Pricing Recommendation for Metabical

Pricing Recommendation for Metabical

(The calculation table presented on the third page)

First, let me explain about Metabical’s targeted segment. In my point of view, the ideal customer for Metabical is an ‘educated female’, with 35-65 of age with BMI between 25-30 and a health conscious people who are serious about losing weight.  Metabical focused on 10% of the total of the population who were comfortable using drugs to loose weight.  It also concentrates on 12% of the total respondents who were ready to make an appointment with the doctors.

        Pricing is another important factor in determining the success of Metabical. Pricing was a main concern with this product and several methods were run to try and forecast where the pricing would make the best return on investment (ROI). The retail prices or each four week package was $75, $125, and $150 for the two methods. These prices for the four weeks packages to forecast the different methods. The $75 is priced very low and at a level that just about all consumers would be able to reach. This price was based using Alli as a benchmark, but priced higher due the fact that this drug was a prescription and could be sold at a premium price compared to Alli. The second price is based on other drugs that CSP sold on the market and kept on the same level at $125. The third price option was based on the fact that overweight individuals spent about $450 out of pocket on health care. This gave way to CSP setting Metabical’s price to $150 per four week package, coming out to $450 for the full 12 weeks program. However, in a study CSP conducted, they found this price ($150) higher than customers would be willing  to pay for a weight loss program. As explained before, there are three pricing options that are well justified for Metabical. These were ran in the two methods for figure out which combination of price and scenario gave the best ROI.

        The first method looked at the number of population with a BMI between 25-30. 35% of these people would be actively to lose weight. Selling to these population would create 706.146 unit sales in the first year. The second method consisted of the population with a  BMI between 25-30, and 12% of these people would be go to their doctor to request a prescription for diet pills. This population would create 1.614.048 unit sales in year one. Each methods was adjusted by 10% for consumers who would buy Metabical in the first year, 5% growth in each subsequent year, 60% of consumers who would come back to buy the third final package. From these numbers, the projections were made about revenues and how ROI would turn out.