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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
Qualitative points of view
b. Value benefit analysis III. Quantitative points of view a. Break even analysis IV. Strategic recommendation
Biopure Marketing Strategy
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 07-17-2002 Biopure Marketing Strategy 3 .
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 07-17-2002 Biopure Marketing Strategy 4 .
4° C human blood Seasonal variations medium $ 125 .800 NORTHFIELD PolyHeme < 4° C Outdated human blood Outdated blood containers high $ 600 .425 BAXTER HemAssist < 4° C Outdated human blood Outdated blood containers medium $ 600 .30° C cattle blood None low $ 600 .HEMOPURE REGULAR BLOOD 2 .800 Criterion BIOPURE Hemopure 2 .800 storage temperature Origin potential bottlenecks procurement costs of basis Price 07-17-2002 Biopure Marketing Strategy 5 .PRODUCT COMPARISON .
OXYGLOBIN Criterion Storage temperature Origin Price Regular Blood 2 .30° C Cattle blood $ 100 .200 Many advantages of Oxyglobin compared to regular blood Oxyglobin is ready to launch 07-17-2002 Biopure Marketing Strategy 6 .PRODUCT COMPARISON .4° C Donator animals $ 50 .100 Oxyglobin 2 .
KEY ISSUES I Should BIOPURE introduce Oxyglobin at all? Reasons for the introduction of products in general Opportunities Conclusion in market Revenues Ability to Experience / Oxyglobin should be spread risk Best practice introduced! 07-17-2002 Biopure Marketing Strategy 7 .
KEY ISSUES II When would be the best point of time to introduce Oxyglobin? February 1998 late 1999 07-17-2002 Biopure Marketing Strategy 8 .
Key issues SWOT analysis II. Break even analysis IV. Value benefit analysis III.AGENDA I. Product comparison b. b. Introduction a. Quantitative points of view a. Qualitative points of view a. Strategic recommendation 07-17-2002 Biopure Marketing Strategy 9 .
BIOPURE Strengths Weaknesses Opportunities Threads 07-17-2002 Biopure Marketing Strategy 10 .SWOT ANALYSIS .
STRENGTHS + 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 07-17-2002 Biopure Marketing Strategy 11 .
WEAKNESSES -Dissension within S BIOPURE’ s top management No distribution network No experience in going to market Stockholders with high expectations Enlargement of production plant needed for expansion W O T 07-17-2002 Biopure Marketing Strategy 12 .
OPPORTUNITIES S O W T + Innovative product + Demand on blood that cannot be satisfied due to periodic shortage and anemia + High benefits for autologous donators 07-17-2002 Biopure Marketing Strategy 13 .
established distribution network and additional products in other markets - - 07-17-2002 Biopure Marketing Strategy 14 .THREADS S O W T Uncertain market price Hemopure’s market entry depends on the FDA approval process Competitor with production capacity three times larger.
VALUE BENEFIT ANALYSIS Criterion Gain of experience Generate revenues / profit Pricing of Hemopure Position in Market Rating 26 25 25 8 Oxyglobin ASAP 2 x 26 = 52 50 25 16 16 8 Oxyglobin later 1 x 26 = 26 25 50 8 Customer Awareness Usage of production capacity Flexibility of production plant & administrative effort ∑ 8 4 4 100 8 4 8 129 4 171 07-17-2002 Biopure Marketing Strategy 15 .
Value of benefit III. b. Quantitative points of view a. Qualitative points of view a. Break even analysis IV. Strategic recommendation 07-17-2002 Biopure Marketing Strategy 16 . Key issues SWOT analysis II. Introduction a. Product comparison b.AGENDA I.
revenue 25 20 15 10 5 0 0 30 60 90 120 150 180 210 240 270 Units  07-17-2002 Biopure Marketing Strategy 17 Contribution $100 Fix Costs Contribution $150 Fix Costs Contribution $200 Fix Costs Costs [M] .BREAK EVEN POINTS FOR DIFFERENT PRICES Assumption : Marketing costs = 5% of max.
„BREAK-EVEN PERCENTAGE“ 70% 60% Use of Capacity 50% 40% 30% 20% 10% 0% 100 150 Selling Price in $ 200 07-17-2002 Biopure Marketing Strategy 18 .
Hemopure Assuming maximum sales.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 .050.a. profit turns out to be $ 37.000 p. Influence of Oxyglobin’s price on Hemopure is questionable 07-17-2002 Biopure Marketing Strategy 19 .
Product comparison b. Key issues SWOT analysis II. Break even analysis b. Introduction a. Aspects of different options III. Quantitative points of view a. Nutzwertanalyse IV. b.AGENDA I. Strategic recommendation 07-17-2002 Biopure Marketing Strategy 20 . Qualitative points of view a.
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 07-17-2002 Biopure Marketing Strategy 21 .
DE 07-17-2002 Biopure Marketing Strategy 22 .RADIC@GMX.DISCUSSION KRISTIAN.