Archive for November, 2011

The World’s Largest Blockbuster Drug Just Went Generic — Here Are The Winners And Losers (PFE, WPI, ABC, TEVA, MRK, MYL, CVS, WAG)

Source: http://www.businessinsider.com/the-nations-largest-blockbuster-drug-just-went-generic-2011-11


pfizerap1017

With the expiration of Pfizer’s patent exclusivity on Lipitor, the nation’s top selling drug will go generic and see a market share split that will force manufacturers into a share race.

Lipitor, a cholesterol drug that reduces cholesterol, came to market in 1997 and ultimately peaked with sales of $13 billion. Last year, it contributed $10.7 billion in revenue to Pfizer.

Analysts remain divided over how much market share Pfizer will be able to hold on to. The company is aggressively discounting the drug through a program to entice patients to remain on Lipitor. Over the coming 180 days, Watson Pharmaceuticals and Ranbaxy Laboratories of India will enter the market.

Eight Citi analysts poured over data and see Pfizer retaining 40-50% of market share over the next half year. Delays out of Ranbaxy, which were prompted by U.S. regulatory bans over questionable quality concerns, will aid Pfizer.

But after the 180 days, when another round of pharmaceuticals like Teva and Aurobindo are allowed entry, the cost of Lipitor will drop to “pennies a day,” Citi analyst John Boris writes.

However, most of Lipitor’s decline has already been priced into Pfizer stock over the past year. “We maintain our Pfizer 4Q11E/2012E Lipitor sales/EPS contribution at $930M/$640M,” Boris continues. That represents a Lipitor sales contribution of 14-18% of fourth EPS, before falling to just 2% of earnings in 2012.

The largest to benefit from the change may be drug stores like CVS and Walgreens, which may see an uptick as more patients can afford to take cholesterol medications, even as average drug prices decline.

“In addition, we believe that the drugstores will be able to generate stronger gross profit dollars as the average gross margin for generic drugs is generally 50 to 60%, while the average gross margin for branded drugs is approximately 20%,” Boris says. 

Meanwhile, Pfizer is betting its name on smaller blockbusters in other drug categories to contribute $4 billion in new revenue by 2014 as it re-emerges in a world post-Lipitor.

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Wednesday, November 30th, 2011 news No Comments

Nissan sells more than 20,000 Leafs in first year; Fiat, Not So Much

Source: http://www.engadget.com/2011/11/30/nissan-sells-more-than-20-000-leafs-in-first-year-high-fives-co/

Excerpt: Only a few months after announcing that it sold 10,000 all-electric Leaf cars in international markets, Nissan stated at the Tokyo Motor Show today that the company has sold over 20,000 Leafs since the car went on sale in December of 2010. The company also added that it expects to sell more than 10,000 Leafs in the U.S. by the end of 2011.

SOURCE: http://adage.com/article/news/francois-fights-fiat-fiasco/230033/ This contrasts with Fiat, which went to great expense to make branding commercials with JLo which stirred more “huh’s?” from audiences than sales. One  former auto-marketing exec Peter DeLorenzo called “quite possibly the worst automotive spot of the last decade, hands down.” No official sales numbers were mentioned, probably because it was too embarrassingly low to mention.

Who are they advertising here… the car or JLo? fiat fiasco - fiat 500 ad with jlo   fugly white fiat 500     SOURCE: http://blog.web.blogads.com/2011/11/22/j-los-shameless-strange-and-sad-fiat-fiasco/ Widely denounced, shameless and strange product placement and promo during JLo’s performance at the American Music Awards.

Watch the whole bizarre performance here (The Fiat stuff starts around 1:15):

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Wednesday, November 30th, 2011 Branding No Comments

Spending Tons Of Money To Attract New Customers Is A Stupid Idea

Source: http://www.businessinsider.com/spending-tons-of-money-to-attract-new-customers-is-a-stupid-idea-2011-11


If you’ve ever tried to explain the concept of “make new friends but keep your old ones” to a five-year-old, you have a pretty good perspective on how many high-growth businesses approach customer acquisition and retention.  Growing businesses tend to spend so much of their time and money acquiring new customers that they often overlook their best source of growth: retaining and growing their existing customer base.

One of our clients has more than 90 percent of its resources–people, marketing budget, etc.–focused on creating millions of new customers a year. Their business model is based on monthly recurring feeds, much like the cable or wireless industries. Customers come in and they stay…until they don’t. An analysis of the client’s historical data shows that the average customer stays for an average of 2.5 years. Because their customer acquisition cost is lower than their expected customer lifetime revenue, they reach a break-even point in less than two years. So it’s a great business, as long as they keep generating new customers, right?

Wrong. The problem is that as the management team’s growth expectations increase, it gets increasingly harder to acquire more customers. As a result, customer acquisition costs go up and the quality of customers, in terms of how long they stick around, goes down.

To solve this growth dilemma, the client needs to ask three key questions:

  • What revenue growth will we achieve if we keep our existing customers for just one additional month, on average?
  • What will it cost us to do this by, say, improving customer service or adding customer benefits?
  • How does this growth compare, both in magnitude and cost, to acquiring new customers?

The answer for our client will be the same as it is in almost all businesses. It’s cheaper, easier, and more effective to retain current customers than it is to acquire new ones. In fact, if this business can retain all of its customers by just one additional month on average, they can achieve an additional 3 percent of annual growth. If they can retain their customer base for four additional months, they can create double-digit growth–without adding a single customer.

It’s simple math–something that even a five-year-old might understand.

This post originally appeared on Inc.

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Tuesday, November 29th, 2011 news No Comments

Switching to Private Label Products is Accelerating and Irreversible

See the charts below from comScore, Nielsen and Symphony/IRI.  The percent buying branded products of past has dropped to 43%.  The percentage switching (2nd graph) is most in OTC drugs and apparel. And even if the economy improves, consumers would continue to buy private label. Whole Foods has been offering their 365 “house brand” for many years and Trader Joe’s also has great private label products that are often equal to or arguably higher quality than branded alternatives.

Brand Loyalty is Declining

 

 

 

 

 

 

 

willingness to switch to generic or private label versus branded product

 

 

 

 

consumers will continue buying private label even when economy improves

 

 

 

Related Article:  Spend Polarization – consumers save money in the down economy by buying more from Costco, Sam’s Wholesale, and BJ’s but when they splurge, they buy ultra-high-end.

 

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Monday, November 28th, 2011 Branding No Comments

The Smartphone Is Becoming A Goliath In The Retail Industry

Source: http://www.businessinsider.com/how-smartphones-are-revolutionizing-the-shopping-experience-2011-11


cuba mobile phone

A study by the Times finds many retailers–including major ones like Best Buy, Nordstrom and Amazon–offer the most promotional deals for smartphones, which generate millions, if not billions, in revenue.

Amazon, for example, will make $5.37 billion in sales through mobile devices by year’s end, according to a recent survey by Internet Retailer.

Flash deal and group-buying sites are also jumping on board with mobile-exclusive deals of their own. Gilt Groupe, for example, started offering special holiday promotions on Friday, November 25 at 6 a.m.

Surprisingly, it’s bricks-and-mortar stores who will be making the biggest mobile-deal push. One of the main reasons is because they must compete against the growing consumer trend of using price comparison apps, says Time Moneyland’s Brad Turtle. These apps let you scan an item, compare retailers’ prices and read product reviews, which have become increasingly popular in the last year.

What’s funny, though, is how many retail stores started arming their salespeople with the same equipment. Reuters reports that companies like Lowe’s, Best Buy and Toys R Us gave their people smartphones of their own to research products, check rival’s prices and even make purchases.

More than 40 percent of retailers now have a policy of competing against lower online prices through mobile phones, according to the research firm RSR.

Lowe’s alone is using over 42,000 Apple iPhones and distributing them to 1,700 of their stores.

With the equipment, employees can engage customers more effectively by using iPhones to track down the same information consumers are tracking. They’ll also be able to quickly see if products are in stock, or still available on the website or at another nearby store.

Some companies are also allowing their employees to either match or beat prices that a consumer finds somewhere else on their phone—good news for the consumer.

Check out 8 amazing and free phone apps to help you save >

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Monday, November 28th, 2011 news No Comments

These Time Magazine Covers Explain Why Americans Know Nothing About The World

Source: http://www.businessinsider.com/these-time-magazine-covers-explain-why-americans-know-nothing-about-the-world-2011-11


It’s not news that Time magazines uses different covers for its different regional editions, but it’s only when you gather them all together — so you can see what Europe and Asia read in Time compared to what Americans read in Time — that it becomes clear how insular the U.S. edition of Time is.

