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ExecutiveSummary
Risinghealthcarecostshavepresentedgreatchallengesandopportunitiesincountrieswithsocializedor
privatehealthcare.InCanada,provincialgovernmentsaregrapplingwithwaystofulfilltheirobligation
toprovidemedicalservicestothecitizenryandmaintainahealthyfiscalstate.Approachingthisproblem
fromapreventionperspectivehasgivenrisetobusinessopportunity.
Inthefollowing,aoneyearmarketingplanforSaskTelsLifeStatservicehasbeenconductedto
concludethatthefirmfirstoughttotargetanichemarketwithintheProvince.Thatis,Saskatchewanians
whosufferfromdiabetes.Thesecitizensareoftenrurallylocatedandwithoutthecorrectlevelof
caregivermonitoring,theymayendupinemergencyroomswithcomplicationsthatarenotonly
personallydangerous,butcostlytotheProvince.
ThefastgrowingmedicalITmarket,inwhichSaskTelwantstocompete,hasdrawntheattentionof
telemedicineandtechnologygiants.Inordertosurvive,SaskTelmustfocusitsresourcesonestablishing
itselffirmlyinthetargetmarketsothefirmmaycompeteinthelongterm.
SaskTelshoulddistributeitsLifeStatsystemthroughShoppersDrugMart,LondonDrug,andSafeway
pharmacies.Itisvitalthatmarketingdollarsbespentwiselytonotonlymakethosewithdiabetesaware
ofthesystem,butalsotheirdoctors,nurses,friends,andfamilyaswell.
Withagoalof6500unitsales,SaskTelcanmaintainorslightlyimproveoverallprofitmarginsof7.2%
inthefirstyearevenwhileexpandingintoanewtechnologyfield.Onceestablished,SaskTelcan
continuetoleveragepartnershipswiththeProvinceandtheCanadianDiabetesAssociationtofurther
expandintomarketsegmentswithgoodproductfit.
MarketingSituationAnalysis
Company
SaskTelisaCanadianProvincialtelecommunicationscompanybasedinSaskatchewan.Theyare
nationallyrecognizedfortheircustomerserviceandpositiverelationshipwiththediversegroupof
customerspresentinthatprovince.Thefullservicetelecommunicationscompanyssubsidiariesalso
offersecuritymonitoring,directoryassistance,hospitalroomcommunicationstothehealthcaresector
andinternationaltelecommunicationsconsulting.
Product
SaskTelhasdevelopedtheLifeStatservicetoenablecaregiverstocommunicatewithchronicallyill
patientsandremotelymonitortheresultsofselfadministeredbloodpressure,glucosetests,etc.The
technologyispatentedinCanadaandhascompletedthreesuccessfultrials.Futuredevelopmentcould
comefromfeedbackandresultsfromthethreecompletedtrials.
Customers/Markets
CanadianProvincesfaceproblemsofdecreasingresourcesandincreasingcostsofprovidinghealthcare
toanagingpopulation.Simplyput,theresultisthattherearetoomanysickpeopleandnotenoughbeds.
Diabetesandhypertensionratesof8.3%and14.9%,respectively,havealsocausedpolicymakersto
considerapreventativevisiontocontrolcosts.Thiswouldstoppatientswiththeseconditionsfrom
requiringexpensiveemergencyinhospitaltreatmentasaresultofmismanagingtheirowntreatment.
1)Saskatchewandiabetespatients(enduser):InSaskatchewan,8.3%ofcitizenshavebeendiagnosed
withdiabetes.Diabeticsneedaccesstomedicalservicestomanagetheircondition.Peoplesufferingfrom
diabetesmustmonitorandcontrolbloodsugarlevels.Poormanagementofbloodglucosecanresultin
seriouscardiovascularandneurologicaldiseases.Diabeticshavebeenabletomonitortheirownblood
sugar,buthavenotbeenabletoimmediatelycommunicatethatinformationtodoctorstoensureproper
levelsarebeingmaintained.Enablingthecommunicationofthisdataandtheremotemonitoringof
patients,asLifeStatdoes,solvestheproblemofdiabeticsinthecontextoftheProvincereducing
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healthcarecoststhroughprevention.
