BA 170 - Case 4: Botox Chan | De Jesus | Lee | Mangrobang

I. Problem Statement
With its recent success in the US market, how should Allergan then expand and market Botox, and
establish itself into the Asian market, considering the difference in culture, mindset and behaviour of
the consumers?

II. Case Analysis

Based in California, Allergan began as a small pharmaceutical company specializing in eye and skin care
drugs and over the counter lens cleaners. One of these is Botox, a treatment for cross-eye problems,
which was originally a niche-market drug supported by little marketing efforts by the company.

When its cosmetic benefits were discovered, however, the demand grew by leaps even before the
approval from the FDA was released. In addition to the product catering to the different needs of
consumers to look calmer, to appear youthful, to improve ones vision, to address various health
concerns and more, doctors were also a driver for Botox sales, actively promoting the product to their
clients, whether that is in the form of discount parties, multiple client sessions or a one-on-one basis.

Of this market, the primary users of Botox were identified to be professional and high-income women
aged 3064. These are individuals characterized as modern and empowered women of strong
independent mindsets and ideologies women who are well educated, work full-time, and are
accustomed to making their own decisions. In other words, they are able to better embrace new
products, and have the actual spending capacity to afford it as well.

However, as Allergan penetrates a new market that is Asia, there are points of variation that must be
considered in formulating their plans and strategies. While some of these facts and characteristics are
universal and generally applicable to women of similar socio-economic class and age segment, the
differences in environment, culture and practices can have a significant influence in a consumers
behaviour. Therefore, an Asian woman would most likely think a little differently than that of a Western
woman of the same demographic segment. In the same way, there are differences in their external
environments which may influence the marketing strategy to be implemented by Allergan.

PESTLE Analysis was conducted to understand the overview of the situation in Asia in order to assess
what should the companys next course of action be.

A. Political
Botox is an injected drug that has potentially harmful side effects, and is therefore regulated by the
Food and Drug Authority (FDA). In other words, there are strict standards and protocols that Allergan
must follow consistently, and as we note, there are a different FDA rules and regulations across different
countries and cultures. Some may practice stringent protocols while some may be more relaxed.
Allergan, thus, has to stay in line with all those policies and subsequent changes so that they can adapt
to all those changes accordingly.
B. Economic
The early 2000s was a period characterized by points of recovery for most Asian countries after a series
of crises and recessions the Thailand recession, 9/11 attacks, and 2000s recession. After which, it was
followed by an economic growth boom for the Four Asian Tigers, and that is South Korea, Taiwan, Hong
Kong and Singapore, reporting high annual GDP growths rates.

Another important point to note is that the distribution of wealth in Asia is much more evident than in
the United States or any other region for that matter. On one end of the spectrum, we have China,
Japan and India, placing in the top five richest countries in the world, and on the other end, we have
Afghanistan and the Philippines, suffering from debt and poverty. What this means to say is that
Allergan may have to implement different strategies in terms of pricing and marketing as beauty
consumers may have different purchasing behaviours and thinking processes, depending on whichever
end of the spectrum they live in.

C. Social
Culture and other social factors influence how products enter a specific market, more so for Asians who,
in general, place significant weight in social perception and hierarchy. Beauty is seen as a status symbol
in Asia, and while this shows a good deal of potential sales growth for Botox, that women are much
more traditional in comparison to their western counterparts should also be considered. Asian women
would prefer a certain level of conservatism with such matters even when the product is of high
demand. In other words, the Botox party sessions held by doctors in the United States may not be as
effective in countries like Japan or China.

Another thing to note is that Asians are culturally known to be money savers, and are much more frugal
when it comes to their spending behaviour, and while luxurious pricing may add a factor of exclusivity
which Asians love, there also exists the possibility that they would not find the current pricing of Botox
reasonable given its regular treatments and the variety of beauty products in the Asian market.

D. Technological
With technological advancements, Allergan must integrate itself completely with the recent changes
taking place, keeping in view how consumers utilize technology for their benefit. Television and radio
ads were among the prominent advertising platforms in the 2000s. While, these may be advantageous
in promoting Botox on large scale, Allergan should also consider the fact that some Asian countries,
particularly those belonging to the poorer side of the spectrum, might be behind in terms of
technological developments.

