...Case Differential pricing of pharmaceuticals: the HIV / AIDS Crisis 1) Is the monopoly on patented pharmaceuticals warranted? What barrier to entry prevents the re-importation into the United States of pharmaceuticals sold at lower prices abroad (say, in Canada)? The monopoly on patented pharmaceuticals is an improper term, and represents only a limited warranty. * First, it is limited in time. The company needs to recover its R&D investment and make a fair profit during the period of exclusivity. * Second, it is limited geographically – as some countries will not respect intellectual property and allow their own pharmaceutical companies to copy innovations, making generic drugs even before the original patent expires. * Third, it lacks the most important element of a monopoly: price control. In most countries, the prices of drugs are set by a governmental agency. The manufacturers are merely consulted; their influence is very limited. In the end, once the price is set, they can only decide if they are willing to sell at that price or not. Take it or leave it. * The combinations of the factors above will put pressure on the pharmaceutical companies to expand geographically as quickly as possible, in order to maximize their chances of recovering their R&D costs and making a fair profit within the time period covered by patent protection. In order to do that, they will accept in some countries prices that are far from ideal – prices they would...
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...Name: VINETHA KARUNANITHI No Metric: PGSM 0145/12 Tutorial :5 1. Is the monopoly on patented pharmaceuticals warranted? What barrier to prevent the re-importation into the United States of pharmaceuticals lower prices abroad (say, in Canada)? The monopoly on patented pharmaceuticals is an improper term, and represents only a limited warranty. First, it is limited in time. The company needs to recover its R&D investment and make a fair profit during the period of exclusivity. Second, it is limited geographically, as some countries will not respect intellectual property and allow their own pharmaceutical companies to copy innovations, making generic drugs even before the original patent expires. Third, it lacks the most important element of a monopoly: price control. In most countries, the prices of drugs are set by a governmental agency. The manufacturers are merely consulted; their influence is very limited. In the end, once the price is set, they can only decide if they are willing to sell at that price or not. Take it or leave it. The combinations of the factors above will put pressure on the pharmaceutical companies to expand geographically as quickly as possible, in order to maximize their chances of recovering their R&D costs and making a fair profit within the time period covered by patent protection. In order to do that, they will accept in some countries prices that are far from ideal – prices they would never accept in a true monopoly situation. In doing...
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...Differential Pricing: Many important industries involve technologies that exhibit increasing returns to scale, large fixed and sunk costs, and significant economies of scope. Two important examples of such industries are telecommunications services and information services. In each of these cases the relevant technologies involve high fixed costs, significant joint costs and low, or even zero, marginal costs. Setting prices equal to marginal cost will generally not recoup sufficient revenue to cover the fixed costs and the standard economic recommendation of "price at marginal cost" is not economically viable. Some other mechanism for achieving efficient allocation of resources must be found. The outcome of this investigation is that (i) efficient pricing in such environments will typically involve prices that differ across consumers and type of service; (ii) producers will want to engage in product and service differentiation in order for this differential pricing to be feasible; and, (iii)differential pricing will arise naturally as a result of profit seeking by firms. It follows that differential pricing can generally be expected to contribute to economic efficiency Thus differential pricing is “the practice of selling the same product to different customers at different prices even though the cost of sale is the same to each of them. More precisely, it is selling at a price or prices such that the ratio of price to marginal costs is different in different sales” ...
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...Ladies’ Night Differential Pricing Name: Institution: Date: Ladies’ Night Differential Pricing Introduction Gender-based price discrimination is illegal regardless of the motivation or severity since it violates public accommodation rights stipulated in the constitution. It results in the exclusion of persons as well as unequal treatment based distinctly on sex. The law prohibits discrimination on the basis of sex in public accommodations. All persons are equal and, regardless of their sex, should be entitled to equal and full privileges, services, facilities, advantages, and accommodations in all business establishments. Therefore, it is discriminatory to offer half-price drinks for women and no similar offers for men. Gender-based pricing violates the Human Rights Act by denying men the right to equal and full enjoyment of the services and privileges offered in the establishment. Although economic interests could have motivated the differential price on ladies’ night, the anti-discriminatory law does not require discriminatory intent, but evidence of discrimination and hence such promotion is illegal under these provisions. The discriminative practice causes stigma, and thus the male customers are stigmatized based on their gender. By charging men more, the business indirectly expresses that men are less welcome than women and portrays the former as inferior by treating them as second-class citizens. On the other hand, the argument that differential pricing encourages...
