phew....its done now.....
Deleted my old blog...'cause it's traceable....
yes,right.....Rajat is my pseudonym!
Tuesday, March 2, 2010
Mariano Rojas: Price discrimination by pharmaceutical companies across Central American countries, International Journal of Pharmaceutical....
Mariano Rojas: Price discrimination by pharmaceutical companies across Central American countries, International Journal of Pharmaceutical and Healthcare Marketing, Vol. 3 No. 2, 2009 pp. 118-136.
Introduction: Price becomes a main instrument for rationing pharmaceutical drugs in Central America as a consequence of pro-market reforms implemented in the 1980s. Under market-rationing conditions, people’s access to branded drugs does depend on their purchasing power and on the vector of prices they face. The purpose of this paper is to study the regional pricing strategy followed by pharmaceutical firms across Central American countries. These countries differ in such economic factors as per capita income, income distribution, market size, and nature and extent of their social-security system; thus, there are conditions that foster the implementation of price-discrimination practices across the region.
Research Methodology: – The investigation takes advantage of a large database with information about prices of identical drugs sold across Central American countries and produced by 17 large pharmaceutical companies. Regression analyses are used to study whether price discrimination exists in Central American drug markets and what pricing strategies are followed by different pharmaceutical companies.
Findings: Results show that there are significant differences in the prices of identical drugs across the Central American countries, as well as that pharmaceutical companies follow different pricing strategies.
Introduction: Price becomes a main instrument for rationing pharmaceutical drugs in Central America as a consequence of pro-market reforms implemented in the 1980s. Under market-rationing conditions, people’s access to branded drugs does depend on their purchasing power and on the vector of prices they face. The purpose of this paper is to study the regional pricing strategy followed by pharmaceutical firms across Central American countries. These countries differ in such economic factors as per capita income, income distribution, market size, and nature and extent of their social-security system; thus, there are conditions that foster the implementation of price-discrimination practices across the region.
Research Methodology: – The investigation takes advantage of a large database with information about prices of identical drugs sold across Central American countries and produced by 17 large pharmaceutical companies. Regression analyses are used to study whether price discrimination exists in Central American drug markets and what pricing strategies are followed by different pharmaceutical companies.
Findings: Results show that there are significant differences in the prices of identical drugs across the Central American countries, as well as that pharmaceutical companies follow different pricing strategies.
Chicken Coop:An HBR Case
INTRODUCTION
This case is about The Chicken Coop, a quick service restaurant (QSR) chain whose growth has been pretty impressive at about 10% per annum, even during economic downturns. The motto –“We are chicken” reflects their philosophy to provide the best tasting meal around by specializing in the preparation and delivery of chicken. But in 1995 – unprecedentedly, sales were down in 20 of the Coop’s 76 stores. Also, many of the struggling restaurants had long been considered the company’s strongest; together, the 20 restaurants accounted for 32% of retail sales.
Product differentiation strategy has been followed by launching new products like chic pizza and the aim of the company has been to create overall value for the customer. But still the sales have been down. Hence, immediate strategy has to be formulated and the CEO meets his vice-president quality and Vice President marketing in the same pursuit. They analyze the sales slump and suggest various alternatives available. But the CEO is having doubts in the success of all the expensive alternatives being suggested.
PROBLEM DEFINITION
The main problem is that the management is to formulate a strategy in response to the sales slump and immediately implement the corrective measures. Decisions regarding market research and its technique, co-branding, product diversification strategy, focus on the core competencies etc has to be taken meticulously so as to ensure a positive response in the future. Various other issues such as whether to provide home delivery service or not, control on the quality of food and competition from the competitors are also to be addressed.
ANALYSIS
The analysis of the problem basically addresses product differentiation, aggressive marketing, price discounts and the quality of food getting degraded at some of the restaurants. The various alternatives for market research suggested are as follows:
Taste Tests: The purpose of the taste tests would be to gather objective information about eh quality of the coop’s menu items, relative to the competition. A “convenience sample” of loyal customers from nearby stores will visit the kitchens and give their opinions about food items. It will require $6000 for one Taste Test which would involve 8-12 customers. If this is conducted in every 20 problematic coop’s branch, cost of $120000 will be incurred, which is not an economical proposition. Also its not ensured that which food will select for test purpose.
