Updated: Jun 11th, 2024

The Weight-Loss Options Analysis Case Study

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Table of Contents

Pros and Cons of Print up Forecasting Method
Packaging Size Analysis
Pricing Strategy
Impacts of Pricing Decision

I recommend B2C which is more effective in enhancing product access and consumption. Currently, many different diets, exercise regimens, and prescription and over-the-counter treatments are available for weight loss. Therefore, the producers of these products were forced to pay $25 million by the Federal Trade Commission in 2007 to resolve claims that the results were falsified. The three-month supply of these additional OTC medications costs around $300.00. Additional weight-loss options include exercise regimens, nutritional supplement products like Slim Fast, weight management plans like Weight Watchers, and pre-portioned food delivery programs like Nutrisystem and Jenny Craig.

While pre-portioned food programs like Nutrisystem and Jenny Craig would cost between $1000 and $1600 for three months, Weight Watchers membership costs would be under $120. The pharmaceutical company Cambridge Sciences Pharmaceuticals (CSP) thought there was a market for overweight people seeking alternatives or unsatisfied with their present options. The first prescription medication particularly authorized for obese people with a BMI of 25 to 30 who want to lose 10 to 30 pounds is called Metabical.

Pros and Cons of Print up Forecasting Method

The first strategy involved counting the number of overweight Americans with a BMI of 25 to 30 and then reducing the population to the proportion of people actively attempting to lose weight. 35% of people were actively attempting to reduce weight, according to a CSP poll. 15% of the people in this sample felt at ease utilizing weight-loss medications. Although this strategy is highly organized, it is incredibly wide. There is no specified income, education, or gender range. If the product is released widely, they may miss out on possible target audiences. The calculations are as indicated in table 1 below.

Table 1: 5-Year Demand Forecast

Approach 1 Targeting BMI Between 25 and 30
Available Market	78,000,000
35% Actively Trying to Lose Weight	27,300,000
15% who are Comfortable Using Diet Pills	4,095,000
	Year 1	Year 2	Year 3	Year 4	Year 5
% of Market	10%	15%	20%	25%	30%
First Pack	409,500	614,250	819,000	1,023,750	1,228,500
Second Pack (60%)	245,700	368,550	491,400	614,250	737,100
Third Pack (20%)	49,140	73,710	98,280	122,850	147,420
Sales	704, 340	1,1056,510	1.408,680	1,760,850	2,113,020
Total					7,043,400

Approach 2 Targeting BMI Between 25 and 30
Available Market
12% Prescribed by Health Care Provider	9,360,000	9,360,000	9,360,000	9,360,000	9,360,000
	Year 1	Year 2	Year 3	Year 4	Year 5
% of the Market	10%	15%	20%	25%	30%
First Pack	936,000	1,404,000	1,872,000	2,340,000	2,808,000
Second Pack	561,600	842,400	1,123,200	1,404,000	1,684,800
Third Pack	112,320	168,480	224,640	280,800	336,960
Sales	1,609,920	2,414,880	3,219,840	4,024,800	4,829,760
Total					16,099,200

Approach 3 Targeting Educated Females Between Ages 35 to 65 With BMI Between 25 and 30
Available Market
	4,300,000	4,300,000	4,300,000	4,300,000	4,300,000
	Year 1	Year 2	Year 3	Year 4	Year 5
% Market	30%	35%	40%	45%	50%
First Pack	1,260,000	1,505,000	1,720,000	1,935,000	2,150,000
Second Pack	774,000	903,000	1,032,000	1,161,000	1,290,000
Third Pack	154,800	180,600	206,400	232,200	258,000
Sales	2,218,800	2,588,600	2,958,400	3,328,200	3,698,000
total					14,792,000

Us Population Obesity Population	78,000,000

Packaging Size Analysis

Some of the considerations include the following:

In the FDA studies, people completed their weight loss targets in twelve weeks
Due to the low dosage formula, the drug would have to be given at the same time each day. The efficacy would be greatly decreased if consumers missed a day.

Recommendations

I advise using packaging with a 28-day, 4-week supply. The proposed container would be compact enough to allow the user to choose between buying a 12-week supply in one go or a 4-week supply. The four-week package might be beneficial for those who may not be able to buy all 12 weeks at once because insurance companies are not paying for the prescription.

Pricing Strategy

Options, competitive pricing, premium pricing, were all things Printup was investigating and could have utilized.

Option 1 Advantages: Competitive Pricing: A new entrant would have an easier time entering the market if there were competitive pricing, enabling them to compete in a market with much competition.

Option 1 Disadvantages: Competitive Pricing: Once the price is lower, there may be a decrease in sales and profit margins.

Option 2 Advantages: Premium Pricing: It would help generate immediate income that may eventually be used to offset the $400 million overall R&D expenses.

