Developing A Consumer Pricing Strategy: As Consumers Take On

Developing a Consumer Pricing Strategy: as consumers take on more cost responsibilities for their own health care, providers should adopt a more retail-oriented approach to positioning and pricing strategies to stay viable.

Having recently graduated from an evening MBA program where I worked closely with a team of other MBA students, we developed a wellness tracker app designed to promote healthier lifestyles through daily activity monitoring, linking users with personal coaches via video, providing regular fitness updates, and offering rewards redeemable at local retailers. After preliminary testing and initial interest from insurance companies and small to medium-sized employers, we are now contemplating securing venture capital to scale our venture. A critical factor in our strategic planning involves understanding how to enter the health technology market effectively, determining our current position within the product life cycle, and recognizing potential challenges associated with that position.

In analyzing our market entry strategy, it is essential to evaluate whether our wellness app is at the introduction, growth, maturity, or decline stage. Currently, with promising early results and initial stakeholder engagement, we are likely at the early growth stage of the product life cycle. This indicates that our primary challenge is increasing market adoption while managing costs and building brand recognition. As an innovative health tech product, market entry should leverage targeted marketing to early adopters—such as health-conscious consumers and organizations focused on wellness—using digital channels, influencer partnerships, and pilot programs to generate user engagement.

Furthermore, positioning our wellness tracker app as a retail-oriented health management tool aligns with current consumer trends emphasizing personalization and convenience. Integrating with local retailers and offering tangible rewards taps into the 'retailization' of healthcare, a concept discussed by Sturm & Tiedemann (2013), emphasizing consumer-centric approaches where personalization and cost transparency are paramount. This positioning underscores the importance of adapting pricing strategies to the retail environment, moving from traditional healthcare pricing models to flexible, consumer-friendly pricing. Such strategies might include subscription services, tiered access to premium features, or pay-per-use options, appealing to cost-conscious consumers who are increasingly bearing more out-of-pocket expenses.

As the product advances through the growth phase, continuous market assessment is vital; understanding competitors’ positioning and pricing gives insight into how to refine our value proposition. Innovating around customer engagement through emotionally driven branding—an approach highlighted by Kemp, Jillapalli, & Becerra (2014)—can foster loyalty, ensuring the app’s sustained market presence. Pricing strategies should also consider the societal shift towards value-based care, where health outcomes and consumer satisfaction influence reimbursement outcomes. Therefore, early market entry must be coupled with adaptive, consumer-focused pricing, emphasizing transparency, value, and the app’s unique features to differentiate from existing wellness solutions.

Moreover, the challenge in the early growth stage includes scaling operations efficiently without sacrificing quality or user experience, requiring careful management of costs and strategic partnerships. Collaborations with health insurers, employers, and local retailers can enhance the value chain, creating a network effect that amplifies user engagement and market penetration. As Sturm & Tiedemann (2013) suggest, adopting retail-like pricing models that emphasize value and consumer empowerment can position the product favorably amid increasing consumer cost responsibilities.

References

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