HDMS Executive Summary: Zoetis

Matt Bowen, Shriya Mantry, Emily Janin, Mano Das, & Joe Vigoda

Fall 2022

Project Background

Our multidisciplinary team worked with Zoetis, the world’s leading animal health company, which develops and markets vaccines, diagnostics, and medicines for pets and livestock. Zoetis markets a product that is expected to face LOE, at which point generic entrants are expected to come to the market, as well as branded competition.

 

Project Objective

In order to inform Zoetis’ defense strategy, our project team sought to answer the following questions:

  1. What major trends are driving growth and change in the target market over the next 5-10 years?
  2. What human and animal health LOEs have successfully defended market share in the past?
    1. What strategies were employed?
    2. What was the impact on post-LOE sales?
  3. What specific strategies should Zoetis pursue to protect sales following branded and generic competition entering the market?

 

Solution Approach - Choice Structuring & Options

We leveraged both primary and secondary research to understand the animal health market and potential strategies for Zoetis to take to defend market share:

●        Zoetis stakeholder interviews to inform internal thinking and validate hypotheses: Corporate Strategy, Competitive Intelligence, Commercial Development, Product Marketing

●        Qualitative interviews with veterinarians to understand product buying patterns, loyalty, and perception of generics

●        Case studies in human and animal health to understand prior approaches to competitive defense and inform strategies

 

From this research, the team developed four potential scenarios and competitive defense strategies that could be taken in each:

  1. “Give Up the Market” Approach: decrease pricing and cut back spend on PetCare rewards, DTC promotion, and vet promotion efforts
  2. “Business as Usual” Approach: don’t change pricing and maintain existing promotional spend
  3. “Incremental Promotion” Approach: don’t change pricing, maintain DTC promotional spend, and further invest in PetCare rewards and vet promotion efforts
  4. “Position as a Premium Product” Approach: increase pricing and further invest in Petcare rewards, DTC promotion, and vet promotion efforts

 

Recommendation

●     As a long-standing market leader, Zoetis could use this inflection point in the market to rebrand as a premium product in the evolving market. As such, we recommend they employ the “Position as a Premium Product” approach, in which they will increase pricing and further invest in Petcare rewards, DTC promotion, and vet promotion efforts.

●     Major trends and forces impacting market size over the next 10-15  years include (1) shifting demographics of pet owners to younger generations who are increasingly invested in their pet’s health, and (2) growth of e-commerce platforms providing consumers with more choice. Promotional strategies that aim to strengthen vet partnerships and improve brand loyalty among millennial consumers are recommended. Key tactics include petcare rewards program enhancements, TikTok partnerships, celebrity endorsements, loyalty program enhancements, and enhanced digital engagement with vets and consumers can drive an aggressive marketing strategy to lock in customers and minimize erosion.

●        Zoetis could take inspiration from historical blockbuster drugs, such as Viagra, Nexium, Lipitor, Ivomec, and Nuflor, which all underwent LOEs and successfully defended market share. Critical defense strategies included DTC campaigns and loyalty programs. Although share erosion varied by therapeutic area, these strategies softened the blow of new competition.

 

Final Thoughts

We found this project to be an enriching experience and enjoyed working with the Zoetis collaborators. Although some of our team members had backgrounds in human pharmaceuticals, we were all new to the animal health industry and eager to learn. We came out on the other side of this project more knowledgeable about the industry, the market, pet owner and vet preferences, and Zoetis company values.

 

Contributors

Matt Bowen, Shriya Mantry, Emily Janin, Mano Das, and Joe Vigoda