1. What company/organization is the subject of the problem?
Augustine Medical Inc. – The Bair Hugger Patient Warming System
2. What is the problem? – Identify the strategic aspect of a marketing situation. Augustine Medical needs to figure out how to price the two components of the Bair Hugger Patient Warming System (the heating unit and blanket) and how to place their product against competitors.
3. What is the significance of the problem to the subject?
There are many competing technologies designed to treat hypothermia of postoperative patients, most are less expensive than the Bair Hugger. Although Augustine see’s their product as superior to most alternatives they need to price and introduce their product to the market before a similar air-circulating blanket is introduced to the US market (like the English-made Hosworth-Climator).
4. Who has the responsibility for addressing the problem (usually the protagonist)? Augustine Medical, Inc.
5. What does he/she need to know to do something about it?
> What are the costs of producing and selling through distributors? How could they minimize distribution costs? > Augustine Medical should find out more about their competition in the long run > The company should also gain more knowledge of the hospital market and how to expand their product even further > How will price/volume influence the cash flow position of the company?
6. What are the decision options?
> Use free blankets/units as a promotional offer to the hospitals > Price their product competitively compared to their competitors
7. What are some possible criteria for evaluating these options? > Hopefully in the future, after selling the product for free, the hospitals will become loyal and Augustine will have gained a huge market share and will profit. > Hope that their product is superior and that it will sell successfully at the medical trade show.