Option 2 Disadvantages: Premium Pricing: This cost may drive away customers with lower income levels.

Recommendations

I would advise using a premium pricing structure. The company will be able to swiftly recoup its R&D costs because of the higher sale price. Additionally, this tactic could revitalize their brand. Customers who want to reduce weight and seek a higher-quality product will be drawn to this cost. Customers believe the product is the greatest if the price is high. The product might always be discounted later once it has gained more traction. This consumer will purchase a four-week supply that they will replenish more frequently, increasing sales.

Impacts of Pricing Decision

For every year and every target category, premium pricing provides a profitable return on investment. Notably, the target group of people with a BMI between 25 and 30 had the highest ROI at 184% for the premium pricing as indicated in table 2 below.

Table 2: Quantitative Analysis: Gross Margin Forecast, Cost Estimates, Return on Investment

Approach 1 Targeting BMI Between 25 and 30
Available Market	78,000,000
35% Actively Trying to Lose Weight	27,300,000
15% who are Comfortable Using Diet Pills	4,095,000
	Year 1	Year 2		Year 3	Year 4		Year 5
% of Market	10%	15%		20%	25%		30%
First Pack	409,500	614,250		819,000	1,023,750		1,228,500
Second Pack (60%)	245,700	368,550		491,400	614,250		737,100
Third Pack (20%)	49,140	73,710		98,280	122,850		147,420
Sales	704, 340	1,1056,510		1.408,680	1,760,850		2,113,020
Total							7,043,400

Pricing Option 1 $75.00			Pricing Option 2 $125.00			Pricing Option 2 $150.00
Total Manufacture Price	528,255,000	Total Manufacture Price		880,425,000	Total Manufacture Price		1,056,510,000
Fixed Cost	424,200,000	Fixed Cost		424,200,000	Fixed Cost		424,200,000
Variable Cost	177,493,680	Variable Cost		177,493,680	Variable Cost		177,493,680
Manufacturer Gross Margin	174,676,320	Manufacturer Gross Margin		409,432,842	Manufacturer Gross Margin		526,846,320
ROI	-60%	ROI		-3%	ROI		24%
Approach 2 Targeting BMI Between 25 and 30
Available Market
12% Prescribed by Health Care Provider	9,360,000	9,360,000		9,360,000	9,360,000		9,360,000
	Year 1	Year 2		Year 3	Year 4		Year 5
% of the Market	10%	15%		20%	25%		30%
First Pack	936,000	1,404,000		1,872,000	2,340,000		2,808,000
Second Pack	561,600	842,400		1,123,200	1,404,000		1,684,800
Third Pack	112,320	168,480		224,640	280,800		336,960
Sales	1,609,920	2,414,880		3,219,840	4,024,800		4,829,760
Total							16,099,200

Pricing Option 1 $75.00	Pricing Option 2 $125.00	Pricing Option 2 $150.00
Total Manufacture Price	1,207,440,000	Total Manufacture Price		2,012,400,000	Total Manufacture Price		2,414,880,000
Fixed Cost	424,200,000	Fixed Cost		424,200,000	Fixed Cost		424,200,000
Variable Cost	405,699,840	Variable Cost		405,699,840	Variable Cost		405,699,840
Manufacturer Gross Margin	405,699,840	Manufacturer Gross Margin		935,846,496	Manufacturer Gross Margin		1,204,220,160
ROI	-4%	ROI		121%	ROI		184%
Approach 3 Targeting Educated Females Between Ages 35 to 65 With BMI Between 25 and 30
Available Market
	4,300,000	4,300,000		4,300,000	4,300,000		4,300,000
	Year 1	Year 2		Year 3	Year 4		Year 5
% Market	30%	35%		40%	45%		50%
First Pack	1,260,000	1,505,000		1,720,000	1,935,000		2,150,000
Second Pack	774,000	903,000		1,032,000	1,161,000		1,290,000
Third Pack	154,800	180,600		206,400	232,200		258,000
Sales	2,218,800	2,588,600		2,958,400	3,328,200		3,698,000
total							14,792,000

Pricing Option 1 $75.00	Pricing Option 2 $125.00	Pricing Option 2 $150.00
Total Manufacture Price	1,109,400,000	Total Manufacture Price		1,849,000,000	Total Manufacture Price		2,218,800,000
Fixed Cost	424,200,000	Fixed Cost		424,200,000	Fixed Cost		424,200,000
Variable Cost	372,758,400	Variable Cost		372,758,400	Variable Cost		372,758,400
Manufacturer Gross Margin	366,841,600	Manufacturer Gross Margin		859,858,960	Manufacturer Gross Margin		1,106,441,600
ROI	-14%	ROI		103%	ROI		161%

Us Population Obesity Population	78,000,000

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