Advice You - Business

The law of demand states that the quantity of a product demanded decreases when the price of that product increases. So when the BMW manufacturer raised the price of their cars over a t

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

wo-year period, sales should have dropped off. Right?

Not exactly. This strategy helped incredibly for BMW sales in South Africa. To keep sales from slipping BMW actually raised the 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

ices in an effort to take on a more upmarket image.

A growing number of middle-price brands are under attack from competing products in both the luxury and the discount markets. Custom

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

rs are moving away from middle-of-the road products in favour of premium products or those offering the lowest prices. The inexpensive supermarket label brands are thriving as is the ex

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

clusive ranged products, leaving the average (price and product)to fall by the wayside due to a shift in consumer buying habits. These days, choosing the right price is even more import

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

Combination pro

ant than it was in the past. Although much has been written on the science of pricing products, the fact is that in many cases, pricing remains an art. Of course, production cost figure

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

influence a products price, but many other less tangible, less measurable factors also influence a pricing decision. Lower prices are preferred for most products, but there are excepti

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

ons. The higher you price certain products like Mercedes Benz, the more desirable they become.

Most customers associate high quality with high prices. Image plays an important role in

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

setting prices. For example, the ingredients of a bottle of perfume retailing for $200 may only cost $50, the the $200 price tag creates an air of mystique and sophistication. "Women ar

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

buying atmosphere, hope, and the feeling of something special," says a major perfume manufacturer. Customers consider more than price alone when making decisions. Quality, reliability,

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

service support, ease of operation and other intangibles rank high on customers' list of buying criteria.

Penetration pricing strategies involves gaining quick acceptance and extensiv

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

Following aspects would a

e distribution in the market. The entrepreneur introduces the product at a low price. The low profit margins may discourage other competitors from entering the market with similar produ

dd to the challenges in developing combination products:

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

ts.

Skimming pricing strategies involves setting the price well above the total unit cost and to promote the product heavily in order to appeal to the segment of the market that is not

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

sensitive to price. Such a pricing tactic often reinforces the unique, prestigious image of a shop and projects a quality picture of the product.

Sliding-down-the-demand-curve pricing

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

strategies involves the entrepreneur introducing a product at a high price till technological advancements enable the firm to lower its costs and to reduce the products price sooner th

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

n its competitors.

Other pricing strategies involve.

ODD PRICING, $12,95 instead of $13,00

PRICE LINING, each category of merchandise contains items that are similar in appearance, q

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

Professional from academic institutions, pharmaceutical industries, health care indust

uality, cost and performance. Music shops generally use this technique by placing CD's etc in the same price line.

LEADER PRICING, products are marked down from what consumers are accu

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

stomed to paying in an attempt to attract more buyers, they earn smaller profits in the hope to attract more customers.

OPPORTUNISTIC PRICING, when products or services are in short su

.

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

ply customers are willing to pay more.

DISCOUNTS, products are marked down to move stale, outdated, damaged or slow moving products.

Pricing, is it an art or a science?. Well the only

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

Companies that provide selfless information through particip

way to really know is to study and understand your products and your market segment. The right price today may be completely inappropriate tomorrow because of changing market condition

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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