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Transcript of PRODUCT LIFE CYCLE_CANNIBALIZATION
1
CAPSTONE PROJECT
TITLE: PRODUCT LIFE CYCLE MANAGEMENT OF TAPENTADOL
(ANALGESIC) WITH COMPARISON AMONGST FOUR BRANDS WITH
THE REFERENCE TO PRODUCT CANNIBALIZATION TECHNIQUE
SUBMITTED BY: INDRANEEL SINHA
POST GRADUATE DIPLOMA IN PHARMACEUTICAL MANAGEMENT
INDIAN INSTITUTE OF HEALTH MANAGEMENT & RESEARCH, JAIPUR
25 NOVEMBER 2011
MENTOR & FACULTY CO ORDINATOR: Dr. SEEMA MEHTA
INDIAN INSTITUTE OF HEALTH MANAGEMENT & RESEARCH, JAIPUR
2
ACKNOWLEDGEMENT
I take immense pleasure in thanking the IIHMR, Jaipur Administrators and Faculty members for giving
me the opportunity to work in Capstone Project 2011 as a Project Researcher.
I wish to express my deep sense of gratitude to my Mentor, Dr. Seema Mehta, IIHMR, Jaipur for
guiding me throughout my project and for her wise suggestions and crisp advice which helped me
complete the project in time.
I would like to thank Mr. Makrand Upadhaya and Mr. Abhishek Dadhich for their guidance.
I would also like to thank Dr.Monika Chowdhury (mentor, Faculty, IIHMR) for her timely guidance
during the conduct of training.
Finally, yet importantly, I would like to express my heartfelt thanks to my beloved parents for their
blessings, my friends/classmates for their help and wishes for the successful completion of this project.
Indraneel Sinha
3
INDEX
S.NO. CONTENT PAGE NO.
1 INTRODUCTION 7
2 BACKGROUND 11
3 RATIONALE 13
4 LITERATURE REVIEW 14
5 PRODUCT LIFE CYCLE MANAGEMENT 18
6 PRODUCT LIFE CYCLE 23
7 OBJECTIVES 28
8 BRIEF PROCEDURE OUTLINE 29
9 STUDY DESIGN &RESEARCH
METHODOLOGY 30
10 ANALYSIS & RESULTS 33
4
11 FINDING & CONCLUDARY REMARKS 37
12 QUESTIONNAIRES 39
13 REFERENCES 42
5
LIST OF FIGURES
S.no. Content of figures Page no.
1 Generic life cycle of product 7
2 Stages of life cycle of product 10
3 Product Life Cycle with aid of Product
Cannibalisation 13
LIST OF GRAPHS
S. No. Content of Graphs Page No.
1 PLC Curve 23
2 Graphical representation of Primary
data from Chemists 33
3 Graphical representation of Primary
data from Doctors 34
4 Graphical representation of Primary
data from Medical Representatives 35
6
LIST OF TABLES
S. no Table content Pg.
No.
1 Stages of PLC 9
2 Major players in Indian Pharmaceutical Sector 12
3 Possible Strategies of PLCM Phases 38
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INTRODUCTION
In industry, product lifecycle management (PLM) is the process of managing the entire lifecycle of a
product from its conception, through design and manufacture, to service and disposal. PLM integrates
people, data, processes and business systems and provides a product information backbone for
companies and their extended enterprise.
Product lifecycle management (PLM) should be distinguished from 'Product life cycle management
(marketing)' (PLCM). PLM describes the engineering aspect of a product, from managing descriptions
and properties of a product through its development and useful life; whereas, PLCM refers to the
commercial management of life of a product in the business market with respect to costs and sales
measures.
Fig 1: Generic Life Cycle of a Product
8
Product life-cycle management (or PLCM) is the succession of strategies used by business
management as a product goes through its life cycle. The condition in which a product is sold
(advertising, saturation) changes over time and must be managed as it moves through its succession of
stages.
Product life cycle (PLC) Like human beings, products also have a life cycle. From birth to death,
human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life
cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many
professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to
do with the life of a product in the market with respect to business/commercial costs and sales measures.
To say that a product has a life cycle is to assert three things:
Products have a limited life,
Product sales pass through distinct stages, each posing different challenges,
opportunities, and problems to the seller,
Products require different marketing, financing, manufacturing, purchasing, and human
resource strategies in each life cycle stage.
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Table 1: Stages of Product Life Cycle
All products and services have certain life cycles. The life cycle refers to the period from the product’s
first launch into the market until its final withdrawal and it is split up in phases. During this period,
significant changes are made in the way that the product is behaving into the market i.e. its reflection in
respect of sales to the company that introduced it into the market. Since an increase in profits is the
major goal of a company that introduces a product into a market, the product’s life cycle management is
very important. Some companies use strategic planning and others follow the basic rules of the different
life cycle phase that are analyzed later.
The understanding of a product’s life cycle, can help a company to understand and realize when it is
time to introduce and withdraw a product from a market, its position in the market compared to
competitors, and the product’s success or failure. For a company to fully understand the above and
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successfully manage a product’s life cycle, needs to develop strategies and methodologies, some of
which are discussed later on.
Fig 2: Stages in Life Cycle of a Product
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BACKGROUND: The Indian Pharma Scenario
India currently represents just U.S. $6 billion of the $550 billion global pharmaceutical industry but its
share is increasing at 10 percent a year, compared to 7 percent annual growth for the world market
overall. In addition, while the Indian sector represents just 8 percent of the global industry total by
volume, putting it in fourth place worldwide, it accounts for 13 percent by value, and its drug exports
have been growing 30 percent annually.
