Price Optimization for Two Versions of a New Medical Device
Challenge
Our client is a manufacturer of medical technology who is planning to launch a new lab device. Two product versions shall be available, a basic device and a premium tool with advanced features. GLG has been asked to provide quantitative willingness-to-pay data from a sample of potential buyers to inform the go-to-market pricing strategy for the new products.
The GLG Approach
As customers are likely to be price-sensitive and to compare product options carefully, we recommended GLG’s method for price optimization in a competitive context (Price CheX). The two new products were shown in their future competitive environment and survey respondents were asked to choose the option they would be most likely to buy. The method varied product prices systematically based on each respondent’s choices. The survey was conducted with n=100 lab directors and managers in the US and Europe.
Outcome
Using GLG’s pricing simulator, it was easy for our client team to get the answers to their business questions: How much more are customers willing to pay for the advanced features included in the premium version of the new product? What price points will optimize the total revenue (or total margin) of the two new products? If only one of the two products can be launched, which should be chosen and at what price? Which customer segments are willing to pay the most for the products?
Why GLG?
Project Breadth
Sample of 100 lab directors and managers in the US and Europe.
End-to-End Support
GLG collaborated with the client team to design a survey questionnaire with experimental choice questions. In-house pricing methodology experts presented key results to the team in a web meeting.
Let us start helping you today
As the World’s Insight Network, GLG connects clients to the subject-matter experts who can provide real-world insights to make informed decisions. Our team of professionals work with you to create a tailored approach that identifies, assesses, and answers your questions on your timeline. We bring the power of insight to every great professional decision.