Goal 1. Select the method of administration
and price to maximize Beat's profits.
Imagine that Company A's
Away Cold & Flu
is the only over-the-counter (OTC) cold and
flu medicine on the market. Away is available in a caplet form with a 4-hour duration of
symptom relief.
In some circumstances, Away Cold & Flu may cause liver damage.
Currently, Away is priced at $7.00 and is not expected to make any changes.
You are the marketing manager for Company B's
Beat Cold & Flu,
a new OTC cold and
flu medicine that your company wishes to launch into the market.
The formulation developed by Beat's scientists allows for a duration of 24 hours, but
may cause stomach bleeding in some instances.
Management is asking you to determine the optimal combination of price and method of
administration (spray, caplet, effervescent, or liquid) that will maximize profits for Beat.
Constraints
You can only adjust the method of administration and price. The duration of symptom
relief and possible side effects are fixed because of the medicine's formulation.
Product(s) in the Market
1.
Company A
: Away Cold & Flu, Caplet, 4 hours, May Cause Liver Damage,
$7.00
Administration method: Caplet, 4 hours
Price: $7
My company product:
Company B's
Beat Cold & Flu 24 hour duration, may cause
stomach bleeding
Administration method:
Price:
