Creating a pricing strategy for a product upgrade of a ICD platform
Our client wanted to launch an upgrade for their cardiology defibrillator platform. Before developing their own upgrade, they needed to take into consideration the current market drivers, the value and their value drivers. The question they needed to answer: what is the ideal product configuration and price to successfully launch our product upgrade?
The end goal
The client was looking for a complete and substantiated pricing study that would help them understand the current market drivers, the value proposition, the optimal product configuration per customer segment and a pricing strategy to enroll across the EU.
We conducted hybrid phone/online interviews across France, Germany, Italy, the UK and Spain. The profiles we questioned were electrophysiologists, heads of cardiology and purchasers. Within our interviews we had 2 phases:
Phase 1: gaining qualitative insights on value drivers:
- What is the perception of innovative product features?
- Which benefits and features are absolutely necessary?
- What does the current purchasing process look like?
- In comparison to the competition, what could our premium price be?
- What do we have to do to make the purchaser willing to pay 20% more for the new product, compared to the one we currently have?
Phase 2: executing a quantitative conjoint analysis:
- What features are most important?
- What levels contribute to the optimal utility score?
- How can utility scores be translated in price configuration?
- What product configurations would allow a price premium?
By answering these and many other questions, we could provide the client with recommendations on a European level, as well as a country and segment level. Next to this, we could determine the ideal value proposition as well as different ways of communication and learn which value drivers have to be put in the spotlight.
Our interviews led us to three key takeaways, which provided the necessary answers to our clients’ questions.
- Insights into the current treatment drivers, as well as the purchase pathway.
- Understanding of the product/company features’ value drivers.
- Understanding of the willingness to pay for new premium and entry products.
How they will help the customer
By understanding how all the features come together in an end result, and looking at the purchase process and the competition, the client was able to come up with different configuration options: medium products and high level products.
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