mkt523 marketing plan example
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MarketingTRANSCRIPT
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(THIS IS A SAMPLE ONLY)
Marketing Plan for NeedleZap 2006-2007
Submitted by:
(Individual Student’s name on team)
Submitted to:
Kellie C. McGilvray
MKT523 Marketing Management (section) Fall Term II – 2006 MBA
(The date)
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NeedleZap Executive Summary
Current methods of hypodermic needle disposal are expensive and open to the risk of
injury and disease. In many underdeveloped countries, needles may be used more than once and
on different patients allowing for the spread of HIV and hepatitis. Here in the United States,
alternative technologies such as retractable needles, can be used to help safeguard healthcare
professionals from being accidentally infected by used needles. These needles, however, add to
the already spiraling cost of healthcare. It is our intention through the implementation of the
following marketing plan, to introduce the world to the NeedleZap needle disposal device, a
technology that will not only save scarce healthcare dollars, but help prevent injuries and the
spread of diseases associated with used hypodermic needles.
The NeedleZap device is a unique and revolutionary device that safely disintegrates the
sharp metal portion of a hypodermic syringe It utilizes high temperature electrodes safely
housed in a small (3” x 4” x 2”), portable, and rechargeable unit. It requires only one hand to
operate so the opposite hand is not exposed to an accidental needle stick. Disposal costs are
dramatically reduced because of the reduction in volume of bio-hazard waste and the complete
absence of the sharp needle.
Our primary objective is to displace sharps containers, the most commonly used
methods of needle disposal. We will demonstrate that even in the smallest physician office
settings, the NeedleZap device can pay for itself within the first few months of use. In addition,
because a single preventable bloodborne pathogen infection can be devastatingly expensive for
testing, treatment, lost work time, and disability payments, there are additional and substantial
financial and medical benefits for the widespread use of this device.
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In order to increase the awareness of NeedleZap in what we believe to be a virtually
unlimited marketplace that includes hospitals, physician offices, veterinarians, and dental
practices, our domestic marketing campaign will focus on ads in the most commonly read
medical trade journals, including the Journal of the American Medical Association. Participation
at strategic medical trade shows by our executive staff will bolster our awareness campaign. In
addition, given what we believe to be the newsworthy nature of our product, strategically timed
press releases will help to publicize NeedleZap with minimal expense. We recognize that
adoption of NeedleZap technology will entail a change in protocol for healthcare providers. For
this reason marketing activity will focus on ease of use and cost reduction, in addition to the
obvious medical and safety benefits.
Internationally we will target governmental and private aid organizations that have
funds available specifically for the prevention of diseases such as HIV and hepatitis.
Negotiations with these entitles will be accomplished directly by our executive staff. We believe
that access to these funds, though sporadic, will provide an enormous source of future sales of
the NeedleZap device while also serving a humanitarian need.
Because of the relatively low cost of this product, we believe that a direct sales
organization, at least initially, is too costly to build. NeedleZap will be distributed by a network
of qualified, existing, medical equipment distributors who will be required to stock adequate
quantities to meet customer requirements. This will also generate early cash flow and reduce
manufacturer stocking expenses in order to facilitate the development of future products and
upgrades as well as additional marketing support. Service will be provided on a unit exchange
basis and extended warranties will be offered at point of purchase.
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We expect that in the first twelve months after implementation and finalization of
contractual agreements with our distribution partners that we will achieve a 65% awareness of
the product in our target markets. We expect net domestic sales to reach over 19,000 units and
exceed $8 million. At a manufacturing cost of $78 (including charger and accessories) per unit
and an average selling price of $410 (after volume discounts) to our distributors, gross profit will
exceed $6 million, including extended warranty sales. This will allow coverage of debt resulting
from prior business activities, additional development of future products and upgrades, coverage
of warranty expenses, customer education, legal expenses related to FDA approvals, and future
promotional activities. We expect future international sales to be significant in the long term,
however, minimal in the first year of implementation.
