An Indian pharmaceutical company invented vaccine for cancer. As the marketing manager of that company, discuss various approaches for pricing this new product. Decide which of them is more appropriate for pricing this vaccine and give reasons in support of your decision.
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Answer:
In today’s competitive world, there are several strategies to deal with the fast changing environment, among which New product development (NPD) is a common strategy. However, almost half of the resources that companies devote to NPD are spent on products that may fail. This issue is particularly highlighted in the pharmaceutical industry mainly because of a long development-time, low success rate, high capital requirement, and market uncertainty. This study identifies critical success factors of NPD based on the relevant literatures and expert opinions in Iranian pharmaceutical industry, then prioritizes them using the methodology of multiple criteria decision making (MCDM) through analyzing 50 filled questionnaires structured based on the AHP (Analytical Hierarchy Process) approach. Although the NPD success factors seem the same in both generic and bio-generic pharmaceutical industries, the underlying factors and related sub-factors show the different importance in these two industries. However, this study reveal that, the company capabilities is the most important factor affecting new product development success in both pharmaceutical generic and bio-generic industry. The results of this study contribute to create baseline information for pharmaceutical industry especially Iranian pharmaceutical companies to be more effective in budget allocation on improving NPD success factors so that they can boost the success rate of NPD more effectively.