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...The differential was first invented in China, in the third century,A.D. After turning a car the outside wheel has to turn faster then the inside one in order to cover the greater distance. That is why two wheels are not driven at a same speed. So we need a differential gear. A car differential is a place halfway between the wheels, on either the front or both axes. Main mechanisms: Wheels receive power from the motor via drive shaft. The power receiving wheels which makes the vehicle move fowrord are called as the drive wheels. Wheels receive power from the motor via drive shaft. The main function of the differential gear is to allow the drive wheels to turn at different Rpm while from the engine. The main characterics of differential is to, * To aim the engine power at wheels. * To transmit the power to the wheels while allowing them to rotate at differential speeds. the left wheel has to travel more distance compared to the right wheel. If the wheels where connected using a soil shaft. The wheels where connected using a soil shaft. The wheels would have to slip to accomplish the turn. The mechanism in a differential allows left and right wheels to turn at different Rpm, while transferring power to both the wheels. Differential parts: There are three types of gear available, Pinion drive gear: Transfers power from the drive shaft to the ring gear. Ring gear: Transfers power to the differential case assembly Side/Spider gears: Helps both wheels to turn...
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...could lead the subject to fall. This is avoided by the subject’s CoP constantly trying to push the CoM back within the BoS, which resulted in a greater radius compared to when the subject was standing on two feet. Condition four had a much greater radius than the previous condition, and this is expected as not only did BoS diminish, but the visual receptors were not able to provide efficient feedback to the brain regarding orientation. In condition five, the CoP radius is seen to be greater compared to the first condition again which is expected as the BoS was reduced along with the visual and somatosensory receptors in the legs. As mentioned before, spindles are stretch receptors located in the muscles which provides information on the body’s...
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...it was chosen? Present the paper in Microsoft Office Word document format. Name the file A deterministic model is the one that contains no random elements. The output of the model determined the parameter values and the initial conditions. Deterministic models samples include accounting, timetables, pricing, a linear programming model and economic quantity models (Nic, 2013). For example, decision-making problems can be deterministic or probabilistic decision models. As deterministic models, decisions to bring good final outcomes. A deterministic model is “you get what you expect” risk-free model, which determines the outcome. It also depends on the influence of the uncontrollable the factors that determine the outcome of a decision and the information the decision-maker input as a predicting factor (Arsham, 1996). According to Schrodt (2004), deterministic models was widely used in the early 18th century to study physical processes to develop differential equations by many mathematicians. These differential equation allow values of a variable as function of its value at any point in time and as a common form of the deterministic concept. The differential equations apply to a variety of astronomical and mechanical phenomena and have produced crucial scientific literature (Schrodt, 2004). The model is important in astronomical and mechanical phenomena because of the finite equations...
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...lotions Determine and discuss a pricing strategy (Penetration or Skimming). Imagine how many people in the world today are actively seeking organic body lotions. Especially when you can get it for $12 in an 8 fl.oz jar. Penetration pricing is a strategy employed by businesses introducing new goods or services into the marketplace. With this policy, the initial price of the good or service is set relatively low in hopes of "penetrating" into the marketplace quickly and securing significant market share. This pricing approach often is used for products that are of good quality, but do not stand out as greatly better than competing products. This would be the best pricing strategy for the organic body lotions because a penetration pricing strategy tries to sell the whole market at one low price. Such an approach might be wise when the 'elite' market—those willing to pay a high price—is small. This is the case when the whole demand curve for the product is fairly elastic. A penetration policy is even more attractive if selling larger quantities results in lower costs because of economies of scale. Penetration pricing may be wise if the company expects strong competition very soon after introduction. Once the product has secured a desired market share, its producers can then review business conditions and decide whether to gradually increase the price. Determine and discuss pricing tactics (Product line pricing, Value pricing, Differential pricing, or Competing against private brands)...
