While a standard low-end version of the
application will be available for smaller hos-
pitals, custom-built solutions will be devel-
oped for large and complex hospitals.
MedTrack will also deliver customer training,
support, and maintenance. MedTrack’s team
of professionals, in collaboration with strong
partners in hardware and software and cus-
tomization of solutions, will serve as a value-
added component of the product/service.
Option 1.Turnkey system. The complete
price of the system will vary according to the
size of the hospital and the amount of hard-
ware, the number of software modules, and
the level of customization required.
MedTrack will price its product at a premium
as it will be the only provider, at least in the
beginning, that will offer a complete solution
that helps hospitals track and manage inven-
tory, patients, and staff. Prices will typically
range between $1 million and $3 million (1
percent of annual supply and equipment
costs) per solution. Several pricing alterna-
tives may be available to customers. The first
will be for the customer to purchase a
turnkey system. Assuming the system
reduces the typical shrinkage of supplies and
equipment by 20 percent (from 10 percent to
8 percent), this option will ensure a mini-
mum ROI over the next five years of at least
200 percent.
Option 2.Lease option. Pursue five-year
minimum leases, although shorter leases will
be entertained. Leasing with the option to
buy in the future will also be possible.
Option 3.Down payment plus a percent of
the realized cost saving (reduction of write-
offs). This is less desirable for MedTrack as
the time associated with accurately determin-
ing the realized cost savings will likely be
expensive. Lengthy legal contracts and diffi-
cult negotiations would accompany each
invoice for the percentage of realized cost
savings.
With all pricing options, MedTrack will
pursue maintenance contracts based on time
and material. (Flat-fee contracts based on
customer insistence will be considered.)
Some hospitals will be comfortable with this
as a long-term arrangement while others will
purchase this service for a specified time peri-
od while their own staff become sufficiently
competent to no longer require MedTrack’s
maintenance services. This revenue stream
will be critical to the startup of the business.
It is recognized that customers will have a
plethora of financing needs. The various pric-
ing plans are designed to ensure maximum
flexibility for the customer and to overcome
possible budgetary constraints.Distribution. MedTrack will subcontract
regional software, equipment, and supplies
to distributors with developed local field
sales networks and preferably with connec-
tions in the medical sector. The distributors
will approach hospitals, assess and qualify
their needs, and present and sell the concept
as a value addition to procurement of sup-
plies. Technical experts from MedTrack will
assist in closing the sale and then take over
the implementation. MedTrack will offer
above-average agent commissions to its dis-
tributors to ensure their commitment and
motivation.
In addition to the distributor network, the
in-house sales force will be comprised of
high-caliber account executives and will be
charged with identifying and approaching a
list of specific medical institutions across the
country classified as key accounts.Advertising and Promotion.To build
brand and product awareness, MedTrack will
advertise in medical journals and other spe-
cialized periodicals and will sponsor medical
training films, a TV series, and documen-
taries. MedTrack representatives will attend
medical conferences and medical equipment
exhibitions and fairs. They will hold press
conferences and make presentations on the
system launch and its further development.
In addition, direct mailings of letters and
advertising brochures will inform potential
customers of the system’s capabilities. A WebMedTrack 433