H3

A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

B

C

D

E

F

G Women added

Male heads affected by bolding

1987 31,576,369

1988 32,523,660

1989 33,499,370

1990 34,504,351

1991 35,539,482

1992 36,605,666

% of boldness product works for

H

I

J change to OTC

K

L

M

N

O

P

1993 1994 1995 1996 1997 1998 1999 2000 37,703,836 38,834,951 40000000 41,200,000 42,436,000 43,709,080 45,020,352 46,370,963 !! the age group we are interested in grew by average 3% - higher than overall population 35,818,645 36,893,204 38000000 41,200,000 42,436,000 43,709,080 45,020,352 46,370,963

29,997,551

30,897,477

31,824,402

32,779,134

33,762,508

34,775,383

9.9% cumulative willing to buy New buyers due to fast growing age segment

2,969,758 0

3,058,850 89,093

3,150,616 91,766

3,245,134 94,518

3,342,488 97,354

3,442,763 100,275

3,546,046 103,283

3762000 109,573

4,327,199 126,035

New market share reached who will try Willing & have not tried yet (new base) cumulative who have tried

445,464 n/a 445,464

443,533 2,169,853 888,997

441,086 1,820,533 1,330,083

438,093 1,476,958 1,768,176

447,893 1,126,419 2,216,070

447,559 779,134 2,663,629

457,440 547,864 424,977 negative! Means we reached whole potential market with our current "constraints" 3,121,069 3,668,933 4,233,233 4,812,422 5,400,585

584,172

579,412

592,204

5,984,757

6,564,169

7,156,373

1,496,189 1,641,042 438,129 434,559 $433,549,322 $471,476,355

1,789,093 444,153 $511,406,038

$137,868,684 $149,929,481

$162,627,120

$238,512,824 $259,378,002

$281,344,918

since doctors do not "filter" I assume that every person with boldness with try

3,652,427 106,381

4,078,800 4,201,164 316,800 122,364 Number changes, since price falls ! 564,300 579,190 588,163

4,457,015 129,816

4,590,725 133,710

= (25% of new buyers from growing age segment * 37.93% able to buy) + previously won loyal buyers

loyal full-time buyers (25% try) 111,366 one year try people for 4 month 334,098 abs. max revenue from above (4month + year)* ($660-20%)$117,602,399

917,233 410,898 ###

1,058,308 423,225 $633,274,336

$35,646,748 $41,001,121 $48,314,372

$54,968,212

New Marketshare (Exhibit 3) men = 73% increase so far 11.3% + 7.1% willing to buy if > $ 600, now additional 13.5% Sales company had in the U.S. (men & women) $2,000,000 $34,000,000 $70,000,000 $95,000,000 ### $122,000,000 $84,000,000 $96,000,000 market share captured of conditional maximum market (US) 510% 45% 29% 27% 30% 29% 49% 50% total sales world-wide $32,000,000 $88,000,000 ### ### ### $165,000,000 ### ### marketing spend on men (based on world-data) $45,000,000 $45,000,000 $45,000,000 $45,000,000 $45,000,000 $30,000,000 $34,580,000 $32,400,000 marketing cost as % of sales 141% 51% 39% 32% 30% 18% 30% 27%

Forcast $96,000,000 57% $124,000,000 $75,000,000 60%

20% is the margin for reseller

222,249 332,650 ###

332,521 330,815 ###

442,044 328,570 ###

554,017 665,907 335,920 335,669 ### $410,676,821

780,267 343,080 ###

$660 was taken as average of annual cost: $600 - $720

abs.max. of people of have the money (men 8.68%)

1,203,106 1,350,146 434,392 441,122 $355,846,395 $395,257,392 !new price base $330

$10,207,888 $15,267,598 $20,293,350 $25,278,552 $30,522,624

$113,159,154 $125,691,851 % goes from 8.68% to 31.8%

Women heads affected by bolding % of boldness the product works for 13.2% cumulative willing to buy % Women who have the money (2.52%)

$195,765,336 $217,446,902

$52,856,641

$58,710,663

$64,398,462

$70,032,060

$75,963,128

20,600,000 20,600,000 2,719,200 568,313

21,218,000 21,218,000 2,800,776 585,362

21,854,540 21,854,540 2,884,799 602,923

22,510,176 22,510,176 2,971,343 621,011

23,185,481 23,185,481 3,060,484 639,641

618,000 120,336 205,179 41,036

636,540 123,946 295,617 59,123

655,636 127,665 388,769 77,754

675,305 373,579 484,715 96,943

24,096 88,031 153,884 $7,633,457 $13,944,063 $24,375,217 65% !new price base $330 Forcast $22,171,060 $38,756,595

