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The society has always appreciated change, especially in health issues. The introduction of In Vitro Maturation (IVM), as an artificial reproductive therapy proves vital in the society. In this new invention, hormonal simulation is done on a woman where one is administered with 5o injections for approximate period of 30 days. After simulation, mature eggs are removed and are fertilized in a test-tube by a male sperm. The fertilized egg is left for 18 hours then the embryo formed is transferred to the uterus.
However, as the product is new in the economy, pricing it is quite a challenge. Defects in pricing can be detrimental to the Medi-Cult’s growth prospects in the long term. Negative experiences feed customer’s perceptions that Medi-Cult Company is difficult to work with as a partner. The main challenge that the organization will face in setting the price is the instability in internal and external environment. Pricing is a complex process because of its sensitivity to the continual changes in the internal and external environment. Internally, Medi-Cult may have seen turnover or may have brought new leadership, resulting in changed policies. The changes in the pricing policies will imply inconsistent techniques and rules of pricing.
The other challenge that Medi-Cult can face when pricing IVM is the perception that the customer is always right. Though one of the objective of the company is to satisfy its customers and attract potential customers, there is need to analyze feature implications of the pricing strategy. Customers would want a lower price for the IVM, and this may coerce the organization to price the product at its lowest value. As such, the price will be detrimental to the long-term success of the organization (Rodger, 2005).
In order to realize an equilibrium price, the company should consider a number of factors in its implementation. One of it is the superiority of the IVM method over In Vitro Fertilization (IVF) method. This will be considered in both the cost incurred and benefit accrued from the two methods. In addition, the Medi-Cult needs to estimate only 2-3 years of first-mover advantage in order to ascertain the sales that will be achieved. As the company is not the only in the economy, it needs to anticipate availability of stiff competition in the near future, and determine the price that the consumers will be comfortable with even after new companies enter the market.
In pricing the product, Medi-Cult should employ price skimming in its strategy. As such, it should note that the direct competitors would not be available in the economy in the short term; therefore, the company should price IVM until when competition forces it to go down (Rodger, 2005). Most customers perceive that when the commodity is expensive, it is definitely of value to the consumer. Finally, push strategy should be incorporated in the plan, where advertising is done directly to the intended consumers, thus, and encouraging clinic to easily franchise with the company. However, educating consumers on IVM benefits will be of importance in realizing high revenue outlay.
In conclusion, pricing is critical to a company’s success, and realizing a slightly better price overall across all transactions has a tremendous impact on the bottom line for any company. As such, improving prices and preventing price erosion transactions should be the first priority for a company seeking to improve its profits.