Metabical Case Solution

987 Words Apr 22nd, 2013 4 Pages
B Problem Statement
Barbara Printup must determine the packaging for Metabical that will best capture the accurately forecasted demand of the target market. With many substitutes for weight loss in a variety of packages and price points, it will be important to create a package that can be priced in a way to both drive sales and continued use of the 12-week drug.
Printup must also develop a pricing model to align with the packaging and the price expectations of the target market. Since this is the first prescription drug for overweight people, reference prices are compared to many "non-exact" substitutes that will factor into the price sensitivity of the market. Additionally, unlike other drugs in CPS ' portfolio, it 's unlikely that
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This would help optimize demand of the product, not leaving profits on the table but also not pricing out consumers who are willing to pay a reasonable price for a weight loss drug.
Additionally, this price model is not only the best terms of maximizing profits, but also aligns with CSP’s historical pricing unit. While “doing it how we’ve always done it” is a bad pricing habit, in this case, the analysis confirms that $125 is the best option. This should make her recommendation easier to “sell” internally as well.
$150/unit option
This option is significantly higher than the reference prices used in analysis, meaning consumers are significantly less likely to purchase it. Knowing this, the 48-202% ROIs calculated the demand models seems inflated and unrealistic. I think this price point could even drop the demand in half, making the ROI look more like $125 analysis.
I imagine that consumers would start to compare $150 a month to other things they pay $150 for: a week of groceries, a cell phone bill, a cable & internet bill, gas, etc. They may have hard time justifying the value of the drug at this price point and opt for a lower priced alternative, whether it’s Alli or a gym membership.
Conclusion
Barbara Printup has done an adequate job creating data related to price models and demand scenarios in order to provide thoughtful analysis for

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