221,713 $35,119,306

291,576 $46,185,717

363,536 $57,584,121

$55,839,696

$73,435,290

18,302,833 17,387,692 2,295,175 57,838

18,851,918 17,909,322 2,364,031 59,574

19,417,476 18,446,602 2,434,951 60,874

20,000,000 19,000,000 2,508,000 55,176

5,784 5,784 1,157

549,085 60,866 14,720 2,944

565,558 62,643 23,851 4,770

582,524 63,770 32,127 6,425

4,338 $1,374,241 30%

11,040 $3,497,443 53%

17,888 $5,666,985 56%

% goes from 2.52% to 20.9%

New buyers due to fast growing age segment New market share reached who will try cumulative who have tried loyal full-time buyers (20% try)

600,000 116,831 117,374 23,475

since meaningful regrowth only 20% for women, I assume this is the loyal rate

one year try people for 4 month abs. max revenue from above (4month + year)* ($660-20%) New Marketshare (Exh. 3) women

total share with women = 59% increase so far 11.1% + 5.3% willing to buy if > $ 600, now additional 9.7%

$91,558,752 Weights

Forcast under old model / new price Revenue expectation (1 billion in 4-5 years) Analyst "think 400-500 million possible per year"

$200,000,000

### $200,000,000 $200,000,000

$200,000,000

30%

estimate was $250,000 possible per year / or 1 billion in 5 years

without progaine

$450,000,000 ### $450,000,000 $450,000,000 $450,000,000 Total max forcast $217,936,395 $256,203,496 $294,352,520 $332,813,292 $372,903,670 US Weighted forcast $235,761,837 ### $281,611,512 ### $328,742,202 World forcast (ratio average 1.55)$365,430,848 $401,019,252 $436,497,843 $472,266,361 $509,550,413

10% 60%

million men % of total 21.3 23.0% age 29 31.3% age 6.2 11.0% age 56.5 million women% of total 21.6 45.1% age 19.6 41.0% age 6.65 13.9% age 47.85

% of $25,000- % of $50,000+% of $ 75,000+ 25-34 34.40% 4.70% 1.70% 35-44 41.80% 11.80% 6% 45-54 (half) 19.60% 6.95% 8.10% 25-34 35-44 45-54 (half)

17.20% 22.20% 11.10%

1.20% 2.70% 1.50%

0.40% 1% 0.50%

under old price % with new price % 1.47% 9.4% 5.56% 18.6% 1.65% 3.8% 8.68% 31.8% 0.72% 1.52% 0.28% 2.52%

8.5% 10.6% 1.8% 20.9%

m

4.7 11.8 6.95 4.05 6 1.7 35.2 92.8 0.38

34.4 41.8 19.65 95.85

ForeCast estimated people affected bolding pattern it works for subtract % willing to pay % of people who effectively sought treatment possible people seeking treatment

men 40,000,000 38,000,000

women 20,000,000 19,000,000

total 60,000,000 57,000,000

9.90% 3,762,000

13.30% 2,527,000

57,000,000

% people willing to spend people available to buy Annual OTC sales / year potential max sales % people who see moderate success people who might stay with the product sales that might stay

31.90% 26.10% 1,200,078 659,547 $320 $320 $384,024,960 $211,055,040 26% 19% 312,020 125,314 $99,846,490 $40,100,458

% people who have the money people who would have the money to buy potential max sales % people who see moderate success people who might stay with the product sales that might stay

37.93% 1,426,966 $456,628,966 26% 371,011 $118,723,531

7.25% 183,189 $58,620,377 19% 34,806 $11,137,872

cumulative ! Taking place over time thus spread it over the years ! ! Exhibit 5 falsch gerechnet 1,859,625 since new price is roughly half of previous price ### 4.7 1.7 11.8 6 6.95 4.05 35.2

437,334 ### correct now 1,610,154 ### 405,817 ###

4 month supply cost full year

4month

4month 213.33 640

trial 1619418 1799353 1999281 2221423 2468248 2742498 3047220 3385800 3762000 here

rate 404854 1214563 449838 1349515 499820 1499461 555356 1666068 617062 1851186 685625 2056874 761805 2285415 846450 2539350 I end up with the cummulative of 9.9%

1.2 0.4 2.7 1 1.5 0.5 7.3

trial repeat are 25% of trial HOW LONG WILL THEY TRY IT

13.9 8.1

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

35.2 7.3

Survey data - is max population do not start at 9 that is the max

only work pattern boldness

95%

3 case talks about others COULD launch it could be that we are in the market place without competition lower price and could lower again if they launch - they go down to 40% market potential

