Product Team Cialis
Summary
Week 2,
EWMBA 206
Ganesh Iyer
1
Part 1: Product Positioning
Execution Toolkit
Product Manager’s Positioning Strategy Toolkit
1: For whom am I? Identify the Target Consumer Segment.
For _____________,
(Target Market)
2: Who am I? (value proposition, usp)
our product/service is ______________________________________________
(Most Important Claim/Unique Selling Proposition)
3: Why buy me? (support)
because ___________________
(Single Most Important Support)
4: And not the competition? (competitive set)
among all ___________________
(Competitive Set)
Ganesh Iyer
2
The Four Positioning Questions
1.
For whom am I? (Target customer segment)
2.
Who am I? (Value proposition, USP)
3.
Why buy me? (Support)
4.
And not the competition? (Competitive Advantage)
Ganesh Iyer
3
Positioning a New Product in a Market with an
Incumbent

Where will demand come from?
» increase primary category demand (new customers)
» steal from competitors (existing customers of rival)
» re-capture dissatisfied customers (not happy with existing brand/solution)

Which of the above segments are able to perceive as relevant a given
way of positioning benefit/improvement? (Learning, Self-selection)

With whom can we leverage dimensions that are objectively
measurable?

With whom can we leverage dimensions that are not objectively
measurable?

Evolution of Positioning:
» In what phase to target each segment? (Build category vs. build brand vs.
protect brand)
Ganesh Iyer
4
Erectile Dysfunction Drugs–
Vertical Positioning
A benefit associated with a performance or quality
36h
Attribute, typically objective, for which consumers
differ in valuation.
Examples in Automobiles, PC, Retail Markets
4h
~4h
Viagra
(Pfizer)
Levitra
(Bayer/GSK)
Cialis
(Lilly/Icos)
Ganesh Iyer
5
Erectile Dysfunction Drugs–
Horizontal Positioning
A benefit that is a matter of “taste” or “attitude” often associated
with psychographics, lifestyle, or underlying attitude
Naughty/Mischievous
Romantic
Attitude towards sexual relationship
Ganesh Iyer
6
Competition &
Vertical vs. Horizontal Positioning of New Products
- Well defined objective benefit where more of is better
One firm at high end
-Consumers know how much improvement is worth to
them
-Difference in willingness to pay for improvement
-Segmentation based on tradeoff between particular benefit(s)
and willingness to pay
One firm at low end
One firm offers
benefit B
One firm offers
benefit A
- Price sensitivity not a primary issue
- More is not necessarily better for
everyone
Ganesh Iyer
-Heterogeneity in tastes, attitudes
7
Leverage Unquantifiable Dimensions- Vertical
Reliability/Consistency/Count on it
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Target Market Selection and the Incumbent Firm
Presence of Incumbent firm creates a new layer of segmentation
(users, drop outs, never tried but aware, never tried not aware)
= Behavior- based segmentation.

Does dis-satisfaction with existing = high willingness to try
something new?

User of incumbent brand = hard to switch = last resort?

Who has advantage with those that never tried?

How do other relevant parties/influencers factor in?
Ganesh Iyer
9
Evolving Positioning
Courage
Sympathy
Fight condition
Building Category
Macho
Winning
Success
Building Brand
Excitement
Wild
Naughty
Protecting Brand
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10
Importance of Positioning

Becoming more important in pharmaceuticals:

78% of drugs that entered the market in past six years were
classified by FDA:
» “not likely to be improvements over drugs already sold to treat the
same condition”.
» Prevalence of lifestyle/Quality of life drugs

Positioning is not what you do to the product but what you
do to the mind of the consumer!
Ganesh Iyer
11
Positioning Strategies

Product Quality: (Ford: Quality is job 1)

Class of Users: (Pepsi generation).

Owning the category (Coke: The Real thing)

Against a Competitor (Avis)
» Repositioning Hertz
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12
Positioning Strategies

Away from Competition (7-Up the Uncola)
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13
Customer Analysis:
Market Research Study
ATTRIBUTE
Good for snacks
Good with meals
For active people
For mixing
Good for indigestion
Thirst quenching
Good tasting
7Up
39
32
38
66
60
60
58
Coke
62
47
60
18
17
30
62
Pepsi
61
44
66
4
8
28
59
Ganesh Iyer
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Options

Tell consumers 7Up possesses soft drink attributes
» point of parity (see also K&K p. 312-314).