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...Brian J. McCue Marketing Management 500 November 14, 2011 Determine and discuss a pricing strategy (Penetration or Skimming). When deciding between skimming and penetration for a pricing strategy, Bag It, Incorporated considers the relationships that have already been formed with its current clientele. Skimming would allow Bag It, Incorporated to price our Zip N Seal bag at a higher price than the competition. This may allow us to gain a higher profit, but in return gain low sales volume. Bag It Incorporated will choose to use a penetration pricing strategy. This type of strategy is a price strategy that will allow Bag It Incorporated to price the Zip N Seal bag a competitively low price so that our current clientele and new customers will be eager to try this new product. We have seen our prices from our competitors such as Uline.com and Papermart.com. Although they do not offer product quite like the Zip N Seal, we will use the other similar products as a guide to help set our prices. Determine and discuss pricing tactics (Product line pricing, Value pricing, Differential pricing, or Competing against private brands) to be used for your product. Bag It Incorporated will be using a few different types of pricing tactics. Product line pricing is one of them. In an article written by Bovay (2011), she states, “Let me state the obvious: you can only use a product line pricing strategy if you have a whole product line or if you are in the process of building a whole...
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...Revised version, July 27, 2003 Abstract. The rapid erosion of privacy poses numerous puzzles. Why is it occurring, and why do people care about it? This paper proposes an explanation for many of these puzzles in terms of the increasing importance of price discrimination. Privacy appears to be declining largely in order to facilitate differential pricing, which offers greater social and economic gains than auctions or shopping agents. The thesis of this paper is that what really motivates commercial organizations (even though they often do not realize it clearly themselves) is the growing incentive to price discriminate, coupled with the increasing ability to price discriminate. It is the same incentive that has led to the airline yield management system, with a complex and constantly changing array of prices. It is also the same incentive that led railroads to invent a variety of price and quality differentiation schemes in the 19th century. Privacy intrusions serve to provide the information that allows sellers to determine buyers’ willingness to pay. They also allow monitoring of usage, to ensure that arbitrage is not used to bypass discriminatory pricing. Economically, price discrimination is usually regarded as desirable, since it often increases the efficiency of the economy. That is why it is frequently promoted by governments, either through explicit mandates or through indirect means. On the other hand, price discrimination often arouses strong opposition from the public. There...
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...is likeImpact of pricing strategy and promotions on sales on service/ solution: From time to time we come across instances where businesses are not realizing their full potential when setting prices. Sometimes this can mean missed revenues. The company’s top priority should be better pricing to its products. Price is the only revenue generating element among the 4P’s, the rest being cost centers. Indeed the pricing will capture the better essence of company’s products/services. The reasons for a company to have a better pricing strategy: * There are more chances to tap the hidden profits * Fit the realities of market place (Will customers buy at this price?) * Differential pricing and its success is improving its access to other low and middle income areas A well implemented differential pricing system will increase in sales of pharmaceutical manufacturers. In setting pricing policy, a company estimates the demand curve, the probable quantities it will sell at each possible price. It estimates how its costs vary at different levels of output . We will analyze by reviewing the existing literature on differential pricing and examples of successful and unsuccessful of such pricing is affecting the sales. We will also analyze different pricing strategies and its effectiveness of each strategy and their impact on sales. we also study situations when companies often face situations where they may need to cut or raise prices. As we progress the empirical study, we...