The “organized” sector of India's pharmaceutical industry consists of 250 to 300 companies, which
account for 70 percent of products on the market, with the top 10 firms representing 30 percent.
However, the total sector is estimated at nearly 20,000 businesses, some of which are extremely small.
Approximately 75 percent of India's demand for medicines is met by local manufacturing. According to
the German Chemicals Association, in 2005, India's top 10 pharmaceutical companies were Ranbaxy,
Cipla, Dr. Reddy's Laboratories, Lupin, Nicolas Piramal, Aurobindo Pharma, Cadila Pharmaceuticals,
Sun Pharma, Wockhardt Ltd. and Aventis Pharma. Indian-owned firms currently account for 70 percent
of the domestic market, up from less than 20 percent in 1970. In 2005, nine of the top 10 companies in
India were domestically owned, compared with just four in 1994.
India's potential to further boost its already-leading role in global generics production, as well as an
offshore location of choice for multinational drug manufacturers seeking to curb the increasing costs of
their manufacturing, R&D and other support services, presents an opportunity worth an estimated $48
billion in 2007.
Different area of pharmaceutical sector broadly includes –
Research & Development
Production
Clinical trials
Marketing
Sales
12
Table 2: Some major players in the Indian pharmaceutical sector
13
RATIONALE
Pain is an unpleasant and discomforting sensation generally evoked by noxious stimulants, which may
be internal or external. Pharmaceutical and Medical industry’s answer to solving this issue was the
development of Analgesics, which in layman’s language is more popularly known as pain killers. There
are numerous formulations and APIs that are being developed and sold by many Indian pharmaceutical
organisations.
Thus, it paved a way for us to focus my interest on analgesics as a product of choice as for the
accomplishment of this project, as securing well profound data would be easier to procure. Once we
finalised the product category, it struck us that why not study the PLC of it. As a general basic
guideline, greater understanding of the molecule is only possible if we carefully study the details of the
product starting from its inception to its decline.
Another interesting fact that struck us was a well-known and widely popular analgesic was Tramadol
(Instril by DRL, Nexdol by Zuventus, and Trabest by Lupin). It was launched back in the 1980s and was
a hugely successful molecule. But as of late this product is being pushed out by Tapentadol ( Transdol
by Lupin, Tapenta by Zuventus, Tapel by MSN, Neap by DRL). This product is superior than its
predecessor in numerous aspects which has been discussed later. This particular technique of PLC is
known as Product Cannibalism. In this study we have taken special interest to understand that how a
predecessor product is followed by a newer, modified much better product in the same category to
prevent decline of it. It also gives me the chance to understand how the market dynamics will be
affected by the newer product as it starts to grow from the peak of the pre-existing product.
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LITERATURE REVIEW
“Pharmaceutical Product Lifecycle Management Technology Gaining Momentum”:
Datamonitor report by Markella Kordoyanni
Growing regulatory pressure, competition will drive adoption of product lifecycle management (PLM)
software and services in the pharmaceutical industry. This is according to a new report by independent
market analyst Datamonitor titled "Streamlining Information in the Pharmaceutical Industry with
PLM." The report estimates spend on PLM by the pharmaceutical industry in Europe, North America,
China and Japan will total $460.2 million by the end of 2007 and expects this to more than double by
2012.
The report offers insight into four key attributes that pharmaceutical companies should look for in a
PLM technology vendor, discusses successful PLM strategies, and argues that collaborating with a
technology vendor is beneficial to both the pharmaceutical company and the vendor. It notes that while
PLM at its core aligns closely with the pharmaceutical industry's business processes, most current PLM
technologies lack configurability attributes and other essential features.
"Product lifecycle management (PLM) software and services solutions are still a nascent market for the
pharmaceutical industry," says Markella Kordoyanni, pharmaceutical technology analyst at Datamonitor
and author of the study. "Although the industry is starting to recognize the potential benefits of PLM in
drug development, unless pharmaceutical companies adopt a strategic mindset about PLM, with all the
process management changes and cultural adaptations it requires, PLM will remain a tactical solution
whose potential is not maximized."
Pharmaceutical companies constantly strive to accelerate drug development processes, and decrease the
time it takes to bring a drug to market, since the window from discovery to launch is both lengthy and
costly. As competition from generic drugs grows, the industry has an additional motive to shorten the
time it takes to bring a drug to market. Furthermore, as mergers and acquisition (M&A) activity
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continues, companies are in need of tools, such as PLM, to harmonize their product portfolios and
enhance visibility across the entire pipeline.
PLM addresses the challenges of managing a portfolio of tens or hundreds of drug candidates, from
disparate research and development (R&D) facilities and manufacturing plants spread across the globe.
Adding to the business drivers for investing in PLM is the increasing pressure by regulatory bodies that
emphasize compliance to ensure drug safety. As a result, the industry is in need of sophisticated tools
that automate research processes and create electronic trails that can help reduce non-compliance errors.
PLM supports regulatory compliance by including applications that track adherence to regulation codes
and identify risks of non-compliance.