Emphasize fresh, clean taste (and no caffeine)
» point of difference
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7Up: “The Uncola”
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Positioning Traps (1)

Positioning on unimportant/irrelevant attributes
1992
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Positioning Traps (2)
Positioning with the wrong attributes
Diet Beer
 Gablinger’s
 Introduced in 1967 as a “low calorie” diet beer

Lite beer by Miller
 Less filling…means you can drink more!
» Everything you wanted in a beer
» (like getting drunk)…and less.
» 1/3 calories means you can drink 2 extra and call it even!
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18
Positioning Traps (3)

Positioning on someone else’s benefits…positioning is sticky

Burger King unable to claim “fast.” Already taken by
McDonalds.

Mercedes Benz and General Motors unable to claim “safety.”
Already taken by Volvo.
Ganesh Iyer
19
Part 2:
ED Market Updates: Global Performance
• Is Cialis better off with or without DTC in the launch phase?
®
Country
Cialis
Launch Date
2003
Share of PDE5 Market – Dec 2005
®
®
®
Cialis
Viagra
Levitra
U.K.
February
26%
66%
8%
Germany
February
35%
46%
19%
Italy
March
36%
47%
17%
France
February
48%
37%
15%
Spain
March
29%
48%
23%
Mexico
August
36%
42%
22%
Brazil
May
38%
45%
17%
USA
November
23%
65%
12%
Canada
November
31%
62%
7%
Australia
February
41%
51%
8%
Ganesh Iyer
20
Cialis and ED Market- An Update
In the US 2004 ($1.03Billion)
Viagra 65% ($672 million)
Cialis 20% ($206.6million)
Levitra 11% ($112 million)
In the US 2005 ($1.1Billion)
Viagra 61% ($665 million)
Cialis 25% ($273million)
Levitra 14% ($140 million)
Worldwide 2004
Viagra $1.7Billion
Cialis $552million
Levitra $265 million
Cialis in 2005 $746.6million
Ganesh Iyer
21
ED Market Competitive Reactions

Advertising in the US first 11 months of 2004:
» Viagra $98million
» Cialis $151million
» Levitra $147million

The “Cialis Promise” – Lilly gives men three free tablets of Cialis. If not
satisfied Lilly will pay for three free tablets of Levitra or Viagra. If
satisfied another round of Cialis. A Comparative Trial (92% ask for
Cialis again)

Viagra “loyalty program” for every six prescriptions- get seventh free
Ganesh Iyer
22
ED Market Further Updates:

Medical Experts: Men with ED problems = 30 million in US. Men who are
interested in being treated probably half of that.

Worldwide (a modest 5-10% increase in 2004, likewise in 2005)

Number of new prescriptions is going down in US: 10% fewer in October 05’
compared to October 04’

GlaxoSmithKline sold marketing rights outside the US back to Bayer– “The
ED market hadn’t grown as fast as the company had hoped…tough to sell
the drugs without the help of consumer ads” (in most of Europe direct-toconsumer advertising is prohibited)

Sexual performance drugs likely to be covered by Medicare’s new
prescription benefit beginning next year (limited quantities, only when
medically necessary).

Lilly sets deal to acquire ICOS for $ 2.1 Bn.
Ganesh Iyer
23
Competitive Advantages
First-Mover Advantages
» Lock customers in.
» Association with category
» Network effects (among
influencers, consumers)
» Economies of scale
Second-Mover Advantages
» Free-ride on first-mover’s
costs of educating the
market
» Learn from leader’s
mistakes
» Learn the market size
Parallel Entry
» Market may pay more attention when two companies are entering
together.
– Benefit from increased category awareness
Ganesh Iyer
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Learning

Positioning is not what you do to the product but what you
do to the mind of the consumer!

Good Positioning is an integrated answer to 4 questions
1.
2.
3.
4.
For whom am I? (Target customer segment)
Who am I? (value proposition, usp).
Why buy me? (support)
And not the competition? (competitive advantage)
Ganesh Iyer
25