Recent years have seen an explosion in genetic research and the use of DNA technology. 23and Me, founded in 2006 by Linda Avey and Anne Wojcicki, helps each customer understand his or her unique genome, made up of 23 pairs of chromosomes. 23andMe's Personal Genome Service-winner of Time magazine's 2008 Invention of the Year award-gives people data about their ancestry, including possible predispositions for dozens of diseases and health conditions. Individuals are also given the chance to help advance genetic research. According to Avey, “We're generating information that not only gives you an idea of what your risks are, but it's prognostic information, too.”13 The basic service may be purchased on the company's Web site for a one-time fee of $399 plus shipping costs. A collection kit is shipped to the customer, who sends a saliva sample to 23andMe. Several weeks later, the customer can view the results online. By participating in this service, 23andMe's customers can provide data for a genetic research initiative with the Parkinson's Institute in Sunnyvale, California. In the fall of 2008, 23andMe dropped its basic price from $999 to $399, to help increase customer demand. Avey indicated that lower costs for mechanisms used to scan genomes helped to make the price reduction feasible. 23andMe's primary competition, Navigenics, and deCODE genetics, charged about $2,500 and $ 1,000, respectively, for similar services. Avey explained: “It's really more about getting the price down to a point that is more affordable. If that was what was holding [customers] back, this will be a better price for them to get involved.”14 When 23andMe reduced its price, the chief executive of Navigenics, Mari Baker, commented that cheaper does not always mean better. Baker admitted that her company's costs were much greater than 23andMe's new price. Avey pointed out that the lower price not only makes genetic information accessible to more individuals, it simultaneously helps to find more answers to genetic-risk problems. Referring to the research database 23andMe is building, Avey said, “It's all
about numbers and having as many people enrolled as possible.”15 23andMe is located in the Silicon Valley, a region in the San Francisco Bay area known for its technological firms. 23andMe now stands alongside many other high-tech businesses such as Microsoft, Apple, and Intel, as part of Silicon Valley's history of entrepreneurial innovation. 23andMe is funded in part through prominent health-science and technology companies, angel investors, and venture capital firms-listing Google, Inc.; Genentech, Inc.; and New Enterprise Associates on its promotional information. In short, 23andMe brings medical technology to individual consumers at a price designed to encourage purchase, and thereby increase genetic data.
Case Study Analysis
1. What is the product/service offered by 23andMe?
2. What could 23andMe's new pricing structure suggest about its brand? In other words, what risk(s) did 23andMe take when it cut its basic price by more than half?
3. What role does company location likely play in 23andMe's marketing strategy?
4. List factors to include in a breakeven analysis for 23andMe. Suggest the company's strategy for achieving a breakeven point.
5. How has 23andMe woven philanthropic attitudes into its business? Name some specific ways in which the company could incorporate philanthropy further into its marketing mix.