In such a data-rich industry as Pharma, knowledge tends to be diluted quickly unless each organization
adopts an effective methodology for transferring knowledge and for ensuring visibility and access to
critical information when and where it is needed. In addition to being a data-rich environment, the
pharmaceutical drug development process is characterized by heterogeneity and fluidity. Here,
scientists, compliance staff, and engineers work with multiple protocols, materials, internal and external
partners, constantly adapting their workflows according to experimental results. Although the degree of
variability tends to decrease as the drug lifecycle progresses, a flexible PLM system that can keep up
with this iterative process is crucial in supporting the development needs of the drug lifecycle.
Datamonitor believes that only an enterprise-wide system will maximize the value of PLM in a
pharmaceutical company by offering the visibility, and flexibility the organization needs across its
otherwise isolated functional departments. Furthermore, recognizing the value of an enterprise PLM
solution indicates that the organization has a strategic view of PLM, rather than a tactical and merely
technical view. In fact, a strategic approach to PLM necessitates an enterprise-wide system.
Today, PLM solutions have been slow in adoption by the pharmaceutical industry primarily because
implementation takes anywhere between six months and two year. This indicates that current PLM
products sold to pharmaceutical and biotechnology companies require tremendous amount of
customization and configuration before they can be used within that type of environment. Datamonitor
believes that PLM technology for the pharmaceutical industry will be widely adopted once vendors are
16
able to offer configurable packages rather than customized PLM projects or horizontal packaged
solutions that may lack the necessary applications needed for the industry.
In the meantime, collaborating with a vendor may be a necessary strategy for pharmaceutical
companies. Some of the most successful and innovative pharmaceutical companies have collaborated
with a technology vendor to pursue a customized enterprise PLM implementation. Partnerships can
ensure that the technology fits the company's needs. Partnerships also provide technology vendors will a
longer-term success than simply selling PLM products and services. By working collaboratively with
the organization to develop the solution, vendors can gain the organization's loyalty, trust and business
for years to come. Datamonitor believes that partnerships can be most successful when vendors fit the
following four criteria: a long-term commitment to the project, a flexible and innovative mindset for
conducting business, an efficient implementation strategy, and a record of accomplishment of success.
Kordoyanni concludes:
"PLM must begin earlier and be more comprehensive than it has been in the past. Only those PLM
technologies that are aligned with business processes will maximize value within the organization.
Organizations which do not make the necessary transition to PLM, either alone or through partnerships,
will shortly find themselves lagging behind their more forward-thinking competitors who will be
enjoying the benefits of their new knowledge-based centralized resources."
Datamonitor's report, "Streamlining Information in the Pharmaceutical Industry with PLM" analyzes
the pharmaceutical product lifecycle management (PLM) market and offers insight into four key
attributes that pharmaceutical companies look for in a PLM technology vendor. The research
methodology is based in part on Datamonitor's Business Trends surveys and primary interviews with
vendors and end-users. Geographic coverage includes the US, Canada and Western Europe.
Markella Kordoyanni, pharmaceutical technology analyst at Datamonitor and author of this report, is
available for comment.
Datamonitor is a premium businesses information company specializing in industry analysis. They help
clients, 5000 of the world's leading companies, to address complex strategy issues. Through their
proprietary databases and wealth of expertise, they provide clients with unbiased expert analysis and in-
17
depth forecasts for six industry sectors; Automotive, Consumer Markets, Energy, Financial Services,
Healthcare and Technology. Datamonitor maintains its headquarters in London and has regional offices
in New York, Frankfurt, Hong Kong, Shanghai, Sydney and Tokyo.
- “Pharmaceutical Product Lifecycle Management Technology Gaining Momentum”:
Datamonitor report by Markella Kordoyanni
18
UNDERSTANDING PLC MANAGEMENT WITH THE REFERENCE OF:
PRODUCT CANNIBALISATION TECHNIQUE
Getting to the product: TAPENTADOL
Introduction
Tapentadol (brand name Nucynta by Jhonson & Jhonson) is a centrally acting analgesic with a dual
mode of action as an agonist at the μ-opioid receptor and as a norepinephrine reuptake inhibitor. While
its analgesic actions have been compared to Tramadol and oxycodone, its general potency is somewhere
between tramadol and morphine in effectiveness. Tapentadol is a new molecular entity that is
structurally similar to Tramadol. It has opioid and non opioid activity in a single compound.
November 25, 2008- The US Food and Drug Administration (FDA) has announced approval of
18apentadol hydrochloride (Johnson & Johnson), an oral tablet for the relief of moderate to severe acute
pain. Due to the dual mechanism of action as an opioid agonist and norepinephrine reuptake inhibitor,
there is potential for off label use in chronic pain.
Doctors use serotonin and norepinephrine reuptake inhibitors in chronic pain management to increase
the effectiveness of opioids and, to a lesser extent NSAIDs (along with other analgesics) against
neuropathic pain and from certain specific contributing causes such as fibromyalgia and diabetic
neuropathy.
Its dual mode of action provides analgesia at similar levels of more potent narcotic analgesics such
as hydrocodone, oxycodone, and pethidine (meperidine) with a more tolerable side effect profile.
19
Chemical structure
Name
Tapentadol
Synonyms
3-((1R,2R)-3-(Dimethylamino)-1-ethyl-2-methylpropyl)phenol
Molecular Structure
Molecular Formula
C14H23NO
Molecular Weight
221.34
CAS Registry Number
175591-23-8
Mechanism of action
Tapentadol was characterized as an µ-opioid receptor agonist and a norepinephrine transporter inhibitor
in receptor binding assays and in functional µ-opioid receptor and norepinephrine synaptosomal
reuptake assays. Norepinephrine and µ-opioid receptor reuptake inhibitors have analgesic effects,
although the pain conditions in which these two drug classes are most efficacious may be different. For
example, it appears that µ-opioid receptor agonists are mostly effective against acute moderate-to-severe
pain, whereas norepinephrine reuptake inhibitors are particularly effect against chronic pain. This
implies that a medication that combines both mechanisms of action may be effective a broad spectrum
of pain conditions.