The following marketing plan will explain in more detail why we believe that the
cooperative, competitive, economic, social, and political environments are all extremely
favorable to the success of the NeedleZap needle disposal device. This marketing plan is
intended to exploit the current absence of a viable solution to the disposal of contaminated
needles safely and economically. Future enhancements to the product, detailed in the plan, will
allow us to attract an even larger portion of what we believe to be a virtually unlimited market.
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Table of Contents
Introduction ………………………………………………………………………... 6
Situational Analysis …………………………………….......................................... 8
Cooperative Environment …………………………………………………. 8
Competitive Environment …………………………………………………. 9
Economic Environment …………………………………………………… 10
Social Environment ………………………………………………………... 11
Political Environment/Legal Environment ……………………………….. 11
Marketing Planning ………………………………………………………………. 12
Marketing Objectives …………………………………………………….. 12
Target Markets ……………………………………………………………. 13
Marketing Mix ……………………………………………………………. 13
Product ……………………………………………………………. 13
Promotion …………………………………………………………. 15
Distribution ………………………………………………………... 16
Price ……………………………………………………………….. 16
Implementation and Control of the Marketing Plan ……………………………….. 17
Summary ………………………………………………………............................... 17
Appendix - Financial Analysis …………………………………………………….. 20
References ………………………………………………………………………..... 24
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NeedleZap Introduction
Each year in the United States alone, there are an estimated one million accidental needle
sticks among healthcare professionals. It is difficult to estimate how many more occur among
non-medical personnel who must inject insulin or self-administer other types of injectable
medication. In other parts of the world, particularly in third world countries, it is not unusual for
hypodermic needles to be used more than once creating a significant risk for the spread of HIV,
hepatitis, and other blood borne diseases. In addition, healthcare costs throughout the world
have spiraled out of control for years. The NeedleZap needle disposal device is designed to
address not only healthcare costs and the spread of disease, but also the safety of health care
workers.
The NeedleZap is designed to safely disintegrate the sharp portion of a hypodermic
needle before an injury can occur by using high temperature electrodes to vaporize the sharp
metal portion. The device is barely larger than two decks of cards and weighs less than two
pounds. It is rechargeable and is therefore portable enough to be placed in easy reach of virtually
every treatment environment and available at the point of care. It will be adapted to use with a
variety of the most common needle gauges and for use with specialty needles such as those used
for kidney dialysis and IV’s.
The NeedleZap system will be packaged with a durable carrying case, comprehensive
instructions, and a 6V charger. Various accessories to accommodate specialty usage and to
prevent theft are in development and will be made available as options. In addition, a variety of
training and service options will be made available in order that users can make the most of this
technology and utilize it safely.
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Though versions of this device have been FDA approved and available for over a year,
they have not been widely distributed to this point. We believe that this is due primarily to a lack
of awareness by those who could benefit most as a result of inadequate and ineffective marketing
and distribution strategies implemented by the manufacturer. Those strategies included direct
sales representation that we feel is inappropriate for a relatively inexpensive medical product of
this type and sales through distributors that were ill-equipped to market the product adequately.
Our intention in this report is to redefine a product, sales, and distribution plan for NeedleZap
that will allow this technology to reach its considerable potential and to describe how these new
strategies will be implemented.
Given the benefits of this product and that it is being manufactured with a high level of
quality and reliability in both the United States and China for approximately $78 per unit, we
believe that the potential for sales and profitability for NeedleZap is essentially limitless. The
market will include any medical facility, physician office, dental practice, veterinary practice, or
home where hypodermic or specialty medical needles are used. We anticipate and expect that
first year sales post-implementation of this marketing plan to be in excess of $8 million. At an
average selling price of $410 from a list of price of $450, NeedleZap can generate an exceptional
margin which can fund subsequent upgrades and marketing programs.
In this report we will provide a detailed situational analysis describing the current and
anticipated selling environment that will guide our strategy. Next we will describe the strategy
itself, including our target markets, objectives, and the details of how NeedleZap will be
promoted and distributed. Within this section we will describe our plans for future products,
upgrades, and add-ons that will further enhance the utility and profitability of NeedleZap. We
will also describe how the NeedleZap strategy will be implemented and controlled as well as
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how the success of the programs will be monitored and by whom. Finally we will provide a
detailed financial analysis that will further define our anticipated sales, marketing costs, and
return on investment.
