Provel Case Analysis

Introduction:

Being the division of Eli Lilly Canada Inc,launch of Micotil is critical to the success of Provel.The new product has many strengths and key distinctiveness.The potential market is large and expected to grow rapidly in the future.But the market also competetive involved 3 key products with their own characteristics and wide range of price. How to launch Micotil successfully? The marketing decision of Micotil would have long-term implications for the whole company. Set price and choose effective promotional strategies are the most two important things Provel need to deal with.

Situation analysis

SWOT analyse. See appendix 1.

Pricing issue

From the concept of “marketing management”, demand,supply and environmental influences are all must be considered for effective pricing.

Demand influences on pricing decisions concern primarily the nuture of the target market and expected reactions of consumers.There are approximately 7500 veal producers in Canada,most operations fall in the 50 to 100 animal range. Us the average number 75 to caculate the veal market,it would be 562,500 animals annully.

There are approximately 2.5 million calves entering feedlots,so the amout of animals in Feedlots market is 2,500,000. Exibit 1 summarizes the numbers.Because the distribution of Micotil has been restricted to the ethical veterinary market,in oder to evaluate the potential market size,we have to consider the veterinarian's number.We know there are 600 large animal veterinary practices employing nearly 1200 veterinarins. Exibit 2 show the approximate size of large animal veterinarians in distribution center based on different geographic.If the center located in 2 provices, we would divided the number of clinics to 2 equal parts and assigned to the 2 centers. For example,the Steere Enterprises has location in B.C and Saskatchewan,so 25 from 51 clinics from B.C. and 28 of 56 clinics from Saskatchewan assigned to Steere Enterprises,it is easy to count the Veterinarians number from exist statics. Total large veterinarians number is approximate 1179,how to reach them with proper information?I would talk it in area of Promotion.

Consider the Supply influences on Pricing,we need think about the pricing objectives,cost and nuture of Micotil.It is unrealistic to expect Provel to break even in the first year, the objective would be more realistic if pricing to achieve a target market share.The price must cover costs of production,promotion and ditribution plus a profit according to the Cost consideratioin.Distinctiveness of the product itself also effect pricing.Micotil has a key feature-single injection which distinctive from competitors, using skimming polisy to charge relatively high price is feasible.

Environmental influences include variables that are unconttollable.We consider the competitioin here.The three types of competitive products have their own characteristics and charge price in a wide range.Exibit 3 show a price comparison among Micotil and its compatitors.

Promotion issue

Promotion mix concepet refers to the combination and types of nonpersonall and personal communication the oganization puts forth during a specified period.There appeared to be several promotion options, salesforce,telemarketing,direct mail ,Media advertising. Appedix 2 show the prons ans cons of each approach.Telemarketing and direct mail are forms of Direct marketing which is one of the 5 elements of Promotion Mix.The other 4 are personal selling,advertising,sales promotion and public relations. As a new product, the promotion objectives of Micotil are 1.Make potential buyers aware of the product,2 inform buyers about the benefits of the product,3 convince buyers of the product's value and entice potential buyers to purchase the product.

Recommendation:

1.Set price

As showed in Exibit 3, Trivertrin is the most expensive product if caculate the drug's price for a single animal use. Although Micotil has key feature-single injection which could be the “selling point ”, it is not good for it launch at the highest price in the exist market, pricing at competition and relatively high is recommendated.So,we first assume the price of drug per animal use is set at the range from $7.5 to$12, the 100ml size bottle would approximately be $100 to $160 when selling to the end user—farmer.We know the typical margin earned by veterinarian on phatmaceutical product is 30%, and the ditribution centres would operate on a 12% markup on the their selling price,Exhibit 4 show the pricing process of Micotil.Obviously,the price $61.6--$98.56 selling to Wholesalers (Distribution