Pharmacodynamics
Tapentadol is a centrally acting oral analgesic with a dual mechanism of action, combining µ-opioid
receptor agonist and norepinephrine reuptake inhibition in a single molecule. Norepinephrine plays a
role in the endogenous descending pain inhibitory system, and the analgesic efficacy of norepinephrine
reuptake inhibitors has been shown in neuropathic pain.
Analgesic effect of tapentadol has been demonstrated in a wide range of animal models of pain with
nociceptive and neuropathic components, and development of tolerance to its analgesic effect was
twice as slow as that of morphine. Although tapentadol has a 50-fold lower binding affinity to µ-opioid
20
receptor, its analgesic potency is only 2 to 3 times lower than that of morphine, indicating that the dual
mode of action may result in an opiate-sparing effect.
Pharmacokinetics
Absorption:
Mean absolute bioavailability after single-dose administration (fasting) of tapentadol is approximately
32% due to extensive first-pass metabolism. Maximum serum concentrations of tapentadol are
observed between 3 and 6 hours after administration of NUCYNTA™ CR. Dose proportional
increases in serum AUC were observed following administration of NUCYNTA™ CR as single doses
over a range of 50-250 mg. The increase in serum Cmax values was greater than proportional to the
increase in dose over this range. The deviation from dose-proportionality for mean Cmax values
ranged from 14% to 26% with each increase in dose from 50 to 250 mg.
Steady-state exposure of tapentadol is attained following the third dose (i.e., within 36 hours after first
twice-daily multiple dose administration). Mean serum tapentadol Cmax values accumulated
approximately 1.7-times following dosing with 150 mg every 12 hours, relative to single-dose
administration. The serum accumulation ratio is primarily determined by the dosing interval and
apparent half-life of tapentadol.
Distribution:
Tapentadol is widely distributed throughout the body. Following intravenous administration, the
volume of distribution (Vz) for tapentadol is 540 +/- 98 L. The plasma protein binding is low and
amounts to approximately 20%.
Metabolism and Elimination:
In humans, the metabolism of tapentadol is extensive. About 97% of the parent compound is
metabolized. Tapentadol is mainly metabolized via Phase 2 pathways, and only a small amount is
metabolized by Phase 1 oxidative pathways. The major pathway of tapentadol metabolism is
conjugation with glucuronic acid to produce glucuronides. After oral administration, approximately
70% (55% O-glucuronide and 15% sulfate of tapentadol) of the dose is excreted in urine in the
21
conjugated form. A total of 3% of drug was excreted in urine as unchanged drug. Tapentadol is
additionally metabolized to N-desmethyl tapentadol (13%) by CYP2C9 and CYP2C19 and to hydroxy
tapentadol (2%) by CYP2D6, which are further metabolized by conjugation. Therefore, drug
metabolism mediated by the cytochrome P450 system is of less importance than phase 2 conjugation.
Side Effects
Weak or shallow breathing, weak pulse, slow heartbeat;
Seizure (convulsions);
Severe drowsiness or dizziness;
Confusion, problems with speech or balance; or
Agitation, hallucinations, fever, fast heart rate, overactive reflexes, nausea, vomiting, diarrhea,
loss of coordination, fainting.
Mild nausea or vomiting;
Constipation;
Mild dizziness, drowsiness;
Dry mouth;
Itching;
Increased sweating.
Dosage and Administration
Recommended dose for adults is 50-100mg by mouth as needed every 4-6 hours without regard
to meals.
If adequate pain control is not achieved following the initial dose, a second dose can be
administered as early as 1 hour following the initial dose, with dose titration up to a maximum
total daily dose of 700mg on the initial day of therapy.
Subsequent maximum daily dosing is 600mg.
Hepatic Impairment
22
o No dose adjustment recommended in mild impairment
o In patients with moderate hepatic impairment, an initial dose of 50mg every 8 hours is
recommended, with further dose/frequency titration based on resulting analgesia and
tolerability.
o Use of tapentadol in severe hepatic impairment (Child-Pugh Class C) has not been
studied and is not recommended.
23
PRODUCT LIFE CYCLE
PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION
The product’s life cycle - period usually consists of five major steps or phases:
Product development,
Product introduction,
Product growth,
Product maturity and finally
Product decline.
These phases exist and are applicable to all products or services from a certain make of automobile to a
multimillion-dollar lithography tool to a painkilling molecule. These phases can be split up into smaller
ones depending on the product and must be considered when a new product is to be introduced into a
market since they dictate the product’s sales performance.
Graph 1: PLC with aid of Product Cannibalisation
Existing Product
(Tramadol)
New Product
(Tapentadol)
24
1. PRODUCT DEVELOPMENT PHASE
Product development phase begins when a company finds and develops a new product idea. This
involves translating various pieces of information and incorporating them into a new product. A product
is usually undergoing several changes involving a lot ofmoney and time during development, before it is
exposed to target customers via test markets. Those products that survive the test market are then
introduced into a real market place and the introduction phase of the product begins. During the product
development phase, sales are zero and revenues are negative. It is the time of spending with absolute no
return.
