Declan Dixon, director of marketing for Warner-Lambert Ireland (WLI), examined two very different sales forecasts as he considered the upcoming launch of Niconil, scheduled for January 1990. Niconil was an innovative new product that promised to help the thousands of smokers who attempted to quit smoking each year. More commonly known simply as "the patch," Niconil was a transdermal skin patch that gradually released nicotine into the bloodstream to alleviate the physical symptoms of nicotine withdrawal.

Now in October of 1989, Dixon and his staff had to decide several key aspects of the product launch. There were different opinions about how Niconil should be priced and in what quantities it would sell. Pricing decisions would directly impact product profitability as well as sales volume, and accurate sales forecasts were vital to planning adequate production capacity. Finally, the product team needed to reach consensus on the Niconil communications campaign to meet advertising deadlines and to ensure an integrated product launch.

Company Background

Warner-Lambert was an international pharmaceutical and consumer products company with over $4 billion in worldwide revenues expected in 1989. Warner-Lambert consumer products (50% of worldwide sales) included such brands as Dentyne chewing gum, Listerine mouth wash, and Hall's cough drops. Its pharmaceutical products, marketed through the Parke Davis Division, included drugs for treating a wide variety of ailments, including heart disease and bronchial disorders.

Warner-Lambert's Irish subsidiary was expected to generate 30 million in sales revenues in 1989: 1 22 million from exports of manufactured products to other Warner-Lambert subsidiaries in Europe and 4 million each from pharmaceutical and consumer products sales within Ireland. The Irish drug market was estimated at 155 million (in manufacturer sales) in 1989. Warner-Lambert was the sixteenth-largest pharmaceutical company in worldwide revenues; in Ireland, it ranked sixth.

Dixon was confident that WLI's position in the Irish market would ensure market acceptance of Niconil. The Parke Davis Division had launched two new drugs successfully within the past nine months: Dilzem, a treatment for heart disease, and Accupro, a blood pressure medication. The momentum was expected to continue. The Irish market would be the first country launch for Niconiland thus serve as a test market for all of Warner-Lambert. The companywide significance of the Niconil launch was not lost on Dixon as he pondered the marketing decisions before him.

Almost 600 million would be spent by Irish smokers on 300 million packs of cigarettes in 1989; this included government revenues from the tobacco sales tax of 441 million. Of 3.5 million Irish citizens, 30% of the 2.5 million adults smoked cigarettes (compared with 40% of adults in continental Europe and 20% in the United States).2 The number of smokers in Ireland had peaked in the late 1970s and had been declining steadily since. Table A presents data from a 1989 survey that WLI had commissioned of a demographically balanced sample of 1,400 randomly chosen Irish adults. Table B shows the numbers of cigarettes smoked by Irish smokers; the average was 16.5 cigarettes.

Table AIncidence of Cigarette Smoking in Ireland (1988-1989)

Of adult population(16 and over) 30% (100%)

By Gender

Men 32 (50)

Women 2 (50)

7

By Age

16-24 27 (17)

25-34 38 (14)

35-44 29 (12)

45-54 29 (9)

55+ 27 (19)

By Occupation

White collar 24 (25)

Skilled working class 33 (30)

Semi- and unskilled 38 (29)

Farming 23 (17)

Note: To be read (for example): 27% of Irish citizens aged 16-24 smoked, and this age group represented 17% of the population.

Media coverage on the dangers of smoking, anti-smoking campaigns from public health organizations such as the Irish Cancer Society, and a mounting array of legislation restricting tobacco advertising put pressure on Irish smokers to quit. Promotional discounts and coupons for tobacco products were prohibited, and tobacco advertising was banned not only on television and radio but also on billboards. Print advertising was allowed only if 10% of the ad space was devoted to warnings on the health risks of smoking. Exhibit 1 shows a sample cigarette advertisement from an Irish magazine.

