Product Pricing Component
The organization
Boiron Group, a French company, provides products for health maintenance through, mainly, health and natural foods stores. The products they produce and market are homeopathic medicines. These medicines are the result of work by a German physician, Samuel Hahnemann, in the 1800s. He was disgusted with the barbaric state of medicine, which still included bloodlettings at the time, and decided to look for a gentler way to heal people of disease. He began taking doses of various plant and mineral substances to determine the effect on the body. Today, the medical establishment regards homeopathy as a 'quack' form of medicine, as do most Americans. Interestingly enough, however, the British Royal Family uses homeopathic physicians, and no one can accuse them of shortening their lives. "Queen Mary and King George VI were firm followers of homeopathy, the King even calling one of his horses Hypericum which won the 1000 Guineas race [in 1946]." (Hypericum is the name of a popular remedy.) (Homeopathy Home Web site)
The utility of the product
The products are relatively inexpensive, and the interesting and wonderful, aspect of homeopathy is that self-prescribing is perfectly safe. One of the basic ideas of homeopathy, in which incredibly dilute solutions of the curative substance are responsible for kicking the body's immune system into a cure, is that if it is not the right remedy for the illness in question, it will simply have no effect. In homeopathy, that is part of what is known as the "law of similars." Obviously, to a population burdened not only be astronomical health-care costs, when the allopathic medicines needed to cure a strep throat can cost $90 or more (Zithromax, for example), paying about $6 or $7 for a tube of remedy would be a great advantage to the consumer. In fact, even if the consumer chose the wrong remedy the first time -- or the first three times -- they would still have saved enormously over the cost for an allopathic medicine.
Substitute products
There are a number of other homeopathic medicine manufacturers competing with Boiron, and producing...
If two goods are substitutes, we should expect to see consumers purchase more of one good when the price of its substitute increases." (Moffat, 2006) How much a price range is there, really one might ask? Although some washers, for example, may be several hundred dollars more or less expensive than others, the higher line goods posses more desirable amenities or physical features desired by the higher-end consumer. Hence,
' The consumer is willing to pay more to communicate this image, and thus the high pricing of new goods or 'skimming' is a reasonable strategy for the company. Low pricing of new products is best to use when trying to lure consumers to adopt a particular 'habit.' Gym memberships with introductory rate offers for new food products are often priced low to encourage consumers to give them a try and
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Pricing strategy for our new product is going to be penetration pricing. This strategy involves undercutting the competition on price in order to win market share. Undercutting does not necessary mean that the firm with follow a cost leadership strategy, but it implies that the firm will price below the prices of competing products with similar attributes. A penetration pricing strategy implies that the firm will maintain the low price
Pricing Decisions Describe the strategic implications that would need to be considered in setting a price for that product The public company selected for this analysis is Coca Cola Company. The identified product of the company is the Coca-Cola 20 fl oz bottle, which can be typically obtained from a convenient store, vending machine as well as super market. There are strategic implications that would need to be taken into consideration in
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