Provel Case Study

International Marketing Communications

Case Study: Provel

A. Situational Assesment:

Eli Lilly Canada Inc. is a pharmaceutical company which established a new divison called Provel, to provide pharmaceutical products and technical services exclusively to veterinarians. Before Provel was established, the over-the-counter market and the ethical market were both served by Elanco, another division of Eli Lilly Canada. The over-the-counter market consists of selling pharmaceutical products to farmers through retail outlets and farm supply dealers, while the ethical market consists of the approach to reach end-users through veterinarians. Even though Provel is new on the market it benefits from the long-time experience of Eli Lilly Inc. and Elanco which are both well-established organizations.

In the past years the ethical market gained in influence, estimated at $60 million and is expected to grow in the future. In Quebec the provincial law even dictates that all pharmaceutical products have to be prescribed by a vetrinarian. It is very possible that in the near future this law might be adopted by other provinces. To do justice to this development the new division was formed with the means to focus exclusively on products for large animals and the ethical market. The two largest markets in the vetrinary market is the veal production and the feedlot production, where the latter one is the bigger and more important one.

Provel's plan is to enter the canadian veterinary market with its new product, Micotil, the first single-injection therapy for the treatment of Bovine-Respiratory Disease (BRD)

The disease is highly- infective for young calves due to their weak immune system. Approximately 35 per cent of all calves entering a feedlot may be affected by BRD, and therefore require treatment. The disease results in high costs fo the whole industry. Provel's aim ist to have 10 products in it's line within five years.

Actually the veterinary market in Canada is dominated by PVU Inc. and Roger/STB which manufacture the product Liquamycin and hold a market share of approximately 67 per cent.

Another main competitor are the company's Hoechst and Coopers with their product Trivetrin which are holding a 30 per cent market share. Another product on the market is Upjohn's Exenel with a 3 per cent market share.

B. SWOT Analysis

Exhibit 1

The table shows the internal and external assesments of Provel's new product Micotil.

Micotil is the first tratment of BRD which works with single-injection. During the test phase of Micotil several veterinarians have agreed that the product is working very good. Benefits exist for both the farmers and the animals. It reduces sress factors for the animals and saves the farmers labour and money in comparison to other products on the market which work with 4-5 injections. With it's sophisticated parent company Eli Lilly Canada Inc. Provel has a strong partner and will definetly profit from it's good reputation in the pharmaceutical industry. Also in terms of finacial aspects the parent company will be a big standby in the first cost-intensive first year.

One of Provel's major weaknesses is the high price of Micotil in comparison to other products on the market. The main task for Provel's marketing staff will be to persuade veterinarians and famer's that Micotil is offering them a broad range of advantages and that the higher price is justified. Also offering only one product size might be not compatible with customer's needs and wants.

Micotil and Provel are still two unknown brand names facing very strong competitors with effective distribution system and good reputation among the veterinarians.

External opportunities will occur if Provel will get the approval to enter the U.S. market with Micotil. The american market provides even bigger market opportunities for Provel. Also it is quite possible that sooner or later other provinces than Quebec will dictate that only veterinarians are allowed to prescribe pharmaceutical products for animals. Since Provel is focusing on the ethical market this might become a competitive advantage in the future.

External threats are as I mentioned before the strong competitors on the veterinary market. Maybe the biggest external threat is the expiration of our patent whereby our competitors would be able to copy our treatment. High costs in the introduction phase are also a threat that needs to be mentioned.

C. Problem Statement

The main problem of the case is how to reach and influence the vaterenerians and give them

proper information about the new treatment Micotil.

D. Alternatives

1.Sales Force

One alternative is to hire salespeople to visit target veterinarians personally to introduce Micotil and explain them the it's potential benfits.

2. Telemarketing

Another option that can be used is telemarketing , where all contacts would be made by telephone instead of in person visits.

3. Direct Mail

A third alternative that can be considered is Direct Mail. Through the extensive use of high-quality direct mail the number of sales calls would be minimal.

4. Media Advertising

The fourth option would be the use of print advertising in veterinarian journals and farm publications. In addition to ads also the distribution of inserts can be considered.

E. Analysis of the Alternatives

1. Sales Force

A main advantage of Sales Force is the establishment of customer relationships. In the traditional face-to-face selling you learn a lot about your conversational partner and his needs and wants can be detected. The quality of the transmitted information is very high. Especially when you are trying to aquire new customers, Sales Force is a very effective tool.

Disadvantages of Sales Force are the high costs of approximately $90.000 per salesperson. For Provel, which has only one product in