It must also be taken into account that the Asian community is heavily invested in the beauty market,
and are likely to be actively thinking of ways to improve their beauty product offerings to cater to their
needs for beauty and that would include technology. This might pose a potential threat to the growth of
Botox in the Asian market.
E. Legal
There are a lot of legal implications, especially when it comes to the drug market. More often than not,
beauty injections such as Botox, or any drug for that matter, must strictly follow procedures to avoid
unwanted side effects, which could possibly end in a lawsuit. Medical malpractice is not an uncommon
occurrence, and as we note, there are several side effects that comes with Botox, and therefore,
Allergan must take strict measures to avoid legal issues. Also note that while Botox is patented in the
US, which protects it from potential competitors, these may not necessarily apply in Asian countries
where the governments are more lax in general, or if it does, it only gives protection to a certain extent.

F. Environmental
In general, environmental factors can affect the growth of Botox, but not that it would significantly alter
its trade and profit generation as these factors are much more directly related to agri-businesses.

SWOT Analysis
Strength Opportunity
- First mover advantage for Botox - Huge market for the beauty industry
- Patented - Ophthalmologic market
- Doctors strongly promote the use of Botox - Asian Market
- Strong R&D investment
Weakness Threat
- Not yet fully established in the Asian - Competition (other beauty products)
market no branding and positioning - Country specific rules and regulations
- Has side effects

III. Alternative Courses of Action

A. Implement existing strategies in the US, and market Botox as a product for everyone, whether
that is to cure ophthalmologic problems, chronic health concerns or to achieve a certain appearance to
match ones line of work. As such, the market potential of Botox can be utilized to its full extent. Under
this alternative, treatments would continue to being conducted in a more casual setting such as parties,
and multiple client sessions aside from the one-on-one basis, thereby making it more affordable to the
regular user. On the flip side, however, is that the branding of Botox could be diluted by its various uses.
People, even more so for Asians, who put great value in beauty, would be skeptical of a facial treatment
thats being used to treat migraines and chronic diseases. In addition, casual environments such as
group discount parties for Botox might not prove effective given that in general, Asians are more
conservative, and would ultimately prefer being perceived as someone of natural beauty. Thus, as much
as possible, potential Botox users wouldnt want to have it in public knowledge that they got themselves
done. In addition, broadcasting the various uses of the product might put it under the spotlight
especially for drug regulation authorities, which would entail added barriers for the product.

B. Market the Botox as a professional treatment process that is strictly for beauty. While doing so
results in the loss of potential sales for other uses of the product, this alternative enables Allergan to
create and establish for Botox, a strong brand association with beauty. Given that Asian consumers are a
great market for the beauty segment, positioning Botox as a new, innovative and revolutionary
beautifying treatment process would enable the company to maximize the potential of this target
market. This capitalizes on the relevance of beauty and might even create a trend especially for the
high-income, professional women market. Likewise, a professional environment creates that
appearance of exclusivity and luxury, which

Note that while Botox is being marketed as a product for beauty, this does not necessarily mean that the
actual usage of Botox will be confined in this segment. It can still be used for other treatments with the
recommendation of doctors. Botox is simply being branded more as a beauty product to capitalize on
the consumers preferences, while its other health benefits can be marketed subtly by practitioners
concerned with its use.

IV. Recommendation
As Allergan begins to establish Botox in Asia, the chosen alternative would be Option B, and that is to
align Botox with beautification. As such, the following strategies will be implemented to effectively
capitalize on the Asian beauty market.

Product: To strengthen Botoxs brand association, a name change to Botox Care would be conducted.
Likewise, given than Botox is, in effect, both a product and a service, an effective way to attract clients is
by providing a convenient and effective customer experience.

Price: Seeing as Botox, at that point, was a blue ocean, Allergan has the advantage of pricing their
products at a premium, and enjoy a high profit margin given the value it offers to consumers. For the
same reason, Allergan may occasionally price its products slightly lower, such as seasonal discounts and
special offerings, to cater to a larger market and attract new clients.

Placement: Botox should be introduced to high-income countries first to gain traction and popularity
within Asia, and for the fact that the saleability of Botox is relatively higher in these regions. The
distribution strategy should be conducted primarily through cosmetic clinic consultations so as to
maintain a standard of professionalism and sophistication. This prevents unfavourable occurrences such
as people using the product on themselves improperly, which may ultimately lead to bad PR for Allergan

Promotions: In line with its STP, promotion programs will be done using traditional media (ATL
promotions, beauty magazines and other articles) with a different positioning as a revolutionary and
luxurious beauty treatment procedure. Promotions should establish a strong brand association between
Botox and beauty.

After establishing its position in the beauty market, a future recommendation is for Allergan to explore
product diversification such as ophthalmologic markets and the like under a different product line or
branding.