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Problem statement Pricing must be decided for Metabical that captures the accurately forecasted demand of the target market. Because of heavy competition such as Alli , it is important to create a package that can be priced accurately to drive up sales and consistency of a 12 week drug. Situation Analysis Cambridge Sciences Pharmaceuticals’ (CSP) is international health care company. Their focus is on developing, manufacturing and marketing products that treat various diseases. They want to enter the market for weight-control products in the US. Metabical was part of a strategic initiative that allows CSP to enter $3.74 billion market for weight control products in the United States. Metabical’s competitors are Alli and Xenical and…show more content…
There is no money to cover R&D and marketing costs! Recommendation In consideration of the ROI, it is my recommendation to pursue a more forceful approach and take into account the entire US population. In this case, the 209 million people and multiply 34% of it to include people who are overweight equaling 71.06 million. Next, utilizing the 12% (target audience) and equaling it to 8.527 million. With this, Metabical will capture 10% in year one, 15% in year 2, 20% in year 3, 25% in year 4, and 30% in year 5. The lowest pricing structure was decided upon because this demographic can afford other weight loss techniques. (Jenny Craig, Weight Watchers) This model produces a ROI of 5.7% which meet the requirements of executive management making a 5% ROI on 400 million in Research and Development expenses. Customers will be able to utilize the low pricing structure giving Metabical a better chance to sell its predicted volume. It is important to remember, Metabical’s marketing team cannot always predict how a specific demographic (women ages 35-65) will react to their product and still expect large revenues. Individuals who are ready to take a pill to lose weight can also be included in this demographic along with other similar markets (perhaps a percentage of overweight women of other age groups possibly buying the Metabical product) Again, with the above listed recommendation, utilizing a low pricing structure

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