2. INTRODUCTION PHASE
The introduction phase of a product includes the product launch with its requirements to getting it
launch in such a way so that it will have maximum impact at the moment of sale. This period can be
described as a money sinkhole compared to the maturity phase of a product. Large expenditure on
promotion and advertising is common, and quick but costly service requirements are introduced. A
company must be prepared to spent a lot of money and get only a small proportion of that back. In this
phase distribution arrangements are introduced. Having the product in every counter is very important
and is regarded as an impossible challenge. Some companies avoid this stress by hiring external
contractors or outsourcing the entire distribution arrangement. This has the benefit of testing an
important marketing tool such as outsourcing. Pricing is something else for a company to consider
during this phase. Product pricing usually follows one or two well structured strategies. Early customers
will pay a lot for something new and this will help a bit to minimize that sinkhole that was
mentioned earlier. Later the pricing policy should be more aggressive so that the product can become
competitive. Another strategy is that of a pre-set price believed to be the right one to maximize sales.
This however demands a very good knowledge of the market and of what a customer is willing to pay
for a newly introduced product. A successful product introduction phase may also result from actions
taken by the company prior to the introduction of the product to the market. These actions are included
in the formulation of the marketing strategy. This is accomplished during product development by the
use of market research. Customer requirements on design, pricing, servicing and packaging are
invaluable to the formation of a product design. A customer can tell a company what features of the
product are appealing and what are the characteristics that should not appear on the product. He will
Pre-existing
product (Tramadol)
25
describe the ways of how the product will become handy and useful. So in this way a company will
know before its product is introduced to a market what to expect from the customers and competitors. A
marketing mix may also help in terms of defining the targeted audience during promotion and
advertising of the product in the introduction phase.
3. GROWTH PHASE
The growth phase offers the satisfaction of seeing the product take-off in the marketplace. This is the
appropriate timing to focus on increasing the market share. If the product has been introduced first into
the market, (introduction into a “virgin”market or into an existing market) then it is in a position to gain
market share relatively easily. A new growing market alerts the competition’s attention. The company
must show all the products offerings and try to differentiate them from the competitors ones. A frequent
modification process of the product is an effective policy to discourage competitors from gaining market
share by copying or offering similar products. Other barriers are licenses and copyrights, product
complexity and low availability of product components. Promotion and advertising continues, but not in
the extent that was in the introductory phase and it is oriented to the task of market leadership and not in
raising product awareness. A good practice is the use of external promotional contractors. This period is
the time to develop efficiencies and improve product availability and service. Cost efficiency and time-
to-market and pricing and discount policy are major factors in gaining customer confidence. Good
coverage in all marketplaces is worthwhile goal throughout the growth phase. Managing the growth
stage is essential. Companies sometimes are consuming much more effort into the production process,
overestimating their market position. Accurate estimations in forecasting customer needs will provide
essential input into production planning process. It is pointless to increase customer expectations and
product demand without having arranged for relative production capacity. A company must not make
the mistake of over committing. This will result into losing customers not finding the product “on the
self”.
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4. MATURITY PHASE
When the market becomes saturated with variations of the basic product, and all competitors are
represented in terms of an alternative product, the maturity phase arrives. In this phase market share
growth is at the expense of someone else’s business, rather than the growth of the market itself. This
period is the period of the highest returns from the product. A company that has achieved its market
share goal enjoys the most profitable period, while a company that falls behind its market share goal,
must reconsider its marketing positioning into the marketplace. During this period new brands are
introduced even when they compete with the company’s existing product and model changes are more
frequent (product, brand, model). This is the time to extend the product’s life. Pricing and discount
policies are often changed in relation to the competition policies i.e. pricing moves up and down
accordingly with the competitors one and sales and coupons are introduced in the case of consumer
products. Promotion and advertising relocates from the scope of getting new customers, to the scope of
product differentiation in terms of quality and reliability. The battle of distribution continues using multi
distribution channels2. A successful product maturity phase is extended beyond anyone’s timely
expectations. A good example of this is “Tide” washing powder, which has grown old, and it is still
growing.
5. DECLINE PHASE
The decision for withdrawing a product seems to be a complex task and there a lot of issues to be
resolved before with decide to move it out of the market. Dilemmas such as maintenance, spare part
availability, service competitions reaction in filling the market gap are some issues that increase the
complexity of the decision process to withdraw a product from the market. Often companies retain a
high price policy for the declining products that increase the profit margin and gradually discourage the
“few” loyal remaining customers from buying it. Sometimes it is difficult for a company to
conceptualize the decline signals of a product. Usually a product decline is accompanied with a decline
of market sales. Its recognition is sometimes hard to be realized, since marketing departments are
usually too optimistic due to big product success coming from the maturity phase. This is the time to
start withdrawing variations of the product from the market that are weak in their market position. This
must be done carefully since it is not often apparent which product variation brings in the revenues. The
prices must be kept competitive and promotion should be pulled back at a level that will make the
27
product presence visible and at the same time retain the “loyal” customer. Distribution is narrowed. The
basic channel is should be kept efficient but alternative channels should be abandoned.
28
OBJECTIVES & PROBLEM STATEMENTS
To analyse the market of analgesics and learn about PLCM for product: Tapentadol (centrally
acting analgesics).
To study Product Life Cycle Management with the aid of Cannibalization Technique
29
BRIEF PROCEDURE OUTLINE
After selecting the brands, we prepared a questionnaire for CHEMISTS, DOCTORS &
MEDICAL REPRESENTATIVES (Data pool).