2)Saskatchewanhypertensionpatient(enduser):Persistenthighbloodpressure,hypertension,isthe
leadingcauseofstrokesandaffectsfifteenpercentofCanadians.PeoplewithHypertensionneedaccess
tomedicalservicestomanagetheircondition.Hypertensionpatientsalsohavebeenabletomonitor
themselves,anddoctorssuggestthatselfmonitoringisthebestpreventativetactic.However,
hypertensionpatientsalsoneedtohaveacaregivermonitoringtheirbloodpressuresotheycanprevent,
anticipate,andrespondtomedicalemergencies.
Hypertensionanddiabetespatientschooseproductsbasedonprice,convenience,andeaseofuse.Also,
patientsvalueproductsthatincreasetheirindependence.Thisappliesespeciallytotheruralandsparse
populationofSaskatchewanwhoseekproductsthatsparethemunnecessarilylongjourneystohavetheir
bloodpressure/glucosemeasured.
3)Intermediaries:RetailoutletslikeShoppersDrugMart,LondonDrug,andSafewaymustkeepproduct
offeringsuptodatewithindustrytrendsandcustomerdemand.WIthrisingdemandfortelemedicine
relatedservicesandhardware,itisvitalthatretailerscompetebyofferingproductsthatwillsolvetheir
customersproblems.
Industry
LifeStatwouldcompeteinthemedicalinformationtechnologydevices/servicesindustry.
ThreatofCompetition
ThereareseveralstrongcompetitorsinthismarketthathavemoreexpertiseintelemedicinethanSasktel.
Onecompetitorinparticular,PhilipsMedicalSystems,isarevenuegiantthatjustpurchasedamedical
alarmcompanywithmanyCanadiancustomers.TheindustrysprojectedgrowthrateinCanadaof15%
overthenextfiveyearsshouldattractmoremarketentrants.
ThreatofSubstituteProductsandServices
Thisthreatismediumbecausetherearefewdistinctalternativestosolvingthisconsumerproblem.
However,switchingserviceproviderswouldnotbedifficultorcostlyinmostcases.Additionally,
smartphoneadvancesincludingpluginexternaldevicescouldcreatenewandmoreconvenient
technologiesthatsolveconsumersproblemsandbetterfitbuyingpatterns.
BargainingPowerofBuyers
Duetothelimitednumberofintermediariesandlargenumberofserviceproviders,buyershavehigh
bargainingpower.Buyerswillleveragegrantingaccesstotheirestablisheddistributionchannels.Buyers
pricesensitivityalsostrengthenstheirbargainingpower.
BargainingPowerofSuppliers
Suppliersmayhavelimitedbargainingpowerbecausetheirinputshaveasmalleffectonproduct
differentiation.Thereisalsohighsuppliercompetition.
IntensityofCompetitiveRivalry
Theindustryisopentoinnovationsthatdriveproductdifferentiation.Highadvertisingexpensesandthe
racetoestablishexclusivedistributionchannelsincreasesrivalry.
Competition
1)CybernetMedicalsMedStar
CybernetMedicalisasubsidiaryofalargersystemscompany.Cybernethasbeendevelopingrobotics
technologyinthecontextofcommercialwebdevicesandnationaldefensefor24years.Theirmedical
monitoringproduct,MedStar,worksbyusersuploadingmedicaltestresults(conductedbytheuser)toa
datamanagementsystemwiththeabilitytoproducecustommedicalreports.Theunitsretailpricerange
dependingonmedicalhardwareneededis$975$2,946inadditiontoa$37.50monthlymonitoringfee.
2)AMDTelemedicineInc.sCareCompanion
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AMDtelemedicine,consideredtheleaderintelemedicinemaintainsastrongglobalmarketpresencewith
4,000installationsin58countries.ThecompanyhascreatedapartnershipwiththeVisitingNurses
AssociationthelargesthomecareagencyintheunitedstatesgivingAMDaccessto24,000patients
and400,000yearlyhomevisits.AMDsmedicalmonitoringproduct,CareCompanion,featuresevent
reminders,medicationprompts,andmedicalmeasurementsviatheusersmonitoringequipment.Test
resultscanbesentviainternettoacaregiver.CareCompanioniscurrentlyonlyavailableintheU.S.The
retailpriceis$125/monthinadditiontothecostofperipheralmonitoringequipment.
