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CASE STUDY

Commercializing a new transfection reagent

 

Goal

The goal of this exercise is to synthesize market information about products, customers and competitors in order to develop a simple marketing strategy to commercialize a new product. It is intended to show the value of including customer feedback and competitive analysis as well applying critical thinking to a business question. It also highlights the value of integrating marketing into product development early in the process.

 

Background

A new transfection reagent has been developed by a team of life scientists at HoyaFECT, LLC, a start-up at the Georgetown University Biotechnology Incubator (GUBI).  The team of R&D scientists is quite excited about how their new product performs in their laboratory and has other ideas to develop novel transfection technology and additional transfection reagents. A marketing manager at GUBI collected the following information from a mix of government, academic and industry scientists who conduct basic research at the laboratory bench.  The mix included principal investigators, post-docs, technicians, lab managers and graduate students.

Data

1. One hundred customers were surveyed to create a list of “non-price” purchasing attributes for reagents used to transfect mammalian cells in the laboratory. The list of attributes articulated by the survey participants include:

• High transfection efficiency
• Fast & easy to use
• Works with a broad range of cell types
• Works in serum or serum-free conditions
• Works with DNA, RNA or proteins
• Reputation of the supplier
• Works with difficult to transfect cells
• Low cytotoxicity

2. To understand the relative importance of these attributes, the survey participants were then asked to spread 100 points across the eight attributes. Results are:

• High transfection efficiency- 25
• Fast & easy to use- 5
• Works with a broad range of cell types- 10
• Works in serum or serum-free conditions- 10
• Works with DNA, RNA & proteins- 15
• Reputation of the company- 5
• Works with difficult to transfect cells- 10
• Low cytotoxicity- 20

3. Ten of the customers were then asked to do a side-by-side evaluation of the GUBI product with three other competitive products. They rated the products on the attributes using a ten-point arbitrary scale, where 1 is “negative” and 10 is “positive”.

The marketing manager converted the ratings to a weighted score by multiplying the rating by the importance weight.  The results of the external evaluation are tabulated in Table 1.

Table 1. Competitive Comparison of Transfection Reagents

Non-price Attributes	Importance Weight	Competitor A		Competitor B		Competitor C		GUBI
		Rating	Score	Rating	Score	Rating	Score	Rating	Score
1.  High transfection efficiency	25	9	2.25	7	1.75	3	0.75	8	2.00
2.  Fast & easy to use	5	8	0.40	8	0.40	8	0.40	8	0.40
3.  Works with a broad range of cells	10	6	0.60	10	1.00	8	0.80	8	0.80
4.  Works in serum or serum-free conditions	10	7	0.70	8	0.80	5	0.50	8	0.80
5.  Works with DNA, RNA & proteins	15	5	0.75	5	0.75	5	0.75	8	1.20
6.  Reputation of the company	5	3	0.15	10	0.50	6	0.30	8	0.40
7.  Works with difficult to transfect cells	10	8	0.80	7	0.70	10	1.00	8	0.80
8.  Low cytotoxicity	20	9	1.80	6	1.20	6	1.20	8	1.60
Sum of Importance Weights	100		7.45		7.10		5.70		8.00

Composite scores for each competitive product were determined by adding up the weighted scores. This provides a way to compare the products overall and on each of the eight attributes.

4. The marketing manager determined the list price for the competitive products while doing an Internet survey. It was further determined that each company collected actual shipping expenses from the customer. Competitor C was the low price player and the marketing manager normalized the prices against the lowest price of $172 (x10).

Price	Competitor A	Competitor B	Competitor C
Cost per 1 ml	$205.00	$224.00	$172.00
Normalized	8.39	7.68	10.00

5. The marketing manager found market share information on the three competitors from a summary of the transfection market printed in a trade journal. Overall, the global market for transfection reagents was estimated at $1.2 billion USD.

Market Share	Competitor A	Competitor B	Competitor C
% of Target Market	10%	35%	25%

6. Finally, the marketing manager went back to the survey participants to compare the non-price attributes to the price by allocating 100 points between the two criteria. Participants came back and said price would make up 30% of their buying decision while the sum of the non-price attributes would make up 70% of their buying decision.

All Attributes	Importance Weight	Competitor A		Competitor B		Competitor C
		Rating	Score	Rating	Score	Rating	Score
Non-price Attributes as a Group	70	7.45	5.22	7.10	4.97	5.70	3.99
Price	30	8.39	2.52	7.68	2.30	10.00	3.00
Sum of Importance Weights	100		7.73		7.27		6.99

 

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