We believe that the NeedleZap needle disposal device is the right product for these
times. By stemming the spread of disease, providing a safer environment for healthcare workers,
and saving healthcare dollars, this technology has tremendous potential from both a humanitarian
and business standpoint. We are very excited to present a marketing plan that we believe will
make this potential a reality.
Situational Analysis
Cooperative Environment
To begin this portion of the analysis it is critical to acknowledge that environmental
factors play a huge role in the success or failure of any product. With our analysis of the
NeedleZap device the environmental factors exist within the healthcare industry, however, other
cultural and social influences do play a role. Based on the enormity of this industry we must
acknowledge that the market for NeedleZap is virtually without limit. If there is a facility where
injections are given, then this product is right for them. The cooperative environment mainly
consists of those entities that would benefit from this product and how a service relationship
should be established and maintained with them. Mainly our focus would be on any facility that
routinely gives injections to include hospitals, physician offices, dental offices, veterinary
clinics, nursing homes, home health care aides, and hospice units. The need exists in these
places; therefore, this environment is cooperative to our marketing plan. Although we have
mentioned the need existing in Africa we recognize the unpredictable nature of humanitarian aid
and government help that many of these underdeveloped nations rely on. This fact alone dictates
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that the majority of the cooperative environment is here in North America. While we understand
that expansion into Africa and even Asia is possible, we believe the healthcare industry of North
America is our main target and comprises the majority of the cooperative environment. We
would strive to establish strong relationships in this environment and to also gain referrals from
our existing client base. We would not only be selling a useful product, but also the idea that
they are buying top-of-the-line service.
There exists no greater advantage in sales than not only being paid for your product, but
also by gaining business through word of mouth. We will operate in an indirect marketing
environment that actively pursues qualified referrals from our customers. To conclude the
discussion related to the cooperative environment it essential to recognize the large role of the
health insurance industry. The savings in reducing injury or disease to healthcare workers can
save insurance companies millions. These facts dictate why they may look at making NeedleZap
a requirement in healthcare settings. We believe that a cooperative relationship can exist with
insurance companies and can also aid in facilitating revenue from third parties.
Competitive Environment
From a competitive standpoint one of the main sources of competition comes from those
companies that sell the traditional needle and syringe disposal containers. These are the plastic
boxes in physician offices and hospitals that we have all seen on multiple occasions. The
injections are given and immediately the needle is disposed of in one of these containers. The
strength of this competitor is these containers have become the norm in the healthcare industry.
They are often seen as the best and safest way to dispose of needles when injections are given
and therefore have monopolized this industry to a large extent. The problem is that many in the
industry have not been exposed to an alternative. We understand that the need for these
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containers may not be eliminated completely; however, safety could be increased substantially
with our product. One exploitable weakness of this competition is that there is the possibility of
accidents still occurring with these containers. Defects in manufacturing as well as the improper
disposal of them could lead to an increased risk of needlestick injury. Not only the healthcare
workers but also those maintenance staff that dispose of the needles could now also be at risk for
accidental needlestick injury. We look to effectively manage the competitive influences around
us, however, will stress that increased safety will come from purchasing NeedleZap. The final
point related to the competitive environment is that we plan to fully exploit the cost advantages
of this product. While retractable needles meet OSHA guidelines for safety standards we plan to
prove that purchasing NeedleZap is more cost effective than purchasing any other product.
Economic Environment
From an economic standpoint this product benefits by being a part of one of the most
economically healthy industries in the world. As Americans we all understand the reality of
astronomical health care costs. NeedleZap would benefit from an economic culture of more
liberal spending on healthcare and also the idea that safety is above everything else. While this
is possible in the United States we do acknowledge that this will be a challenge as we pursue the
African market. Many of these nations with the highest percentages of HIV/AIDS may not be
able to spend as we do domestically. Our main objective in marketing this product is to
recognize the economic environment and adapt accordingly. While one approach may be
beneficial domestically we do recognize the need to market differently in other countries. These
economic factors prove that we do need to maintain the focus to the North American health care
industry.
