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Management / Strategy

Pricing Strategies

The Outlook for Medical Device and Diagnostic Companies

Publication Date   May 2006
Publisher   HSB Consulting
Product Type   Report
Pages   not applicable
ISBN Number   not applicable
Product Code   HBS021
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Price £2,470.00

approximately: $4,615 | €3,133

Summary


This report on provides:
• An analysis of the benefits and advantages various pricing strategies can offer.
• Provides a detailed insight into impacting factors affecting pricing strategies in Europe, US and Japan.
• Case studies reviewing experiences of companies within the medical device and diagnostic sectors.

This report is relevant to all medical device company employees. However, its specific target is pricing managers, marketing and sales personnel of medical device companies who should be working together to develop their companies’ pricing strategy.

It is evident that the pricing strategies of many medical device companies could be improved upon and this report investigates the strategies that are being used, those that are recommended and the pressures that influence pricing. These pressures include:
- The competition’s technology
- The competition’s price
- The reimbursement situation of the market being entered.
- The procurement methods within the market
- The price trends within the sector
- The medical need for the product
- Who the customers are for the product
- The brand strength of the product and its competition
- The economic and medical value of the product
- The company’s market share
- The company’s economic strength

It can be seen how each of these factors raise questions of pricing strategies and the report discusses them all,but some of note include:

  • The competition’s technology – is it as effective as yours? If not can you price higher than the competition?
  • The competition’s price – should you match it?
  • The reimbursement situation of the market being entered – even if your technology is better than the competition’s will the reimbursement system of the country being entered price it at the same level? What are they looking for in order to reimburse the price of a product?
  • The price trends within the sector – are prices falling or rising?
  • The medical need for the product – can a greater need command a higher price?
  • The company’s market share – is the company’s market share worth protecting or enhancing through aggressive pricing?
  • The company’s economic strength – can the company afford to undercut the price of the competition?
  • The brand strength of the product and its competition – can a brand protect the price of a product?
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    Content


    1. Executive Summary


    2. An Introduction To Pricing

    2.1 The target audience
    2.2 The price is right?
    2.3 Pricing strategies
    2.3.1 Price sensitivity
    2.3.1.1 The unique value effect - peripheral stents
    2.3.1.2 The substitute awareness effect - syringes
    2.3.2 Conjoint analysis
    2.3.3 The strategy clock
    2.3.4 Economy pricing
    2.3.5 Price skimming
    2.3.6 Penetration pricing
    2.3.6.1 Premium or prestige pricing
    2.3.6.2 Cost-based pricing
    2.3.6.3 Cost-plus pricing
    2.3.6.4 Experience curve pricing
    2.3.6.3 Demand-based pricing
    2.3.6.3.1 Product line pricing
    2.3.6.3.2 Pricing differentiation
    2.3.6.4 Competition-based pricing
    2.3.6.4.1 Competitive parity
    2.3.6.4.2 Cost-benefit pricing strategy
    2.4 Market segmentation
    2.5 Company example – Chiron Behring GmbH & Co
    2.6 Company example - Tyco Healthcare

    3. Customer Value, Competition And Cost. Their Role And Influence On Development For Effective Pricing

    3.1 The therapy
    3.2 The customer
    3.3 Value pricing
    3.3.1 The effect of the changing medical device market on value pricing
    3.3.2 Value pricing for consumer markets
    3.3.2.1 Uniqueness
    3.3.2.2 Scarcity
    3.3.2.3 Trust
    3.3.2.4 Proximity
    3.3.2.5 Opportunity
    3.3.3 Integrating value pricing into a company
    3.3.3.1 Customer research
    3.3.3.2 Translation of the customer response into value components
    3.3.3.3 Anchoring
    3.3.3.4 Equip the sales force with tools that support value-based pricing
    3.3.3.5 Company example - Varian Medical Systems
    3.4 Impact of branding and loyalty
    3.4.1 Creating a brand
    3.4.2 Branding/price questions
    3.4.3 Company example - Hill-Rom
    3.5 The competition
    3.5.1 Price points
    3.5.2 Price wars
    3.5.3 Price leaders and followers
    3.5.3.1 Barometric price leadership
    3.5.3.2 Dominant firm and competitive fringe
    3.5.3.3 Collusive price leadership
    3.5.3.4 The dynamic view
    3.5.4 Company example – Omron Healthcare
    3.6 Pricing strategy examples in different medical device sectors
    3.6.1 Pacemakers
    3.6.2 PTCA catheters
    3.6.3 Wound care

    4. Current issues and changes impacting on pricing

    4.1 Reimbursement
    4.2 Health technology assessment issues

    5. Global and Regional Pricing : Drivers and Trends, Market Challenges

    5.1 Market facts
    5.2 USA
    5.2.1 Company example - Baxa Corporation
    5.3 Japan
    5.4 Europe
    5.4.1 The Czech Republic
    5.4.2 France
    5.4.3 Germany
    5.4.3.1 Company example - Bien-Air
    5.4.4 Italy
    5.4.4.1 Company example – Smith & Nephew
    5.4.5 Poland
    5.4.6 Spain
    5.4.6.1 Company example - Synthes, Inc
    5.4.7 The UK
    5.4.7.1 Company example - Smith & Nephew

    6. Alignment of Pricing Strategies with Overall Corporate Business Strategies

    6.1 Incorporation of pricing strategies into company strategic objectives
    6.2 Company logistics
    6.2.1 Discounting
    6.2.2 Improving the pricing structure

    7.Conclusions and Strategic Recommendations

    7.1 The company
    7.1.1 Streamline electronic systems
    7.1.2 Advertise and disseminate the goals of the company
    7.2 The product
    7.2.1 Value pricing
    7.2.2 Market dynamics