Price-setting strategies and practice for medical devices used by consumers

Abstract

Advancements in technologies, emphasis on preventive care, and increased health awareness led to a growing market of home health medical devices. This study examines how and why price-setting strategies are established for Home Health and Direct to Consumer (HHDTC) medical devices using a multiple case study methodology based on eleven SME interviews as primary data source. The theoretical framework of Neubert (Cent Eur Bus Rev 6(3):41–50, 2017a) is used for this study. Study results suggest that mainly market-based price-setting strategies and competition-informed price-setting practices and to a lesser extent value-informed price-setting practices are used for pricing decisions of innovative HHDTC medical devices.

This is a preview of subscription content, access via your institution.

References

  1. Ailawadi, K., and K.L. Keller. 2004. Understanding retail branding: Conceptual insights and research priorities. Journal of Retailing 80 (4): 331–342.

    Article  Google Scholar 

  2. Al-Salamin, H., and E. Al-Hassan. 2016. The impact of pricing on consumer buying behavior in Saudi Arabia: Al-Hassa case study. European Journal of Business and Management 8 (12): 62–73.

    Google Scholar 

  3. Alhojailan, M.I. 2012. Thematic analysis: A critical review of its process and evaluation. In WEI international European academic conference proceedings, 8–21.

  4. Bahadori, M., J. Sadeghifar, R. Ravangard, M. Salimi, and F. Mehrabian. 2012. Priority of determinants influencing the behavior of purchasing the capital medical equipments using AHP model. World Journal of Medical Sciences 7 (3): 131–136.

    Google Scholar 

  5. Bhakar, S., S. Bhakar, and A. Dubey. 2015. Analysis of the factors affecting customers’ purchase intention: The mediating role of customer knowledge and perceived value. Advances in Social Sciences Research Journal 2 (1): 87–101.

    Article  Google Scholar 

  6. Bilal, M., and T. Ali. 2013. Factors influencing consumers purchase intentions towards private brands. Journal of Independent Studies and Research-Management, Social Sciences and Economics 11 (2): 17–28.

    Google Scholar 

  7. Chiciudean, D., S. Funar, F. Arion, G. Chirla, and A. Man. 2012. The factors of influence over the consumer buying behavior for organic food. Bulletin UASVM Horticulture 69 (2): 68–71.

    Google Scholar 

  8. Chilukuri, S., M. Gordon, C. Musso, and S. Ramaswamy. 2015. Design to value in medical devices. New York: Mckinsey & Company.

    Google Scholar 

  9. Chandrashekaran, R., and D. Grewal. 2006. Anchoring effects of advertised reference price and sale price: The moderating role of savings presentation format. Journal of Business Research 59 (10–11): 1063–1071.

    Article  Google Scholar 

  10. Cheah, Y.K. 2014. Factors influencing consumer purchase decisions for health-promoting goods and services in Malaysia. Journal Medical Science 21 (6): 36–44.

    Google Scholar 

  11. Chenavaz, R. 2012. Dynamic pricing, product and process innovation. European Journal of Operational Research 222: 553–557.

    Article  Google Scholar 

  12. Clarke, V., and V. Braun. 2013. Teaching thematic analysis: Overcoming challenges and developing strategies for effective learning. The Psychologist 26 (2): 120–123.

    Google Scholar 

  13. Cohen, B., and M. Neubert. 2017. Price-setting strategies for product innovations in the medtech industry. In 10th annual conference of the EuroMed academy of business, 459–474.

  14. Copeland, A., and A.H. Shapiro. 2016. Price setting and rapid technology adoption: The case of the PC industry. Review of Economics and Statistics 98 (3): 601–616.

    Article  Google Scholar 

  15. Dovleac, L. 2014. Pricing policy and strategies for consumer high-tech products. Bulletin of the Transilvania University of Braşov: Economics Sciences 7 (56): 37–42.

    Google Scholar 

  16. Farooq, S., S. Habib, and S. Aslam. 2015. Influence of product packaging on consumer Purchasing Intention. International Journal of Economics, Commerce and Management 3 (12): 538–547.

    Google Scholar 

  17. Faith, D.O., and A.M. Edwin. 2014. A review of the effect of pricing strategies on the purchase of consumer goods. International Journal of Research in Management, Science & Technology 2 (2): 88–102.

    Google Scholar 

  18. Fishbein, M., and I. Ajzen. 1975. Belief, attitude, intention, and behavior: An introduction to theory and research. Reading, MA: Addison-Wesley.