We divided the entire questionnaire in the ratio of 60:20:20 (Chemists:Doctors:MR)
The entire questionnaire was based on product life cycle management (PLC).
The survey was decided to be conducted in various areas like;- Jaipur, Ajmer, Bhilwara, Kolkata,
Saharanpur, Haridwar, Dehradun, Bhusawal, Siliguri, Bengaluru etc..
Initial survey conducted on Chemist (asking the questions regarding Tapentadol like- “How you
came to know about Tapentadol?” ; “What is its market perception?” etc...)
After collecting the appropriate information from the Chemists we then approached Doctors and
asked her/his perception about the Tapentadol.
Finally, we visited some medical representatives and asked them their strategy regarding launch
of Tapentadol.
The reason for taking Tapentadol as a subject for project was to find out the market share of
Tapentadol in today’s market against the common prescribed drug Tramadol
Tramadol was launched in 1970’s, factually it is in its maturity phase since the last few years so
to prevent the eviction of the product from the market in analgesic category companies had
launched a new product named Tapentadol with dual mode of action, better effects and less side
effects.
Each of the companies prefers to follow the process of cannibalisation. Cannibalisation is most
commonly a technique where a company is selling the same category (analgesic) product in its
modified and newer form.
By cannibalisation method, companies did not withdraw Tramadol from the market all of a
sudden but now focuses on the growth of Tapentadol (which is superior) depicting it as a more
effective drug in such a way that sale of Tapentadol does not affect the sales figure of Tramadol,
instead it (Tapentadol) will grow starting from the matured phase of its predecessor (Tramadol)
30
STUDY DESIGN & RESEARCH METHODOLOGY UNDERTAKEN
The goal of the research project was to acquire new knowledge, or deepen understanding of the topic or
issue. This process took three main forms:
Exploratory research, which structures and identifies new problems.
Constructive research, which develops solutions to a problem.
Empirical research, which tests the feasibility of a solution using empirical evidence.
Primary research: Was based on the original findings in the field. A detailed set of questionnaire
was carefully prepared keeping the objectives and problem statement in mind. The primary
research yielded the data which was known as primary data. The data was collected manually in
local areas of Jaipur. To add a more interactive side to the project further, the form was e-mailed
and sent across to other parts of India such as: Kolkata, Siliguri, Dehradun, Haridwar,
Bengaluru, Bhusawal, Ajmer & Bhilwara. This enabled us to get access to a wide pool of data
from diversified locations spanning across India.
Secondary research: The primary data acquired was assessed and was then compared and
analyzed with available data. The sources of available data were: Field reports available at online
portals, sale turnovers from chemists etc. These were then compared with the primary data to get
a secondary data, and the process by which it was got is categorized as secondary research.
Qualitative research was conducted to understand human behavior and the reasons that govern
such behavior. Broad and open ending question method was followed and collecting word-type
data was done. This type of research looks to describe a population without attempting to
quantifiably measure variables or look to potential relationships between variables. It is viewed
as more restrictive in testing hypotheses because it is extremely expensive and time consuming,
and typically limited to a single set of research subjects. Qualitative research helped us for
exploratory research as a basis for later quantitative research hypotheses.
31
Quantitative research is systematic empirical investigation of quantitative properties and
phenomena and their relationships. We framed narrow questions (statistics oriented) and
collected numerical data to analyze utilizing statistical methods. The quantitative research
designs are experimental, correlational, and survey (or descriptive). Statistics derived from
quantitative research can be used to establish the existence of associative or causal relationships
between variables.
My Capstone Research Project was conducted using the hourglass model structure of research.
The hourglass model starts with a broad spectrum for research, focusing in on the required
information through the methodology of the project (like the neck of the hourglass), then
expands the research in the form of discussion and results.
Methodology is generally a guideline for solving a problem, with specific components such as phases,
tasks, methods, techniques and tools.
A project methodology tells us what we have to do, to manage our projects from start to finish. It
describes every step in the project life cycle in depth, so we know exactly which tasks to complete,
when and how. Whether we are an expert or a novice, it helps us to complete tasks faster than before.
Steps evolved in Research Process:
o Data Collection Method- Data is collected qualitatively by asking the select data pool to fill the
questionnaire prepared for each individual category.
o Sample Size- Total hundred questionnaires were prepared by dividing the pool into ratio of:
sixty chemists, twenty doctors and twenty medical representatives.
o Sampling extent- Jaipur, Ajmer, Bhilwara (Rajasthan); Kolkata, Howrah, Siliguri (West
Bengal); Bhusawal (Maharashtra); Dehradun, Haridwar (Uttarakhand); Saharanpur ( Uttar
Pradesh) & Bengaluru (Karnataka)
32
o Sampling Method- The method used by the group is convenient sampling which is the part of
Non Probability Sampling Method
o Contact Method- The pool was contacted in person, by phone and by emails.
o Tool for Data Collection- Various parameters included in tools for data collection comprises of
appropriate questionnaires, observation sheet, interview schedule, data sheets.
o Tool for Data Analysis- Data is analyzed by Graphical techniques (Bar graphs & Pie charts) and
Frequency Counts Methods using MS Excel.
