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The Value Curve Model: Creating Value Propositions in Pharmaceuticals

First of all, what is Value Curve Model? 

The concept of Value curves was introduced by two professors of INSEAD – W. Chan Kim and Renée Mauborgne which was published in their well famous bestselling book, “Blue Ocean Strategy”.

The value curve is a tool used to differentiate the various segments. It allows product managers to differentiate & manage their product portfolio.

An Example of a pharmaceutical value curve combines:

– Y axis showing product or service complexity

 – X axis shows gross margin by product

general-electric-medical-systems-2002-12-638

Fundamentally, the Value Curves are diagrams to compare products on a range of factors by rating them on a scale from low to high.

These factors in Pharmaceuticals can be

  • Features of the product
  • Benefits or ways in which a product is distributed or consumed
  • Price
  • Novelty & number of approvals
  • Degree of safety etc.

It’s the well accepted fact that with increasing regulatory imperatives & competitive environment, it has become difficult for the product/marketing managers to evolve ways to differentiate their products and services. Moreover, the consumer (patients) & customer’s (HCPs) behaviors are even changing faster by virtue of various enablers like access to internet – based knowledge &  increasing media broadcast-ed discussion with Industry & Govt. to negotiate the elements of pharmaceutical marketing. It is therefore difficult to determine which factors are of most importance to customers.

Therefore, a product manager has to draw multiple Value Curves in pharmaceuticals to imagine the visual comparison with competitive products (refer above graph) and to deep dive to find out the possible spaces or gaps in the market. By identifying the gaps between value curves, it may also be possible to identify changes to the product that significantly alter the value proposition.

Now, what next ??? What next after drawing the value Curves??

To know, read the next article to be published shortly..:) Happy reading..:)

Watch this video to understand the value curve & its importance :

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4 responses on "The Value Curve Model: Creating Value Propositions in Pharmaceuticals"

  1. Great article.. Very informative

  2. Wonderful web site. Plenty of useful info here. I am sending it to some friends ans also sharing in my social network. And certainly, thanks for your effort!

  3. Am not sure how many managers believe in the concept of value curve model, but its important to connect the theory discussed with you and the practical drawings been required for defining the playscripts for products & their contribution to company’s bottom line.

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Pradeep Agarwal

Marketing - AstraZeneca
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