    Google Scholar 

  19. Geng, D., and K. Saggi. 2015. External reference pricing policies, price controls, and international patent protection. Retrieved November 25, 2019 from https://my.vanderbilt.edu/kamalsaggi/files/2011/08/ERP-Geng-Saggi-Sept-16.pdf.

  20. Guest, G., K.M. MacQueen, and E.E. Namey. 2011. Applied thematic analysis. Thousand Oaks, CA: Sage.

    Google Scholar 

  21. Gogoi, B.J. 2013. Study of antecedents of purchase intention and its effect on brand loyalty of private label brand of apparel. International Journal of Sales & Marketing 3 (2): 73–86.

    Google Scholar 

  22. Herrmann, A., L. Xia, K.B. Monroe, and F. Huber. 2007. The influence of price fairness on customer satisfaction: An empirical test in the context of automobile purchase. Journal of Product and Brand Management 16 (1): 49–58.

    Article  Google Scholar 

  23. Hsu, Y., and H. Pham. 2015. Effect of reference pricing on customer purchasing intention. International Review of Management and Business Research 4 (4): 1156–1170.

    Google Scholar 

  24. Ingenbleek, P.T.M., R.T. Framback, and T.M.M. Verhallen. 2013. Best practices for new product pricing: Impact on market performance and price level under different conditions. Journal of Product Innovation Management 30 (3): 560–573.

    Article  Google Scholar 

  25. Khanna, V. 2014. A study on factors impacting consumer preference and purchase intention: With special reference to beverage industry. International Journal of Advanced Technology in Engineering and Science 2 (11): 525–542.

    Google Scholar 

  26. Kotler, P. 2000. Marketing management: Analysis, planning, implementation, and control, 10th ed. Upper Saddle River, NJ: Prentice Hall.

    Google Scholar 

  27. Kumar, D.P., and K.V. Raju. 2013. The role of advertising in consumer decision making. IOSR Journal of Business and Management 14 (4): 37–45.

    Article  Google Scholar 

  28. Kvale, S. 1995. The social construction of validity. Qualitative Inquiry 1 (1): 19–40.

    Article  Google Scholar 

  29. Lin, N.H., and B.S. Lin. 2007. The effect of brand image and product knowledge on purchase intention moderated by price discount. Journal of International Management Studies 8: 121–132.

    Google Scholar 

  30. Maguire, M., and B. Delabhurt. 2017. Doing a thematic analysis: A practical, step-by-step guide for learning and teaching scholars. Journal of Teaching and Learning in Higher Education 8 (3): 3352–33514.

    Google Scholar 

  31. Merriam, S.B., and E.J. Tisdell (eds.). 2016. Qualitative research: A guide to design and implementation, 4th ed. San Francisco, CA: Jossey-Bass.

    Google Scholar 

  32. Mirabi, V., H. Akbariyeh, and H. Tahmasebifard. 2015. A study of factors affecting on customers purchase intention. Journal of Multidisciplinary Engineering Science and Technology 2 (1): 267–273.

    Google Scholar 

  33. Neubert, M. 2017a. International pricing strategies for born-global firms. Central European Business Review 6 (3): 41–50.

    Article  Google Scholar 

  34. Neubert, M. 2017b. How lean global start-ups select their pricing strategies, practices and models. In 10th annual conference of the EuroMed academy of business, 1200–1209.

  35. Neubert, M., and A. Van Der Krogt. 2017. Lean internationalization of high-tech firms. International Journal Teaching and Case Studies 8 (2/3): 133–150.

    Article  Google Scholar 

  36. Nguyen, N., T.H. Phan, and P.A. Vu. 2015. The impact of marketing mix elements on food buying behavior: A study of supermarket consumers in Vietnam. International Journal of Business and Management 10 (10): 206–215.

    Article  Google Scholar 

  37. Nicolitsas, D. 2016. Price setting practices in Greece: Evidence from a small-scale firm-level survey. Bulletin of Economic Research 68 (4): 0307–3378.

    Article  Google Scholar 

  38. Nowell, L.S., J.M. Norris, D.E. White, and N.J. Moules. 2017. Thematic analysis: Striving to meet the trustworthiness criteria. International Journal of Qualitative Methods 16: 1–13.

