Pricing Strategy Next Generation MRI
Posted on: 18th June 2020
The Client & Business Challenge:
Our client is a global medical equipment company, and a leader in the diagnostic imaging equipment market.
The company was due to launch an advanced extremity MRI scanner with significant improvements over both software and performance on existing devices. Considering these advancements and the fast-approaching international launch of this new product, the client approached us to help them define an optimal pricing strategy.
After a kick-off call, key intelligence objectives for this project were refined with the client. Seeing as the outcomes of the study had to address price sensitivity, understand customer response and gather insights on the market segments that would be most receptive two different methodologies were proposed.
The project consisted of N=180 web surveys executed across two key countries. A total of N=15 telephone interviews were also conducted to explore C-suite (i.e. CEO, CIO, CFO, CMIO, etc.) and Radiologist perception of the new technology and to gather qualitative insights against the objectives of the study.
In order to measure price sensitivity in a competitive context, a conjoint exercise (propose to include some re-direct in the case studies – this one should go to our e-book) was included as part of the web survey. This exercise consisted of presenting a range of product options at varying price points to respondents and allowing them to complete individual choice tasks in order to determine how much they valued different product attributes.
The Results and Impact:
The research allowed the client to identify the main value drivers of the new extremity MRI scanner and what could be barriers to adoption. Based on the three main barriers to adoption we were able to recommend key factors the company had to consider in order to increase its chances of success during launch. As lack of space and financial viability (aside from price) were thought to be potential barriers, we identified and suggested market segments the client should have prioritized where this would be less of an issue.
From the conjoint exercise we collected very significant data regarding the value respondents attributed to the different product attributes. This allowed us to estimate and recommend the most appropriate price for the product and approximate the market percentage who would be most receptive at that price. Our recommendations also looked at potential price points to drive adoption across the whole market and across the most receptive segments, particularly considering the other findings. The results led the client to adjust the original intended price for their next generation extremity MRI scanner and prioritize launch in key markets who were most receptive to the product.