33
ANALYSIS & RESULTS
Graph 2: REPRESENTATION OF PRIMARY DATA FROM CHEMISTS (Data pool 1)
INFERENCE:
Evidently, from the graph we can make out that in the category Prescriptive Analgesics, Tramadol is the
leader and it is in its Maturity phase. On an average the market data we procured, it was equated
approximately that Tramadol sales in the market was higher, but on seeing the recent developments 30-
40% of the Tramadol sales shares are being captured by Tapentadol (Cannibalising approach). The
reasons for such a shift being dual mode of action of Tapentadol and lesser costs. The highest selling
product in this category is Transdol by Lupin. The market perception for it is bright and promising. Well
recognition of brand, availability of good scientific literature and effective marketing has boosted sales
0
5
10
15
20
25
30
35
40
45
Prescriptive Medicine
Non Prescriptive Highest selling product
Market Perception
Tramadol
Aceclofenac
Tapentadol
Diclofenac
Ibuprofen
Nimesulide
Lupin
MSN
DRL
Zuventus
Promising
Satisfactory
Don’t know
Nu
mb
er o
f R
esp
on
den
ts
34
for Lupin. This has also propelled them to launch another generic product by the name of Lucynta in
another division.
Graph 3: REPRESENTATION OF PRIMARY DATA FROM DOCTORS (Data pool 2)
INFERENCE:
While the data came in from the medical professionals, i.e the Doctors, Tapentadol is the clear leader
indicating that, this new molecule has an effective introduction and is steadily building its growth curve.
This molecule though a bit costlier than Tramadol, but still is popular nowadays with doctors due to its
sheer quality and dual mode of action, lesser side effects, good analgesic effectivity. Doctors perceive
Tapentadol’s market as bright and promising compared to its predecessor analgesic (Tramadol) and
thus Tramadol is losing out on the Maturity phase and will be moving into the Decline phase in the near
0
2
4
6
8
10
12
14
16
18
20
Prescriptive Analgesics
Does price matter
Brand preferred
Product information
Opinion and future
perspective
Tramadol
Aceclofenac
Diclofenac
Tapentadol
Yes
No
Sometimes
Lupin
Ranbaxy
DRL
Zuventus
MR
Company Program
Very Bright
Promising
Don’t know
Nu
mb
er o
f R
esp
on
den
ts
35
future. Lupin is most popular with the doctors as it has superior market recognition, well proven
scientific and clinical track record. Effective marketing by the MRs with good scientific literature and
visual aids also boosts Tapentadol’s sales for Lupin (Transdol). Trabest (Tramadol by Lupin) which was
released in 1970s has already reached its sales peak in the analgesic category. Lupin thus to prevent on
losing out in this category has thus, now devised a more advanced molecule Transdol (Tapentadol) that
will work with better efficiency than Tramadol. Thus again the Cannibalising approach is clear,
indicating the release of a new molecule to compensate and better efficate the sales.
Graph 4:REPRESENTATION OF PRIMARY DATA FROM MRS (Data pool 3)
INFERENCE:
Lupin Ltd, headquartered in Mumbai is the clear market leader for Tapentadol. Transdol by Lupin is the
clear market leader of Tapentadol variant, which has a superior sales ratio when compared to Tramadol
version. Medical Representatives are the premier sales force of any pharmaceutical organisation. They
possess the best first hand details and knowledge about the product and are equally equipped to predict
the future of a product. They perceive Tapentadol’s future as very bright and promising and expects it to
substitute Tramadol in the near future. Going by the PLC of Tramadol, it had had its share as the market
0
2
4
6
8
10
12
14
16
18
Best Brands for Tapentadol
Sales Ratio (Tramadol : Tapentadol)
Sales Figure (in boxes)
Opinion
Transdol by Lupin
Tapenta by Zuventus
Niap by DRL
Tydol by Ranbaxy
70:30:00
75:25:00
60:40:00
Lupin
DRL
Zuventus
Ranbaxy
Very Bright
Satisfactory
Don't Know
Nu
mb
er o
f R
esp
on
den
ts
36
leader, but advent of newer modifications has made way for Tapentadol to be the new leader.
Tapentadol is a much better product with lesser side effects, aptly supportive dual mode of action etc.
Tramadol in the present day has its nose ahead in terms of sales but slowly and steadily Tapentadol is up
its heels and catching up is faster. Thus, Lupin has equally answered to the changing market trends by
producing Tapentadol (Transdol) which is Cannibalising Tramadol.
37
FINDINGS & CONCLUDARY REMARKS
Product cannibalization occurs when a company decides to replace an existing product (Tramadol) and
introduce a new one in its place (Tapentadol), regardless of its position in the market. This is due to
newly introduced technologies and it is most common in larger companies. As all things in life there is
negative and positive cannibalization.
In the normal case of cannibalization, an improved version of a product replaces an existing product as
the existing product reaches its sales peak in the market. The new product is sold at a high price to
sustain the sales, as the old product approaches the end of its life cycle. Nevertheless there are times that
companies have introduced a new version of a product, when the existing product is only start to grow.
In this way the company sustain peak sales all the time and does not wait for the existing product to
enter its maturity phase. The trick in cannibalization is to know when and why to implement it, since
bad, late or early cannibalization can lead to bad results for a company sales.
In our project findings we came to know Lupin’s Tapentadol variant is the market leader in the segment.
They have followed the method of Positive Cannibalization. Trabest (Tramadol variant of Lupin),
though was still in good sales perception but was steadily progressing towards a stagnant maturity phase
which would have ultimately led to its decline. Thus to prevent its sales figures from drooping in the
analgesics category, the Lupin officials were quick to implement the technique and implement a newer
product with much elaborate advantages (Transdol) over its successor.
