TITLE

Staying out of Trouble With Innovation

AUTHOR(S)
Matanovich, Tim
PUB. DATE
March 2004
SOURCE
Marketing Management;Mar/Apr2004, Vol. 13 Issue 2, p14
SOURCE TYPE
Periodical
DOC. TYPE
Case Study
ABSTRACT
This article presents a case study on price competition. A firm referred to as Animaceuticals is a leading supplier of pharmaceutical products used by livestock producers to maximize yield. Like the typical generics firm, Animaceuticals chose to go to market with its prices set at a fraction of the market leader's price. In many markets, this type of generic price competition leads to an initial migration of customers but market leaders are able to hold on to the bulk of their share. Shares and prices ultimately stabilize with branded and generic alternatives priced at two distinct levels. In Animaceuticals' case, however, prices have not stabilized. Unintended price competition continues and is seriously eroding margins across the industry. A market test of a new price structure prompts a competitive response. A price promotion targeted to one segment bleeds into another, inciting competition. Or, the single most frequent cause of price competition we observe: Valuable services are offered at little or no cost. As a place to begin, Animaceuticals leaders must focus primarily on margin improvement rather than share growth. Second, Animaceuticals should begin to raise their product prices. This action should begin to stabilize its market. Third, Animaceuticals should provide its clients with service options instead of the whole offer for free.
ACCESSION #
12884322

 

Related Articles

  • Call for a 1:1:1 approach to licensing veterinary medicines.  // Veterinary Record: Journal of the British Veterinary Association;11/21/2009, Vol. 165 Issue 21, p611 

    The article reports on the call of the International Federation for Animal Health (IFAH) Europe for a 1:1:1 approach to licensing veterinary medicines. This approach serves as one assessment and one licence for companies seeking marketing authorisations for a new product. It is intended to...

  • Pricing Strategy. Holden, Reed K. // Sales & Service Excellence Essentials;Jul2007, Vol. 7 Issue 7, p10 

    The article discusses the three possible pricing strategies for products or services, namely, skim, penetration, and neutral. Skim pricing is high relative to competitors to reflect the high value or exclusivity of certain products, while penetration pricing is low relative to competitors and is...

  • Third-Party Product Review and Firm Marketing Strategy. Yubo Chen; Jinhong Xie // Marketing Science;Spring2005, Vol. 24 Issue 2, p218 

    Product reviews by third parties are growing in popularity. This paper examines when and how a manufacturing firm should adapt its marketing strategies to such reviews. For example, should a firm receiving an unfavorable review reduce its price or adjust its advertising? Should a winning product...

  • Consumers focus on price, selection. French, Dana // Furniture/Today;10/4/2010, Vol. 35 Issue 5, Special section p6 

    The article reports on the importance of competitive prices and product selection as factors that influence consumers to shop for and buy furniture from a retailer according to consumers in the U.S.

  • The Coming of Risk-Based Pricing. Beidl, Richard; Focardi, Craig // Mortgage Banking;Oct2000, Vol. 61 Issue 1, p156 

    Part II. Discusses the role of technological processes as they relate to risk-based pricing (RBP) though delivery channels. Application of automated underwriting systems by secondary marketers in total value pricing (TVP); Explanations on product bundling; Information on the pricing process;...

  • A General Equilibrium Model for Industries with Price and Service Competition. Bernstein, Fernando; Federgruen, Awi // Operations Research;Nov/Dec2004, Vol. 52 Issue 6, p868 

    This paper develops a stochastic general equilibrium inventory model for an oligopoly, in which all inventory constraint parameters are endogenously determined. We propose several systems of demand processes whose distributions are functions of all retailers' prices and all retailers' service...

  • Should Marketers Use Price Partitioning or Total Prices? Bambauer, Silke; Gierl, Heribert // Advances in Consumer Research;2008, Vol. 35, p262 

    Price partitioning means the division of a product's price into several components, provided that the components cannot be bought separately. Only some authors have analyzed the effects of price partitioning. They provide opposed recommendations on the question whether price partitioning is more...

  • Marketing Abstracts. Keating, Shirley // Marketing News;3/5/1990, Vol. 24 Issue 5, p26 

    The article presents abstracts of management and sales strategies that would create a strong image for the product and strengthen a company's image. They include "Interviewers Also Need to Prepare for Job Interviews," "Helping Small Businesses Name New Products" and "Pricing Strategy for a...

  • Commonsense of modern marketing. Watling, Tom; Taylor, John // Accountancy;Nov73, Vol. 84 Issue 963, p134 

    Discusses aspects of the marketing function that concern accountants in Great Britain. Identification of customer needs; Product planning; Advertising and promotion; Pricing policy; Commercial policy; Distribution and selling; Public relations; Contribution of accountants to the area of sound...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics