Pricing, Packaging and
Demand
Forecasting
METABICAL
OBJECTIVES
• Product benefits
• Target customers
• Packaging strategy
• Forecasting demand
• Pricing strategy
• Profitability and ROI
METABICAL
FDA approved and can be bought only through a prescription
Lesser negative effects as compared to other available drugs
Only 1 tablet per day
Promotes a healthier lifestyle(behavioural modifications)
Came with a support plan
First drug in the overweight segment
OUR PRIORITY
Overweight females (BMI 25-30)
Age group of 35-65 years
Income level of $50,000 - $80,000
College-educated
The group of women wanted to lose 10- 30 pounds
Ready to change their lifestyle to stay healthy
“ I want to make a difference to my life.”
FACTORS AFFECTING PACKAGING
To ensure the value addition of the consumer is maximum Target
customers’ willingness to spend
Likelihood of the completion of the program Customer perception of the
brand
Cost benefits in packaging cost
Reaching breakeven point
WHY THE 12 WEEK PROGRAM
The target market is
women who are
relatively price
inelastic. So, they
don’t mind paying
whatever price is set
Usually when the
consumer pays so high
she is willing to try the
drug for12 weeks and
thereby the impact
that she will notice will
be higher, which will
make them come and
buy again
The drop out rate
becomes lesser since
the customer will not
forget to repurchase
or go get a
prescription
CUSTOMER SATISFACTION IS OUR
PRIORITY

Completion of 12 weeks program
Optimum result
Customer satisfaction
Brand value
$$$
DEMAND OUTLOOKS
Approach
1
Demand forecast(millions)
619
2
680
3
1242
A niche market can also give
rise to a high demand
PRICING STRATEGY
Option 2 is a good pricing strategy
ADVANTAGES OF OPTION 2
OF PRICING
 Price elasticity of demand- Target consumers are
insensitive to price and their demand is relatively
inelastic
 Level of monopoly- Being the only company in the
market that is offering drugs for the overweight
category, we have monopoly in the market
ADVANTAGES OF OPTION 2
OF PRICING
 Freedom to set the price - To maintain the uniqueness of
the product , we can set the price relatively high without it
affecting our demand
 Exploiting consumer surplus- Overweight consumers are
willing to pay $450 out of pocket on health care. With that
consumer surplus available, it should be used
 Considering goodwill
DISADVANTAGES OF OPTION 2
OF PRICING
• Prone to competition- Monopoly is prone to
competition
• Product value to customer is not equal to product
price- The consumer’s perception of the product might
not match the actual product
• Higher price might lead to lower demand- If
competition enters the market , the pricing may lead to
lower demand
• Assuming customer preference does not change
over 5 years
ADVANTAGES OF OTHER
PRICING OPTIONS
Advantages:

At $75:
 Target market becomes
bigger Low price ,high
demand
At $150:
Brand image in the market is that the product is
“premium” and high quality
DISADVANTAGES OF
OTHER PRICING OPTIONS

At $75:
 The image of the product becomes that of it being a
low quality product
At $150
 Exploitation of the consumer surplus
 Target market being narrowed down too much
PROFITABILITY & ROI

Retail price ($)
ROI ( with approach 3) (in %)
75
103.62
125
239.37
150
307.24
ROI-ADVANTAGES

 Higher retail price, leads to higher estimated profit
 Quicker recovery of costs incurred
 Satisfied
shareholders
 Brand Value in the market is made Reduced cost of
customer acquisition
new