Sample Pricing Strategy Plan for a Healthcare Institution Capstone Project

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IntroductionThe pricing model for telemedicine has yet to be standardized as the industry is just being to burgeon. As a result, many competitors use various pricing model that depend heavily on their business models. For startup with large amounts of cash and financial backing, many are willing to charge much lower profits in order to generate loyal and entrenched followers. Many technology-based companies such as Amazon and Microsoft followed this strategy during their start up phases. Amazon for example, generated substantial loses for a majority of its existence as it looked to generate a lower customer following while also building out its product offerings. Microsoft used the same tactic in order to become the dominate word processing software. Once it became dominate, it then was able to charge higher prices and add additional services. Pricing for startup telemedicine organizations look to be employing the same technique. This can very disruptive, as these software providers are purposing taking financial losses and operating on thin margin to take market share from competitors. Those competitors who do not have the financial backing, capital, or investor base to sustain these losses will ultimately lose market share and ultimately profitability. We are currently witnessing this within the retail sector as many of the more established department stores such as JC Penny, Sears, and Neiman Marcus have all filed for bankruptcy due to their inability to compete with online retailers who used aggressive price tactics. On the other end of the spectrum are more established providers who are not “pure play” telemedicine providers. Here they provide a combination of service each with different profit characteristics. As a result, these businesses do not rely entirely on revenue from the telemedicine operation solely. As a result, these operations have much more pricing flexibility as it relates to their own telemedicine product offering relative to their competitors. Going back to the retail example earlier Costco has been able to thrive in the current environment has their core retail operations have performed very well due their cost focus strategy. Even with Amazon operating at loss and undercutting their prices, Costco still offering such as compelling value proposition that consumers still used their services. As a result, there were able to slowly roll out their online offering to better compete with Amazon. In this instance AZ Hospital will take a similar approach to its pricing strategy relative to competitors. The hospital benefits from other “core” services that allows it to be flexible as it relates to its telemedicine product offering. As a result, the company does not feel pressured to take losses in order to properly roll out its product.

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Instead the company can be patient and deliver a compelling experience, leveraging its healthcare expertise and potentially charging premium prices (David, 2014).Pricing Plan with justification from a reputable source like payors or CMS. - Pricing Plan with sourcing and analysis.To being, the current pricing strategy will revolve around a low monthly base fee and a combination of consultation fees that are based on the product being demanded by the consumer. This pricing structure will first be very transparent to the consumer prior to engaging with the company. The start the base monthly fee will start…

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…of promotion and frequency and associated costs.As noted above, the promotion aspect will be primarily internal at first as we will leverage our own customer base to generate traffic. Afterwards, the firm will engage in limited advertising and promotion on social media, YouTube, google, and so forth. The initial promotion will be modest to gauge ROI and overall costumer generation. As the industry is relatively new, nearly all market participants are not entirely sure which promotional strategies generate the highest customer traffic and ROI. In addition, promotion through our distribution channels with telemedicine and other healthcare providers will help establish the brand.Product/Service Forecasts - Forecasts with rationale and support for decision.As it relates to the product and services forecast, we anticipate that our product offering will grow in the line with the industry overall. As of 2021, the industry is growing at roughly 20% per year. As such, we believe we should be able to grow at roughly this rate for the following reasons:1. We have a sustainable competitive advantage by offering both physical healthcare services and online healthcare services. This provides us with a strong customer base in which to leverage high telemedicine adoption rates2. We have a strong and well-responded brand that is synonymous with quality. As healthcare is very important to consumers, they typically are not price sensitive and want the best quality care available at a reasonable price.3. Competitors who are growing lack the breadth and depth of our product offering allows consumers to choose us over them4. Competitors lack the brand awareness, distinction, and comfort that our company offers consumers5. We will have extensive….....

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"Sample Pricing Strategy Plan For A Healthcare Institution" (2021, April 11) Retrieved June 30, 2025, from
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