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Useful Advices - How Much Should You Charge?
When marketing a product or service, businesses find it difficult to set their prices. Too high, and no-one will buy, too low, everyone will buy, but you will go broke. So how do you set you
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
r prices?
The basic principle of pricing is that you should set your prices as high as the market will allow. But what does that mean? (You may not decide to do this for other marketing rea
The basic principle of pricing is that you should set your prices as high as the market will allow. But what does that mean? (You may not decide to do this for other marketing rea
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ons such as trying to buy customers, or offering an introductory price to encourage people to try a new product or service. But this should be a conscious strategic decision.)
When setting
When setting
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
heir prices, the single biggest mistake that businesses make is not to understand the value they offer compared with their competitors. So you must understand why your product is better than
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
everyone else's.
Is it stronger? Does it last longer? Is it better designed? Does it look better? If it is a service, what are the superior results you provide? What is the value of such di
Is it stronger? Does it last longer? Is it better designed? Does it look better? If it is a service, what are the superior results you provide? What is the value of such di
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ferences to the buyer?
If it is a commodity, then what else are you offering? For example, you can get a $2 fruit snack bar at the service station as you are filling your car. You know you
If it is a commodity, then what else are you offering? For example, you can get a $2 fruit snack bar at the service station as you are filling your car. You know you
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ould probably get the exact same bar for 25% less at the supermarket, but you will have to make a special stop, and then you will have to wait in a queue. Its just not worth the 50 cents you
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
will save. You are prepared to pay 50 cents for the convenience of buying the bar now. But if the bar was $5, would you buy it? Well you might if you knew that this service station was the o
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ly retail store for 200 miles!
Economists call this decision making "the cost of shoe leather" which is the amount of effort you are prepared to make to find a saving on your purchase.
Whe
Economists call this decision making "the cost of shoe leather" which is the amount of effort you are prepared to make to find a saving on your purchase.
Whe
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
you understand the value of what you provide compared with your competitors, and that includes substitutes for your product or service, you can then better set your prices.
So if you produ
So if you produ
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
t lasts twice as long, could you charge twice as much? Well consider the inconvenience factor of the replacement. If the item was socks, the inconvenience factor might be quite low. But if i
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
was a special valve inside a jet engine, the replacement cost of which was many times the value of the valve, you could probably charge considerably more for the valve than twice the cost o
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
a valve that lasts half as long, particularly if you guaranteed its lifetime.
So the value of the product has little to do with the cost of production or service. It is the value of the pr
So the value of the product has little to do with the cost of production or service. It is the value of the pr
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
duct to the buyer. But it is not enough for you to know the value of the product or service to the buyer. The buyer has to know as well. But it is surprising how often that a buyer really do
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
sn't understand the full value of what they may be buying.
If the buyer does not understand the value of what they are buying, they won't pay what it is worth. If they don't know there is n
If the buyer does not understand the value of what they are buying, they won't pay what it is worth. If they don't know there is n
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
t another retail store for 200 miles, they are unlikely to pay $5 for that snack bar. And the jet engine manufacturer may not understand the maintenance cost implications of a lower quality
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
alve to the end user.
When you know what your product is truly worth, and you have educated the buyer of its value, you will be able to set prices that reflect that value. The maximum value
When you know what your product is truly worth, and you have educated the buyer of its value, you will be able to set prices that reflect that value. The maximum value
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
that the buyer will bear- before they will decide they are better off with the lower value product, or the pain.
How do you find this threshold? Trial and error! Start at a price a little a
How do you find this threshold? Trial and error! Start at a price a little a
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
ove the inferior product, but below a superior one, and keep lifting your prices until your sales conversion factor declines to an unsatisfactory level. If you can't sell it at a price above
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
an inferior product, look closely at your marketing and sales process.
But remember, if you don't understand your value, you will forever be just another commodity seller competing on price
But remember, if you don't understand your value, you will forever be just another commodity seller competing on price
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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