# augustine medical must figure out how research

Essay Topics: Market share, Price point,
Category: Mathematics,
Words: 605 | Published: 12.10.19 | Views: 578 | Download now

Practice Calculations

#### Excerpt from Exploration Proposal:

The first is \$995 for the system and \$12 for the blankets. The second is \$1, 499 for the machine and 20 dollars for the blankets. The 3rd is \$3, 995 to get the unit and \$22 intended for the quilts. The fourth can be \$5, 1000 for the machine and \$25 for the blankets. Set costs will be \$500, 500. The contribution margin is usually expected to be 70% within the units and 60% for the blankets around the delivered value.

Our demand estimates happen to be derived based on the price relative to the main competition, and consider the impact of experiencing to gain formal approval further than the \$1, 500 price point. We have also assumed that wherever we all set our price point, we will need to offer a discount. Buyers expect to receive a deep discount, so we expect that regardless if we offer a low price point you will have a mental need for the buyer to obtain a discount; not really offering one could compromise revenue.

The \$995 machine and \$1, 499 machine will be able to capture significant market share, as they are price beneath existing second-rate technologies. These rates likewise come with lower blanket costs. The \$995 machine offers blanket costs of \$14, lower than the competitors. This will help to lower functioning costs for hospitals by 30-41% over existing disposable blanket costs. At 12 million surgical treatments, this represents a significant financial savings. For this reason all of us feel that the \$995 equipment and \$14 blankets can capture a 60% market share. The \$1, 499 equipment with the \$20 blankets can capture a compact, but still significant market share, perhaps 40%.

The \$3, 995 machine with the \$22 covers is equally priced against competitors. We expect the Endure Hugger symbolizes superior technology. This will allow all of us to capture a number of the market, could be 15%. We feel that the greatest price point, \$5, 000 intended for the machine and \$25 pertaining to the blanket, best signifies the value of our technology. However , at these levels, the retail price elasticity between us and our main competitors will limit each of our sales. We expect that we would only be able to catch a five per cent market share whenever we priced yourself above the competitors. Each of our estimated market is 7, 560, 000 surgical procedures for the number of blankets and 2117 equipment. The blankets at the \$14 range could contribute the following, based on 50% discount and 40% commission payment on sent price.

The contribution on the \$995/\$14 price is consequently: \$14 2. 50% sama dengan \$7 provided price

6 = Net sale = \$4. twenty minus \$0. 85 price = \$3. 35 contribution

7, 560, 000 * 60% business = 4, 536, 000 blankets 5. \$3. thirty five = \$15, 195, six hundred

For the units, we certainly have a 40% discount and 30% percentage. \$995 *. 6 sama dengan \$597 shipped price. \$597 *. 7 = \$417. 90 net. Less \$380 cost = \$37. 85 contribution 5. \$80, 234. 30.

The whole contribution as of this price point is usually thus \$15, 275, 834.

Using the calculations, the contribution \$1, 499/\$20 which has a 40% market share is \$15, 784, 744.

The contribution at the \$3, 995/\$22 and 15% business is \$6, 932, 678. The contribution at the \$4, 999/\$25 level and 5% market share is definitely \$2, 735, 879.

What emerges out of this examination is usually that the disposable blanket are the most significant factor. However , as the costs in the blankets are absorbed into hospital operating costs, they are not anticipated to be the deciding take into account the buy. Therefore , if the blankets will be priced competitively vs . The blankets of competing devices, Augustine will need to use the value of the machine to steal market share.

One of the most significant demand motorists for the