3)PhilipsMedicalSystemsMotivaInteractive
PhilipsMedicalSystemsisasubsidiaryofPhilipsElectronics.Philipsisalarge,globallyrecognized
companywith$30billioninrevenuesand$4.4billioninassets.Philipsaquiredamedicalalarm
companywith500,000Canadiancustomers.ThisparticularLifeLineserviceincludedtelephone
reminders,helpbuttons,andspeakerphonesystems.PhilipsmedicalmonitoringdeviceistheMotiva
Interactive.Itusesbroadbandtelevisiontotransfertheresultsofselfadministeredvitalsignsteststo
caregivers.Motivacosts$140permonth,plustheonetimecostforperipheraldevices.
Context
People:Saskatchewanhasapopulationof968,157.Thispopulationisspreadoutoveraverylarge
geographicarea.Manyliveinruralcommunities.Theprovincehasthehighestproportionofsenior
citizensinthecountry.14.88%ofthepopulationareNativeCanadians.
Economy:Saskatchewanseconomyis95%basedontheproductionandprocessingofnaturalresources.
IncreasingworldwideenergyconsumptionhasincreasedthedemandforSaskatchewansuranium,
naturalgas,andoil.Thishasresultedinaneconomicboomfortheprovince.
Withrespecttothehealthcareeconomy,thecostofillnessinCanadawasexpectedtoexceed$140
billion.Thisshowsalarge,growingmarketwithgrowingconsumerpains.
Politics:ThevotersofSaskatchewanwerethefirsttogivetheirprovincialgovernmenttheresponsibility
ofprovidinghealthcaretoitscitizens.Initsroleasahealthprovider,bothfederalandprovincial
governmentsaredealingwithrisinghealthcarecostsassociatedwithanagingpopulation.Governments
arejudgedandchangedbasedonwhethertheyareabletofulfilltheirresponsibilities.Therefore,
Saskatchewan,andallprovincesarelookingforwaystocontinueprovidinghealthcaretoallcitizens
withoutgoingbrokeorraisingtaxes.
Collaborators
ProvinceofSaskatchewan:AsaprovincialCrowncorporation,Sasktelhasastrongrelationshipwiththe
provincialgovernment.Thiscouldultimatelyprotectthecompanyfrominprovincecompetitionandgive
preferredaccesstodistribution,marketing,andoperationalchannels.
DiabetesAssociationofCanada:CDAisaspecialinterestgroupfordiabetessufferers.Theyhavegiven
positiveattentionthetheLifeStatproductforitsuseintheselfmonitoringofglucoselevels.Thisisan
attractivemarketingchannelthataddsbrandcredibility.Othersimilargroupswouldrepresentgood
channelopportunitiesaswell.
ShoppersDrugMart:ShoppersisanextremelystrongbrandinCanadawith1,055storesnationwide.
Shoppersmaintains45%marginsonhardwareand$75commissiononalloneyearcontractssold.
LondonDrug:LondonDrugisaleadingpharmacyinWesternCanada.Theyhavealsodiversifiedinto
smallappliances,furniture,cosmetics,etc.LondonDrugmaintains48%marginsonhardwaresoldand
requireda$75commissiononalloneyearcontracts.
SafewayPharmacy:SafewayPharmacyhas1,775locationsintheU.S.andCanada.Safewaystresses
wellnessthrougheducationandprevention,inlinewiththeProvincialgovernmentshealthcarestance.
Safewayalsohasafocusondiabeteshealth.Safewayexpects40percentmarginsonhardwareanda$75
commissiononalloneyearcontracts.
MarketPotential
Market:Thesetofallactualandpotentialbuyersofaproduct
CanadianMarketPotential:7,334,193units.(SeeEx.1)
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MarketSegment1:DiabetespatientsinSaskatchewanwhoneedtocommunicatebloodglucoselevelsto
caregiverswithouthavingtotraveltoahospital.
TotalSize:78,420units(Ex.1)
MarketSegment2:HypertensionpatientsinSaskatchewanwhoneedtocommunicatebloodpressure
measurementstocaregiverswithouthavingtotraveltoahospital.
TotalSize:153,936units(Ex.1)
Opportunities/IssueAnalysis
ExternalOpportunities
GrowingSickPopulation:Thenumberofpotentialcustomersinthemarketisgoingtoriseasbaby
boomersage.OtherhealthissuescouldalsoincreasetherateatwhichCanadianssufferfromdiabetes
andhypertension.
RiseofTelemedicine:ThesizeoftheCanadianmedicalITindustryisexpectedtogrow15%from$3.9
billionto$4.6billionby2011.Morethanjustanincreaseinsickpeople,thisstatisticindicatesthat
policiesaregoingtoincreasethepropensityforconsumersandcaregiverstoturntotechnologylike
LifeStattofulfillnational,provincial,andpersonalhealthcaregoals.
