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level: PRICING STRATEGIES COMMONLY USED IN THE DRUG INDUSTRY

Questions and Answers List

level questions: PRICING STRATEGIES COMMONLY USED IN THE DRUG INDUSTRY

Question	Answer
result from overstock or excess inventory, or products are expiring within 3 months= 1 year, that is why you have a new product to introduce or marketing cost are too high which you lost a leader in retailing.	Selling below cost
you want to gain a fast entry on desired market segment then you have a bigger slice in the market and then dislodge competition out of your market. Especially if your product is new	Selling below competition
following the leader pricing policy or launching and introducing specialty drug product or highlight the bioequivalent advantage or other benefits that is absent in other competitor and set the price into competitive selling	Competitive selling
if your value given is emphasized and other price consideration. It was emphasized that it has quality assurance, it has warranty, after sale service more qtty. or additional features or weight	Pricing above competition
this happens in hospital or drugstore setting. setting a price at a very low levels by giving other discounts like buy take 1, allowances rebate or gift certificates to drug outlets and binding them to sales contract	Stopping entry of Competition
companies set their price at 863 or numbers that has round surfaces. (example 863 or 9 or even numbers/ round numbers because they have soothing effect to the eyes, compared with angular effect 7 4 or 5 that is not soothing in the eyes) Set bargained price. (i.e., P599.95, the human perceived it as P500)	Psychological Pricing strategy
Promotional Pricing strategy list	1 Loss leader pricing 2 Special Event Pricing 3 Cash rebates or Pin money 4 Low interest financing and longer warranties
Meaning the pricing depends on the location of the products. Meaning higher price for far away customers because they need to pay for the shipping costs. (For example, in online, you pay for your product with a shipping fee/cost since your location is far. However, if the product in near your area, then shipping costs may be free)	Geographical Pricing strategy
These absorbs all or part of the actual freight charges. (i.e., imported goods)	Freight Absorption Pricing
The introduction of your drug product is usually set at higher price. (For example, new product, if you put it in market, meaning you set that at higher price and eventually you trimmed down your price when your sales slowdown to attract the next price sensitively your of customers)	Market skimming pricing strategy:
In this, you are setting a low price to penetrate your market	Market penetration pricing strategy
In here, it is by combining several products and offers that set at a reduced price.	Product-bundle pricing strategy
Are usually price adjustments done by drugs companies to reward the drug outlets for the prompt payments.	Discount Pricing and Allowances strategy
Discount Pricing and Allowances strategy:	1 Cash discount 2 Quantity discount 3 Seasonal discounts 4 Promotional allowances 5 Other discount pricing
Discriminatory Pricing Strategy :	1 Customer-segment pricing 2 Product-form pricing
these are mark ups that equals to the cause of the operating store; meaning, your price is added based on the store operating costs	Full cost pricing strategy:
It is intended for biddings and quotations such as for the hospitals	Sealed bid pricing strategy
This is based on customers perceptions and demand intensity rather than the costs. (For example: When the pandemic started, there is a demand-orientated pricing strategy like the alcohol, face masks and etc.)	Demand-oriented pricing strategy
Meaning how your consumer perceived your products then they will pay what they perceived—Usually branded drugs, since they perceived it as branded ones, meaning it more expensive because branded drugs are too expensive because of higher quality	Perceived value pricing strategy
It is a pricing at an average level. Meaning it’s not cheap nor expensive	Going-rate Pricing