Quality Inspection Program: In this program a quality inspector will visit each of The Coop’s restaurant and note down the measures. But the CEO is skeptic that outsider will not be able to find out whether all the processes & standards are followed in the kitchen or not. Also the quality inspector may be unaware of the various problems of the QSR industry .Hence an internal Quality inspector is suggested.
Brand image Monitoring Surveys: The purpose of this would be to gather quantitative data on The COOP’s brand image as against its competitors and will be done through telephonic interviews. This is an uneconomical and uncontrollable from company’s perspective. Also the customer might not feel good hence may affect the company’s image.
The Customer Experience Study (CES): The purpose of the Customer Experience Study would be to gather information on how customers viewed their visits to the Coop’s restaurants. A questionnaire will be prepared and filled in by dummy customer who will be employed. Though it is more economical, the credibility of this study is in question.
Customer Feedback Cards: The purpose of the customer feedback cards would be to gather information on customer satisfaction. These cards will be placed in stores. Comparatively, this is easier and economical.
RECOMMENDED ACTION
Keeping the analysis and the information provide in the case, the following actions are recommended:
Training to be conducted for the staff where they are told about courtesy towards customers, quality of food and service.
Internal quality inspectors should be employed to conduct quality survey.
The company should stick to its core competencies as product diversification has not fetched good results recently.
Price discounts may be offered on products having substantial margins. Also some promotional offers may be formulated.
Quantified survey using the Customer feedback cards should be done.
This case is about The Chicken Coop, a quick service restaurant (QSR) chain whose growth has been pretty impressive at about 10% per annum, even during economic downturns. The motto –“We are chicken” reflects their philosophy to provide the best tasting meal around by specializing in the preparation and delivery of chicken. But in 1995 – unprecedentedly, sales were down in 20 of the Coop’s 76 stores. Also, many of the struggling restaurants had long been considered the company’s strongest; together, the 20 restaurants accounted for 32% of retail sales.
Product differentiation strategy has been followed by launching new products like chic pizza and the aim of the company has been to create overall value for the customer. But still the sales have been down. Hence, immediate strategy has to be formulated and the CEO meets his vice-president quality and Vice President marketing in the same pursuit. They analyze the sales slump and suggest various alternatives available. But the CEO is having doubts in the success of all the expensive alternatives being suggested.
PROBLEM DEFINITION
The main problem is that the management is to formulate a strategy in response to the sales slump and immediately implement the corrective measures. Decisions regarding market research and its technique, co-branding, product diversification strategy, focus on the core competencies etc has to be taken meticulously so as to ensure a positive response in the future. Various other issues such as whether to provide home delivery service or not, control on the quality of food and competition from the competitors are also to be addressed.
ANALYSIS
The analysis of the problem basically addresses product differentiation, aggressive marketing, price discounts and the quality of food getting degraded at some of the restaurants. The various alternatives for market research suggested are as follows:
Taste Tests: The purpose of the taste tests would be to gather objective information about eh quality of the coop’s menu items, relative to the competition. A “convenience sample” of loyal customers from nearby stores will visit the kitchens and give their opinions about food items. It will require $6000 for one Taste Test which would involve 8-12 customers. If this is conducted in every 20 problematic coop’s branch, cost of $120000 will be incurred, which is not an economical proposition. Also its not ensured that which food will select for test purpose.
Quality Inspection Program: In this program a quality inspector will visit each of The Coop’s restaurant and note down the measures. But the CEO is skeptic that outsider will not be able to find out whether all the processes & standards are followed in the kitchen or not. Also the quality inspector may be unaware of the various problems of the QSR industry .Hence an internal Quality inspector is suggested.
Brand image Monitoring Surveys: The purpose of this would be to gather quantitative data on The COOP’s brand image as against its competitors and will be done through telephonic interviews. This is an uneconomical and uncontrollable from company’s perspective. Also the customer might not feel good hence may affect the company’s image.