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Social Environment
The social environment consists mainly of two underlying factors. First, people are living
longer and subsequently are in need of more intensive healthcare. The National Center for Health
Statistics reports that the average American will live to be 77.6 years old. More people are
seeing doctors and therefore they are requiring more care to include injections on an ongoing
basis. There is an absolute need for this type of product because of this factor. The second social
factor is the culture of HIV/AIDS. Thirty years ago no one had heard of this disease and it was
something that we did not need to safely manage. In modern society we now have to live in a
culture where the risks of this disease are very real. Individuals with HIV are not only living
longer, but also are requiring more ongoing care. This is predominately due to advances in
treatment and research. They now require more treatment and thus pose an increased risk to
health care professionals in charge of their care. Our product will make it that much safer for the
individuals that care for these patients.
Political Environment/Legal Environment
For the most part the political and legal environments are closely related for this product.
One of our main goals is to support the marketing of NeedleZap based on existing legislation for
safety standards in the United States. While Africa is secondary to our plan, we do acknowledge
the need to understand the various laws of potential international customers in order to determine
the legal requirements for proper disposal of needles. If these nations do have existing legislation
then this will only enhance our marketing and sales approach. Based on a new OSHA guideline
that was cited at the NeedleZap website, in the United States, employers that have employees
who are exposed to the risks of accidental needlesticks are now obligated to take advantage of
new technologies that may reduce the risk. While no exact guidelines exist we could work in a
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lobbying effort to establish future legislation. While the product itself continues to be the main
focus of our marketing plan, we can also enhance our sales potential with this OSHA regulation.
Marketing Planning
Marketing Objectives
We feel the NeedleZap device is truly innovative and has potential to benefit its users
both in reducing needlesticks and in cost of needle disposal. Even though that we agree that
NeedleZap is a better alternative than its predecessors, the Sharps container; we believe that little
progress has been made in terms of its marketing to launch this product. In response to this, we
concluded that the first objective for the NeedleZap device would be to increase its awareness to
65 percent of its markets in the first year. However, we also know that the marketing budget is
not as generous as we would like due to poor sales of past efforts. As a result of limited financial
support, we determined other methods that are relatively inexpensive, but can be very effective.
These methods include a variety of public relations efforts that will create numerous
opportunities for the NeedleZap device. The first PR effort should focus on the creating a need
for NeedleZap, which is a product that eliminates accidental needlesticks easily, quickly, and at a
low cost compared to that of its competitors. Furthermore, once this need has been established
and created, NeedleZap must be introduced to satisfy this need. Another PR solution could be
that of partnering with an advocacy group to defuse industry critics by delivering positive
messages and the benefits about NeedleZap. In addition, referrals/testimonials from existing
clients would also draw positive messages that would help the product. A third PR goal could be
to obtain favorable coverage in medical journals as well as the general press through the release
of well timed press releases. Another PR strategy should be to create awareness on a more
personal level that can be accomplished in two ways: first E Med needs distributors who can
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demonstrate the features of NeedleZap to health-care providers on a one-on-one basis and
secondly, the company will participate in events such as a medical conference that would
provide a platform for its product for others to get first-hand experience of the benefits and ease
of use of NeedleZap.
The second objective that we feel is of the utmost importance is that of increasing its
sales. Currently, the NeedleZap device has been struggling with making positive strides and the
future of this product lies in the actual sales. The initial strategy for the NeedleZap device
should be to create a client base that will help boost sales and from these relationships, create
word of mouth awareness in the medical community.
