Customers and Demand

Characteristics	Current situation	Future trend
Segmentation of customers	Age: target segments are 20-35 years and 40+ years; Price: low price segment, middle segment and top segment; Location: differentiation by countries; Purpose of usage: determined by the pharmaceutical effects; Frequency of usage: occasional users and constant users.	Segmentation is not expected to change much, only the overall number of customers is expected to increase.
Does a buyer's purchase volume represent large fraction of typical seller's sales revenue?	Only the hospitals that use them as a remedy may represent quite large amount of buyers’ power. Personal users represent huge amount of the sales revenue, however they are too dispersed to possess any buyers’ power.	Depends on the creation of industry substitutes. If they appear, the buyer’s power of the first group will diminish.
Switching cost	Do not exist or insignificantly low.	Will increase as market develops
Can buyers find substitutes for industry's product?	The industry is unique by now. Therefore, no legal substitute for the industry exists.	Depends on the creation of industry substitutes. If they appear, the customers will have access to substitutes.
Price elasticity of market demand	For the drugs that are used for treating diseases the demand is inelastic as there are no substitutes for them so far. Other drugs of the industry are counted as normal goods and, therefore, have negative elasticity coefficient.	The elasticity differentiates much based on the purpose of usage. The elasticity may change only if close substitutes appear.
Price elasticity of demand for typical firm	The elasticity of a particular firm can be described using the presented template: the firm producing a treating-disease drug has an inelastic demand and the one that produces other drugs for personal usage has a negative elasticity.	The elasticity differentiates much based on the purpose of usage. The elasticity may change only if another industry will provide products with similar effect.
Price elasticity of various customers	Demand is inelastic in terms of price for those who treat diseases. It is elastic for the others.	This trend will not change because the purpose of usage of these products cannot be different.
Price discrimination (actual and potential)	Actually, there is no price discrimination in the area of personal usage, as well as in the area of medicine drugs, because the producer of a particular drug cannot distinguish between the customers in advance. The drugs appear on the market with a fixed price.	As the industry develops, the price discrimination will exist because the properties of the drugs will be extended and provide additional utility for users for additional price. The producers of personal usage enhancers may construct several brands based on the strength of the drug effect and the risk of usage. The sector of disease-treatment enhancers may also have the price discrimination: the producers of such drugs may evaluate the wealth of customers and set different prices for them. All of the relatives who want to treat the Alzheimer’s disease, for example, will pay all money they have for the remedy.
Versioning (actual and potential)	Versioning is not widely used, only few products have versioning. For example, a Russian nootropic drug “Semax” has two versions: 0.1% - for direct nootropic usage; and 1% - to treat apoplexy (cerebrovascular accident)	The producers will start applying versioning strategies widely only when the society will normally accept the concept of cognitive enhancers. At the moment, the safe usage of those drugs is considered questionable and is discussed a lot.
Bundling and Tie-ins (actual and potential)	The producers are not strong enough to provide neither tie-ins nor bundles at the moment. Such drugs are very individual in their effect and bundling or tying-in is not very desirable for a rational customer. Customers buy particular cognitive enhancers for a particular desirable effect.	Bundles and tie-ins are not common in pharmacology and cognitive enhancers, in particular. The perspectives of including those methods are very obscure.
Are prices negotiated on each individual transaction or set as take-it-or-leave-it" for all transactions?	As the customers do not have any legal substitute for the cognitive enhancers now, the prices are set by the “take-it-or-leave-it” strategy	The development of the industry and appearance of adequate substitutes will provide the opportunity to negotiate prices.
Do buyers pose credible threat of backward integration? (for B2B)	Only the area of cognitive enhancers that is connected with treating disease may represent this threat as some hospitals buy huge amounts of such drugs, however the costs of such integration are quite high and not affordable for hospitals. Other buyers do not pose such threat.	The same.
Does product represent significant fraction of cost in buyer's business? (for B2B)	As the buyer’s business does not involve the particular area of cognitive enhancers only, the costs of purchasing those drugs represent a small fraction of overall costs.	If the concept of cognitive enhancers will develop and more research works on that area of drugs will be done, the businesses that buy these drugs may increase the fraction of the costs connected with cognitive enhancers significantly.

Дата добавления: 2015-11-14