Price is an important component of Indian pharmaceutical marketing to recapture the market share. In brief, price is an exchange value of a product or a service.
Price of a product depends on its subjective part like evaluation of price impact on market strategies and objective part like demand, supply, cost, competition, government regulation etc.
Indian pharmaceutical industry is very price sensitive industry with high government regulations on price. Currently there are ceiling price fixed for 74 bulk Drugs and Formulations. (2001 O.P.P.I. census.).
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In pharmaceutical marketing, Government of India has laid various norms related to packaging, labeling, distribution etc. So it has necessary to exploit the residual degree of freedom up to maximum extent.
To make strategic decision regarding price it is obvious to explain the various factors such as pricing objectives, pricing decisions, bases of pricing, pricing management, economy of scale etc. understanding above factor helps the company to make effective and realistic pricing strategies.
Therefore the Pricing objectives define as maximization of profit and return on investment to attain overall and sustainable growth for a long period, capture market leadership position and lastly minimize the overall risk.
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Ultimately there are two situation were pricing decisions differs in one, when we are going to launch a new product from existing category into the market. For the first price decision is broader as there are no government price restrictions and for second price decision depends on market price as a competitor slashes it, we have to reduce the price as per market trend.