The Customer Experience Study (CES): The purpose of the Customer Experience Study would be to gather information on how customers viewed their visits to the Coop’s restaurants. A questionnaire will be prepared and filled in by dummy customer who will be employed. Though it is more economical, the credibility of this study is in question.
Customer Feedback Cards: The purpose of the customer feedback cards would be to gather information on customer satisfaction. These cards will be placed in stores. Comparatively, this is easier and economical.
RECOMMENDED ACTION
Keeping the analysis and the information provide in the case, the following actions are recommended:
Training to be conducted for the staff where they are told about courtesy towards customers, quality of food and service.
Internal quality inspectors should be employed to conduct quality survey.
The company should stick to its core competencies as product diversification has not fetched good results recently.
Price discounts may be offered on products having substantial margins. Also some promotional offers may be formulated.
Quantified survey using the Customer feedback cards should be done.
Calyx and Corolla:HBR case excerpts
INTRODUCTION
This case, about Calyx and Corolla, a mail order flower retail company, is analyzed and presented in various sections encompassing the organization and its management, the relationships with the key players – how it led to its success, its growth in terms of volumes and profits. A comparative study has been given evaluating the efficiencies of the traditional supply chain and the innovative route that has been followed by Calyx and Corolla. Combining the use of overnight air freight (Federal Express), information technology, an 800 number, and a catalog, Calyx & Corolla was changing the way flowers had traditionally been distributed, bypassing three layers of distribution, and providing very fresh flowers directly from the growers to consumers.
PROBLEM DEFINITION
How this start-up venture should grow further is one of the major concerns as the market has been taken up by traditional florists. Though the company started with the differentiation strategy but the thing that will help it to sustain itself in the competitive market is innovation. Proper positioning in the market is also required. Some of the minor issues are that the company is unable to deliver its service on holidays as it is dependent on Fed-Ex which did not provide service on holidays. Also the company is unable to deliver flowers at certain places such as Mexico, Canada. The seasonal and unpredictable demand of the customers was not being able to be catered to as flowers are perishable products and must be delivered within few days to a week of its picking.
ANALYSIS
By eliminating the wholesalers and distributors that provide most retail florists with their inventory, Mrs. Owades has cut a week to 10 days out of the distribution channel for fresh flowers and plants. Exhibit 2 depicts that the company has a good reputation with its existing customers. Also the use of internet technology was a new concept then, and new vistas can be explored by the company as far as the technological aspects are concerned.
RECOMMENDED ACTION
• The company should formulate strategies that retain its current customers and attract new customers also.
• The company can think of expanding by opening up retail outlets at chosen places such as shopping malls or prominent market places. The company should keep its inventory very meticulously.
This case, about Calyx and Corolla, a mail order flower retail company, is analyzed and presented in various sections encompassing the organization and its management, the relationships with the key players – how it led to its success, its growth in terms of volumes and profits. A comparative study has been given evaluating the efficiencies of the traditional supply chain and the innovative route that has been followed by Calyx and Corolla. Combining the use of overnight air freight (Federal Express), information technology, an 800 number, and a catalog, Calyx & Corolla was changing the way flowers had traditionally been distributed, bypassing three layers of distribution, and providing very fresh flowers directly from the growers to consumers.
PROBLEM DEFINITION
How this start-up venture should grow further is one of the major concerns as the market has been taken up by traditional florists. Though the company started with the differentiation strategy but the thing that will help it to sustain itself in the competitive market is innovation. Proper positioning in the market is also required. Some of the minor issues are that the company is unable to deliver its service on holidays as it is dependent on Fed-Ex which did not provide service on holidays. Also the company is unable to deliver flowers at certain places such as Mexico, Canada. The seasonal and unpredictable demand of the customers was not being able to be catered to as flowers are perishable products and must be delivered within few days to a week of its picking.
