Brief Overview: Pourer has two new products namely Globing and Humored. Globing is a first of its kind, new blood substitute for the veterinary market and has passed all the tests and is ready for consumer use. Humored is another such blood substitute for the human market and it will take a minimum of two years to launch the product from now. There is a concern about creating an unrealistic price expectation for Humored by marketing Globing before Humored.Whereas another point of view is that selling Globing will benefit the company by generating revenues that could e utilized while launching Humored and also in gaining valuable experience as to how to market and avoid the same errors while launching Humored. There are many other advantages of launching Globing early which have been clearly stated in the analysis that follows.
Question 1: Should Pourer launch Globing before the launch of Humored?Recommendation: Yes, Pourer should go ahead and launch Globing as soon as possible Justification: SOOT Analysts Strengths Weaknesses First product of its kind Shelf life of 2 years without refrigeration Globing has already got FDA approval Due to the same production facility being used for both, only one amongst Globing or Humored can be produced at a given time First of its kind, so market behavior is tough to predict No existing Distribution Network Opportunities Threats No other company producing blood substitute from cattle-based hemoglobin right now.This patented process has given Pourer a lead of at least 2 years By marketing Globing first, Pourer will be able to study the market easily The brand image built and assets accumulated, on success of Globing will help Pourer in its PIP Humored has still not got the FDA approval Competitors, if they get the approval, will launch the product in late 1999. Whereas Pourer can release their product only in 2000 Though Pourer was founded in 1984, it has not generated any revenue till 1998.So, it has to start generating revenue because in this span of 14 years they have already generated Research & development cost of $200 million 84% of the veterinarian doctors complained tout lack AT alternatives Tort 01000 transfusion As goldenly Is FDA approved and there are no other competitors in animal blood transfusions racket, launching Globing now will give Pourer the early bird advantage(a minimum of 2 year advantage over any other potential competitor).As per Exhibit-9, there is high probability of failure in Phase-3 trials of many newly developed drugs.
Hence, we have to hedge the risk for delay or failure of Humored trials. Releasing Globing now will bring some revenues till Humored is launched or in case of Homophone’s failure Globing will give a firsthand experience to Pourer at launching a product which it has never done and will be learning experience for launchingHumored It will give a fair idea into the scale of production, sales and distribution ground level problems which will take time to get resolved and help in preparing ground for Humored Revenue generated from Globing can be used for the launch of Humored and can help in avoiding financial bottle necks. Also since one of the competitors for Humored has a much larger production capacity,revenues could be used to invest in increasing production capacities It will give some idea about the company to the investors if Pourer decides to go for PIP before Humored launch