Target Markets
We feel that the NeedleZap’s target market is both in the domestic and international
market and includes any healthcare facility where injections are given. These include hospitals,
physician offices, dental practices, and veterinarians. Bio-hazard disposal is a highly competitive
market and we feel that the NeedleZap device is a truly unique product that would satisfy the
needs of users in all markets. With this said, we feel that the approaches to domestic and
international markets should be slightly different. For example, we feel it would be better to
market NeedleZap domestically if we draw attention to its ease of use and cost effectiveness,
while in the international market (i.e. third world countries) the NeedleZap device would be
marketed more effectively by decreasing the spread of the AIDs/HIV epidemic and hepatitis.
Marketing Mix
Product.
Needle Zap is a Revolutionary new device that significantly reduces the danger of
accidental needle sticks. NeedleZap disintegrates the entire sharp needle portion of the
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hypodermic syringe eliminating possible danger to its users and other individuals within the area.
It is compact, lightweight, and portable, and can be used in fixed or mobile applications. The
unit itself measures 3" x 4" x 2" and weighs 1.4 lb. It handles all standard needle sizes: 16 to 30
gauge; and needles up to 2 ½ inches in length, without any adjustment.
This product is used by inserting the needle into the designated hole. Then the needle
must be rotated and gently pushed against the specially designated electrodes. At this point, low
voltage electricity disintegrates the needle in about two seconds using temperatures that approach
2,200oF. The needle is then eliminated only leaving the syringe intact. This product is designed
to be operated with only one-hand (95% of all needle stick injuries occur to the opposite hand;
the hand not holding the needle).
NeedleZap operates with rechargeable batteries and with either an AC or DC charger. It
can disintegrate up to 100 needles without recharging. NeedleZap is currently offered in two
forms, the Standardized unit or mobile health unit. The standardized unit is designed for use in
either fixed location use or can be transported by a medication cart or tray to the procedure
location. The standard unit comes with choice of either AC or DC charger. DC charger allows
use in out-of-facility applications. We also offer two color choices, black or white.
The Mobile health unit is designed for mobile applications such as home health providers
and farm veterinarians. It includes all of the required elements in a convenient carrying case that
includes the following items: White NeedleZap® unit, with rechargeable battery, AC charger and
DC charger, gloves and disinfectant wipes.
NeedleZap currently comes with a one year warranty and has a life cycle of seven years.
An extended warranty may be purchased at point of sale for $45.00 per year and all NeedleZap
devices are packaged with detailed instructions, a complete education guide on disk, and access
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to a call-in help line. Upgrades and enhancements that will allow NeedleZap to accommodate
specialty needles such as those used for diabetics or in kidney dialysis are in development to
further enhance its utility. A lock down device for hospital use is also being developed and will
be offered as an option to prevent theft.
Promotion.
The promotion for NeedleZap will focus on advertising, sales promotion, and direct
marketing. Currently NeedleZap information is available on the internet, however, few people
know that it is there. In order to start the hype about NeedleZap, the following will occur:
The advertising for NeedleZap will consist of purchasing ads in the following magazines:
The Family Doctor Magazine, Prevention Magazine, Medical Product Outsourcing Magazine,
and the Journal of American Medial Association (JAMA). This promotion will allow for a
greater opportunity for the medical profession to have an understanding of what NeedleZap is.
The Medical Product Outsourcing Magazine is distributed globally and deals with new and
innovative products in the medical field. The Family Doctor and Preventative Magazines are
articles that are often found in doctor’s offices that allow for employees of the office and patients
to be made aware of this product.
For sales promotion, NeedleZap will be offered in the following way: If a distributor
partner wishes to purchase multiple units of 100 or more, then a discount of 10% will be taken
off the total order. If a client purchases 500 or more units a 20% discount will be given. Thirdly,
for first time purchasers, the shipping and handling for the units will be waived. The goal is to
give an incentive for the purchaser and get units into the market so users can create talk. Without
multiple units in the field, it will be hard to effectively market this product.
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Additionally a sales promotion will be offered to the distributors of this product. In order
to drive the sales of the distributors, NeedleZap will offer the following incentive program for
the 2006 fiscal year. The top selling salesperson of the NeedleZap product will receive a new
Sony 52” flat panel television, the salesperson with the second number of units sold will receive
a new Sony 42” flat panel television, and the salesperson with third highest number of
NeedleZap units sold will receive a new Sony 32” flat panel television. This promotion will give
the distribution sales force an added incentive to sell NeedleZap.
