What is external reference price marketing?
External reference pricing (ERP), sometimes known as international reference pricing, refers to the practice of informing price negotiations in a given country by calculating a benchmark, or reference, price based on publicly available pricing data from one or more other countries.
What are internal and external reference prices?
Internal reference price is based on the past prices paid for the brand by the consumer, and external reference price is dependent upon the prices of all brands in the category at the point of purchase.
What is internal and external reference?
Published Apr 15, 2019. + Follow. As you know, the meta program ‘internal reference’ is defined as: using one’s own standards in evaluations. ‘External reference’ is using other people’s standards in evaluations.
What is the difference between internal and external reference price?
Internal reference price is based on the past prices paid for the brand by the consumer, and external reference price is dependent upon the prices of all brands in the category at the point of purchase.
Does the external reference price discrepancy affect brand choice?
For consumers facing a stockout condition at the time of purchase, and for deal-prone consumers, the impact of the external reference price discrepancy on brand choice is greater than that of the internal reference price discrepancy.
Do reference prices stimulate competition in established markets?
Conversely, reference prices are reduced and price competition is stimulated in established markets, but not to the extent that it becomes economically unviable for generic medicines companies to remain on the market [ 11 ].
What is reference pricing and how does it work?
If a medicine is priced above the reference price, the patient pays the difference between the price of the medicine and the reference price, in addition to any other co-payments, e.g. prescription fee, percentage co-payment [ 1 ]. Unlike its name suggests, a reference pricing system is not a pricing system, but in fact a reimbursement system.