Written Assignment Unit 5: MEDI – CULT CASE STUDY ANALYSIS

MEDI-CULT CASE STUDY; ANALYSIS

MBA DEGREE PROGRAM

UNIVERSITY OF THE PEOPLE.

JULY 2020
 Written Assignment Unit 5: MEDI – CULT CASE STUDY ANALYSIS

INTRODUCTION

Medi-Cult, a Danish biotechnology company, develops and manufactures cell culture media and services clients

all over the world through its extensive distribution network. They have developed a new alternative to In Vitro

Fertilization (IVF) called In Vitro Maturation (IVM). IVM significantly reduces the time needed to mature an egg

from 30 days to just 2 days. These methods are used to help infertile couples have children. IVM and IVF are quite

similar: Both involve the retrieval of eggs from a woman’s ovaries, followed by fertilization in a lab, and then

implantation of one or more fertilized embryos back into the woman’s uterus. The crucial difference is the state of

the eggs at retrieval: With IVF, the eggs are matured inside the ovaries, while in IVM doctors remove immature

eggs and then mature them outside the body. IVM come in handy as its innovation has greatly reduced the cost of

the IVF from $9,000 to $5,000 which affordable and less risky and with less side effects. Medi-Cult, must deal

with regulatory constraints, larger competitors, and the challenges of introducing a new product into the local and

global marketplace.

MAJOR MARKETS FOR MEDI CULT PRODUCTS

There are three separate types of consumers – infertile couples, doctors, clinics, and one consumer group –

governments and insurance companies. Infertile couples consider the effectiveness of the infertility treatments and

seek exhaustive information on this. Along with effectiveness, they desire safety i.e. less discomfort and other side

effects associated with the treatment process. Major markets of the Medi-Cult products are Denmark, France,

Great Britain, the United States, and the international market

WHAT ARE THE STRIKING BEBEFITS AS MENTIONED IN THE CASE STUDY?

The major benefit of IVM to IVF is that it doesn’t require woman to go through the thirty days of self-

administered hormonal injections, associated with the significant side effects. This is a drastic departure from
 Written Assignment Unit 5: MEDI – CULT CASE STUDY ANALYSIS

current assisted reproductive technologies (ART) and thus represents a radically innovative product. Second, IVM

is cheaper compared to IVF. The cost of hormones, reduces by 90 percent, while laboratory work and other

miscellaneous cost also drop 50% and reduced time for maturing process from 30 days to 2 days

MEDI CULT MARKETING STRATEGY

The vision of Medi Cult is to be the leading quality service and product provider for its customers. Medi-Cult’s

core strengths are its IVF products and its R&D network, in which they have partnered with academic institutions

for projects, and doctors, scientists and biotechnological manufacturers to stay abreast of the latest research. Being

the best and the leading player means that Medi Cult marketing strategy and operations focus on:

 Providing high quality of products and services

 Providing value to customers

 Concentrate on building customer experience

Being in the “High Tech. Market”, Medi Cult is using the “Three C’s Pricing” strategy to market and penetrate its

products;

a. Cost; Medicare has already costed its IVM product at a very moderate price just below that of the IVF. Prices

are very sensitive here as if too low then could be impacted to profitability and risk having the credibility of the

product being questioned and if too high might, only attract limited number of the infertile couples

b. Consumers: Medi Cult focuses on its customers who are mainly “Infertile Couple”, since they are the most

important parts and they determine which treatment they wish to have.

c. Competition: Medi Cult operates with competition in mind. Medi Cult face two different competition:

- From large pharmaceutical companies since the IVM method significantly reduce the need to hormone and this

method impact to the pharmaceutical business

- The other biotech companies who can develop their own product and clinical procedure.
 Written Assignment Unit 5: MEDI – CULT CASE STUDY ANALYSIS

Since the Medi Cult is the “First Company” in this business, they expect to enjoy some time advantages by being

the first to market.

RECOMMENDED PRICING STRATEGY

Since Medi Cult is the First Company to find the IVM method, therefore Medi Cult could implement the

“Monopolistic Power” in the market. The Price discrimination could be applied to this case is the “Third

Degree Discrimination”. The Third-Degree Price Discrimination are:

A. The different prices for the same product which is sold in the different market, it should be charged

based location

- With the condition Denmark, France, UK and USA are treated as different market based on location.

- Setting higher price for the market inelastic demand (USA) and lower price for market with elastic demand

(Europe countries such as: UK, Denmark, France)

B. Marginal revenue on each market is equal to marginal cost of production MR=MC then the maximum

profit can be achieved by selling this product on each level market

CONCLUSION

For any person/couple, knowing that the success rate of IVM in clinical trials is above that of IVF by 50%. Also,

for the fact that IVM uses fewer steps only, thereby eliminating /avoiding the hormonal stimulation part of the IVF

procedure where patients have to inject themselves which could be dangerous, is a yes for any couple/person;

coupled with the low cost of undergoing the procedure. Medi Cult to my opinion has brought a breakthrough

solution to a problem and is offering the value at a very affordable price making its pricing strategy a a powerful

one just upon its launch.

 Written Assignment Unit 5: MEDI – CULT CASE STUDY ANALYSIS

REFERENCES

University of Minnesota, 2017. Pricing Strategies. [Online]

Available at: https://open.lib.umn.edu/principlesmarketing/chapter/15-3-pricing-strategies/ [Accessed 24 April,

2017].

Zahay, D. & Griffin, A., 2010. Marketing strategy selection, marketing metrics, and firm performance. Journal of

Business & Industrial Marketing, 25(2), pp. 84-93.

Russ Winer, Customer-Oriented Pricing Exercise1: New York University

https://philosophyessays.net/medi-cult-company/

http://www.imd.org/research-knowledge/for-educators/case-studies/medi-cult-pricing-a-radical-innovation/