1. Product Team Cialis Summary
Week 2,
EWMBA 206
Who am I
My name is ganesh iyer. And I would like to tell you something about myself. I am originally from the city of Bombay in India. I have an undergraduate degree in electrical engineering and an MBA from the university of Bombay. I also have a Ph.D in marketing from the University of Toronto. I have seven years of corporate experience in a wide variety of marketing jobs and industries both in India and in North America. I have worked as a product manager. In the early part of my career I have handled the largest brand of alcoholic beverages in India. then in the later part of my career I swicthed to being a product manager for in the pharmaceutical industry when I began working for Boots Pharmaceuticals which with glaxo’s is one of the largest pharmaceutical conglomerate in Europe. In fact one of the brands that I handled was “Advil” some of you may recognize that as a headache tablet. Perhaps this change in my carreer was probably to make up for all the hangover headaches that I must have been responsible for as a product manager for alcoholic beverages. I have also worked as a sales manager and have handled large sales forces. Finally in Canada I have worked as a marketing research specialist before I joined the Phd program when I did projects for companies like Shell, McKinsey Consulting and Ault Foods. I have consulted for P&G and.. I have also provided consulting on competition and antitrust policy issues to various agencies.
My research deals with economic analysis of marketing problems. During my Ph.D I got training in microeconomic theory, a frontier level mathematical theory of competitive analysis and strategy called game theory and industrial organization. And so I use these theoretical framework to attack various marketing problems. I am particularly interested in problems dealing with distrbution channels, retailing and customer service.
In terms of teaching I have taught the principles and other advanced marketing management courses as also a course in marketing research.
One thing that you will notice that I will often tend to get very excited in the class and you will have to get used to that. I love teaching this principles course and also my research and you will see that this translates into high energy levels in the class.
So now enough about me. Lets us get to hear about each one of you. I would like each one of you to introduce yourself say a few sentences about yourself……

2. Part 1: Product Positioning Execution Toolkit
Product Manager’s Positioning Strategy Toolkit
1: For whom am I? Identify the Target Consumer Segment.
For _____________,
(Target Market)
2: Who am I? (value proposition, usp)
our product/service is ______________________________________________
(Most Important Claim/Unique Selling Proposition)
3: Why buy me? (support)
because ___________________
(Single Most Important Support)
4: And not the competition? (competitive set)
among all ___________________
(Competitive Set)

3. The Four Positioning Questions
For whom am I? (Target customer segment)
Who am I? (Value proposition, USP)
Why buy me? (Support)
And not the competition? (Competitive Advantage)

4. Positioning a New Product in a Market with an Incumbent
Where will demand come from?
increase primary category demand (new customers)
steal from competitors (existing customers of rival)
re-capture dissatisfied customers (not happy with existing brand/solution)
Which of the above segments are able to perceive as relevant a given way of positioning benefit/improvement? (Learning, Self-selection)
With whom can we leverage dimensions that are objectively measurable?
With whom can we leverage dimensions that are not objectively measurable?
Evolution of Positioning:
In what phase to target each segment? (Build category vs. build brand vs. protect brand)

5. Erectile Dysfunction Drugs– Vertical Positioning
A benefit associated with a performance or quality
Attribute, typically objective, for which consumers differ in valuation.
Examples in Automobiles, PC, Retail Markets
36h 4h
~4h
Viagra
(Pfizer)
Levitra
(Bayer/GSK)
Cialis
(Lilly/Icos)

6. Erectile Dysfunction Drugs– Horizontal Positioning
A benefit that is a matter of “taste” or “attitude” often associated
with psychographics, lifestyle, or underlying attitude
Naughty/Mischievous
Romantic
Attitude towards sexual relationship

7. Competition & Vertical vs. Horizontal Positioning of New Products
One firm at low end
One firm at high end
Well defined objective benefit where more of is better
Consumers know how much improvement is worth to them
Difference in willingness to pay for improvement
Segmentation based on tradeoff between particular benefit(s)
and willingness to pay
One firm offers
benefit B
benefit A
Price sensitivity not a primary issue
More is not necessarily better for everyone
Heterogeneity in tastes, attitudes

8. Leverage Unquantifiable Dimensions- Vertical
Reliability/Consistency/Count on it

9. Target Market Selection and the Incumbent Firm
Presence of Incumbent firm creates a new layer of segmentation
(users, drop outs, never tried but aware, never tried not aware)
= Behavior- based segmentation.
Does dis-satisfaction with existing = high willingness to try something new?
User of incumbent brand = hard to switch = last resort?
Who has advantage with those that never tried?
How do other relevant parties/influencers factor in?

