1 / 10

Botox solution

Botox solution. Professor Richard Hamilton. 1. How many men will use Botox if the average male customer has two injections per year?. 2. What is our market penetration of the primary market of 29 million women in our primary market?.

glora
Download Presentation

Botox solution

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Botox solution Professor Richard Hamilton

  2. 1. How many men will use Botox if the average male customer has two injections per year?

  3. 2. What is our market penetration of the primary market of 29 million women in our primary market? • If the primary market has 29 million women - and we are projected to reach 19 million of them, our market penetration is 19/29 or 65.52%

  4. 3. a. which segment is most profitable for Doctors?

  5. 3. b. Which segment is most profitable for Allergan? Revenue for Allergin = 48,000,000 X $ 100 = $ 4,800,000,000. Ad Cost on a per shot basis = $ 50,000,000/48,000,000 = $ 1.041.Given that the margin will be kept at 60%, the $ 50,000,000 promotional cost of $ 1.04 per shot eats into that bound by $ 1.04. Based on the calculations below - each vial costs $155.83 to produce - making each shot cost $38.96

  6. 4. what is the cost of producing the 12 million vials of Botox

  7. 5. a. what happens to the contribution margin if sales do not increase? 5. b. How much do sales need to increase if the company wants to maintain a 60% contribution margin? Given that the contribution margin is 60% and that the cost of goods sold will remain constant - to cover the additional $50 million dollars in ad spending - sales will have to increase by: $50 million / .60 or $83.3333 million dollars. Remember that for every dollar in sales earned - Allergan can only keep $0.60 as gross profit. Therefore to amass $50 million dollars the firm will need to generate $83.333 million in sales revenue.

  8. 5. c. Given the preceding target market information, is this plausible? An additional $83.33 million in sales represents almost 1 million additional shots ($83.88 million / $100 per shot). Given that we can expect to sell 48 million shots in year one - an increase of 2%. 5. d. What other markets could Allergan cultivate? Allergan could expand their reach and target: post operative surgery patients - actors/models - international markets. Again, the discussion should come back to communication strategy and the synergy, if any, that can be developed across segments.

  9. 6. Which segment provides the greatest long-term value?

  10. 7. How could Allergan and physicians use these types of calculations to better position and market Botox?

More Related