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Mersck Case Ans

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Submitted By puiimek
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It will set the standard of our pricing system, as if the new innovations have the same social issues (e.g. new innovation that saves lives + high demand on low income patients) people will expect the same practice of pricing from the new products. So before we take action on changing the price, we need to take in consideration the future consequences and the expectation of the market. It will effect the willingness to pay of the patients, the negotiation for government substitutions and the expected value of the company by shareholders. As well as, for our effort in helping to increase the infrastructure of developing countries, we will eventually be stuck to that social responsibility image (which is good), thus forcing us to continue our input without fail in the future sales of each medicine.

We did not change the price from what’s it like at the beginning. Moreover, we even go into doing more for the social without asking for more money from the patients. From our efforts in helping the developing countries to put more infrastructure, This will make our brand image of “social responsibility” and “Helping lives” goes bigger and stronger. As we not only want to save lives of people at the current issues, but also we want to create as sustainable solution for the community. Thus, we are committed to fixing the problem where it really occurs, reducing the whole percentage of patients in the future effectively. Moreover, we can also benefit from the increasing accessibility of the solutions. Since the pills are widespread and used by more people, we will gain the image of creditability and reliability, making the people see the effectiveness of the pill and our solutions in helping to cure with the disease. These brand image will gradually increase over time, but it will be a sustainable competitive advantage for us to differentiate clearly from the competitors and are unable to copy.

6) We are not changing the price of our products. We figured that we won’t find the right middle point, so rather than we go into changing the price to satisfy different stakeholders, apparently we change our costs structure. 

Firstly, we go into asking subsidization from the governments of Tier 1 countries. We will simply ask for tax exemption for our sales from our pills. Thus, we can goes into investing the production distribution in developing countries without the need for them to copy the products. We will eventually gain more profit by increasing channel and improving our cost structure. Secondly, we will help contribute back to the social both by our own efforts and by joining with the government. We are providing donation of medicines to the ones who couldn’t afford it and those in emergency situations. For the joint program, we are to invest in infrastructure of the developing countries, for the purpose of long term solution. This will not only reduce the negative feedbacks to our company, but also to improve the brand image of the company, helping us in long term too.

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