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BIOPURE – STRATEGIC MARKETING

BIOPURE – STRATEGIC MARKETING. BA 160 – Marketing Berkeley, 07-17-2002 Lars Eiermann, Eric Hirschberger, Alexander Mantzsch, Carsten Müller, Kristian Radic, Malte von Reden. AGENDA. I. Introduction a. Product comparison b. Key issues II. Qualitative points of view a. SWOT analysis

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BIOPURE – STRATEGIC MARKETING

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  1. BIOPURE – STRATEGIC MARKETING BA 160 – Marketing Berkeley, 07-17-2002 Lars Eiermann, Eric Hirschberger, Alexander Mantzsch, Carsten Müller, Kristian Radic, Malte von Reden

  2. AGENDA I. Introduction a. Product comparison b.Key issues II. Qualitative points of view a. SWOT analysis b. Value benefit analysis III. Quantitative points of view a. Break even analysis IV. Strategic recommendation Biopure Marketing Strategy

  3. INTRODUCTION • To February 1998 Biopure had spent over $ 200 million on developing Hemopure • During the development process Oxyglobin was discovered • Biopure has not brought a product to market yet • Funds are sufficient to operate for two more years • Hemopure will probably receive approval during 1999 while Oxyglobin is approved and ready to launch Biopure Marketing Strategy

  4. GENERAL BENEFITS OF BLOOD SUBSTITUTES • Blood substitutes are universal • Free of threads like AIDS • Storable for up to 2 years • Immediately 100% efficient at transporting oxygen • Further benefits due to smaller molecules Biopure Marketing Strategy

  5. Criterion REGULAR BLOOD BAXTER HemAssist NORTHFIELD PolyHeme BIOPURE Hemopure storage temperature 2 - 4° C < 4° C 2 - 30° C < 4° C Origin human blood Outdated human blood Outdated human blood cattle blood potential bottlenecks Seasonal variations Outdated blood containers Outdated blood containers None procurement costs of basis medium medium high low Price $ 125 - 425 $ 600 - 800 $ 600 - 800 $ 600 - 800 PRODUCT COMPARISON - HEMOPURE Biopure Marketing Strategy

  6. PRODUCT COMPARISON - OXYGLOBIN • Many advantages of Oxyglobin compared to regular blood • Oxyglobin is ready to launch Biopure Marketing Strategy

  7. Conclusion KEY ISSUES I • Should BIOPURE introduce Oxyglobin at all? Reasons for the introduction of products in general Ability to spread risk Opportunities in market Revenues Experience / Best practice Oxyglobin should be introduced! Biopure Marketing Strategy

  8. late1999 February 1998 KEY ISSUES II • When would be the best point of time to introduce Oxyglobin? Biopure Marketing Strategy

  9. AGENDA I. Introduction a. Product comparison b.Key issues II. Qualitative points of view a. SWOT analysis b. Value benefit analysis III. Quantitative points of view a. Break even analysis IV. Strategic recommendation Biopure Marketing Strategy

  10. SWOT ANALYSIS - BIOPURE Strengths Weaknesses Opportunities Threads Biopure Marketing Strategy

  11. Time & development advantage on animal market • Both products are nearly identical in terms of production processes • Funds are sufficient for 2 years S W O T STRENGTHS Biopure Marketing Strategy

  12. Dissension within BIOPURE’ s top management • No distribution network • No experience in going to market • Stockholders with high expectations • Enlargement of production plant needed for expansion S W O T WEAKNESSES Biopure Marketing Strategy

  13. S W O T • Innovative product • Demand on blood that cannot be satisfied due to periodic shortage and anemia • High benefits for autologous donators OPPORTUNITIES Biopure Marketing Strategy

  14. S W O T • Uncertain market price • Hemopure’s market entry depends on the FDA approval process • Competitor with production capacity three times larger, established distribution network and additional products in other markets THREADS Biopure Marketing Strategy

  15. Criterion Rating Oxyglobin ASAP Oxyglobin later Gain of experience 26 2 x 26 = 52 1 x 26 = 26 Generate revenues / profit 25 50 25 Pricing of Hemopure 25 25 50 Position in Market 8 16 8 Customer Awareness 8 16 8 Usage of production capacity 4 8 4 Flexibility of production plant & administrative effort 4 4 8 ∑ 100 171 129 VALUE BENEFIT ANALYSIS Biopure Marketing Strategy

  16. AGENDA I. Introduction a. Product comparison b.Key issues II. Qualitative points of view a. SWOT analysis • Value of benefit III. Quantitative points of view a. Break even analysis IV. Strategic recommendation Biopure Marketing Strategy

  17. BREAK EVEN POINTS FOR DIFFERENT PRICES Assumption : Marketing costs = 5% of max. revenue Biopure Marketing Strategy

  18. „BREAK-EVEN PERCENTAGE“ Biopure Marketing Strategy

  19. PRICING OF OXYGLOBIN Oxyglobin should be introduced at a price of $ 200 per unit • Demand exceeds break-even point • Pet Owners are willing to pay even more • Price Range of Oxyglobin - Hemopure • Assuming maximum sales, profit turns out to be $ 37.050.000 p.a. • Influence of Oxyglobin’s price on Hemopure is questionable Biopure Marketing Strategy

  20. AGENDA I. Introduction a. Product comparison b.Key issues II. Qualitative points of view a. SWOT analysis b. Aspects of different options III. Quantitative points of view a. Break even analysis b. Nutzwertanalyse IV. Strategic recommendation Biopure Marketing Strategy

  21. STRATEGIC RECOMMENDATIONS • Introduce Oxyglobin as soon as possible at $ 200 • Launch a market research to receive more detailed information on the Hemopure market • Marketing department should distinguish Oxyglobin and Hemopure as two independent products • Advertisement for Oxyglobin should consist of adds in veterinary journals and practices as well as of attendance at veterinary trade shows Biopure Marketing Strategy

  22. DISCUSSION KRISTIAN.RADIC@GMX.DE Biopure Marketing Strategy

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