    Article  Google Scholar 

  39. Olawale, L., and O. Joel. 2017. Factors influencing pricing decision: Evidence from non-financial firms in Nigeria. Acta Universitatis Danubius, Œconomica 13 (1): 157–172.

    Google Scholar 

  40. Plexus Corporation. 2014. Medical devices come home: How to address the challenges. http://sanderslarsen.com/work/medicaldevicewhitepaper.pdf. Accessed 25 Nov 2019.

  41. Qi, V., S.P. Phillips, and W.M. Hopman. 2006. Determinants of a healthy lifestyle and use of preventive screening in Canada. BMC Public Health 6: 275.

    Article  Google Scholar 

  42. Rizwan, M., Q. Irshad, K. Ali, M. Nadir, and M. Ejaz. 2014. Impact of sales promotional tools on purchase intention. International Journal of Management Sciences and Business Research 2 (1): 36–49.

    Google Scholar 

  43. Rzem, H., and M. Debabi. 2012. Store image as a moderator of store brand attitude. Journal of Business Studies Quarterly 4 (1): 130–148.

    Google Scholar 

  44. Sadeghi, T., K.G. Tabrizi, and A. Noroozi. 2011. The effective factors related with feelings, brand perception and purchase decision under a model. African Journal of Business Management 5 (30): 12025–12030.

    Google Scholar 

  45. Shah, S.S.H., J. Aziz, A.R. Jaffari, S. Waris, W. Ejaz, M. Fatima, and S.K. Sherazi. 2012. The impact of brands on consumer purchase intentions. Asian Journal of Business Management 4 (2): 105–110.

    Google Scholar 

  46. Smith, B. 2003. An empirical investigation of marketing strategy quality in medical markets. International Journal of Medical Marketing 3 (2): 153–162.

    Article  Google Scholar 

  47. Tsou, H.T., H.F. Liu, and H.Y. Hsu. 2015. The effects of reputation and relative low price on purchasing intention: Service quality as a mediated moderator. Web Journal of Chinese Management Review 18 (3): 1–16.

    Google Scholar 

  48. Uchenna, U.J. 2015. The impact of consumer behaviour and factors affecting on purchasing decisions. Global Conference on Business and Finance Proceedings 10 (1): 204–212.

    Google Scholar 

  49. Uy, M.A., M.D. Foo, and Z. Song. 2013. Joint effects of prior start-up experience and coping strategies on entrepreneurs’ psychological well-being. Journal of Business Venturing 28 (5): 583–597.

    Article  Google Scholar 

  50. Vaismoradi, M., J. Jones, H. Turunen, and S. Snelgrove. 2016. Theme development in qualitative content analysis and thematic analysis. Journal of Nursing Education and Practice 6 (5): 100–110.

    Article  Google Scholar 

  51. Whelan, C. 2009. Life science meets lifestyle: Market opportunity where professional medical and consumer health technologies converge. A Frost & Sullivan White Paper.

  52. World Health Organization. 2010. Medical devices: Managing the mismatch—An outcome of the priority medical devices project. Geneva, Switzerland: WHO Press.

    Google Scholar 

  53. Wu, P.C.S., Y.Y. Yeh, and C.R. Hsiao. 2011. The effect of store image and service quality on brand image and purchase intention for private label brands. Australasian Marketing Journal 19: 30–39.

    Article  Google Scholar 

  54. Yin, R.K. (ed.). 2017. Case study research and applications: Design and methods, 6th ed. Los Angeles, CA: Sage.

    Google Scholar 

  55. Younus, S., F. Rasheed, and A. Zia. 2015. Identifying the factors affecting customer purchase intention. Global Journal of Management and Business Research 15 (2): 8–14.

    Google Scholar 

  56. Zitkiene, R., G. Markeviciute, and M. Mickeviciene. 2017. Factors influencing consumer behavior and decision to use smart technologies. Journal of Economic Literature 17: 135–143.

    Google Scholar 

  57. Zhou, H., and Z. Gu. 2015. The effect of different price presentations on consumer impulse buying behavior: The role of anticipated regret. American Journal of Industrial and Business Management 5: 27–36.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Michael Neubert.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Gousgounis, Y.Y.L., Neubert, M. Price-setting strategies and practice for medical devices used by consumers. J Revenue Pricing Manag 19, 218–226 (2020). https://doi.org/10.1057/s41272-019-00220-7

Download citation

Keywords

  • Medical devices
  • Price-setting strategies
  • Price-setting practice
  • Pricing decisions
  • Pricing strategy