Market Research to Support Late Stage Lifecycle Management

1
Market Research to Support Late Stage Lifecycle
Management
From Midlife to Grave and Beyond

• Facilitated by Taylor Nelson Sofres Healthcare

2
Organization of the Workshop

• Introductory discussion (30 minutes)
• marketing and market research in the maturity and
  decline phases of the PLC
• Group work session (75 minutes)
• roundtable work session marketing case
• each roundtable group to develop marketing plan
  and market research program for each of two
  specific strategies
• Feedback session (45 minutes)

3
Review of the Product Lifecycle (PLC) (i)
Early Stage
Late Stage
4
Expenditure Through the Product Cycle
5
Review of the Product Lifecycle (PLC) (ii)

• EARLY STAGES
• Introduction
• slow sales growth
• large investment in promotion / marketing
  expenses
• often losses are incurred
• Growth
• rapid increase in demand / use of product
• profit becomes positive and grows as well

6
Review of the Product Lifecycle (PLC) (iii)

• LATE STAGES
• Maturity
• penetration plateaus, so sales growth slows or
  declines
• profits also reach a peak and then may begin a
  slow decline
• Decline
• newer (better?) products eventually ours and/or
  competitors overwhelm and displace our product
• both sales and profits typically decline, often
  sharply

7
Change in the Nature of the Offering Over the PLC
Airline Example
Getting from point A to point B
In-flight services seat comfort
Primary
Security reservations Fast Track
Secondary
Tertiary
8
Maturity Stage
9
Objectives of Late Stage PLC Management

• Maturity Stage
• Can be the stage with the greatest profit
  potential if the maturity stage can be managed to
• extend the length of this phase
• delay or slow the inevitable decline in profits
• The broad objective of this stage is to maximize
  profit while defending market share

10
Objectives of Late Stage PLC Management

• Maturity Stage
• Maintenance
• no new threats from competitive products /
  technologies, no major changes in market
  conditions
• objective is to maintain / reinforce products
  market position
• incremental changes only are required in
  marketing tactics
• however, constant market vigilance is a necessity
• evaluate generic and Rx-to-OTC strategies

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Objectives of Late Stage PLC Management

• Maturity Stage
• Defense (i)
• important market perturbations
• new products or technologies
• new (and significant) changes in labeling for old
  competitors
• continued strong offensive marketing by
  competitors

12
Objectives of Late Stage PLC Management

• Maturity Stage
• Defense (ii)
• active defense is primary objective
• make product improvements e.g., new
  formulations, new delivery methods
• fine-tune product line (including pricing)
• refocus advertising
• consider additional (geographic) markets
• evaluate generic and Rx-to-OTC strategies

13
Objectives of Late Stage PLC Management

• Maturity Stage
• Innovation
• significant product improvements may be required
  in order to maintain the product preempt or
  outflank competition and delay the onset of
  decline
• continue to fund additional trials, seek
  additional indications and/or improved labeling
• in addition, implement defensive strategies

14
Strategies for Late Stage Management

• Maturity (i)
• expand volume
• convert non-users
• enter new markets e.g., specialties,
  indications, geographies
• obtain greater use from current users, especially
  low writers
• more frequent use (i.e., Rx for more of the
  eligible patients)
• new uses (i.e., indications)

15
Strategies for Late Stage Management

• Maturity (ii)
• line extensions
• maintain a vigorous trials program
• new formulations, dosages
• patent extension
• new indications
• fine-tune product line
• prune line as new formulations/dosages come on
  line
• pricing strategy
• begin evaluation of generic and OTC strategies

16
Strategies for Late Stage Management

• Maturity (iii)
• fine-tune positioning, advertising and promotion
• strengthen / develop the brand (brand image)
• customer loyalty and retention programs

17
Lucozade

• Originally promoted for people who were ill or
  convalescing
• Mature brand re-positioned and line extended

Promoted as an isotonicsport drink
replacesfluides fast Official drink of
FootballAssociation PremierLeague
Promoted as an energy boost for people who need a
pick-me-up after working or playing hard
18
Decline Stage
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Objectives of Late Stage PLC Management

• Decline Stage
• Managing the endgame
• supporting a declining product can be costly
• hence, a key objective must be to determine when
  to pull the plug i.e., when and how to
  withdraw active support and promotion
• do we enter the generic market ourselves, take
  the product OTC or simply let it die, and so on

Decline in sales and profits is inevitable,
especially in a technology-driven industry The
lifecycle of an ethical drug is constrained by
its patent life
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Strategies for Late Stage Management

• Decline
• prune product line
• prune customers promote only to highest decile
  physicians, drop low yield specialties, and so on
• reduce expenditure for advertising and promotion
• eliminate all clinical research programs
• implement the endgame strategy
• market our own generic
• take it OTC
• let it die

Marketers must be vigilant to ensure that the
decline doesnt become a self-fulfilling prophecy
by withdrawing support too soon
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Market Research to Support the Mature Product
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Market Research to Support the Mature Product

• Implement a market monitoring system assess the
  market on an ongoing basis
• monitor market trends developments
• including competitors activities
• monitor product performance
• usage and share
• awareness of product and message
• message comprehension
• image and positioning
• market gaps
• are there new or under-served segments
• monitor message understanding and credibility
• Determine potential for and benefits of
  repositioning

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Market Research to Support the Mature Product

• Are we targeting the right prescribers?
• Are we sending the right messages to the
  right targets?
• Is the product line optimized?
• market potential for extensions (including
  cannibalization potential)
• pruning the product line
• What is the market potential for new
  formulations?
• Is our pricing correct?
• What is the market potential of an Rx-to-OTC
  switch?
• Should we market a generic how much will
  generics erode our franchise?

24
The life of an anti-inflammatory
Chronic conditionsOsteo/rheumatoidarthritis
Initial indication
Additional indications
Acute inflammatory conditions
Acute pain
Dysmenorrhea(Gynecologists)
Sporting injuries
Renal colicTrauma(AE units)
New formulations
(protect against generic competition)
Topical formulation
Extension
OTC
New product COX-2 (cycle begins again)