Distribution.
NeedleZap will be primarily manufactured in Mentor, Ohio where E Med Future, Inc.
currently houses their manufacturing plant for the domestic market. NeedleZap will then be
shipped to distributors across the country. These distributors will be responsible for selling the
NeedleZap product within the United States. A second manufacturing plant in China, already in
operation, will service our international customers.
Price.
The price for the NeedleZap product is $450.00 per unit for the distributors. Multiple
unit sales will be discounted to our distributors according to the schedule detailed above. Our
suggested price to the healthcare market is $650.00 per unit. This is a $200.00 markup after
initial purchase. This will give the distributor incentive to sell the product and make a profit.
The final cost of the product is still quite reasonable given that it is in the medical filed. Along
with the incentive programs listed above and the markup price, this product will be highly
attractive to our selected distributors.
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Implementation and Control of the Marketing Plan
The marketing plan will be implemented by existing senior staff of E-Med Futures, Inc.
All sales and contractual activity with both domestic distributor partners and officials involved in
international government bodies and aid funds will be conducted by current executives for the
first year. As sales activity and revenue increases, additional sales and marketing personnel will
be added as warranted and as available cash allows.
Results of the plan will be continuously monitored and evaluated based on actual sales
compared against those forecast in each sales category. The board, along with senior staff, will
meet on a quarterly basis to review results and recommend any changes in the plan that may be
necessary at that point in time. In addition, average selling price will by monitored and
evaluated at the quarterly meeting to determine if any correction is necessary in order that our
target profit margin is achieved.
On a qualitative basis, each NeedleZap unit will be packaged with a postage paid
customer response card in order to facilitate user comments concerning the use of the product,
quality of service, and recommendations for enhancements to either. Significant trends based on
customer responses will be reviewed at the quarterly board meeting. Recommendations by the
board for the resolution of any issues and enhancements to the plan will be made at that time.
Senior staff will be responsible for evaluating the cost and feasibility of the board’s
recommendations and for their ultimate implementation.
Summary
Through this marketing plan we have introduced a revolutionary new product called
NeedleZap that will substantially decrease the risks associated with traditional needle disposal.
Currently the methods used to dispose of hypodermic needles are expensive and are open to the
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risk of injury and disease. As stated in the Executive Summary, many underdeveloped countries
use needles more than once on different patients which allows the spread of HIV and hepatitis.
In the United States the problem is not necessarily the use of one needle on multiple patient but
we do have issues related to high costs when dealing with disposal. Retractable needles as well
as the traditional disposal containers have become the norm in the healthcare industry. With this
plan, we will introduce the NeedleZap needle disposal device that will not only save scarce
healthcare dollars, but will also assist in preventing injuries and diseases associated with
accidental needle sticks and improper disposal.
Throughout this plan we have discussed the primary objective of replacing the traditional
sharps containers, which are the most commonly used methods of needle disposal. Hospitals,
physician offices and other healthcare settings, by purchasing NeedleZap, will have drastically
increased safety and decreased the financial burden associated with normal disposal. This
benefits not only the healthcare facility but safety to the workers and patients as well.
A common theme throughout this plan is the fact that the need for this device is virtually
without limit. Any place where injections are routinely given will benefit from NeedleZap. In
order to market this product domestically our focus will be on advertising NeedleZap in medical
trade journals, one of which is the Journal of the American Medical Association. Medical trade
shows as well as inexpensive public relations activities such as the strategic positioning of press
releases will be our major focus in getting the word out on this device. We have recognized that
traditional methods of disposal will be difficult to completely replace initially due to existing
disposal contracts and protocols therefore the major focus is to discuss how easy the device is to
use and also how incredibly cost effective this product is.
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From an international perspective we are looking more toward the future however we
will target governmental and private aid organizations that have the funds available to support
the reduction of diseases such as HIV and hepatitis. The NeedleZap device will serve a great
humanitarian need.