Assumption: 1 year higher try rate then assume decrease since lack of doctor cumulative levels off

Q2 conclusion TIP : they did WELL

the market for rogaine is what rogaine made it to be, since there is NO competition thus market share I have "100%" for prescription thus analyze if we did a good job

sales world 1987 1988 1989 1990 1991 1992 1993 1994 1995

sales us $32 $88 $115 $140 $148 $165 $115 $122 $124

$2 $34 $70 $95 $103 $122 $84 $96 $96

Marketing sales per marketing $ Sales-Marketing consumer measure meadia SALES Amount of users worldiwdetotal market % market sharetotal market women men women advertising ($ in million) next slide (600-720) men men $45.00 $0.71 -$13 16.00 $4.91 110 48,485 40,000,000 0.12% 20,000,000 $45.00 $1.96 $43 2.59 $9.35 110 133,333 40,000,000 0.33% 20,000,000 $45.00 $2.56 $70 1.64 $3.44 110 174,242 40,000,000 0.44% 20,000,000 $45.00 $3.11 $95 1.47 110 212,121 40,000,000 0.53% 20,000,000 $45.00 $3.29 $103 1.44 110 224,242 40,000,000 0.56% 20,000,000 $30.00 $5.50 $135 1.35 women were added 110 250,000 40,000,000 0.63% 20,000,000 $34.58 $3.33 $80 1.37 110 174,242 40,000,000 0.44% 20,000,000 $32.40 $3.77 $90 1.27 110 184,848 40,000,000 0.46% 20,000,000 $75.00 $1.65 $49 1.29 110 187,879 40,000,000 0.47% 20,000,000 ! Text is confusing about what the marketing expenditure is! 12.43

believed

1.55

$250 Q2: has Rogaine been able to capture enough market share 25% of existing consumers will continue to buy product 75% will go to alternative (find the number)

What is your assessment of the revenue performance for Rogaine from 1988 to 1995? How do you support your assessment? (20 points)

Segments male female total

number of heads

Marketing as percentag of sales 140.6% 51.1% 39.1% 32.1% 30.4% 18.2% 30.1% 26.6% 60.5%

% of market

Male heads affected by bolding

1987 40000000

1988 40000000

% of boldness product works for

38,000,000

38,000,000

9.9% cumulative willing to buy New buyers due to fast growing age segment

3,762,000 0

3,762,000 0

New market share reached who will try Willing & have not tried yet (new base) cumulative who have tried

564,300 n/a 564,300

545,490 2,652,210 1,109,790

= (25% of new buyers from growing ag

loyal full-time buyers (25% try) 141,075 one year try people for 4 month 423,225 abs. max revenue from above (4month + year)* ($660-20%)$148,975,200 20% is the margin for reseller

277,448 409,118 ###

$660 was taken as average of annual cost: $600 - $720

abs.max. of people of have the money (men 8.68%)

$12,931,047 $18,965,536

New Marketshare (Exhibit 3) men so far 11.3% + 7.1% willing to buy if > $ 600, now additional Sales company had in the U.S. (men & women) $2,000,000 $34,000,000 market share captured of conditional maximum market (US) 647% 56% total sales world-wide $32,000,000 $88,000,000 marketing spend on men (based on world-data) $45,000,000 $45,000,000 marketing cost as % of sales 141% 51% Women heads affected by bolding % of boldness the product works for 13.2% cumulative willing to buy % Women who have the money (2.52%) New buyers due to fast growing age segment New market share reached who will try cumulative who have tried loyal full-time buyers (20% try) since meaningful regrowth only 20% for women, I assume this is the loyal rate

one year try people for 4 month abs. max revenue from above (4month + year)* ($660-20%) New Marketshare (Exh. 3) women

so far 11.1% + 5.3% willing to buy if > $ 600, now additional

Forcast under old model / new price Revenue expectation (1 billion in 4-5 years) Analyst "think 400-500 million possible per year"

hands attached to heads potentially buging (Gessner formula) average amount of wallets - weighted spending average single hands paying * $620 ( - 20% to company) 5

Women added 1989 40000000

1990 40000000

1991 40000000

1992 40000000

1993 1994 40000000 40000000 !! the age group we are interested 38,000,000 38,000,000

38,000,000

38,000,000

38,000,000

38,000,000

3,762,000 0

3,762,000 0

3,762,000 0

3,762,000 0

3,762,000 0

526,680 2,125,530 1,636,470

507,870 1,617,660 2,144,340

504,108 1,113,552 2,648,448

489,060 624,492 3,137,508

485,298 564,300 139,194 negative! Means we reached whole potential 3,622,806 4,187,106

