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Medi-Cult Analysis

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As the innovator of a new, hormone-free fertility treatment with minimal to no side effects, Medi-Cult faces the key decision of selecting a pricing strategy that will maximize revenues in order to start turning a profit and create value for its shareholders. While the ability to conceive a child is considered priceless for many couples, Medi-Cult must maintain social responsibility and remain ethical in their pricing strategy in order to create credibility and customer loyalty.

Medi-Cult should position itself as the only company that provides a hormone-free fertility treatment that reduces the physical and psychological effects to a woman resulting in an increased chance of pregnancy among couples who wish to achieve and maintain a pregnancy. Based on the table below, Medi-Cult can charge up to the difference between the cost savings of IVM over IFV ($3,200 in the US and $1,600 in the rest of the world). Although IVM has significant benefits over IVF it is not possible to quantify the perceived value of these benefits based on the information provided in the case.

Cost Savings (IVM over IFV)

Cost of IVF Treatment Cost of Hormones Lab Work Misc. Costs Total Cost
USA $0 $2,700 $250 $250 $3,200
Rest of the World $0 $1,350 $150 $100 $1,600

Medi-Cult must immediately take advantage of the two to three year barrier to entry for competitors and maximize revenues in each market by implementing a combination of high, medium, and low pricing among the four countries. Medi-Cult should price high in the US ($2,200) and France ($1,429), medium in the UK ($1,167), and low in Denmark ($1,250) in order to maximize revenues to $8.3M as evidenced in the data below.

Recommended Price (IVM)

Price Volume

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