As stated previously, we will not focus on a direct sales approach for the NeedleZap
device. The fact that the device is relatively inexpensive supports a plan whereby distribution is
focused on qualified medical equipment distributors. We rely on them to maintain adequate
inventory and also to facilitate potential business by seeking qualified referrals from healthcare
facilities. The service of NeedleZap will be provided on a unit exchange basis and extended
warranties will be offered to the customers at the point of purchase.
We believe that within the first twelve months of implementation the plan will generate
65% awareness of the product in target markets. Our expectation is for net domestic sales to
exceed 19,000 units and $8 million, including extended warranty sales. At a manufacturing cost
of $78 (including charger and accessories) per unit and an average selling price of $410 to our
distributors, gross profit will exceed $6,000,000. We expect future international sales to be
significant in the long term, however, minimal in the first year of implementation.
To conclude, it is essential that we recognize and stay focused on the core benefits of this
product. Safety is without question the greatest benefit and the number one selling point for the
NeedleZap device. However, the cost benefits will make it attractive for institutional buyers to
justify. We feel that our marketing plan will effectively make this device available to everyone
who can benefit by it so that sales and profitability targets can be easily achieved. At the same
time, we will have made the world a safer place.
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Appendix – Financial Analysis
Financial analysis is a critical component of our marketing plan. The financial analysis
for the marketing plan for NeedleZap includes two main sections. These sections are a Sales
Forecast and Estimates of Marketing Costs.
Sales Forecast
The first step in developing a sales forecast is to determine the number of entities in the
target market. As stated previously, the target market for NeedleZap consists of hospitals,
physician’s offices, dentistry offices, and veterinary offices for the domestic market and national
health departments and aid organizations for the international market. The total number of
entities in the different sections of the target markets and the number of purchases each section is
expected to make in the first year is as follows:
Domestic Sales Forecast Home Nursing Hospice Health Hosp. Phys. Dentists Vets Homes Units Aides Total number of entities (est.) 28,000 700,000 150,000 58,000 17,000 4,500 608,000 Annual # of purchases per entity x5 x0.1 x0.1 x0.1_ x 0.1 x0.1 x0.1 Total potential market 140,000 70,000 15,000 5,800 1,700 450 60,800 % total market coverage x0.65 x0.65 x0.65 x0.65 x0.65 x0.65 x0.65 Total available market 91,000 45,500 9,750 3,770 1,105 293 39,520 Expected market share x0.10 x0.10 x0.10 x0.10 x0.10 x0.10 x0.10 Sales forecast (in units) 9,100 4,550 975 377 111 29 3,952 Average Price x$410 x$410 x$410 x$410 x$410 x$410 x$410 Sales forecast (in thousands of dollars) $3,731 $1,866 $400 $155 $46 $ 12 $1,620 Warranty sales of 10% of Units @ cost of $45.00/yr $40,950 $20,475 $4,387 1,697 $500 $131 $17,784 Total domestic sales forecast in units = 19,094 Total domestic sales forecast in dollars + warranty sales = $ 7,915,924
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International Sales Forecast
Total # of national health departments in Africa 53 Annual # of purchases per entity x 100 Total potential market 5,300 % of total market coverage x 0.65 Total available market 3,445 Expected market share x 0.10 Sales forecast (in units) 345 Price x $410 Sales forecast (in dollars) $141,450 Warranty sales of 10% of units @ cost of $45/yr $1,553 Total sales forecast in dollars $143,003
In making the sales forecast, estimated numbers from Internet sources determining the
number of hospitals, physicians, dentists, offices, veterinary offices, nursing homes, Hospice
units, and home health aides in the domestic market and a national health department in each
country in Africa were used. The goal of the market plan was to have 65% target market
coverage and 10% market share in the first year. The main competitor for our product is sharps
containers and because they are an inferior product we believe a 10% market share is feasible in
the first year. Hospitals will use the largest number of NeedleZap devices due to their numerous
sites on each floor for injections and blood draws. However, most hospitals are already under
contract for needle disposal and will not purchase NeedleZaps for the entire hospital until this
contract runs out. Our estimate of 5 NeedleZaps purchased in the first year is from infiltrating
the hospitals in a department by department approach. Physicians, dentists, veterinaries, nursing
homes, hospice units, and home health aides each would have a limited number of injection and
draw sites and their number of annual purchases was estimated at 0.1 per entity in the first year.
