Product Line Design Problem in Two Markets With Dependent Demand and Its Implications

Abstract

The paper considers the product positioning problem faced by the hospitals in an emerging economy like India. The paper considers both non-profit as well as for-profit organizations. The paper considers two segments: one where there is high potential, but customers have low ability to pay; and the other where there is low market potential, but customers have high willingness to pay. The model suggests the product positioning along with the corresponding price. The authors characterize conditions for providing subsidy to low end segment.