This week in PharmaSim

In the first trial, based on the conjoint analysis, I set the price to 3.59 which decreased my stock price. Brand awareness increased and overall manufacturer sales decreased. Although my sales and units sold increased dramatically, my net income decreased based on the drop in price.

Replaying the period, I set my next price at $4.79. In this second try, I saw brand awareness stay relatively steady around 83% while unit sales jumped to 130 million. I saw my share of manufacturer sales decrease also but not nearly as much (from 25% to 23%).

 Next I performed a test looking at two separate bundles. Bundle 3 (price of $4.31 and drop alcohol) decreased net income from $85 million to $52 million and slightly decreased the stock price. As expected with the drop in price, the number of units sold increased from 115 million to 140 million. I knew that sales would increase but I was hoping that my net income figure would not decrease as much as it did. Looking at the industry market, my manufacturer sales was similar to the 2^nd trial above. Bundle 3 decreased my manufacturer sales from 24% to 23%. I also saw the purchases survey indicate an increase from 18% to 24% for percentage of units sold.

Bundle 11 (price $5.27 and switch to expectorant) had mixed results. I saw both my stock price and net income decrease. Income going from $85 million to $77 million. The drop in net income was much better than the bundle 3 trial. I saw the number of units sold slightly increase which was surprising to me. Especially with my changes in pricing. This bundle also had an increase in the purchasing intentions of the customer.

Looking at my personal preferences when buying over the counter cold medicine, I typically try to get a good balance with both price and quality. I think that can be said for most customers who are buying OTC products. I do not have a preference to buy a specific brand and price will typically be the deciding factor.