IncreasingFocusonPreventativeCare:Governmentsarehavinganincreasinglydifficulttimebridging
thehealthcarefundinggap.Bytakingastancethatfocusesonprevention,productsthatattemptto
identifyearlywarningsignsbeforetheybecomeemergencyhealtheventswillbemorevalued.
RelationshipwithProvince(s):AsaCrowncorporation,LifeStatmaybeprotectedfromdirect
competitioninSaskatchewan.OtherprovincesCrowntelecommunicationscompaniesmaychooseto
becomelicenseesanddistributeLifeStat.
InternationalCompetition:ThemajorindustrycompetitorsarenotbasedinCanadaoridentifiably
Canadian.ConsumersinCanadianmarketsegmentsmayprefertopairtheiruniquelyCanadianmedical
systemwithdomesticproducts.
Distribution:WiththegrowthofmedicalIT,retailersneedtoincludetelemedicineproductstokeepup
withconsumerdemand.StrongnationaldistributorslikeShoppersandLondonDrughavealready
establishedthemselvesastrustworthypurveyorsofhealthcareproductsandgivestrongbrandequityto
theproductstheystock.
RuralPopulation:TheruralpopulationofSaskatchewanseeksproductsthatwilleasetheinconvenience
oftheirgeography.
ExternalThreats
StrongCompetition:Theindustryisattractingtheattentionofextremelylargecompanieswithdedicated
medicaltechnologydivisions.LargeR&Dbudgetscouldadvancetelemedicinetechnologyrapidlyand
makeoldertechnologiesobsolete.Largecompetitorshavealsotakennoticeoftherapidindustrygrowth
rateandhavemademarketentryacquisitionslikePhilipspurchaseoftheLifeLineservice.
Substitutes:Ascompetitiondevelops,firmswillcreatemoreefficientandeffectivetechnologiesto
addresstheseconsumerproblems.Newdevelopmentscouldalsobemuchcheaper,therebyminimizing
theinconvenienceandcostofswitchingservices.
Distribution:Retailersareabletodemandhighcommissionsbecausetherearefewofthemandmarket
rivalryishigh.Retailerswillonlywanttocarrythebestproductsandmayvaluebrandrecognitionover
otherobjectivecriteria.SaskTelisprobablynotwellknownoutsideofSaskatchewanandconsumersmay
behesitanttotrustastrangefirmwithanimportantresponsibility.
InternalStrengths
ProvincialProtection:SaskTelsrelationshipwiththeprovinceismutuallybeneficial.Inlinewiththeir
preventativeapproach,theprovincialgovernmentisincentivizedtochampiontheLifeStatproduct
becauseitcouldhelpincontrollingcosts.InSaskatchewan,thisrelationshipwiththeProvincewill
decreasetheattractivenessofSaskatchewantoprivatefirms.
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ExpertiseinCommunications:SaskTelswealthofexperienceinthetelecommunicationsindustrycould
helpthemtakeadvantageoftheriseoftelemedicine.Sasktelhaslogisticalandinfrastructureexpertise
toleverage.Also,thenewCEOisfirmlyrootedinthetelecommunicationsindustry.
AcclaimedProduct:LifeStathasbeenpraisedbytheDiabetesAssociationforbeinganeffectivetoolin
selfmonitoringandprevention.Thismatchesupwithprovincialgovernmentsfocusonpreventative
care.
Popularity/FamiliaritywithConsumers:SaskTelknowsitscustomers,andthepeopleofSaskatchewan
praiseSaskTel.Citizensaremorelikelytotrustacompanythattheyalreadyreceiveservicesfromthana
newentrant,especiallywhenitcomestohealth.Thiscouldalsoshiftbargainingpoweragainstretailers
slightlybecausetheywillseethevalueinSaskTelsbrandintheProvince.
InternalWeaknesses
InexperiencewithMedicalTechnology:SaskTelhaslimitedexpertiseinmedicalfields.Not
understandingthenuancesofprovidinginhomehealthcaretopeoplemayresultinfailuretodeliverthe
wholeproductexperience.
LowR&DPriority:SaskTelhasnothadtofocusontheresearchanddevelopmentprocessinitsroleasa
telecommunicationsprovider.
PoorInternationalBrandEquity:OutsideofSaskatchewan,SaskTelisnotwellknown.
