Metabical Price

In: Business and Management

Submitted By skyrey123
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Marketing Assignment YP53B – Metabical Price
M. Ray Akbar Mutalibov
29115113

For the case study of Metabical Price, I would recommend Option 2 ($125 in 4-week supply) as the price recommendation. This recommendation decision was mostly made of target return pricing, but combined with a little bit element of value-based pricing and psychological pricing. The reason I would choose the target return pricing as a main tools to pick the price is because the CSP’s Metabical informed us that they wanted to achieve a minimum 5% ROI within five years of the new product’s launch. Thus, target return pricing was picked since this kind of pricing would set a price based on the achieved target of ROI. The reason why I include value-based and psychological pricing would be explained later in paragraph below.
Based on the calculations from Metabical Worksheet, I get several different results of ROI in 5 years, based on different method and different manufacturer gross margin. For the ROI’s manufacturer gross margin of $24,8, I have 210% (Method 1) and -26% (Method 2). For the ROI’s manufacturer gross margin of $58,13, I have 627% (Method 1) and 74% (Method 2). For the ROI’s manufacturer gross margin of $74,8, I have 835% (Method 1) and 124% (Method 2).
There were 2 different method in my worksheet calculation, the first one is Method 1 which taken the US’s overweight population who actively trying to lose weight and comfortable using diet pills into potential customer. The second one is Method 2, which taken the US’s overweight population who would go to a doctor to request prescription. Since Metabical is a prescription drug, I do not consider Method 1 is an appropriate choice in this case, thus making Method 2 into my prioritization. Since ‘prescription drug’ is one of the value that Metabical had offered, I include value-based pricing into consideration, regardless of…...

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