A Case study on BOTOX

Principles of Marketing Group Assignment

Table of contents
Background
SWOT Analysis
 Strengths
 Weaknesses
 Opportunities
 Threats
Recommendations and Solutions
Answers (Question 1 – 5)
References
Allergan
A global health-care company
 Specialty pharmaceutical and medical devices
products.
In1990, Allergan was still a small firm.
Now, Allergan has tremendously grown.
 Botox products: Blockbuster status, with
approximately $1 Billion revenues.
SWOT Analysis
Strengths
Strong financial position
 Acquisition of Inamed.
 Added $371.6 million to revenues in 2006 due to growth in
sales.
 Strong revenue growth.
 2002-2006, 21% growth in revenue.
 2005-2006, cashflow doubled.
 Competitive returns.
 Better returns than the industry average.
Strengths
Botox’s value to customers
 Botox as a specialty drug for ocular problems.
 Highest-rated pharma company website in 2005.
 Treat ocular problems and relieve pains and discomforts.
 Botox as a cosmetic treatment.
 Diversification of products.
 Fast and non-invasive treatment.
 Good relationships with customers (Doctors).
 Private communicating channels, provide resources for
doctors.
 Free distribution of promotional materials.
Weaknesses
Overdependence of topselling products.
◦ Heavily relies on top 5 products.
 Botox franchise, Alphagan P, Alphagan, Combigan,
Lumigan franchise
Geographic market concentration.
 Present mainly in US, 67% revenue from US market.
Side effects of Botox.
 Some negative side effects on patients.
 Headache, respiratory infection, ect. even temporary
paralysis.
Opportunities
Strategic acquisitions.
 Early 2007, acquired EndoArt and Groupe Corneal
Laboratoires.
Penetration into Europe and Asia
 In Europe, collab. with Pierre Fabre Dermatologie
to market Tarozac.
 In Asia, expand and focus on aesthetic treatment.
Global connection.
 Connections with global professional organizations.
Threats
Intense competition.
 Competitive and price sensitive market.
 Competitors: Alcon, Mentro Corporation, Beaufour Ipsen,
Apotex.

Re-importation of drugs
 Much higher prices in American.
 Re-import drugs from other countries
Recommendations & Solutions
Diversification of products.
 Produce more medical, beauty-enhancing cosmetic
products.
Penetration into new markets.
 Metrosexual males market.
 New users market.
Penetration into China market
 China is an enormous market
 Collaboration or acquisition Chinese established
cosmetic companies.
Answers (Question 1-5)
Question 1
Medical market.
 Botox as a need, to relieve discomforts and
inconveniences
 Value, as difference between benefits and costs.
 The greater the value, the higher the price.
 Value delivered.
 Important safety and other information available anywhere.
 Easy and convenient access to Botox.
 Ability to relieave pains and discomforts.
 Packaged in medical field.
Question 1
Cosmetic market
 Botox, as a want and a demand.
 Value delivered
 Enhanced exclusivity with other peripherals programme.
 Loyalty programme with exclusive event invites.
 Non-clinical atmosphere e.g. parties.
 Simple and convenient treatment.
 Value and price:
 With its exclusivity and perceived value, Botox comes as an
expensive commodity.
Question II
Botox sold as an ocular treatment
◦ Product concept
 Constant efforts on reducing negative side effects.
 Decrease conflict interaction when using with other
drugs.
 Enhancing the medical effect of Botox.
 Discovery of new advantageous benefits of Botox.
Question II
Botox as a cosmetic treatment.
◦ Marketing concept.
 Diversification of Botox products.
 Botox for MEN, created for male professionals.
 Botox for excessive underarm sweating.
 Follow and adapt to current trends
 Invest on plastic surgery trend in Asia
 New niche markets, for those need enhanced looks due to
occupational reasons.
Question III
Doctors treating patients in offices
◦ Marketing concept
 Focus on customer’ need: to remove optical or
dermatological problem.
 Long-term relationships are created.
Doctors hold parties for patient at home
◦ Selling concept
 Promotional efforts are made for increasing Botox’
usage.
 Not customer’ need focused.
 Some take up just due to peer pressure, promotional efforts.
Question IV
Customer lifetime value
◦ Value of entire streams of purchases in a life
time patronage of a customer.

Customer equity
◦ Total combined customer lifetime value of all
company’s customers.
Question IV
 Doctors hold informal gatherings.
 More conducive to patient receptivity
 Reduce time & costs, offer discounts.
 Allergan’s VIP cards to offer discounts on follow-up
visits.
 Hotline services of Inamed’ for customers.
 Make order placement, inquiries, update status.
 Personalized product, program and service information.
 Treatments in resorts.
 Patients reimbursement through private insurance
coverage.
 Ontario Drug Benefit Plan.
 Trillium Drug Program.
Question V
Connecting with customers (Doctors).
 Private communicating channels, provide resources
 Botox Cosmetic Physician’s network.
 Allergan Practitioners’ Page.
 Free distribution of promotional materials for health
professionals.
Connecting with final customers.
 Offer great varieties of products
 Further investment in marketing
 In 2002, $50 mllion spent on marketing
 Advertisements all over the world, on magazines
and TV.
Question V
Global connection
 Connections with global professional organizations.
Connections with value and social
responsibilities.
 Allergan Environmental Health and Safety Policy.
 Enhance the welfare of the society.
 Developing a manufacturing process, with minimal
enviromental effects, recyling emphasis.
Reference
 Rewarding consumer loyalty. By: Kapes, Beth. Cosmetic Surgery Times,
May2005, Vol. 8 Issue 4, p1-10, 2p.
 Allergan site ranks first in respect for customers. By: McGuire, Stephen.
Medical Marketing & Media, Apr2005, Vol. 40 Issue 4, p22-22, 1/4p.
 Allergan official website. Retrieved September 25, 2007.
 Botox Injection Information & Botox Cosmetic Injection Doctors.
Retrieved September 28, 2007.
 Allergan, Inc. SWOT Analysis, Jun2007, p1, 10p.
 Philip Kotler, Gary Armstrong, Swee Hoon Ang, Siew Meng Leong, Chin
Tiong Tan, and David K. Tse (2005), Principles of Marketing: An Asian
Perspective, Pearson Education.
Thank you.