CIALIS

Case Analysis: Cialis

Cialis is a prescription drug developed by the pharmaceutical company Lilly ICOS LLC, to treat Erectile Dysfunction (ED). The challenges include the need to launch Cialis on the market, where ED is an extremely sensitive topic of discussion and where there is already an established leader Viagra.
Marketing Analysis
Customers: Men who suffer from ED are targeted by Cialis. Especially the current unsatisfied Viagra users, Viagra dropouts and those who never used Viagra (Exhibit 1). Patients who experience Viagra’s side effects (e.g. blurred vision) or want a longer half-life time are looking for alternatives, which is Cialis (Exhibit 6). The importance of the drug is high because being sexually incompetent affects the personal lives of the potential customers.
However, due to issues associated with the early launch of Viagra (130 deaths), some customers are afraid to try the drug. Moreover, men who are younger than 50 years, feel embarrassed to talk about the problem and hope the symptoms to go away (Exhibit 3). The perception of ED differs across the 5 possible markets of Cialis, with customers from US and UK being the most open and willing to seek help, while Europeans (German, French) remain more skeptical (Exhibit 4). To summarize, the dimensions along which customers can be segmented are age, geographical region, presence of a sexual partner and Viagra usage history
Company: Strength of Lilly ICOS LLC is that its net income as % Sales is higher (2000) compared to Pfizer or Bayer (competitors). Exhibit 6 shows that Lilly invests high in R&D and has a lower Sales General and Administrative costs (SGA) than the competitors. Furthermore, Lilly ICOS LLC has a strong and fully dedicated cross-functional team, with medical, marketing and logistics functions.
Cialis is the first product brought to the market by the joint venture. Eli Lilly is a pharmaceutical giant whereas ICOS is a Biotech company. This joint venture is optimal since Lilly has the experience along with resources for rolling out a new drug, while ICOS has strong technical competence.
Competitors: Pfizer, the producer of Viagra, is currently the leader in the erectile dysfunction market. It adapts an aggressive strategy; they use famous spokespersons in promotion campaigns and also direct activities towards physicians. Their strategy has enabled them to achieve high brand recognition for Viagra. However, this drug is also perceived as a ‘playboy’ drug. Bayer is another competitor, but it targets only a niche market: patients with ED problems and diabetes. Thus it is not a likely direct competitor for Cialis.
Strategic Recommendations: Segment Targeting Position
Segment: Based on age and sexual partner status dimensions, the following segments are identified: under 50, married; over 50 years, married; under 50years, changing partners; over 50 years, changing partners.
Target: In terms of competitor coverage and general attractiveness, the most attractive are under 50, married and over 50 married segments. They are concerned by not being able to please their lifetime partner and the partner is likely to encourage them to seek help.
Position: Cialis should be launched with a beat strategy. Horizontal diversification should be adapted, as for the first group the durability and a spokesperson of their age is more relatable, while the second group should be informed more of the safety and lack of side effects. For the ones under 50, married: For a successful businessman in his forties, Cialis gives the ultimate 30hours of pleasure time because it is safe and long lasting. Have an aggressive campaign, featuring young people. For over 50, married: For a self-caring man in his fifties, Cialis helps to sustain life-quality - because it is approved by health authorities and long lasting. Clear statements featuring health authorities that it is absolutely safe should be made. This is especially important to avoid the playboy image.
4. 4P’s
Product: Cialis has a relative advantage over the Viagra given the actual benefits to the patient: lasting up to 36 hours, unaffected by food intake, rare visual irregularities. While Viagra works for 80% of cases, Cialis works for 84%. Price: Lilly ICOS LLC should price Cialis 20% higher than Viagra, due to its benefits. It also signals about safety and quality.
Position: Cialis should be positioned as a life-quality premium drug for educated, working middle or upper class customer and ED is a natural outcome of his journey to success (career, money, family-wise). It should be introduced in Anglo-Saxon (UK, USA) and Continental European (Spain, Germany, Italy, France) countries, as from initial market research the cultural attitudes are known (Exhibit 4).
Promotion: Easing the conversation about ED should be the target: TV-ads between 8 p.m-11p.m, radio infomercials, high-school sex-education should be used to get the conversation going. Conferences explaining the benefits of Cialis to doctors (practitioners and urologists) should be organized; especially in Germany, Italy and Spain, as in these countries the physicians are embarrassed to initiate conversation about ED (Exhibit 4).

Exhibits:
Exhibit1.

Exhibit2.
Exhibit3.

Exhibit 4.
Exhibit 5.

Exhibit 6.