ANALYSIS
By eliminating the wholesalers and distributors that provide most retail florists with their inventory, Mrs. Owades has cut a week to 10 days out of the distribution channel for fresh flowers and plants. Exhibit 2 depicts that the company has a good reputation with its existing customers. Also the use of internet technology was a new concept then, and new vistas can be explored by the company as far as the technological aspects are concerned.
RECOMMENDED ACTION
• The company should formulate strategies that retain its current customers and attract new customers also.
• The company can think of expanding by opening up retail outlets at chosen places such as shopping malls or prominent market places. The company should keep its inventory very meticulously.
Financial Risk Management: Is it a value adding activity?
This article analyzes whether financial risk management is value adding or not. Having been a controversial issue, risk management is very much desired by the companies. A firm’s total risk equals market risk and specific risk of which the latter can be handled by maintaining a diversified portfolio but the former cannot be eliminated. Further, the paper says that risk management activities will not increase the market price of the firm’s share because though total risk is reduced but the market risk remains unaltered. On the contrary risk management may actually be value reducing, since it creates expenses in terms of time and resources.
Further it is argued that the total risk does matter, through its effects on the cash flows. Risk management aimed at reducing total risk, may increase expected cash flows because risk reduction may attract higher cash flows and thus increase the firm’s value. Also, it is argues that firm’s managers consider two discount rates, one private and one social because management would have a lower private valuation of the firm than the market. And risk management is a way for management to increase their private valuation towards the market valuation.
Shimko (2001) then proposes an adjustment to the NPV method and introduced RPV (risk-adjusted present value) which attacks the problem by adjusting the discount rate. RPV is equal to project’s NPV value minus a risk charge that is proportional to the difference between the expected value and the worst case value.
Notably the value of the asset is affected by total risk and particularly the value-at-risk. Thus this approach emphasizes that, when there are limitations to portfolio diversification, investors become concerned with total risk. Drawback of this approach is that the valuation is not standardized and thus RPV method could lead to incorrect project acceptance/rejection decisions.
Shapiro and Titman (1998) provided another approach to investment appraisal whose goal is to identify and accept value-increasing projects. Assumptions made are that the CAPM formulation is robust, and that investors are only rewarded for holding market risk and the idea of value-at-risk is retained. It says that it is better to adjust the cash-flows rather than the discount rate. But the major drawback of this valuation is that self-interested management may reject a value-increasing project. Thus this valuation is not further explored in the paper. Instead managers are assumed to be acting in the interests of shareholders.
After analyzing the effect of risk management on the value of the firm, it is concluded that risk management activities are worthwhile if the elimination of the present value of financial distress costs exceeds the expenditure required on risk management activities. Following this 3 decision rules regarding project acceptance and risk management are formulated and the paper is concluded after few worked out examples.
Further it is argued that the total risk does matter, through its effects on the cash flows. Risk management aimed at reducing total risk, may increase expected cash flows because risk reduction may attract higher cash flows and thus increase the firm’s value. Also, it is argues that firm’s managers consider two discount rates, one private and one social because management would have a lower private valuation of the firm than the market. And risk management is a way for management to increase their private valuation towards the market valuation.
Shimko (2001) then proposes an adjustment to the NPV method and introduced RPV (risk-adjusted present value) which attacks the problem by adjusting the discount rate. RPV is equal to project’s NPV value minus a risk charge that is proportional to the difference between the expected value and the worst case value.
Notably the value of the asset is affected by total risk and particularly the value-at-risk. Thus this approach emphasizes that, when there are limitations to portfolio diversification, investors become concerned with total risk. Drawback of this approach is that the valuation is not standardized and thus RPV method could lead to incorrect project acceptance/rejection decisions.
Shapiro and Titman (1998) provided another approach to investment appraisal whose goal is to identify and accept value-increasing projects. Assumptions made are that the CAPM formulation is robust, and that investors are only rewarded for holding market risk and the idea of value-at-risk is retained. It says that it is better to adjust the cash-flows rather than the discount rate. But the major drawback of this valuation is that self-interested management may reject a value-increasing project. Thus this valuation is not further explored in the paper. Instead managers are assumed to be acting in the interests of shareholders.