If you live abroad, the current edition of time features a dramatic picture of an Arab rebel wearing a gas mask under the headline “Revolution Redux.” In America, we got “Why anxiety is good for you”:

time magazine covers

Hmm.

Publishing ain’t easy, of course. Editors need to pick what sells (and what sells advertising). There are good reasons why the U.S. audience won’t be as interested in Tintin as Europe’s would be, which explains why Tintin dominated the foreign Time covers on Oct. 31. In the U.S., to Time’s credit, that edition featured “The China Bubble,” a piece about whether economic growth in the East is sustainable.

That laudable example aside, however, this collection of recent Time covers does make us Americans look like we’re just not that interested in the rest of the world.

While the rest of the world gets a thoughtful piece about Islam, the U.S. gets … chores!




Cold Turkey

Turkish prime minister Recep Tayyip Erdoğan may be the key democratically elected Muslim leader who stands at the crossroads between East and West, but hey! What about these inventions?!




Mom liked them best …

The Nov. 14 editions were soft features in all regions, but American exceptionalism was alive and well.



See the rest of the story at Business Insider

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Monday, November 28th, 2011 news No Comments

The Days of Single Purpose Devices Are Numbered – Digital Cameras vs Cameraphones

With the proliferation of smartphones like the iPhone 3G, 3GS, 4, 4S and android devices, users now have digital cameras with them at all times. These digital cameras shoot 5 megapixel – 8 MP still shots and 720p or even 1080i HD video. Furthermore, their built in GPS automatically attaches geolocation information to images and videos.
As can be seen in the charts published by Flickr below, the Apple iPhone 4 has already shot past other major cameras from Nikon and Canon to be the most popular overall camera in the Flickr Community. With additional more detailed data, the Apple iPhone 4 (both 4 and 4S) has an average daily users count of 5,798 while the 2 most popular Canon point and shoot cameras (S95 and SD1100S) have a combined average daily users count of 980.  The iPhone has about 5x the activity.
Flickr Most Popular Cameras List – November 28, 2011.
2011-11-28 Flickr Most Popular Cameras.png
U.S. Smartphone Penetration

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Monday, November 28th, 2011 news No Comments

Restaurants plan DNA-certified premium seafood

Source: http://www.physorg.com/news/2011-11-restaurants-dna-certified-premium-seafood.html

(AP) — Restaurants around the world will soon use new DNA technology to assure patrons they are being served the genuine fish fillet or caviar they ordered, rather than inferior substitutes, an expert in genetic identification says.


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Sunday, November 27th, 2011 news No Comments

Free Shipping On The Web Isn’t So ‘Free’ Anymore

Source: http://www.businessinsider.com/free-shipping-isnt-so-free-anymore-2011-11


shipping, trade, container

It’s no surprise why online shopping is so popular.

“You get the item quickly, you don’t pay for shipping, you often receive better prices, and you don’t have to leave your house,” said Andrew Schrage, founder of Money Crashers.

Perhaps in response to shoppers like Schrage, businesses have been giving away free shipping with a vengeance.

Some 93 percent of stores will offer at least one free shipping deal this year, which means a six percent increase from last year. Meanwhile 30 percent of store sites will offer free shipping on Cyber Monday, according to the National Retail Federation.

Experts like Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco, Calif., told Smart Money that free shipping has become an expectation. However, things don’t always don’t always pan out for consumers.

Retailers may raise the price of their products to make up for shipping costs or bar consumers from using coupons. She also warns shoppers to consider the overall package, including whether or not you can combine discounts.

Besides analyzing the overall deal, Schrage advises shoppers to stick to Web-based companies when shopping online.

“Online sites like Amazon almost ALWAYS have as cheap, and usually cheaper, prices than these retailers who also provide free shipping,” he said.

He points out that companies like Amazon even offer two-day shipping for free, and maintain great return policies that prove to be better than those of bricks-and-mortar stores.

From time to time Schrage admits you will seen an online site offer a higher retail price with free shipping. But stay away—you can score a better deal.

Check out 10 FREE Black Friday apps to help you survive the mall >

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Sunday, November 27th, 2011 news No Comments

Groupon (GRPN) – Underwater in 12 Days; chop $1B off in Market Capitalization TODAY

Took 12 days for the markets to bring Groupon below its IPO price of $20.  Two back to back MINUS 10+% days.
Like I said, I believe in the wisdom of markets (eventually)  :-)

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Wednesday, November 23rd, 2011 news No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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