According to the given news; NASA produced ventilator within 37 days, with the help of 24 companies. Among 24 companies; marked place I realized is Çizgi Teknoloji which is the only Turkish Company obtain a production license for ventilator developed by NASA. This is a great honor for our country.
Under this case, to find Çizgi Teknoloji’s target market among international country markets, I first researched Covid-19 current case all over the world,excluding the countries among these 24 companies base countries because they already in this project and obtain production license. They are; USA, Armenia, Brazil, Australia, Canada, Egypt, India, Indonesia, Malaysia, Mexico, United Arab Emirates. And, I would like to highlight it,there is no European Country on the list of 24 companies.
POSSIBLE TARGET MARKET OF ÇİZGİ FOR VITAL
So, according to my findings; currently 8 million case worldwide and the top five countries with an ever-increasing number of cases are; USA, Brazil, Russia, India, UK. As I mentioned above, we exclude USA, Brazil and India. Russia and UK are left, so now I’m going to look at their situation of needs on ventilator. In UK, ventilator challenge reviews are continues and five ventilator are waiting for clinical testing. And Chancellor of the Duchy of Lancaster Michael Gove said: “These devices are well suited to helping patients in intensive care and will complement the two other Ventilator Challenge devices currently on the NHS frontline. So I concluded that, UK is in the process and I’m turning my target directly into Russia. In Russia, Russian-made ventilators sent to the U.S. last month have been blamed for hospital fires that killed six Russian coronavirus patients in recent days. And The St. Petersburg hospital consultant echoed that sentiment. “It’s not just about this specific Urals plant,” they said. “The phenomenon is systemic. Our equipment is dangerous for patients.”
RUSSIA THE TARGET MARKET
As a result of my findings, our target market is now clear. Our target initially for VITAL is Russia where the second of the ever-increasing cases andintubated patient. The country with poorly experienced ventilators.
Therefore, I started to research medical device industry and healthcare statistics in Russia. I found that, the medical device market is one of the fastest-growing industries in Russia. And The Russian government is the primary buyer of medical technology, as major hospitals are federally owned and operated. The domestic manufacturing industry is very small yet the Russian government prioritizes domestic products over imported devices when making purchasing decisions. Access to the government procurement, or tender, system is the key to market success in Russia. To enter their market with VITAL and market this product; because Russian government directly operating, Çizgi Teknoloji should try its chance in tender ,if Russian government open tender, or they should access to the government procurement by their own trailer, own website just alike Biyovent Intensive Care Mechanical Ventilator Device has been designed andmanufactured completely with national facilities and resources in Turkey.They made their own ventilator and made their first export to Lithuania. When I take a look of their website, I can see their product brochure, features, even training videos, images and documents with language option and ‘contact us’ option. Moreover, Biyovent announced it’s trailer with three language options including; Turkish, English, Russian.
Furthermore, I would like to add that, all medical devices are regulated by Roszdravnadzor (RZN) and regulations themselves change frequently and without warning, and are only available in Russian. It’s important to work with an experienced regulatory partner to help you navigate medical device regulations in this market.
As a result, Çizgi Teknoloji’starget is Russia.They have big problem of ventilator and constantly arising cases andintubated patients.They should market VITAL directly to Russian Government but to warn,they should work with an experienced regulatory partner because medical device regulations change frequently and without warning. Besides, they should follow whether the government has opened a tender.Otherwise, market to the government with the help of it’s own website and trailer ,with language options, to introduce product just alike a close example in Turkey.
The target market is Russia and now it is time to set price. Pricing can be the most challenging due to different market forces and pricing structures around the world and here wefirst consider our costs, country’s competition situation,demand, economic condition, government’s policy and laws.One by one, we will consider them and finally we willreach the results of price.
First thing I would like to add is among new product pricing strategies; market-skimming pricing and market-penetration pricing. In market-skimming pricing; companies invent new products set high initial prices to skim revenues layer by layer from the market. The company makes fewer but more profitable sales. In market-penetration pricing; the company setting a low price for a new product to attract large number of buyers.Among them; market-skimming pricing will be more appropriate in this scenario because the product is medical device so, price is relatively higher with fewer production.
For our costs, NASA improvised parts to avoid supply-chain issues. “They’re not parts that you would normally necessarily use in building up a ventilator,” Polk said in the briefing. “There’s close to 700 parts out there that we’re not using and not having to compete with the supply chain.” As a company which obtain a production license for ventilator developed by NASA; we expect the costs won’t be higher but because we produce and set price in Turkey; some of the costs, expenses could varies because of the different teams, location, knowhow, access to parts, documents, certificates, assembling, testing and our target market. “Producing this device requires high-capacity,multidisciplinary engineering and critical tests,” In Turkey, costs could be relatively higher.
In addition, according to my findings;the biggest competitor is Triton Electronic Systems which right now producing ventilators in Russia. I was looking for their pricing but only thing I found was brochure and features of product in everywhere. Also I searched other brands and competitors in Russia but I can’t find any price information. So, I decided to look Biyovent ventilator price in Turkey. Our domestic ventilator was exported at $17,500. Now, we have an idea to set our priceswhen we enter the market.Here, competition-based pricing could be considered.
In demand side, Russia needs ventilator immediately as an ever-increasing cases country in the process of Covid-19. But, our buyer is directly Russian Government, so we should wait for their demand for example we should wait for them to open a tender.As well, to set price properly, we should know country’s economic condition. Russia is positioned between developed and developing countries. It can be classified as both, depending on which measures are used.Russia is in between but in 2020, Russia GDP will fall by 4.5 percent in 2020.
So, their economic condition is not looking good. We should set price accordingly. Lastly, government’s policy and laws; ceiling and floor prices, taxes (tariffs), subsidies, other incentives, international agreement.It is also the most important point especially in our case in Russia. As I mentioned above, Russian government directly operating as a buyer. The price is also affected by that so we should also consider it.
In a short
To sum up, we analyzed our competitors, costs, demand and economic condition, also policy and laws which are changing by government and affect our target price. As I mentioned, the strategy could be market-skimming pricing and competition-based pricing could be considered.For exact price;in NASA,Gallagher estimated that costs would be roughly $2,000 to $3,000. For comparison, General Motors producing low-cost, conventional ventilators for the national stockpile at more than $16,000 apiece. In Turkey for comparison,Biyovent informed that the prices of ventilators have increased due to the pandemic. Normal prices in between 15-20 thousand dollars,and they sold at $17.500.As a result, according to my findings; I set the price in between 7-10 thousand dollars. To understand better, I use ‘$’ currency to refer price but I want to higlight it; Turkey, Russia sign agreement to trade in local currencies.