12/pill, slightly higher than Viagra, but gives a 36 hour

window. Also, TV ads should highlight the extra duration, with real people active in sports. TV ad should

highlight that this drug is safe for heart and the patient can wait for the right time. Physicians should be

given free samples and more guidance about the benefits of the drug and any results of tests done by

FDA.

This is based on the analysis -

Viagra had a five year lead and many physicans and patients were used to it. Also, there was a

history of side effects generated. When Cialis comes, there will be no history. Further, Cialis remains in

the system for a longer duration, which is good for the product, but there is a chance of side effects for a

longer duration. In order to launch Cialis, the doctors should be first convinced and given the right

direction to decide what is right for their patients. Given, the clinical trials did not produce any side

effects, the TV ads should highlight the duration time is right within the 36 hour window. This will

give a competitive edge over Viagra. Celebraties always have impact on the audience. However, since

Viagra already did this, Cialis should show regular people engaging in sports and are active.