3,762,000 0

25% of new buyers from growing age segment * 37.93% able to buy) + previously won loyal buyers

409,118 395,010 ###

536,085 380,903 ###

662,112 784,377 378,081 366,795 ### $478,706,976

905,702 363,974 ###

1,046,777 423,225 ###

erage of annual cost: $600 - $720

$24,784,507 $30,387,961 $36,120,726

$41,551,766 $47,069,012 $54,439,709

= 73% increase $70,000,000 $95,000,000 ### $122,000,000 $84,000,000 $96,000,000 35% 32% 35% 34% 56% 57% ### ### ### $165,000,000 ### ### $45,000,000 $45,000,000 $45,000,000 $30,000,000 $34,580,000 $32,400,000 39% 32% 30% 18% 30% 27%

ng to buy if > $ 600, now additional 13.5%

total share with women = 59% increase ng to buy if > $ 600, now additional 9.7%

18,302,833 17,387,692 2,295,175 57,838

18,851,918 17,909,322 2,364,031 59,574

19,417,476 18,446,602 2,434,951 60,874

229,518 229,518 45,904

549,085 291,312 238,454 47,691

565,558 300,051 247,585 49,517

172,138 178,840 185,688 $54,533,365 $56,656,567 $58,826,108 79% 123% 118%

Total max forcast US Weighted forcast World forcast (ratio average)

7

8

8

8.5

9

9.45

change to OTC

1995 1996 1997 1998 1999 2000 40000000 40000000 40000000 40000000 40000000 40000000 e age group we are interested in grew by average 3% - higher than overall population 38000000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 since doctors do not "filter" I assume that every person with boldness with try

3762000 0

3,960,000 3,960,000 198,000 0 Number changes, since price falls ! 564,300 562,320 554,400

3,960,000 0

3,960,000 0

3,960,000 0

534,600

514,800

510,840

6,402,726

6,917,526

7,428,366

1,600,682 1,729,382 400,950 386,100 $457,863,516 $490,533,516

1,857,092 383,130 $523,987,596

$145,600,598 $155,989,658

$166,628,056

$251,889,035 $269,862,108

$288,266,536

ative! Means we reached whole potential market with our current "constraints"

4,751,406 1,187,852 423,225 $701,673,192

5,313,726

5,868,126

1,328,432 1,467,032 421,740 415,800 $387,819,036 $423,886,716 !new price base $330

$60,905,233

$123,326,453 $134,795,976 % goes from 8.68% to 31.8%

Forcast $96,000,000 63% $124,000,000 $75,000,000 60% 20,000,000 19,000,000 2,508,000 55,176

$213,354,764 $233,197,038

20,600,000 20,600,000 2,719,200 568,313

21,218,000 21,218,000 2,800,776 585,362

21,854,540 21,854,540 2,884,799 602,923

22,510,176 22,510,176 2,971,343 621,011

23,185,481 23,185,481 3,060,484 639,641

618,000 341,878 428,912 85,782

636,540 352,134 519,351 103,870

655,636 362,698 612,502 122,500

675,305 373,579 708,449 141,690

191,896 255,831 321,684 $60,792,581 $40,523,625 $50,954,779 127% !new price base $330 Forcast $64,432,563 $81,018,098

389,513 $61,698,868

459,377 $72,765,279

531,336 $84,163,683

$98,101,199 $115,696,793

$133,820,255

% goes from 2.52% to 20.9%

582,524 309,052 255,861 51,172

600,000 331,920 341,108 68,222

$200,000,000

### $200,000,000 $200,000,000

$200,000,000

estimate was $250,000 possible per year / or 1 billion in 5 years

$450,000,000 ### $450,000,000 $450,000,000 $450,000,000 al max forcast $277,787,328 $314,215,136 $349,990,234 $385,558,902 $422,086,791 Weighted forcast $271,672,397 ### $314,994,140 ### $358,252,075 rld forcast (ratio average)

9.9

under old price w %ith new price % 0.00% 0.0% 0.00% 0.0% 0.00% 0.0% 0.00% 0.0% 0.00% 0.00% 0.00% 0.00%

0.0% 0.0% 0.0% 0.0%

Laura he sais that using 40m everywhere is fine, but I like it correct this is the 95% for men and women this probably is the difficult part, 9.9% commulative this you can ignore if you take the 40m everywhere

this is the max forecast for Q3 green is Q2

Weights 30% 10% 60%

new price %