P
ProHub
English 简体中文 繁體中文
Hard Pricing Profitability Product Bundling

Diabetes Device

#Healthcare
ProHub Comment

This is a quantitative pricing optimization case requiring candidates to apply price elasticity analysis combined with bundling strategy evaluation. The case tests ability to structure a pricing problem using gross margin calculations, compare discrete pricing options, and recognize complementary product dynamics where bundling creates additional value.

Estimated Time 35 minutes
Difficulty Hard
Source Cornell
20 / 100
Our client is a manufacturer of medical devices used to treat chronic diseases. They recently launched a new device for treating diabetic patients. The device has two components – an injector and a disposable cartridge. They would like to know how they should price and sell these products in order to maximize profit. What advice would you give them?

Clarifying Information

  1. Injector: $40/unit
  2. Disposable cartridge: $20/unit
  3. Both the injector and cartridge are sold directly to patients with a prescription
  4. Injector can be reused up to 20 times but cartridges are one-time use
  5. Acceptance rate is defined as the percentage of customers who are willing to pay that specific price for the product
Mock Interview
Interviewer

Our client is a manufacturer of medical devices used to treat chronic diseases. They recently launched a new device for treating diabetic patients. The device has two components – an injector and a disposable cartridge. They would like to know how they should price and sell these products in order to maximize profit. What advice would you give them?

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

A medical device manufacturer seeks optimal pricing for a two-component diabetes treatment system (reusable injector + disposable cartridge). The analysis involves calculating profitability at various price points, evaluating bundling ratios with customer discounts, and recommending a bundling strategy that maximizes overall gross margin.

Key Insights:

  1. Price optimization requires multiplying gross margin by acceptance rate to account for demand elasticity
  2. Bundling complementary products (reusable + consumable) can increase profitability despite price discounts when the ratio is optimized
  3. The 1:20 bundling ratio outperforms separate sales by $16 in gross margin by leveraging the consumable cartridge repeat purchase pattern
  4. Difference between cost savings and actual profit impact—bundling costs less but profitability depends on customer acceptance rates not provided for bundle variants