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How Important is Price in Your Marketing Mix?
By: Cindy Wendland
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Back in Marketing 101 we learned the 4Ps of marketing — the right product, place, price, and promotion. Selecting price as the variable on which to focus, we learned that pricing can help us sell a lot of product or sell very little. Pricing needs to equate to the value people feel they get out of the product. Now apply pricing to prescription drugs, and generics in particular. We are accustomed to generic drugs costing considerably less than their brand-name counterparts. Now we are seeing something else happen.

Ten generic drugs have seen price increases of more than 300 percent in recent months. If you are used to your Starbucks coffee costing $3.79 one day, then the next day it costs $11.37 (a 300% increase), would you mind? If they told you the price of milk increased, so they have to charge you more, would you accept it or stop buying that coffee? Several generics have had price increases for reasons such as drug ingredient shortages, industry consolidation, and production slowdowns due to manufacturing problems. Is it okay to increase the price to that degree?

Pharmaceutical products historically have had high prices due to manufacturer R&D costs that are factored into the price. Apparently they feel huge price increases are warranted. In most industries, 300% or 8,000% increases would never be tolerated. It’s unfortunate, in an industry where people have to take their medications to keep their health in check, that pricing can be so volatile. Seems like a crime. Maybe that’s why a Senate subcommittee is investigating. Pricing is meant to be equal to value and the product couldn’t have increased in value that significantly.

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About the Author
Cindy Wendland has a background in marketing and finance. She is the creative director for an online men's health magazine, BrainBrawnBody.com, and she gets to write their leisure/travel blog. She is also a web designer helping her clients with online community engagement, websitesbywendland.com. Prior to her web years, she worked in pharmacy consulting.
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