PatentStatus:LifeStatisnotpatentedintheUnitedStates
Objectives
FinancialObjectives
NetProfitMargin
2005:6.4%
2006:7.2%
Objectivefor2007:7.3%
MarketingObjectives
ReachUnitSalesof6500
Achieveanunaidedawarenessof75%
StrategyRecommendations
Recommendation(RefertoEx.2,3)
IwouldrecommendtargetingMarketSegment1:Saskatchewandiabetessufferers.BecauseSaskTelis
attemptingtocrossthechasmintoanewindustry,itisimportantthattheyidentifyasmallniche
marketthattheycanfocusresourcestodominate.Althoughthealarminggrowthrateandlargersizeof
MarketSegment2ishardtoignore,therearefarmoresituationalfactorsthatwillallowSaskTelto
successfullyenterMarketSegment1.Diabetescustomersseemtobemorecompelledtopurchase
medicalequipmentthanthosesufferinghypertensionwhenyoucomparetherespectivesurveyresponses.
Thissuggestsinelasticdemandthatwillgivethefirmgreaterpricingfreedom.Also,preexistingpraise
fromtheDiabetesAssociationofCanadasuggestsfasterdiffusionthroughthetargetmarket.Channel
Access/Fitispotentiallybetterformarketsegment1aswellbecausethereareretailers,likeSafeway,
whoalreadyspecializeindiabetescareandapreventativeapproachtopersonalhealth.Thiscontributes
tothefirmsabilitytoprovidethewholeproductexperiencewithdistributorsasallies.After
successfullydominatingMarketSegment1,SaskTelwillbeabletoboastexpertiseininhomediabetes
careandfurtherleveragespecialinterestpartnershipsintonewCanadianprovincialmarkets.
DifferentiationStrategy
Diabetespatientslookforproductsbasedonprice,convenience,easeofuse,andifitcontributesto
patientindependence.UsingaFishbeinanalysisorsomekindofperceptualmapwouldtellusmore
abouthowconsumersperceivedmarketcompetitors.Whenlookingatrelativepricesandcompetitive
productdescriptions,theevidencesuggeststhatconsumersmightbeoverservedbya$170permonth
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devicewithcapabilitiestheydonotneed.AlowcostdifferentiationstrategywouldnotforceSaskTela
companythatisenteringanewmarkettodevelopacuttingedgeproductthatitcouldntdeliveror
provideadequatecustomersupportfor.
PositioningStatement
LifeStatisforSaskatchewanDiabetessuffererswhoaredissatisfiedwithcomplicatedandexpensive
monitoringdeviceswhoseconfusingcapabilitiesareunneeded.Ourproductisatelemedicineblood
glucosemonitoringsystemthatprovidesallofthecommunicationandtestingfunctionalitydiabetes
sufferersneed,atafractionoftheprice.Unlikeourcompetitors,weunderstandthecitizensof
Saskatchewanandhaveusedourcommunicationsandcustomerserviceexpertisetoassemblean
affordable,convenient,andeasytousedevicethatworkstopreventserioushealthcomplicationsasa
resultofdiabetes.
MarketingMix
ProductStrategy
TheLifeStatserviceenablesdiabetespatientstocommunicatetheresultsofselfadministeredblood
glucosetestsimmediatelytotheirdoctororcaregiverviasecureinternetconnectionandSaskTeldata
centers.
PricingStrategy
TheLifeStatservicewillbepricedat$65permonth,plustheonetimecostofnecessarytestingdevices.
Thisprice,althoughatthetopofthecaserange,isstillfarbelowthecompetition.Pricehasthegreatest
effectonnetprofit.At$65wecanmaximizeourreturnandstillfulfillalowcostdifferentiationstrategy.
PromotionStrategy
N/A
DistributionStrategy
IrecommenddistributionthroughShoppersDrugMart,LondonDrug,andSafewayPharmaciesin
Saskatchewan.TherearenofinancialtermsbeingofferedbyanyretailerthatincentivizeSaskTeltouse
oneoutletexclusively.InordertoreachasmanySaskatchewandiabeticsaspossibleandfulfill
marketingobjectives,alldistributionchannelsintheprovinceneedtobeused.Thehardwaremargins
andcommissionsononeyearcontractsaresimilarenoughthatitshouldnotbeatopdecidingfactor.The
locationswithrequiredmarginsgreaterthanfortypercentareworththeadditionaldistributioncost
becauseoftheirimportancetofurtherexpansionthroughtheprovincesinthelongterm.Thesame
reasoningjustifiestheadditionaldirectsalescostassociatedwiththisapproach.