In the international market, sales will be minimal in the first year because of unpredictability and
the time lag in securing government and foundation funds but will grow substantially in
subsequent years. Also, due to its relative lack of healthcare infrastructure, it was decided to
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market to national health departments (53 countries) and use them as distributors in their own
countries. An estimate of 100 NeedleZap devices per health department was used. The
estimated sales forecast in units for the domestic target market is 19,094 and for the international
target market is 345 for a total of 19,439. The estimated sales forecast in dollars domestically is
$7,915,924 and internationally is $143,003 for a total of $8,053,927. We anticipate that in years
two and beyond that domestic sales will increase by a factor of two and that international sales
will increase by a factor of at least four.
Estimates of Marketing Costs
The main competitors for NeedleZap are companies producing sharps containers.
Therefore, heavy expenditures in advertising are needed to increase customer awareness of
NeedleZap and reach the goal of 65% awareness of the product in the first year.
Advertising
Our customers are mainly healthcare entities in which the purchasing agents must be
reached with advertising and public relations materials. Advertising and creating awareness are
the main expenditures for this product. Advertising costs include purchasing ads in appropriate
magazines or journals, mailing flyers to metropolitan areas, and assisting with the financing of
medical conferences. We estimate that 50% of our marketing budget will be spent on creating
this awareness of NeedleZap.
Sales Force Training and Compensation
Much of the sale force training and compensation expense will be for the distributors
selected to distribute NeedleZap. Incentives must be given to these distributors to encourage
sales of NeedleZap versus other products that they carry. We hope to work with distributors who
have experience in the healthcare and government setting and who have shown the ability to
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communicate well and sell effectively in these settings. Because of our use of experienced
distributors as opposed to the use of individual sales representative we hope to keep the
expenditures for sales force training and compensation to 20% of our marketing budget.
Channel Development
Using established medical distributors should allow us to minimize the costs for channel
development. Most of our costs for channel development will be in researching the available
distributors and determining the correct choices for NeedleZap and in the developing the chain to
supply these distributors with our product. Therefore our channel development costs should be
kept to 5% of our marketing budget.
Marketing Research
The need for NeedleZap is self-evident in our target markets. Since we know all
healthcare facilities are in need of our product, research costs should be limited. These costs will
include determining what if any adaptations our customers desire and their relative satisfaction
with the product. Marketing research costs should constitute 5% of the marketing budget.
Product Development and Package Design
NeedleZap is an existing product, however as stated earlier, we anticipate developing
additional enhancements and upgrades in order to expand utility and improve our product
offering in the future. Product development and package design should constitute 20% of the
marketing budget.
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References
Hospice Facts and Statistics. Retrieved December 10, 2005 from National Association for
Homecare and Hospice Web site: http://www.nahc.org/Consumer/hpcstats.html
National Health Care Survey. Retrieved December 10, 2005 from National Center for Health
Statistics Web site: http://www.cdc.gov/nchs/nhcs.htm
NeedleZap. Retrieved December 10, 2005 from NeedleZap Web site:
http://www.needlezap.com/home.html
Nursing Homes. Retrieved December 10, 2005 from Medicare Web site:
http://www.nahc.org/Consumer/hpcstats.html
U.S. Department of Labor, Bureau of Labor Statistics. Dentists. Retrieved December 10, 2005
From http://www.bls.gov/oco/ocos072.htm
U.S. Department of Labor, Bureau of Labor Statistics. Personal and Home Care Aides.
Retrieved December 10, 2005 from http://www.bls.gov/oco/ocos173.htm
U.S. Department of Labor, Bureau of Labor Statistics. Veterinarians. Retrieved December 10,
2005 from http://www.bls.gov/oco/ocos076.htm