Contact Lenses

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9B03A020

HAYWARD & GUZMAN: DISPOSABLE CONTACT LENSES

Eric Dolansky prepared this case under the supervision of Professor Niraj Dawar solely to provide material for class discussion. The

authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised

certain names and other identifying information to protect confidentiality.

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Copyright © 2002, Ivey Management Services

Version: (A) 2009-10-15

OVERVIEW

Nadine Palmer looked over the report on her desk once again. In two days, she would be expected to give

a recommendation regarding the pricing of the new disposable contact lenses, and she was unsure of what

to do. It was by far the most difficult decision that she’d had to deal with during her short time in Hayward

& Guzman’s eye care division. She knew that Shannon Cole, her superior in the marketing department,

would look upon her recommendation with interest and not only as an informed opinion as to what should

be done. The pricing decision had significant implications for divisional profitability over the short to

medium term, as this was one of the two new product launches the company was counting on to generate

growth.

Palmer understood the basic factors that should go into the pricing decision, but she was uncertain about

the price differential that should be charged for the two versions of the product. It had already been

determined that the new lenses...