Table BNumber of Cigarettes Smoked Daily in Ireland

(based on 400 smokers in a 1989 survey of 1,400 citizens)

More than 20 16%

15-20 42

10-14 23

5-9 12

Less than 5 4

Unsure 3

Smoking as an Addiction

Cigarettes and other forms of tobacco contained nicotine, a substance that induced addictive behavior. Smokers first developed a tolerance for nicotine and then, over time, needed to increase cigarette consumption to maintain a steady, elevated blood level of nicotine. Smokers became progressively dependent on nicotine and suffered withdrawal symptoms if they stopped smoking. A craving for tobacco was characterized by physical symptoms such as decreased heart rate and a drop in blood pressure, and later could include symptoms like faintness, headaches, cold sweats, intestinal cramps, nausea, and vomiting. The smoking habit also had a psychological component stemming from the ritualistic aspects of smoking behavior, such as smoking after meals or in times of stress.

Since the 1950s, the ill effects of smoking had been researched and identified. Smoking was widely recognized as posing a serious health threat. While nicotine was the substance within the cigarette that caused addiction, it was the tar accompanying the nicotine that made smoking so dangerous. Specifically, smoking was a primary risk factor for ischaemic heart disease, lung cancer, and chronic pulmonary diseases. Other potential dangers resulting from prolonged smoking included bronchitis, emphysema, chronic sinusitis, peptic ulcer disease, and for pregnant women, damage to the fetus.

Once smoking was recognized as a health risk, the development and use of a variety of smoking cessation techniques began. In aversion therapy, the smoker was discouraged from smoking by pairing an aversive event such as electric shock or a nausea-inducing agent with the smoking behavior, in an attempt to break the cycle of gratification. While aversion therapy was successful in the short-term, it did not prove a lasting solution, as the old smoking behavior would often be resumed. Aversion therapy was now used infrequently. Behavioral self-monitoring required the smoker to develop an awareness of the stimuli that triggered the desire to smoke and then to systematically eliminate the smoking behavior in specific situations by neutralizing those stimuli. For example, the smoker could learn to avoid particular situations or to adopt a replacement activity such as chewing gum. This method was successful in some cases but demanded a high degree of self control. While behavioral methods were useful in addressing the psychological component of smoking addiction, they did not address the physical aspect of nicotine addiction that proved an insurmountable obstacle to many who attempted to quit.

Warner-Lambert's Niconil would be the first product to offer a complete solution for smoking cessation, addressing both the physical and psychological aspects of nicotine addiction. The physical product was a circular adhesive patch, 2.5 inches in diameter and containing 30mg of nicotine gel. Each patch was individually wrapped in a sealed, tear-resistant packet. The patch was applied to the skin, usually on the upper arm, and the nicotine was absorbed into the bloodstream to produce a steady level of nicotine that blunted the smoker's physical craving. Thirty milligrams of nicotine provided the equivalent of 20 cigarettes, without the cigarettes' damaging tar. A single patch was applied once a day every morning for two to six weeks, depending on the smoker. The average smoker was able to quit successfully (abstaining from cigarettes for a period of six months or longer) after three to four weeks.

In clinical trials, the Niconil patch alone had proven effective in helping smokers to quit. A WLI study showed that 47.5% of subjects using the nicotine patch abstained from smoking for a period of three months or longer versus 15% for subjects using a placebo patch. Among the remaining 52.5% who did not stop completely, there was a marked reduction in the number of cigarettes smoked. A similar study in the United States demonstrated an abstinence rate of 31.5% with the Niconil patch versus 14% for those with a placebo patch. The single most important success factor in Niconil effectiveness, however, was the smoker's motivation to quit. "Committed quitterswere the most likely to quit smoking successfully, using Niconil or any other smoking cessation method."

There were some side effects associated with use of the Niconil patch, including skin irritation, sleep disturbances, and nausea. Skin irritation was by far the most prevalent side effect, affecting 30% of patch users in one study. This skin irritation was not seen as a major obstacle to sales, as many study participants viewed their irritated skin areas as "badges of merit" that indicated their commitment to quitting smoking. WU recommended placement of the patch on alternating skin areas to mitigate the problem. Future reformulations of the nicotine gel in the patch were expected to eliminate the problem entirely.

Niconil had been developed in 1985 by two scientists at Trinity College in Dublin working with Elan Corporation, an Irish pharmaceutical company specializing in transdermal drug delivery systems. Elan had entered into a joint venture with WU to market other Elan transdermal products: Dilzem and Theolan, a respiratory medication. In 1987 Elan agreed to add Niconil to the joint venture. Warner-Lambert planned to market the product worldwide through its subsidiaries, with Elan earning a royalty on cost of goods sold. 3

Ireland was the first country to approve the Niconil patch. In late 1989 the Irish National Drugs Advisory Board authorized national distribution of Niconil, but stipulated that it could be sold by prescription only. This meant that Niconil, as a prescription product, could not be advertised directly to the Irish consumer.

Health Care in Ireland

Ireland's General Medical Service (CMS) provided health care to all Irish citizens. Sixty-four percent of the population received free hospital care through the CMS, but were required to pay for doctor's visits (which averaged 15 each). and for drugs {which were priced lower in Ireland than the average in the European Economic Community). The remaining 36% of the population qualified as either low-income or chronic-condition patients and received free health care through the CMS. For these patients, hospital care, doctor's visits, and many drugs were obtained without fee or co payment. Drugs paid for by the CMS were classified as "reimbursable"; approximately 70% of all drugs were reimbursable in 1989. Niconil had not qualified as a reimbursable drug; although WU was lobbying to change its status, the immediate outlook was not hopeful.4

Support Program

While the patch addressed the physical craving for nicotine, Dixon and his team had decided to develop a supplementary support program to address the smoker's psychological addiction. The support program included several components in a neatly packaged box which aimed to ease the smoker's personal and social dependence on cigarettes. A book.let explained how to change behavior and contained tips on quitting. Bound into the booklet was apersonal"contract"onwhichthe smoker could list his or her reasons for quitting and plans for celebratingsuccessfulabstinence. There was a diary that enabled the smoker to record patterns of smoking behavior priortoquitting and that offered inspirational suggestions for each day of the program.Finally,anaudio-tape included instruction in four relaxation methods which the smoker could practice in place of cigarette smoking. The relaxation exercises were narrated by Professor Anthony Clare, a well-known Irish psychiatrist who hosted a regular television program. The tape also contained an emergency-help

section to assist the individual in overcoming sudden episodes of craving. A special toll-free telephone number to WU served as a hot line to address customer questions and problems. Sample pages from the Niconil support program are presented as Exhibit 2.

While studies had not yet measured the impact of the support program on abstinence rates, it was believed that combined use of the support program and the patch could only increase Niconil's success. It had proven necessary to package the Niconil support program separately from the patch to speed approval of the patch by the Irish National Drug Board. A combined package would have required approval of the complete program, including the audio-tape, which would have prolonged the process significantly. If separate, the support program could be sold without a prescription and advertised directly to the consumer. Development of the support program had cost 3,000. WU planned an initial production run of 10,000 units at a variable cost of 3.50 per unit.

The support program could serve a variety of purposes. Several WU executives felt that the support program should be sold separately from the nicotine patches. They considered the support program a stand-alone product that could realize substantial revenues on its own, as well as generating sales of the Niconil patches. Supporting this position, a pricing study completed in 1989 found that the mean price volunteered for a 14-day supply of the patches and the support program combined was 27.50, and for the patches alone, 22.00. The mean price for the support program alone was 8.50, suggesting a relatively high perceived utility of this component among potential consumers. There was a risk, however, that consumers might purchase the Niconil support program instead of the patches, or as an accompaniment to other smoking cessation products-thuslimiting sales of the Niconil patches.

Another group of executives saw the support program as a value-added pointof difference that could stimulate Niconil patch sales. This group favored widedistributionofthesupport programs, free of charge, to potential Niconil customers.Athirdgroup ofWUexecutives argued that the support program was an integral component oftheNiconil productwhichwouldenhance the total package by addressing the psychological aspects of nicotine addiction and improve the product's success rate, thereby increasing its sales potential. As such, these executives believed that the support program should be passed on only to those purchasing Niconil patches, at no additional cost.

