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Medi-Cult, a Danish biotechnology company, established in 1987 to exploit proprietary cell culture technology, supplies the media for use in the later stages of IVF and developed IVM (in vitro maturation) during the 1990s. This process involves maturing eggs from the ovary in vitro with the help of only a single dose of maturation medium patented by Medi-Cult. The major benefit of IVM in contrast to IVF is that it does not require the woman to go through the thirty days of self-administered hormonal injections, associated with the significant side-effects. This is a drastic departure from current assisted reproductive technologies and thus represents a radically innovative product.
PROBLEM STATEMENT: Management wants to decide what price to charge Clinics for a single dose of IVM medium. The three options are 1. $4000, 2. $3000 and 3. $2000. Krogen, President, was afraid that pricing it too low could sub-optimize potential profitability and risk having the credibility of his product questioned. And by pricing it too high, he might attract only a limited number of infertile couples who eek treatment each year, while perhaps making the industry more attractive for potential competitors.
CONSUMER ANALYSIS: We can identify one consumer market (infertile couples) and five different consumer groups (patients, clinics, doctors, insurance companies and government). But due to their congruencies in use criterion, segmentation will be combined into a one all-inclusive grouping (exhibit 1). The needs of the target consumer market center around the effectiveness and overall ease of the fertility treatment. Consumers, mainly women, are sensitive to the side-effects of the fertility treatment. The gov ...