The Marketing Strategy of Oxyglobin

How best to exploit the opportunity presented by Oxyglobin without jeopardizing the potential of Hemopure is a tough problem for Biopure’s executive. According to the financial analysis, it is suggested that Biopure begin to sell Oxyglobin at $150 per unit to emergency care practice at the Veterinary Blood Market and have its own distribution network. This will make a profit of $5 million at first year and $17 million thereafter. The steadfast income will consolidate Biopure’s financial structure and enhance the competiveness of Hemopure. The potential annual values are $794 & $135 million for Hemopure & Oxyglobin respectively. The human blood substitutes market would be monopoly if only Hemopure released, so the Oxyglobin influence could be omitted. Otherwise, if competitors with similar selling price appear, production cost and capacity will dominate the market share. Unfortunately, the residual capital without launching Oxyglobin can not meet the cost requirement of a new production line. Therefore, launching Oxyglobin is a support rather than a threat. The marketing strategy of Oxyglobin will be mentioned below. First, Biopure has to concentrate on the emergency care market instead of primary care market since the research shows relatively higher gross revenue in emergency care practices despite the rare 5% frequency. In addition, the annual requirement of blood transfusion in emergency care practices is approximately 900,900 units, which exceed 300,000 units – the capacity of Oxyglobin. In other words, the whole Oxyglobin can be successfully sold out because of the deficit blood supply. Furthermore, pet owners are more willing to pay for emergency care than pay for primary care. Therefore, Biopure can only focus its target on emergency care practices market in the initial stage. Second, $150 per unit is a proper price for Oxyglobin because of the results offered by the pet owners’ and veterinarians’ surveys. The results indicated that $150 and $300 per unit are willingly accepted by veterinarian and pet owner when most clients face critical cases. Aside from that, a pet owner will pay $130 to $170 per unit in a typical emergency care practice under the “donor animal” system. Oxyglobin at $150 can motivate clients easily and show profitable. Third, Biopure can set up a brand called “Pure Blood Bank” in charge of the product distribution. After comparing the distribution cost between independent distributors and manufacturer direct, Biopure can find manufacturer direct are more attractive. Those independent distributors will charge Oxyglobin at $150 as less-established product for $45 per unit. The cost of Biopure’s own network, however, is estimated to be $10 to $15 per unit to physically distribute Oxyglobin. The difference between costs for training the sales reps every year and those for maintaining its own sales force is subtly nuanced - $2 million per year. Even more, “Pure Blood Bank” is planned to entry human blood market when Hemopure is going to debut. Fourth, promotion and education of Oxyglobin to veterinarians at trade publications and trade shows are necessary. Biopure sales reps also provide the training to veterinarians when they distribute Oxyglobin. In addition, not only at veterinary hospitals but also at pet’s product retailers, Oxyglobin are going to be advertised to introduce the advantages to pet owners. The annual promotional fee is estimated to be 6 million. To forecast the revenue, Biopure can gain about $45 million annually before Hemopure releases, as long as Oxyglobin are sold out due to the strong demand. The estimated profit of Oxyglobin will be $17 million although it is hard to reach at first year and expected to emerge from the next year. Since Biopure has the uncertainty of FDA approval to Hemopure and the manifest competitors, strengthening the capital venture by increasing earning and possessing a steady income is inevitable.

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