After analyzing the effect of risk management on the value of the firm, it is concluded that risk management activities are worthwhile if the elimination of the present value of financial distress costs exceeds the expenditure required on risk management activities. Following this 3 decision rules regarding project acceptance and risk management are formulated and the paper is concluded after few worked out examples.
Experimental study of consumer behavior conformity and independence
Journal of Marketing Research Vol3, Nov 1966, PP 384-387
Group Influence --> a pressure towards conformity. By different groups of people, compliance, identification and internalization is called conformity.
Reactance-->dissonant with compliance
H1: In Decision making process, where no objective standards are present, individuals will tend to conform to group norms.
H2: In decision making process, when individual are induced to comply , they will show less tendency to conform to the group judgement.
Subjects: 144 college students from University of Minnesota
Task:
To choose best suit among 3.
Subjects were told that
1. 3 suits were from different manufacturers.
2. there were quality differences.
3. Exp. tailors were able to pick out the best.
4. the present study was aimed at finding the consumer who were able to pick out eh best suit.
Group Influence --> a pressure towards conformity. By different groups of people, compliance, identification and internalization is called conformity.
Reactance-->dissonant with compliance
H1: In Decision making process, where no objective standards are present, individuals will tend to conform to group norms.
H2: In decision making process, when individual are induced to comply , they will show less tendency to conform to the group judgement.
Subjects: 144 college students from University of Minnesota
Task:
To choose best suit among 3.
Subjects were told that
1. 3 suits were from different manufacturers.
2. there were quality differences.
3. Exp. tailors were able to pick out the best.
4. the present study was aimed at finding the consumer who were able to pick out eh best suit.
Good News for all the Marketing enthusiasts
By the virtue of the awesome classroom sessions being attended by me, my appetite for research has been whetted. Now I'm Desperate to get something published somewhere. Though the approach may be wrong, but need to find my topic of interest asap :) to result in some useful publication. In the same pursuit, I'll be posting summaries of various research articles here in the blog. This will benefit me and also all the marketing enthusiasts across the globe :D ( hopefully ).
This is one of the old post I made
The intent of writing this blog is manifold. Apart from voicing my opinion on various issues, I have a selfish motive of gaining clarity of thought and hence boosting my self-confidence (part of which I lost in recent past ‘cause of the tough times I went through). In my 26 years long stint with people on this earth, I learnt a lot of things (some may sound very crude).Somebody once told me that the whole purpose of education imparted to humans is to make them free from all biases and prejudices. But despite of the fact I’m at a post-graduate level now, my opinions may sound biased. Over the years I’ve tried to become more emotionally stable and basically, thick skinned. As a child, I remember myself not having the confidence of even going to a sweet shop and buying things. That’s the way I’ve been brought up; that’s the way it has been, and obviously because of over-protective parents, all my life decisions were being managed by them. To make it very clear, I love my parents immensely and not playing any kind of blame game here. But I should have come to the foreground and done things that I’ve started doing now. This (staying in the background and watching things just happen) continued till class XII when finally I was left alone to manage most of the things myself. Being a very poor manager then, I eventually transformed into a hedonist owing to the newly found freedom. Though I haven’t achieved anything BIG as such till now, I have with me the gist of the lessons learnt as a result of my mistakes. I believe that smart people learn from other’s mistakes.Even if my posts give an iota of learning, my partial purpose is served :-)
tough times...
"you never know what you can become" from an ad that appeared long time ago.....is the line that best explains my current state of my mind...firstly, I never ever thought that I would ever be blogging....Second, I never expected that I will have to face the current situation( which I'll try to explain in the following posts)....
People said its all destiny, which I never believed...but now it seems that my belief has started to wane....
So...here I am....trying to post blogs to voice my feelings ...which I heard should be done to a trusted friend in bad times....but as the saying goes:" Once bitten, twice shy"..
People said its all destiny, which I never believed...but now it seems that my belief has started to wane....
So...here I am....trying to post blogs to voice my feelings ...which I heard should be done to a trusted friend in bad times....but as the saying goes:" Once bitten, twice shy"..
Subscribe to:
Posts (Atom)