Niconil & Cigarettes
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Since Niconil offers a long-term alternative to cigarettes, and since its purchasers are likely to be highly motivated to begin with, there is a strong argument for pricing Niconil at a premium over cigarettes. In exchange for the higher purchase price over the short-term (six weeks), consumers are able to break free of the cigarette habit and its associated costs. This should be worth a premium. However, Warner-Lambert needs to be mindful that its Irish customers will be paying for the patch out of their own nonreimbursable funds, with the result that there may be some reluctance, or even inability, to fund a significant premium. Thus the company should adopt a pricing strategy which enables it to capture a premium over cigarettes and thus reduce its payback time, but which also recognizes that the consumers have a low elasticity of demand and may not tolerate a much higher than cigarette price.The sales forecasts associated with Niconil pose a more difficult problem. Depending on which sales forecasting technique is used, demand for the product varies from under 50,000 units total over five years to more than 350,000 in the same time period (see pages six and seven). More careful analysis should be given to these estimates in order to determine which is more accurate. The aggressive figure is based on a survey conducted by Warner-Lambert in which 17 percent of smokers indicated that they would go to a doctor, request and pay for a nicotine patch, although these con
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s) the patch, and it must also convince the physicians that the patch is indeed an effective smoking cessation product. Communications, therefore, must be targeted at two distinct audiences, one intended to "push" the product through (aimed at physicians) and the other intended to "pull" the product (aimed at smokers seeking relief).
The support program, since it is not covered by the Irish regulations regarding prescription products, offers a strong inducement to the "pull" aspect. Warner-Lambert could market the support program independent of the patch and use it to promote the patch from the consumer side. While the company runs the risk that some consumers will purchase the support program in order to augment a different smoking cessation program, the overall effect should be to build consumer confidence and association of Warner-Lambert with smoking cessation.
The communication program targeting doctors needs to take a slightly different approach. While the support program is good for smokers since it addresses the psychological addiction, physicians are more interested in getting their patients to break the physical addiction. Since most doctors, according to Warner-Lambert, do not spend a great deal of time discussin
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Some common words found in the essay are:
Niconil Niconil, , Niconil Unlike, Niconil Users, support program, Users Method, smoking cessation, Grand Total, nicotine patch, niconil users, Move Market, Determining Niconil, units purchased method, 1991 1992 1993, purchased method, survey conducted, 1990 1991, 1990 1991 1992, 1994 650000, 1991 1992, 1993 1994 1st, 1994 1st supply, units purchased,
Approximate Word count = 1341
Approximate Pages = 5 (250 words per page)
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