Two options, not necessarily mutually exclusive, wereunderconsiderationforthe distribution of the support programs. One option was to distribute them through doctors prescribing Niconil. A doctor could present the program tothe patient during the office visitas he or she issued the Niconil prescription, reinforcing the counseling role of the doctor intheNiconiltreatment. Supplying the GPs with support programs could also serve to promote Niconil in the medical community. A second option was to distribute the support programs through the pharmacies, where customers could receive the support programs when they purchased the Niconil patches. A disadvantage of this option was that a customer might receive additional support programs each time he or she purchased another package of Niconil. However. these duplicates might be passed on to other potential consumers and thus become an informal advertising vehicle for Niconil.

Pricing

Because all potential Niconil customers would pay for the product personally, pricing was a critical component of the Niconil marketing strategy. Management debated how many patches to include in a single package and at what price to sell each package. In test trials, the average smokersucceeded in quitting with Niconil in three to four weeks (i.e., 21 to 28 patches); others needed as long as six weeks.

As Niconil was essentially a tobacco substitute, cigarettes provided a logical model for considering various packaging and pricing options. The average Irish smoker purchased a pack of cigarettes daily, often when buying the morning newspaper. Fewer than5% ofall cigarettes were sold in cartons.6 Because the Irish smoker rarely purchased a multi-week cigarette supply at once, he or she was thought likely to compare the cost of cigarette purchases with the cost of a multi-week supply of Niconil. WU thus favored packaging just a 7-day supply of patches in each unit. However, Warner-Lambert subsidiaries in continental Europe, where carton purchases were more popular, wanted to include a six-week supply of patches in each package if and when they launched Niconil.

Managers at Warner-Lambert's international division wanted to standardize packaging as much as possible across its subsidiaries and suggested as a compromise a 14-day supply per package.

Following the cigarette model, two pricing schemes had been proposed. The first proposal was to price Niconil on a par with cigarettes. The average Irish smoker smoked 16.5 cigarettes per day and the expected retail price in 1990 for a pack of cigarettes was 2.25. WLI's variable cost of goods for a 14-day supply of Niconil was 12.00.7 Pharmacies generally added a 50% retail mark-up to the price at which they purchased the product from WLI. A value-added tax of 25% of the retail price was included in the proposed price to the consumer of 32.00 for a 14-day supply. In addition,

the consumer paid a 1.00 dispensing fee per prescription.

Under the second pricing proposal, Niconil would be priced at a premium to cigarettes. Proponents argued that if the Niconil program were successful, it would be a permanent replacement for cigarettes and its cost would be far outweighed by the money saved on cigarettes. The proposed price to the consumer under this option was 60.00 for a 14-day supply.

Competition

Few products would compete directly with Niconil in the smoking cessation market in Ireland. Two small niche products were Accudrop and Nicobrevin, both available without a prescription. Accudrop was a nasal spray that smokers applied to the cigarette filter to trap tar and nicotine, resulting in cleaner smoke. Anticipated 1990 manufacturer sales for Accudrop were 5,000. Nicobrevin, a product from the U.K., was a time-release capsule that eased smoking withdrawal symptoms. Anticipated 1990 manufacturer's sales for Nicobrevin were 75,000.

The most significant competitive product was Nicorette, the only nicotine-replacement product currently available. Marketed in Ireland by Lundbeck, Nicorette was a chewing gum that released nicotine into the body as the smoker chewed the gum. Because chewing gum in public was not socially acceptable among Irish adults. the product had never achieved strong sales, especially given that its efficacy relied on steady, intensive chewing. A second sales deterrent had been the association of Nicorette with side effects, such as mouth cancer and irritation of the linings of the mouth and stomach.

Nicorette was sold in 10-day supplies, available in two dosages: 2mg and 4mg. Smokers would chew the 2mg Nicorette initially, and switch to the 4mg gum after two weeks if needed. In a 1982 study, 47% of Nicorette users quit smoking, versus 21% for placebo users. A long-term follow up study in 1989, however, indicated that only 10% more Nicorette patients had ceased smoking,

compared with placebo users. The average daily treatment cost to Nicorette customers was 0.65 per day for the 2mg gum and 1.00 per day for the 4mg gum. Nicorette, like Niconil, was available at pharmacies by prescription only, so advertising had been limited to medical journals. Anticipated 1990 manufacturer sales of Nicorette were 170,000; however, the brand had not been advertised in three years.