ActionPrograms
BudgetItems
Total:$354,200(SeeEx.5)
ResearchNextSteps
Duringtheyearofthismarketingplan,therewouldbetwomainmarketingresearchgoals.1)
Segmentationresearchofpotentialnextmarketswouldbedone.Thiswouldincludeprofilingconsumer
preferencesinpotentialmarkets,conductingclusteranalysis,andevaluatingforfit.AFishbeinanalysis
orperceptualmapscouldalsobeusedtofurtherevaluateconsumerprioritiesandthenextmarket
segmenttotarget.2)ItwouldbevitaltoconductaFishbeinanalysisviacustomersurveyinthe
SaskatchewanmarkettounderstandhowconsumershaveperceivedSaskTelv.itscompetitorswiththe
marketingmixbeingused.Iftheperceptiondoesnotmatchdifferentiationandpositioninggoals,are
evaluationofthemarketingmixwouldbeneededbeforeanyadditionalmarketsegmentsweretargeted.
Financials
FirstYearunitsales:6500(Ex.2)
ContributionAnalysis
PerUnitTotal
UnitSales6500
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UnitPrice($65/monthx12months)=$780/year$5,070,000
(VariableCosts)($375)$2,437,500
Contribution$405$2,632,500
(FixedMarketingExpense)(54.49)$354,200
(FixedGeneralandAdmin,R&D,Insurance,Internet,etc.)(SeeEx.4)R&D,Insurance,Internet,etc.)
(SeeEx.4)($221.90)$1,442,334
ProfitImpact$128.61$835,965
BreakevenAnalysis
Intermsofmarketingcosts:
TotalMarketingCostsUnitContribution=BREAKEVENUNITS
$354,200$405=875units
875unitswouldneedtobesoldtocoverthecostofthemarketingprogram.
EXHIBITS
Ex.1
Population%w/Diabetes%w/HypertensionMarketPotential(units)
CanadaWideMarket31,612,8978.3%14.9%7,334,193
MarketSegment1968,1578.1%78,420
MarketSegment2968,15715.9%153,936
Ex.2
SegmentComparisonMarketSegment1MarketSegment2
ProblemNeedtobeabletomeasureandcommunicatebloodsugarlevelstodoctorstopreventmore
seriousmedicalemergencieswithouthavingtotakeatriptothehospitalforcostlyemergencyservices
Needtobeabletomeasureandcommunicatebloodpressurelevelstodoctorstopreventmoreserious
medicalemergencieswithouthavingtotakeatriptothehospitalforcostlyemergencyservices.
DecisionMakersDiabetessufferersandtheircaregiversHypertensionsufferersandtheircaregivers
WhoinfluencesdecisionmakersDoctors,family,friendsdoctors,family,friends
SituationalFactorsHighprevalenceinaboriginalpeoples
FactorsforDecisionmakingPrice,convenience,easeofuse,addstoindependencePrice,convenience,
easeofuse,addstoindependence
#CustomersinSegment78,420153,936
GrowthRateofSegmentIncreasingIncreasing33%in4years
CompetitorsinSegmentStrongStrong
%PositivelyRespondingtoLifeStatsurvey8%2%
%Positive*Customersinsegment62743079
Ex.3
SegmentAttractivenessAnalysisMarketSegment1MarketSegment2
CompellingReasontoBuy10/109/10
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GrowthRate8/1010/10
CompetitiveIntensity10/1010/10
CustomerFamiliarity10/1010/10
ChannelAccess10/109/10
CompanyFit10/107/10
Total58/6055/60
Ex.4
TotallingVariableandFixedCosts(Year)
Variable
$25/monthtechsupportor$300/year
$75/yearcommission
Fixed
Depreciation*2,200,000=$733,333
R&D$47,000
Insurance$71,000
Internet3,500per2monthx6=$21,000
Employees:$200,000
ServerCost:$53,000
Licensingfee:$167,000
G&A$150,000
Totalnonmarketingfixedcosts:$1,442,334
Ex.5MarketingBudget
(1)CDAtradeshow:$4,500
(10)Diva/Showcase30seconds:$1,000
(40)Instoredemos:$20,000
(1)EHealthconference:$2,500
(1)CanadianHealthMagazine:$6,200
Directsalesteam(16personsx$400x50):$320,000
Total=$354,200
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