2. Company Background
Merck & co., Inc., was the largest pharmaceutical company in the world which
developed, manufactured and marketed a broad range of human and animal health
product.
Merck ranked high on Fortune list of the most admired company and in it’s history had
never had a government-imposed drug recall
Merck tended to rely more on its own research for new products than on the licensing
of other companies drug
Since 1995, Merck had launched 9 new products including COZAAR and HYZAAR(new
class of HYPERTENSIVE drug) and CRIXIVAN(an HIV and AIDS drug) and expected to
exceed $23 billion in sales in 1997
Other successful drugs like FOSAMAX(drug for OSTEOPROSIS) and ZOCOR(a
cholesterol lowering drug subclass called statins) were also growing rapidly
In spite of the competition from Pfizer’s LIPITOR, ZOCOR maintain the leading share of
total prescription among cholesterol-lowering worldwide
In1998, it planned to introduce an unprecedented number of major products. In
addition to PROPECIA, anticipated launches included SINGULAIR(asthma),
MAXALT(migraines), AGGRASTAT(acute coronary syndrome) and COSOPT(glucoma)
3. Propecia
PROPECIA represented a major breakthrough in the treatment of Male Pattern Hair
Loss(MPHL) and as per the clinical trials could be useful for men to regain hair
Initial clinical studies for PROPECIA included men between the ages of 18 & 41 with
mild to moderate ongoing hair loss of type caused by DHT
Result was 83% of participants at least maintain their current hair count that is did not
have a net loss of hair. Additionally, 66% of men experienced visible regrowth within the
first year
Typically, the drug took about 3 months to produce visible result. However for some
men the drug had no effect
Also, if a man stopped taking PROPECIA, his hair loss would resume at its old rate and
any benefit would be reversed within a year
PROPECIA wouldn’t benefit women suffering from hair loss and women (and children)
were specifically instructed not to use the product
In clinical tests, a small number of men experienced various sexual side-effects (less
than 2%)
4. Understanding Hair Loss
MPHL occurred in 30 to 40 million American men and lifetime incidence was
believed to approach 100%
According to Casola, the potential market for PROPECIA is at least half the
male population
Consumer Behaviour
A lot of men who are losing their hair aren’t even aware of it because it is
happening back of their heads
Some men falsely believe that brushing or wearing hats hastens hair loss
Half of the population suffering from hair loss considered it as a future
problem
Most men underestimated their own degree of hair loss
Only two-third of the men concerned about hair loss
One third of the men resigned themselves to the problem altogether
5. Existing Solutions of hair loss
In spite of the prevalent consumer behaviour the hair loss market
accounted for about $1.5 billion in annual sales
Solutions included in the hair loss market :
Hair replacement surgery allowed a patient to regrow his own hair In a
transplant, costs between $2000 to over $10000.
Mechanical solution: It includes wigs ,weaves and toupees, costs anywhere
between $500 to $3,500
Topical Interventions: Lotions, potions and thickening Shampoos, costs
between $20 to $40
The hair replacement surgery contributed about half of the $1.5 billion
category sales
Apart from these there was Rogaine, which was the only option approved
by FDA to treat hair loss, developed by Upjohn
Rogaine had a extremely high brand awareness of 95% with 2.5 million
men and women spending $162 million annually
6. Marketing in the hair loss industry
Marketing to physicians were done by sales representatives
The face to face interaction time was very low typically around 2 mins and
sales reps had to pitch on an average 3 products during the time frame
On an average 6 detailing calls were required before a physician took
proactive role in prescribing the drug
Direct marketing to patients can be done through television or print
Due to FDA restrictions 3 types of advertisements were possible:
Help seeking advertisements where drug name can’t be mentioned but the
manufacturer urges consumers to visit doctors if they had a particular disease
Reminder Advertisements where brand name was mentioned but it was not
specified which particular disease the brand of drug caters to
Finally, if there is mention of both the brand name and about it’s functionality,
then all the major side effects also needs to be mentioned in the advertisement
7. Estimated Market Size
Total Male population: 132 million
Atleast half of them have hairfall issues: 66 million
Two thirds of these people were concerned about hairfall:
2/3 * 66 million = 44 million
Out of these 44 million, only half consider this hairfall problem to be a
current one
Estimated market size= ½ * 44 million = 22 million
8. Challenges in the product
Patients most likely to be helped by the drug were men just starting to
lose their hair—and the greater the hair loss, the less effective the drug
But most men are only compelled to action after the hair loss is obvious.
So the consumer most likely to buy the product would see fewer benefits.
A less than 2 percent possibility of sexual dysfunction—was too big a
turnoff
Seventy to 80 percent of physicians will write a prescription if a drug is
requested by name by the patient, unless there are overriding health
concerns
Risk of brand awareness being driven by the much-publicized side effects
issue
9. Four views of consumer decision making
The four views refers to the general view or perspective why individuals
behave as they do
•Consumers associate deep
feelings or emotions. The
impact of the firms marketing
efforts is governed largely by
the consumers perception of
these efforts
•Consumers act as a thinking
problem solver. Risk is the key
component the problem solver
tries to dispel the risk
associated with many product
choices
•Consumers are passive,
basically submissive to the
self-serving and promotional
efforts of marketers and are
easily influenced by the
message communicated
•Consumers try to be
economical and makes rational
decisions. Consumers operate
in an imperfect world and
often "settle" instead of
maximising price-quantity,
marginal utility
Economic
View
Passive
View
Emotional
View
Cognitive
View
10. Issues to be addressed: What type of
advertising?
The help seeking ads will not work in this case. This is because in absence of
the brand name it is highly likely that people will relate the ad with Rogaine
which has 95% brand awareness. Hence the ad will prove futile
The reminder ad category also has the problem that it is not easy to imply the
utility of Propecia through ads. It will be extremely difficult to communicate
the benefits of the drug through this kind of advertisements
We recommend product claim ads in this case
Emphasis on visiting doctors for getting details about the product
Emphasis on the fact that only 2% of men suffered from sexual side effects in the
trials and that the side effects became subdued with passage of time
The side effects of the drug have to be notified to the consumers before actual
consumption, so it is better to inform them beforehand and try to point to the
benefits of the product
11. Issues to be addressed: How the
product should be positioned?
Our recommendation is to position Propecia as a drug that prevents hair
loss since 83% effectiveness was established in clinical trials
Positioning it as a drug that is a cure for hair loss may give the consumer a
perception that it will cause hair regrowth completely which has less
chance of actually happening
Also, in cases where Procepia will actually induce high hair regrowth, there
will be a chance of Customer Delight
12. Issues to be addressed: How much
Detailing Support needed?
Since we are suggesting in the products claim ad to go to Physicians for
consultation, detailing support needs to be high
This has to be supported by the fact that the market potential for Procepia
is huge
In the initial phase the drug should be prescribed only
As the consumers get more aware about the brand and the possible side
effects, along with the benefits that it offers, it can be made available in
the OTC market