For best pricing, managers use Konpik’s simulator of price elasticity of demand that helps them price products to anticipate the margin increases.
SOLUTIONS MADE POSSIBLE BY KONPLIK’S PRICE-ELASTICITY SIMULATOR
1. Intense cross-price elasticity analysis
In the real world, the demand for a product is not only dependent on its own price, but also on the price of other “related” products. When setting prices, pharmaceutical companies need to measure the sensitivity of competing medicines to their products through detailed cross-price elasticity analysis. The availability of substitute goods is probably the main factor determining the elasticity of demand for a pharmaceutical product. The more products available, the higher the elasticity, as consumers can easily switch from one good to another. If no substitutes are available, the demand will be inelastic.
2. Evidence-based algorithms
Price elasticity of demand varies depending on the product that is being marketed. Some products have very elastic demand, especially if they have many therapeutic equivalents available on the market. Our algorithms automatically pitch a number of models against each other in simulations that decide which one is the most accurate for each product.
3. Permanent updating
The system updates its predictions, every time the simulator receives new data and warns users whenever it detects a change worth communicating, such as demand variations to the tune of +/- 20% at an SKU.