Metabical Case Study

Metabical: Pricing, Packaging, and Demand Forecasting

1. Evaluate the pros and cons of Barbara’s forecasting methods. Which one would you use and what is your demand forecast for the next five years?

Barbara was confident that sales of Metabical would quickly take off once health care providers and overweight individuals understood that value proposition of the new drug. Barbara has the experience to put together a forecast of demand based on her own past drug launch experience and the market research CSP had performed. Barbara’s forecasting methods were a combination of market research, Barbara’s experience, and test trials that were done on the new drug.

The market research is important in developing an accurate forecast because it gives quantified data on the number of potential consumers. This data is better to determine short-term forecasts; long-term forecasts may be inaccurate do to certain economic and industrial factors that may change in the future. Changes that these factors cause in the future will make the long-term forecast more and more inaccurate.

Barbara also used a qualitative approach by using her own past experiences of rolling out new drug products and determined the share of the market captured in the first year is 10%, and 5% for each subsequent year for the first two approaches. In the third approach, she estimated the market captured in the first year would be 30%, and 5% for each subsequent year. This type of demand forecasting is largely dependent on one person’s experience, expertise, and opinion, and could be inaccurate based on the subjective nature of this type of forecast. New marketing employees may have difficulty making reasonable forecasts. On the other hand, basing a forecast on a qualitative factor is suitable for new-products that do not have any historical data. This method is also easy to apply and understand. This approach does not systematically analyze cause-and-effect relationships. These methods...