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Price Stabilization

Countering the drop in prices with our STOP approach.

Due to the intensifying competitive situation and steadily increasing customer power (e.g. through the consolidation of hospital chains or group-purchasing organizations), medical technology companies are currently battling it out in a tough pricing war. This may lead to a situation in which the field sales force is far less successful in enforcing prices; instead, with the growing frequency of competition, prices are determined, so that players operating on the medical technology market have to adapt – especially due to the growing cost pressure. Homburg & Partner will be happy to advise you on field performance measurement, sales management, pricing strategies and positioning, price management and differentiation as well as market research on willingness to pay and benchmarks.

Price Stabilization Consulting Framework

Price erosion in the medical technology market is where Homburg & Partner’s STOP approach (STabilization Of Prices) sets in, which, after an initial detailed analysis and an interpretative evaluation of the control lever, provides a comprehensive package of measures for your price management in order to optimally reposition you vis-à-vis your competitors, your customers and external regulations. Central parameters that may be adjusted such as the offer, negotiation and contract management are modernized and aligned with the analysis results. Three phases have established themselves as proven procedures through the years of incorporating best practices in the implementation of the STOP approach:

Price Stabilization Consulting Principles

Despite rapidly changing price structures, many medical technology companies are exploring their sales markets incompletely or not at all, thereby losing track of contemporary pricing. This is where we conduct our analysis to identify the relevant levers from the triad of customer needs, off-market regulations and competitors that need to be considered for a sustainable price structure.

As soon as these levers have been worked out descriptively, in the next phase both price and performance levers are differentiated and broken down into more specific sizes. This results in price relations and price perception as well as performance perception and scope especially for your market situation, whereby the goal of evaluating the levers for effectiveness and feasibility can be the precondition for an action plan.

Without specifically translating these adjustable levers into tangible measures, any price adjustments cannot be implemented. The “STOP house” therefore provides schematics for these measures, including internal preconditions and external implementation. The measures are implemented on the basis of clearly defined “STOP principles” such as the determination of the offer based on the customer demand or compliance with lower price limits, which must always be adhered to consistently. As an example, we will optimize your previous offer and negotiation management along a fixed price and conditions system according to your customer segmentation.

The following project examples will give you an impression of the appealing power of our STOP approach in practice

  • Analysis and identification of price erosion mitigation levers and price enforcement measures for a leading neurovascular products company
  • Stabilization of prices at a leading manufacturer of diagnostic products in Germany through the analysis of the offer, negotiation and contract management as well as the price and conditions system
  • Scenario analysis to calculate price adjustments by anticipating price behavior of competitors in the market for diagnostic products

Our experts for medical technology

Homburg & Partner possesses many years of experience in using the STOP approach to successfully adapt outdated price structures of medical technology companies according to their complex customer needs, taking into account drastic regulations. In times of massive price erosion, Homburg & Partner is able to create a strategically advantageous position vis-à-vis the most important competitors with future-oriented pricing.

Do you have questions or would you like to discuss the topic? Then feel free to contact our experts Dr. Michael Scholl, Karl-Hubertus Gruber and Dr. Michael Marquardt.

Porträtbild von Michael Scholl
Managing Director & Partner

Dr. Michael Scholl
Tel.: +49 621 1582-0

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Karl-Hubertus Gruber
Tel.: +49 211 598929-59