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...Why the Highest Price is not the Best Price? It is about how to practice ‘value based pricing’ that support profits and promotes better relationships wth customers Accoring to them Value based pricing means finding out what the value is your offerings realtive to competitors and then charging as high as they can But t,s value based pricing usually shortsighted in 2 respects: 1)It does not consider the profiting from delivering superior value that may result in greaterprofitability 2)It weakens customer relationship Resim fiyatkasa temalı CASE:Electron Instruments manufactures scanning electron microscopes (SEMs).In 2007 as a new initiative Electron developed and introduced a desktop SEM They believed this desktop SEMs vastly superior to the next best alternative Japenese,but they did not conduct any customer value research their belief based on qualitative feedback from a few beta tes customers who were familiar wth SEM technology and most of them was the top customers of expensive SEMS They decided to sell these SEMS %25 higher then the price of the next best alternative. But the sales were not as good as they thouht So because of these poor results they decided to investigate what cause that.Marketing discovered that even they were not wrong about easy use of desktop SEM sor technological properties but their prospective customers did not evaluate them at the same way.Furter marketing discovered the close systme design whşich doesnt allow upgrades such as...
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...growing 229% annually and China being predicted to ship over 400 million smartphones. However, they had a very small presence in these markets occupying a 2.3% share of the market, a dwindling amount when compared their rival Samsung who engrossed the market with a share of 91% (case page 9). Establishing a strategic plan that allowed Apple to target entering these markets presented Apple with a serious obstacle, due to the noticeable different in smartphone trends. Unlike the markets that the company had already penetrated, a premium pricing strategy would not endeavour market share. The smartphone trends in these markets exhibited a demand for products that were low budget and low cost directly correlating with consumer’s limited income. If they compromised on price they would lose revenue per phone, however not changing the current pricing strategy would mean no growth in the emerging markets. Ultimately Apple decided to adjust their pricing strategy to allow them to target this growing and profitable market. In this strategy Apple simultaneously...
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...This article talks of rice gouging as a pricing strategy followed by US companies vis-a-vis Australian consumers. We start with the concept of the strategy and the conditions required for its effectiveness. Next it is applied on the current situation that is the focus of the article. Lastly we try and assess the benefits and costs of this strategy. Price gouging is a form of price discrimination, where the producer/seller is able to discriminate between different consumers on the basis of his selling power or some feature of the consumer itself. Price gouging is negative in its implication as it involves charging higher prices from consumers in times of emergency, as the consumer has no choice. It is even treated as illegal in some economies. For example, if there is a hurricane and plywood manufacturers charge a higher price from consumers wishing to rebuild their homes, it is price gouging. This is because there is no change in the good provided or the cost of manufacturing that good. Producers are simply using the consumers’ emergency demand for plywood to boost profits for themselves. Another example is the rise in essential items prices when there is a curfew in riot affected areas. For the producer this makes sense as demand becomes inelastic in times of emergencies and he can charge a higher price and increase his profits. “Everyone engaged in a business who…engages in a policy of selling products in any area of the country at prices lower than those exacted by him elsewhere...
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...Pricing strategy and Channel Distribution Anthony McKenzie MKT 500 Marketing Management Prof. Deidre Guion November 13, 2011 Determine and discuss a pricing strategy (Penetration or Skimming). The marketing penetration strategy its intention is to raise market shares of any product or services that is still prevailing in the consumer market. This particular pricing strategy was adopted by companies and business in order to increase their sales revenue merely because there wasn’t really a need to make any need to make any needless changes that could affect their products or services The other side of market penetration points out that there are other existing businesses or company that selling their products and services to the consumer. However, they can foresee their existing sales figures can change by using the marketing penetration strategy (Market Penetration Strategy, n.d.). Determine and discuss pricing tactics (Product line pricing) Value pricing, Differential pricing, or Competing against private brands) to be used for your product. The pricing tactic choosing to help promote the sales of products for the Alpha & Omega Medical Supply Company is Differential Pricing, the particular reason why this particular pricing tactic was selected. A company or business uses this type of pricing of their products and services. There are individuals who are living below or near the poverty level. What the company or business will do is that they will sale...
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