Forecasting

Although Nicorette was not considered a successful product, WU was confident that Niconil, with its less-intrusive nicotine delivery system and fewer side effects, would capture a dominant position in the smoking cessation market and ultimately increase the demand for smoking cessation products. Precise sales expectations for Niconil were difficult toformulate,however,andtwo different methods had been suggested.

The first method assumed that the percentage of smokers in the adult population (30% in 1990) would drop by one percentage point per year through 1994. An estimated 10% of smokers attempted to quit smoking each year, and 10% of that number purchased some type of smoking cessation product. WU believed that Niconil could capture half of these "committed quitters" in the first year, selling therefore to 5% of those who tried to give up smoking in 1990. Further, they hoped to increase this share by 1% per year, up to 9% in 1994. Having estimated the number of customers who would purchase an initial two-week supply of Niconil, WU managers then had to calculate the total number of units purchased. Based on experience in test trials. WU anticipated that 60% of first time Niconil customers would purchase a second two-week supply. Of that number, 20% would purchase a third two-week supply. About 75% of smokers completed the program within six weeks.

A more aggressive forecast could be based on WLI's 1989 survey, which showed that of the 30% of [the 1,400] respondents who were smokers, 54% indicated that they would like to give up smoking, and 30% expressed interest in the nicotine patch. More relevant, 17% of smokers indicated that they were likely to go to the doctor and pay for such a patch, though a specific purchase price was not included in the question.A rule of thumb in interpreting likelihood-of-purchase data was to divide this percentage by three to achieve a more likely estimate of actual purchasers. Once the number of Niconil customers was calculated, the 100%/60%120% model used above could then be applied to compute the total expected unit sales.

Production

Under the terms of the joint venture with Elan and using current manufacturing technology, production capacity would be 1,000 units (of14-day supply packages)per month in the first quarterof 1990, ramping up to 2,000 units per month by year-end. WU had the option to purchase a new,more efficient machine that could produce 14,000 units per month and reduce WU's variable cost on each unit by 10%. In addition. if WU purchased the new machine and Niconil was launched in continental Europe, WU could export some of its production to the European subsidiaries, further expanding its role as a supplier to Warner-Lambert Europe.WU would earn a margin of2.00 per unit on Niconil that it sold through this channel.8 Estimated annual unit sales, assuming a launch of Niconil throughout Western Europe, are listed in Table C. Warner-Lambert management aimed to recoup any capital investments within five years; the Niconil machine would cost 1.2millionand could be on-line within nine months.

Table CEstimated Unit Sales of Niconil in Western Europe

Year1 100,000 units

Year2 125,000 units

Year3 150,000 units

Year4 175,000 units

Year5 200,000 units

Prescription products included all pharmaceutical items deemed by the Irish government to require the professional expertise of the medical community to guide consumer usage.9 Before a customer could purchase a prescription product, he or she first had to visit a doctor and obtain a written prescription which specified that product. The customer could then take the written prescription to one oflreland's 1.132 pharmacies and purchase the product.

The prescription nature of Niconil thus created marketing challenges. A potential Niconil customer first had to make an appointment with a doctor for an office visit to obtain the necessary prescription. Next, the doctor had to agree to prescribe Niconil to the patient to help him or her to quit smoking. Only then could the customer go to the pharmacy and purchase Niconil. This two-step purchase process required WU to address two separate audiences in marketing Niconil: the Irish smokers who would eventually use Niconil and the Irish doctors who first had to prescribe it to patients.

Niconil's potential customers were the 10% of Irish smokers who attempted to give up smoking each year (2% of the total Irish population). Market research had shown that those most likely to purchase Niconil were aged 35-44 and in either white-collar or skilled occupations (18% of Irish smokers). Smokers under the age of 35 tended to see themselves as "bullet proof": because most were not yet experiencing the negative health effects of smoking, it was difficult to persuade them to quit. Upper-income, better-educated smokers found less tolerance for smoking among their peers and thus felt greater pressure to quit. Research had also indicated that women were 25% more likely to try Niconil as they tended to be more concerned with their health and thus more often visited the doctors from whom they could learn about Niconil and obtain the necessary prescription.

