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Biopure Case

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1. Launching Oxyglobin without waiting for Hemopure
-First-mover advantage

Launching at low price($80 ~ $100) | Launching at high price ($250 ~ 300) | Pet owners are price sensitiveVeterinarian’s role of gatekeeper | Emergency care practice.
Low pricing jeopardize pricing Hemopure. |

2. Postpone launching Oxyglobin until Hemopure’s FDA approval.
-Mixture of production of Oxyglobin and Hemopure.
-No prior unfavorable price expectation.
-Market research on Oxyglobin is available.
Launching Oxyglobin without waiting for 2 years for Hemopure is the first alternative we came up with. As no other competitors are in the vet blood substitutes market, Biopure will definitely have the first-mover advantage as long as they launch it in a timely manner/fast enough. Also any other competitors won’t be able to jeopardize the Oxyglobin’s profitability as it takes about 2 to 5 years for them to obtain FDA-approval.
Assuming that Biopure decides to launch it, they also have to consider how much they are gonna charge for the product. In the first option, the price will be set at a low rate, ranged from 80 to 100 because pet owners are price sensitive. The average cost that pet owners spend per visit to the vet is about $60, which is pretty low. Also, Vets double the price as they sell the product so it is necessary to keep the original price low. For instance, even if Biopure sells a product at $50, Vets will sell the product at $100 to make profits. Therefore, pet owners will still feel that the price is beyond their budget and would go with a cheaper alternative available. (in a heartbeat).
However, other sales team members claimed that it should be launched at a higher price carrying $200 premium, which is the second option. In case of emergency, pet owners are definitely not going to just let their pets die to save a couple of hundreds dollars. The price is anticipated to run from $200 up to $1000 in critical cases. Given that, the study has shown that 65% of pet owners are willing to pay $400 in critical cases, and 75% said they would pay $300.
The other alternative would be postponing launching Oxyglobin until Hemopure has FDA-approval. One flaw of this option is that Oxyglobin and Hemopure should be produced together in a limited capacity. Biopure only has a single manufacturing facility. Oxyglobin’s full capacity, 300,000 units, and Hemopure’s full capacity, 150,000 units, must be considered together in this scenario.
However, there’s more chance for Hemopure to be priced optimally in comparison to the first two options, because as the two products will be lanched at the same time, consumers would not really have the time to compare the price difference between the two. Also, as Biopure has 2 years until they launch the Hemopure, there’s time for them to execute market research for a better price-set. Optimal production volume / pricing?

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