10. Evolving Positioning Courage Sympathy Fight condition Macho Winning
Success
Excitement
Wild
Naughty
Building Category
Building Brand
Protecting Brand

11. Importance of Positioning
Becoming more important in pharmaceuticals:
78% of drugs that entered the market in past six years were classified by FDA:
“not likely to be improvements over drugs already sold to treat the same condition”.
Prevalence of lifestyle/Quality of life drugs
Positioning is not what you do to the product but what you do to the mind of the consumer!

12. Positioning Strategies
Product Quality: (Ford: Quality is job 1)
Class of Users: (Pepsi generation).
Owning the category (Coke: The Real thing)
Against a Competitor (Avis)
Repositioning Hertz

13. Positioning Strategies
Away from Competition (7-Up the Uncola)

14. Customer Analysis: Market Research Study

15. Options Tell consumers 7Up possesses soft drink attributes
point of parity (see also K&K p ).
Emphasize fresh, clean taste (and no caffeine)
point of difference

16. 7Up: “The Uncola”

17. Positioning Traps (1)
Positioning on unimportant/irrelevant attributes
1992

18. Positioning Traps (2) Positioning with the wrong attributes Diet Beer
Gablinger’s
Introduced in 1967 as a “low calorie” diet beer
Lite beer by Miller
Less filling…means you can drink more!
Everything you wanted in a beer
(like getting drunk)…and less.
1/3 calories means you can drink 2 extra and call it even!

19. Positioning Traps (3)
Positioning on someone else’s benefits…positioning is sticky
Burger King unable to claim “fast.” Already taken by McDonalds.
Mercedes Benz and General Motors unable to claim “safety.” Already taken by Volvo.

20. Part 2: ED Market Updates: Global Performance
Is Cialis better off with or without DTC in the launch phase? 8%
51%
41%
February
Australia 7%
62%
31%
November
Canada
12%
65%
23%
USA
22%
42%
36%
August
Mexico
17%
45%
38%
May
Brazil
48%
29%
March
Spain
15%
37%
France
47%
Italy
19%
46%
35%
Germany
66%
26%
U.K.
Viagra®
Cialis®
Share of PDE5 Market – Dec 2005
Launch Date 2003
Country
Levitra®
Shares range from 25-50% around the world, with us rapidly touching the heels of Viagra

21. Cialis and ED Market- An Update
In the US 2004 ($1.03Billion)
Viagra 65% ($672 million)
Cialis 20% ($206.6million)
Levitra 11% ($112 million)
In the US 2005 ($1.1Billion)
Viagra 61% ($665 million)
Cialis 25% ($273million)
Levitra 14% ($140 million)
Worldwide 2004
Viagra $1.7Billion
Cialis $552million
Levitra $265 million
Cialis in 2005 $746.6million

22. ED Market Competitive Reactions
Advertising in the US first 11 months of 2004:
Viagra $98million
Cialis $151million
Levitra $147million
The “Cialis Promise” – Lilly gives men three free tablets of Cialis. If not satisfied Lilly will pay for three free tablets of Levitra or Viagra. If satisfied another round of Cialis. A Comparative Trial (92% ask for Cialis again)
Viagra “loyalty program” for every six prescriptions- get seventh free

23. ED Market Further Updates:
Medical Experts: Men with ED problems = 30 million in US. Men who are interested in being treated probably half of that.
Worldwide (a modest 5-10% increase in 2004, likewise in 2005)
Number of new prescriptions is going down in US: 10% fewer in October 05’ compared to October 04’
GlaxoSmithKline sold marketing rights outside the US back to Bayer– “The ED market hadn’t grown as fast as the company had hoped…tough to sell the drugs without the help of consumer ads” (in most of Europe direct-to-consumer advertising is prohibited)
Sexual performance drugs likely to be covered by Medicare’s new prescription benefit beginning next year (limited quantities, only when medically necessary).
Lilly sets deal to acquire ICOS for $ 2.1 Bn.

24. Competitive Advantages
First-Mover Advantages
Lock customers in.
Association with category
Network effects (among influencers, consumers)
Economies of scale
Second-Mover Advantages
Free-ride on first-mover’s costs of educating the market
Learn from leader’s mistakes
Learn the market size
Parallel Entry
Market may pay more attention when two companies are entering together.
Benefit from increased category awareness

25. Learning
Positioning is not what you do to the product but what you do to the mind of the consumer!
Good Positioning is an integrated answer to 4 questions
For whom am I? (Target customer segment)
Who am I? (value proposition, usp).
Why buy me? (support)
And not the competition? (competitive advantage)