38
Table 3: Table depicting possible strategies of PLCM phases
39
QUESTIONNAIRES
CAPSTONE PROJECT: Product Life Cycle
Questionnaire for Chemists
Chemist name:
Address:
1. Which type of prescriptive drug do you sell for cases of moderate to severe pain?
2. In cases of no prescriptions, which products do you offer to customers for moderate to severe pain?
3. Do you know about Tapentadol? If yes, how did you come to know about it?
4. If you are dealing in Tapentadol, which brands do you house and why?
5. What is the response of the customers to that particular brand of Tapentadol?
6. Which is the product for moderate to severe pain in the highest and lowest growth category?
Reasons for it.
7. What is the nature of interaction between you and MR? Is regular updating being undertaken by the
companies?
40
8. For product, promotion is the company giving you adequate benefits? What would you like to be
done further to boost sales?
9. Are all the brands differentiated and diversified clearly to prevent misbranding in all aspects?
10. What is your personal opinion about Tapentadol (under the particular brand)? How do you perceive
its market in the future? Any suggestions?
41
CAPSTONE PROJECT: Product Life Cycle
Questionnaire for Doctors
Doctor’s name: Speciality:
Address:
1. In case of moderate to severe pain which molecule do you generally prescribe?
2. Does the price of the product matter to you while prescribing the product?
3. If the product you are prescribing is new, how do you cope with it and what criterions you
look for in it?
4. If you are prescribing Tapentadol, then which company do you prefer and why? If not then
what do you use?
5. How long have you been using the particular product?
6. Do your patients complain about the product?
7. What are the benefits of using Tapentadol? (if answer in Q4 is, Yes)
8. If you are prescribing Tapentadol, how did you come to know about this product?
9. To patients whom you prescribe Tapentadol, is there any increase in the frequency of your
prescribing the drug in the past two months?
10. What is your opinion about the product? And how do you perceive its future?
42
Product Life Cycle
Questionnaire for Medical Representatives
Medical Representative’s name: Company:
Area:
1. Under what generic name Tapentadol is being marketed? Moreover when was it launched?
2. How many competing brands presently exist in the market for the same molecule?
3. According to you which one is the best and which is the least preferred brand in Tapentadol
category?
4. What is the sales ratio (market acceptability) of Tramadol and Tapentadol? Substantiate
with reasons?
5. What was the market introduction strategy adopted by your company?
6. What is the primary and secondary sales figure of Tapentadol?
7. What strategies does your company adopt to boost the sales of the product?
8. What strategies does your company adopt to overcome decline of the product?
9. In the maturity stage of the product what does your company imply to navigate further into
log phase rather than lag phase?
10. What is your opinion about the product? Moreover, how do you perceive its future?
43
REFERENCES & BIBLIOGRAPHY
ONLINE PORTALS:
http://en.wikipedia.org/wiki/Product_lifecycle_management
http://en.wikipedia.org/wiki/Product_life-cycle_management_(marketing)
http://www.medicalnewstoday.com/releases/82989.php
www.urenio.org/tools/en/Product_Life_Cycle_Management.pdf
http://www.emedicinehealth.com/drug-tapentadol/article_em.htm
http://www.nlm.nih.gov/medlineplus/druginfo/meds/a610006.html
http://www.chemblink.com/products/175591-23-8.htm
http://www.medlink.com/medlinkcontent.asp
http://toxwiki.wikispaces.com/Tapentadol
FIGURES:
Product’s_lifecycle.jpg: National Institute of Standards and Technology’s Manufacturing Engineering
http://www.google.co.in/imgres?q=pharmaceutical+product+life+cycle&um=1&hl=en&rls=com
http://www.google.co.in/imgres?q=sectors+in+pharma+company&um=1&hl=en&rls=com.microsoft:en
-inbooks
Box, J. (1983) Extending product lifetime: Prospects and opportunities, European Journal of
Marketing, vol 17, 1983, pp 34–49.
Day, G. (1981) The product life cycle: Analysis and applications issues, Journal of Marketing, vol
45, Autumn 1981, pp 60–67.
Levitt, T. (1965) Exploit the product life cycle, Harvard Business Review, vol 43, November–December
1965, pp 81–94.
44
OTHER SOURCES:
Barringer P. H. “Why you need practical reliability details to define life cycle costs
for your products and competitors products”, Barringer & Associates, on-line
<http://www.barringer1.com>
Business Studies “The product Life Cycle”, on-line <http://www.learn.co.uk>
Clifford D. “Managing the Product Life Cycle”, European Business Journal, July
1969.
Cox W. E. “Product Life Cycles as Marketing Models”, The Journal of Business, p.p.
375-384, October 1967.
Daft L. Organizational Theory And Design, West Publishing, St Paul Minnesota,
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Drummond G. Ensor J. Strategic Marketing: Planning and Control, Butterworth –
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LITERATURE REVIEW
“Pharmaceutical Product Lifecycle Management Technology Gaining Momentum”: Datamonitor report
by Markella Kordoyanni
Product Life Cycle Management, Ioannis Komminnos
Electronic Engineer, B.Eng M.Sc.(Eng), Thessaloniki
Urban and Regional Innovation Research Unit, Faculty of Engineering
Aristotle University of Thessaloniki
William D. & McCarthy J. E. Product Life Cycle: “Essentials of Marketing”, Richard D Irwin
Company, 1997.