Useful Advices - Business

One surefire way to grow profit is to deploy sales resources that masterfully price your company’s products and services. The right

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

price can boost profit more than improvements in the cost-of goods sold or reductions in SG&A. For example, a 1% improvement in pr

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

ce expands operating profit by about 12% whereas a 1% improvement in cost-of-goods sold (COGS) or selling, general and administrativ

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

e expense (SG&A) only yields an operating increase of about 8% or lightly more than 2%, respectively. (1)

Inappropriate discounting

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

dramatically shrinks profits. TopMark’s analysis revealed that price cuts of .5%, 1% and 3% reduced gross profit by about 2%, 3% an

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

d 10% respectively. (1)

Pricing discretion should be delegated to appropriately trained sales representatives who have demonstrated

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

an ability to sell on total delivered value. That is, those who effectively appeal to customers’ needs for lowered product-life ope

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

rating costs or other financial benefits. Under this sales approach, product price is a function of return on investment rather tha

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

a cost.

Selling on total delivered value requires sales representatives to know their customers’ businesses and profit making form

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

ulas. Supplementing this information should be a knowledge of: 1) customer-specific costs and price data (including won and loss qu

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

tes) and 2) competitors’ price levels and value propositions. Thus armed, sales representatives will be able to:

> Identify those

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

customers whose business costs or profits can be improved significantly through the product/service solution they’re offering;

> Q

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

uote the best price indicated by the relationship between market prices, their current price positions at the customer and the price

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

targets management wants the sales representative to achieves; and;

> Avoid “leaving money on the table.”

Typically, different fu

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

nctions – each with their own buying criteria – have input into a purchasing decision. It is important, therefore, that a sales rep

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

esentative understand the buying criteria of each decision maker or influencer in order to tailor the extent a sales message emphasi

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

zes product performance and economics, warranty, parts availability, service, etc.

Finally, price acceptance is highly dependent up

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

n how effectively a sales representative structures and communicates the deal. How a price is structured is as important as the pri

.

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

ce tag. Such off-invoice items as volume discounts, year-end rebates, payment terms, discounts and freight can influence the custom

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

r’s price perceptions.

(1) Results are based on TopMark’s analytical sampling of manufacturing-dominated, publicly-traded companies

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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Many executive management teams have chosen to use franchising as an option to grow their businesses and sell more products and services, while receiving additional royalties from the franchise outlets. Each one of these outlets must be listed in the Uniform Franchise Offering Circular or UFOC, as required by both Federal and some State regulatory bodies. The Uniform Franchise Offering Circular are to be given to each potential franchise buyer 10 days prior to purchase.

The world is truly a continuous work in progress. That is because it is estimated that every hour, a new business or company starts up, making up for already congested industries.

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Useful Advices - Astute Pricing by Sales Representatives can Expand Profit

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