Case Study for Marketing of HemoPure and Oxyglobin

• Price of Oxyglobin ? • Optimum price of

• Annual Revenue Worth
• When to launch Oxyglobin? Oxyglobin
• Break Even In

08/07/2020 Marketing Management – Group 4 1

 Problem Statement

How to best leverage the opportunity by Oxyglobin without jeopardizing the

potential of hemopure?

Options Available

Option 1:
Option 2:
Take oxyglobin to the market now
Launch brand with hemopure &
and sell hemopure later after it
sell oxyglobin post that
gets FDA approval

08/07/2020 Marketing Management – Group 4 2

 1. No prior brand image
1. First FDA approved blood substitute 2. Product weakness
2. Lower cost of raw material
3. Product benefits-
4. RBCs- improved treatment in cases of heart attack and stroke

Strength Weakness

S W
OXYGLOBIN
Biopure
Opportunity
O T Threat
1. Monopoly over veteran market
2. As it would take 2-5 years for any other company 1. Price difference between Oxyglobin and
to bring a product to market no new entrant till Hemopure
that period 2. FDA Approval for Hemopure
3. Unfulfilled demand for blood substitute 3. Negative public perception for source
4. 84% dissatisfied with the current blood transfusion 4. Negative brand image if oxyglobin fails
alternatives available
08/07/2020 Marketing Management – Group 4 3
 Unfavourable Favourable
Peter’s 5 Force - Oxyglobin

Threat of New
Entry
Threat of New Entry Competitive Rivalry
• The threat is low since Biopure • Only company with veterinary blood
company with blood substitutes substitutes

Competitive
Supplier Power Buyer Power
Rivalry

Buyer Power
Supplier Power
• Pet owners are acceptable of the idea
• Abundant supply of the bovine blood
• Negotiating power of the buyer

Substitution
Threat of
decreases
Threat of Substitution
• Blood supply from animal blood
banks & donor animals is very less

08/07/2020 Marketing Management – Group 4 4

 Benefits of Launching Oxyglobin

1. Only veterinary blood substitute in the market

2. Brand image as pioneers of blood substitute methodology
3. Monopoly over veterinary market for at least 2-5 years
4. Build up the brand image to market Hemopure
5. Risk to entire brand dying if hemopure doesn’t work out
6. Don’t want to lose out on revenue
7. Negative social image if not released

08/07/2020 Marketing Management – Group 4 5

Why Launch Oxyglobin now?
Opportunity to establish distribution system

1st mover advantage and Gaurenteed monopoly

for 3 years

Opportunity to create brand value and goodwill

as the only blood substitute player

Protection against the chance that Hemopure

Approval will take time or not happen
4Ps of Oxyglobin
4Ps of Oxyglobin

PRODUCT PLACE PRICE PROMOTION

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 Optimum Price for Oxyglobin

Assumption:
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Price Non-Critical (%) Critical (%) Number of Critical Number of Non- Revenue from Revenue from Non Total (A+B)
($) Cases Critical Cases Critical Cases (A) Critical Cases (B)
50 0.95 1 2745000 812250 137 40.6125 177.8625
100 0.7 0.95 2607750 598500 261 59.85 320.625
150 0.25 0.8 2196000 213750 329 32.0625 361.4625
200 0.05 0.6 1647000 42750 329 8.55 337.95

Revenue in Million $

08/07/2020 Marketing Management – Group 4 9

 Pricing of Biopure
Factors to consider for pricing:
1. Cattle sourced substitute
2. Can be stored at room temperature for up to 2 years, where as it’s
competitors require refrigeration at -4 degrees Celsius.
3. Highly concentrated market with all 3 firms selling almost identical
products. Entry and exit is restricted through legal barriers.

Biopure should initially price hemopure at ~$600-650, in line with it’s competitors. Then it should
work with its competitors and collaborate to reap the benefits of the market by steadily increasing
its profits. Due to the nature of the market, it should not indulge in price competition.

08/07/2020 Marketing Management – Group 4 10

 Benefits?

08/07/2020 Marketing Management – Group 4 11

 Porter’s 5 Forces
For Hemopure (Given that Oxyglobin has been launched)

Bargaining power of buyers:HIGH

Perception of Price Difference
Animal Compound Based

Industry Rivalry:
High Threat of Substitutes:
Bargaining Power of Suppliers: Low
3 New products MEDIUM
Only buyer of Blood from
Slaughterhouses
Launched If Industru is Blood : NO
High Marketing Substitute
Bulk buyer
Expenses If Industry of Blood
Substitute: Blood
Price and Non-Price
Expenses

Threat of New Entrants: LOW

Huge Investment
Long FDA Approval Process