Question

Which of the three pricing strategies below would you recommend to Tanner Pharmaceuticals?  

A. Maintain the high price everywhere and take advantage of the patent period

B. Maintain the high price in developed economies and lower the price for emerging markets

C. Lower prices everywhere

Justify your choice. Evaluate the pros and cons of the one you selected.

Answer 1

I will suggest option B

Maintain the high price in developed economies and lower the price for emerging markets

Pros :

1.if Tanner pharmaceuticals maintain high price in developed economies so they will generate a high revenue without the exploitation of others .Because the developed economies people have abundance of wealth and they will not face any issue of paying high prices for medicines.

2.Emerging market (developing countries market ) facing the problem of non-availability of high quality drugs for critical diseases so by selling quality medicine of critical diseases at lower prices pharmacy contribute in decrease the death rate and increase the health conditions of their country.

3.By maintaining the high prices in developed economies and generate more revenue ,Tanner pharmacy will able to enhance their production and expand their market boundaries .

4.lower prices in emerging market helps to maintain a good will in medicine market and will attract more consumers towards their pharmacy .lowering the price with quality product is the only way for any firm to make a place in the market.

CONS :

1.By maintaining constantly high prices in developed countries will destroy the image of Tanner pharmacy because the others competi1tive pharmaceutical selling same salt medicine at lower cost .

2. Tanner pharmaceutical will suffer some loss because of constantly lower pricing in emerging market.

3. Tanner pharmaceutical will lose their customers through high pricing in developed economies beacause they only emphasized on generating revenue and without doing market research , others pharmaceutical are also there and try their best to attract consumer towards their pharmacy.

4.All time lower pricing in emerging markets result in lower revenue which lead to lower production of Tanner pharmaceutical.Because the market always fluctuating and the firm must go with the flow to maintain a balance in the market otherwise it will vanish because of poor pricing strategies.