CASE ANALYSIS--Warner-Lambert Ireland : Niconil

2392 WordsApr 27, 200410 Pages
Executive Summary In early 1990, Warner-Lambert Ireland planned to launch an innovative new product named Niconil, which was made for people who would like to quit smoking. Niconil would be the first patch-type product in the smoking cessation market in Ireland. While existing smoking cessation products of the other companies had not been successful due to the concerns about negative side effects, Warner-Lambert executives had an optimistic view that Niconil would be recognized as a safe and effective product by prospective consumers. In fact, results obtained through preliminary market research seemed to support their optimistic views. Nevertheless, there were critical problems that should be solved before launching the product as…show more content…
Market Evaluation Overall, total population of Ireland was about 3.5 million in 1989, and 0.75 million people (30% of 2.5 million adults) were smokers. That is, the total potential market for smoking cessation products was 0.75 million. WLI executives estimated that those who tried to stop smoking each year were 75,000, and assumed that Niconil could be sold to half of that number. Therefore, target market size would be 37,500 people, and then, WLI expected that 100% of the estimated consumers would purchase Niconil at first time. After that, 60% of the target customers would buy another two-week supply and finally, 25% of that number would purchase a third-week supply. According to results of test trials, about 75% of smokers finished the Niconil program within 6 weeks. If they did not take remaining 25% of smokers into account, the total expected unit sales could be calculated as follows: 1. Total target consumers : 37,500 2. 60% of No. 1 (those who would purchase a second two-week supply) : 22,500 3. 20% of No. 2 (those who would purchase a third two-week supply) : 4,500 Total expected unit sales : 37,500 + 22,500 + 4,500 = 64,500 This number might be regarded as a minimum expected unit sales, because remaining 25% of smokers who did not complete the program in test trials was not included in this calculation. If taking those people into account, the expected unit sales would increase. Pricing Strategy

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