Med Net Case

Topics: Newspaper, Cost, Advertising Pages: 2 (380 words) Published: April 15, 2014
Most likely Bishop and Yates have shown Mahria the following calculations to convince her to stay with MedNet over the Marvel:

Purchase Rate
Number of sales
Monthly Contribution
Cost per $contr

According to the table, MedNet is almost equal to the newspaper ad in terms of cost per one dollar of contribution. Marvel showed to be almost twice as expensive than MedNet.

Situation with is far more complicated. Case contains no information on ad effectiveness other than that most often niche type sites become first source for the newly diagnosed. However, survey says that 85% of broad audience visit 3 or more sites to research their condition. Taking into account high trustworthiness of the it is reasonable to expect that 85% of users will also visit MedNet. Out of these 85%, 93% will visit MedNet again when medical information is needed. Therefore, roughly 80% of visitors will either switch or become regular MedNet’s visitors. Generally speaking will share almost all its visitor pool with MedNet.

I would advise Marhia to request sample ad effectiveness metrics from From the tone of the case it seems like charges disproportionally high premiums for their not so obvious competitive advantage. Chances are that will prove less effective than MedNet.

If will prove to be more efficient and Windham will switch away from MedNet, the decision of future MedNet strategy will depend heavily on the competitive landscape and internal flexibility of the MedNet.

In the first option, from the survey we know that 75% of MedNet’s audience will switch away once charge is introduced, so if 25% agrees to pay we would need to charge approximately...
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