Rasha

Competition oriented pricing: an approach that uses competitor’s prices as a benchmark. This is the approach chosen by Printup in both her first and second model, as she researched the market closely and was considering using Alli as benchmark, which means 4 week supply for 75$, or even drawing a comparison to other CSP drug margin, and to keep same profit margin on this one which is 70 percent therefore for 4 weeks supply it should be 125$.

By using this method and monitoring competitors, Printup can learn more about how to differentiate her product and make it more attractive, in addition to that this strategy allows her to remain close to competitors. In fact by comparing Metabical to Alli she would be able to project revenue based on Alli’s figure as an estimate, and by comparing Metabical to other CSP products and maintaining the same profit margin percentage, printup would also be benefitting the company at large.

Demand based pricing: pricing the product based on the value created for consumers by matching price to what customers are willing to pay. This revolves around studying the market, evaluating the demand, taking the consumers benefit into consideration and their spending habits. This pricing strategy helped Printup determine a price of 150 $ for 4 weeks supply of Metabical.

This approach is one of the best pricing strategies Printup can rely on, since it gives her an idea about the market, the elasticity of the product and potential sales.

I would recommend charging a price of 125 dollars, which remains close to Alli’s price however the price premium is related to the differentiation of Metabical. In addition to that the price of 125 $ gives the company a profit margin of 70% which could cover the 5% ROI requirement. And finally since a 4 week supply costs 125$ this means that an individual would have to spend in total 375$ for the 12 weeks program therefore remaining under the 450$ spent by over weight individuals on health yearly.