The most likely prescribers of Niconil would be the 2,000 General Practitioners (GPs) in Ireland. The average GP saw 15 patients per day and eight out of ten general office visits resulted in the GPs writing prescriptions for patients. Although 10% of Irish doctors smoked, virtually all recognized the dangers of smoking and rarely smoked in front of patients. A Modern Medicine survey of 780 Irish GPs indicated that 63% formally gathered smoking data from their patients. GPs acknowledged the health risk that smoking posed to patient health, but they were usually reluctant to pressure a patient to quit unless the smoker was highly motivated. Unsolicited pressure to quit could meet with patient resistance and result, in some cases. in a doctor losing a patient and the associated revenues from patient visits. Smoking cessation was not currently a lucrative treatment area for GPs. Most would spend no longer than 15 minutes discussing smoking with their patients. To the few patients who asked for advice on how to quit smoking, 92% of GPs would offer "firm. clear-cut advice." Fewer than 15% would recommend formal counseling, drug therapy, or other assistance. GPs were not enthusiastic about Nicorette due to poor results and the incidence of side effects.

WU was confident that Niconil would find an enthusiastic audience among Irish GPs. As a complete program with both physical and psychological components, Niconil offered a unique solution. In addition.the doctor would assume a significant counseling role in the Niconil treatment. It was anticipated that the GP would initially prescribe a 14-day supply of Niconil to the patient. Atthe end of the two-week period, the patient would hopefully return to the doctor for counselingand an additional prescription. if needed.

Marketing Communications

WU intended to position Niconil as a complete system that was a more acceptable alternative to existing nicotine replacement therapy for the purpose of smoking cessation. Niconil would be the only smoking cessation product to address both the physical dimension of nicotine addiction through the patch and the psychological dimension through the support program. Compared with Nicorette gum, Niconil offered a more acceptable delivery system (Niconil's transdermal system vs. Nicorette's oral system) and fewer, less severe side effects. WU planned to promote these aspects of the product through a comprehensive marketing program. The Niconil launch marketing budget, detailed in Exhibit 3, followed the Warner-Lambert standard for new drug launches. Several WU executives felt that this standard was inadequate for the more consumer-oriented Niconil and pressed for increased communications spending.

Because Irish regulations prohibited the advertising of prescription products directly to the consumer, Niconil advertising was limited to media targeting the professional medical community. Three major publications targeted this audience: Irish Medical Times, Irish Medical News, and Modern Medicine. WU planned to advertise moderately in the first year to raise awareness of Niconil in the medical community. After that it was hoped that the initial momentum could be maintained through strong public relations efforts and personal testimony to the product's efficacy. Exhibit 4 summarizes the proposed 1990 media advertising schedule for Niconil.

WU's advertising agency had designed a distinctive logo for Niconil thatwould be used on all packaging and collateral materials such as "No Smoking" placards. These would featurethe Niconil logo and be distributed to doctors' offices, hospitals, and pharmacies to promote the product. Ideally, the logo would become sufficiently well recognized that it could be used eventually on a stand-alone basis to represent Niconil to the end consumer without the brand name.Thiswould allow some flexibility in circumventing Irish advertising restrictions to reach the end consumer. Sample logos and packaging are illustrated in Exhibit 5. The agency had also developedthefollowing four concepts for a Niconil medical journal advertisement:

• Day and night I crave cigarettes. I can't stop. I'm hooked." When they ask for help, give them the help they need-new Niconil nicotine transdermal patches.
• Where there's smoke, there's emphysema, throat cancer, sinusitis.Now a way to break this deadly addiction. nicotine transdermal patches-all they need to succeed.
• Emphysema, lung cancer, peptic ucler, angina, sinusitis, throat cancer. Help end their deadly addiction. One-a-day instead of a pack-a-day. Introducing Niconil nicotine transdermal patches
• "How many of your patients are dying for a smoke?" Help them break the cycleof addiction. Introducing Niconil nicotine transdermal patches. A better way to stop.

Direct Mail

A direct mail campaign to Ireland's 2,000 GPs was planned in conjunction with the Niconil product announcement. Two weeks prior to launch. an introductory letter would be mailed with a color photo of the product. a reply card offering a support program, and additional product information. The support programs would be mailed in response to the reply cards, arriving just prior to the launch. A response rate of at least 50% was anticipated based on past direct mail campaigns.

Public Relations

The formal Niconil product announcement was scheduled to occur in Dublin at a professional event that WU had dubbed the "Smoking Cessation Institute Symposium." The symposium would be chaired by Professor Anthony Clare (the narrator of the Niconil audio-tape). Professor Hickey (an expert in preventive cardiology). and Professors Masterson and J. Kelly from Elan Corporation. Open to members of the medical profession and media. the event was intended to focus attention on the dangers of smoking and to highlight Niconil as a ground-breaking product designed to address this health hazard.

WU had sought endorsements from both the Irish Cancer Society and the Irish Heart Foundation, two national health organizations that actively advocated smoking cessation. Because both nonprofit institutions relied on donations for financing and were concerned that a specific product endorsement would jeopardize their tax-exempt status. they refused to endorse Niconil directly. Representatives from each institution had, however. stated their intention to attend the launch symposium.

In advance of the symposium. a press release and supporting materials would be distributed to the media. Emphasis would be placed on the role that Niconil would play in disease prevention. It would also be noted that Niconil had been developed and manufactured locally and had the potential for worldwide sales. Other planned public relations activities included a round-table dinner for prominent opinion leaders in the medical community. Publicity in the media was planned to coincide with key "commitment to change" times such as New Year's and Lent.10

Sales Strategy

WU Ireland had a sales force of 16 representatives whose average annual salary. bonus. and benefits amounted to 25,000 in 1988. They focused their selling efforts on 1,600 Irish GPs who were most accessible geographically and most amenable to pharmaceutical sales visits. The sales staff was divided into three selling teams of four to six representatives. Each team sold separate product lines to the same 1,600 GPs. The team that would represent Niconil was already selling three other drugs from Elan Corporation that were marketed by WLI as part of their joint venture. These four salespeople would add Niconil to their existing product lines. Sales training on Niconil would take place one month prior to the product launch.

The pharmaceutical salesperson's challenge was to maintain the attention of each GP long enough to discuss each item in his or her product line. Because Niconil was expected to be of great interest to GPs, the salespeople were keen to present Niconil first during the sales visit, followed by the less exciting products. Normally, a new product would receive this up-front positioning. However, Dixon argued that Niconil should be presented last during the sales call to maximize thetime that a salesperson spent with each GP and to prevent lhe sales time devoted to the other three Elan products from being cannibalized by Niconil. Based on revenue projections for all four products, salespeople would be instructed to spend no more than 15% of their sales call time on Niconil. On average, each WU salesperson called on six to seven doctors per day. The goal was for each sales team to call on the 1,600 targeted GPs once every three months. In the case of Niconil, all 16 sales people would present the new brand during their calls for six weeks after launch.

With just three months to go before the launch of Niconil, Dixon felt he had to comply with the international division's suggestion to include a 14-day supply of patches in each Niconil package, but he debated whether to price the product on a par with or at a premium to cigarettes. Equally important, he had to decide which sales forecast was more accurate so that he could plan production capacity. And finally, he needed to make decisions on the communications program: which advertising concept would be the most effective, what other efforts could be made to enhance product acceptance. and was the current budget adequate to support Warner-Lambert's first national launch of such an innovative product?

1. What is the target market for Niconil? What is the demand for the product?

2. How should Niconil be packaged and priced? What are the pros and cons of the alternative packaging and pricing approaches?

3. What is the total gross margin and breakeven volume and under each pricing strategy?

4. What is the physician/consumer decision making process for purchasing Niconil? What promotional/communication strategies should WL use to influence the decision making of

doctors, pharmacists, and consumers?

5. When should Niconil be launched? Are there "first mover" advantages? How can Niconil best establish itself against future competition?

6.Using the information above, develop a SWOT Analysis