Pricing Strategy Next Generation MRI
The Client & Business Challenge
Our client was 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 IDR Medical to define an optimal pricing strategy.
Following a project kick off meeting and interviews with personnel involved in the commercialisation and development of the technology, IDR Medical worked with the core project team to refine the objectives, approach and align on the business decisions that the project needed to facilitate.
The project included both a qualitative and quantitative phase of market research.
The qualitative phase of research involved telephone and web conference, in-depth interviews with head of department radiologists and C-Suite executives in the buying cycle for MR scanners. Respondents were presented with a value proposition describing the features and potential benefits of the new solution vs. competitor products, and were asked to comment on the value of the technology to their radiology department and wider organisation, and expectations on price. Insights from this qualitative phase of research were leveraged to inform the design of the quantitative study.
As the outputs of the study were required to measure price sensitivity in a competitive context, IDR Medical recommended an approach that incorporated a choice based conjoint methodology. The IDR project team worked closely with the client to agree on the conjoint design, defining the various attributes and levels of the study, and how the new product would be positioned vs. competitor scanners in terms of features and price. Since brand was a major driver of choice, this was included as an attribute of the conjoint.
The survey was conducted online and targeted a sample of 180 respondents across 2 markets and 3 priority customer segments. Prior to launching the study, IDR Medical conducted a series of pilot interviews where respondents completed the survey online whilst speaking with our moderators to ensure the design and flow of the questionnaire was optimal and resonated with the various respondent groups.
The Results and Impact
IDR Medical analysed the data from the interviews and consolidated findings into a detailed project report and management summary, providing actionable recommendations that addressed the objectives of the research. As part of the deliverable the client received a conjoint simulator that enabled them to measure preference shares by country and customer segment.
IDR Medical made a series of recommendations that included:
-The optimal price corridor for the new product by country
-A strategy to target customer segments that saw most value in the new product, and were willing to pay a premium
-The optimal, viable feature profile and positioning of the new product that would drive share
-How best to mitigate challenges and barriers to adoption
Outputs were used to facilitate decision making regarding the commercialisation strategy, drive research and development priorities going forward and refine the value proposition for the new product.