University of Mississippi

Ole Miss

TC Telemedicine

Revolutionizing the Healthcare Industry

Christina Windom & Tyler Massey

MKTG 358

Dr. Rachel Smith

April 30, 2015

1.0 Executive Summary2.0 Situational Analysis

2.1 Market Needs2.2 Market Trends2.3 SWOT

2.3.1 Strengths2.3.2 Weaknesses2.3.3 Opportunities2.3.4 Threats

2.4 Competitors2.4.1 Direct2.4.2 Indirect

3.0 Marketing StrategyMission Statement3.1 Value PropositionMarket Segmentation3.2 Target Market3.3 Critical Issues3.4 Marketing Objectives

4.0 Marketing Mix4.1 Product4.2 Pricing4.3 Promotion

4.3.1 Personal Selling4.3.2 Trade Promotions4.3.3 Direct Marketing4.3.4 Social Networking

4.4 Distribution4.4.1 Website Goals4.4.2 Website Marketing Strategy4.4.3 Development Requirements

4.5 Implementation Schedule5.0 Financials, Budgets, and Forecasts

5.1 Sales Forecasts5.2 Break-even Analysis

6.0 Bibliography7.0 Appendix: PowerPoint SlidesOther information

1.0 Executive SummaryIn an ever-evolving world, the market for technology-based assistance is growing at an

incredibly steady rate.  At TC Telemedicine, we feel that our service is the next step in creating a network of hospital communication in the Southeastern region of the United States, namely within a 200 mile radius of Tupelo, MS.   A recent study by Bernie Monegain in New research projects swelling telemedicine market, estimated that “the market for telemedicine devices and services will generate nearly $3.6 billion in annual revenue within the next five years, with mobile services companies taking a sizeable chunk.”1 As a result, many innovators in the private sector are increasing their investment in broadband-enabled telemedicine tools.  Not only is this positive for our company, considering the industry we serve, but the benefits for our consumers are just as superior.  One study written by Alexander H. Vo, of The Telehealth Promise: Better Healthcare and Cost Savings for the 21st Century, estimates that telemedicine “could save the U.S. healthcare system $4.28 billion [annually] just from reducing transfers of patients from one location, such as a nursing home for medical exams at hospitals, physicians’ offices, or other caregiver locations.”2   This outlines one of the greatest problems that our company seeks to solve. Not only this, but our company seeks to aid in solving the problem of cutting down patients traveling to larger facilities outside rural areas for consultations. Take for instance, a patient in need of a cardiovascular exam, but unfortunately, the nearest facility is 60 miles away. It would be our aim to aid in connecting his hometown rural physician with a larger practitioner through the network communication that telemedicine services provide. Simply, the incredible advantages surrounding the telemedicine industry is what makes this service work.  Our goal is to air our target market of rural hospitals by creating a network between them, their patients, and larger health care facilities.  By reducing daily function costs of these smaller hospitals, this allows them to produce a higher revenue stream and maintain plausible employee compensations.  The benefits are substantial.  They include, as mentioned earlier, higher revenue amongst small hospitals, reduction of patient transfers, immediate communication face-to-face with larger healthcare facilities housing top physicians, and the ability perform consultations externally. “Mississippi’s telemedicine program, ranked among the seven best in the country, has inspired neighboring Arkansas to take bigger steps in some areas of the field, and the impact of its success is making waves in Washington as well,” according to a recent article written by David Pittman.3  We are confident that TC Telemedicine has the ability to help revolutionize hospitalization in the areas surrounding Tupelo, MS, and eventually expand beyond our home state of Mississippi.

TC Telemedicine was founded in 2015 and is a growing service provider in the industry of telemedicine installation services.  Our principal office is located in Tupelo, MS.  TC Telemedicine provides modest-size rural area hospitals with the most up-to-date high-definition video conferencing technology available through the manufacturer Polycom.  Our main service actions include: full telecommunication installation, monthly subscription-based remote monitoring and system maintenance, and on-site trouble shooting.  TCT provides currently provides installation for Polycom’s RealPresence Room systems, RealPresence Packaged Solutions, and RealPresence Desktop systems.   Presently, these three packages are our main service products which are all in the introductory stage of growth within our geographic competitive location.  Our company will compete primarily based on a geographical, cost-based, and industry based competitive advantage.  Our future plans include developing services for installing Polycom’s largest life-size HD video system, the RealPresence Immersive within the

next two years, and to grow a large enough employee base in order to keep staff on hand at each hospital housing Polycom’s products, which will give us a service differentiation advantage.  

2.0 Situational Analysis2.1 Market Needs: One of the things that sets our company apart from others is our target market.  While many Telemedicine providers focus on attaining the larger healthcare facilities, they tend to neglect physicians located in more rural areas of the country.  Our goal at TC Telemedicine is to set ourselves apart from the competition by targeting small to modest sized healthcare providers in order to aid them in reaching new heights within the telecommunication side of medicine.  Not only does our target market represent a strong market need, but our price and convenience stand out above the competition.  We strive to have one of the lowest installation and subscription price in the area compared to competing companies.  The convenience of our customer service and consistent maintenance make using the Polycom Telecommunication system an ease.  

2.2 Market Trends: Telemedicine is a heavily growing industry in which many hospitals are turning to in order to speed up their diagnosis process through video conferencing. This service eliminates the previous barriers of location by allowing doctors and other medical professionals to share patient diagnostics, treatments, and illness images in order to confer with one another about what they can do to help the patient with a quicker and more accurate diagnosis. According to a recent survey on broadbandexpand.com, “patients from rural areas reported that that they are forced to travel, on average, 60 miles to visit a specialty care physician.”5 Technology, and it’s use, is ever increasing in today’s world, especially in the medical community, and is becoming one of the most essential components in saving costs and increasing diagnosis accuracy for health care facilities.  

2.3 SWOT2.3.1 Strengths-The two founders have college degrees in Marketing-Connections with Telpro Communications, another business that helps distribute other Polycom systems, though not their health medicine systems, and is owned by one of the founder’s father-Only one other Polycom telemedicine distributor within a 500 mile radius of Tupelo, MS (Carousel Industries of North America located in Ridgeland, MS and Memphis, TN)

2.3.2 Weaknesses-No previous experience with telemedicine-No direct connections with healthcare facilities at the moment -New market that could be hard to penetrate upon initial entry

2.3.3 Opportunities-Increasing use of new technology in the medical world -New telemedicine systems are constantly being updated to make it easier to use

-Mississippi’s Telemedicine field is growing into one of the best markets in the U.S

2.3.4 Threats-Increases in technology have allowed new video conferencing services, such as Skype and Apple’s Facetime app, to become available to virtually anyone with a smart phone. -Companies already within the telemedicine industry already have connections in areas surrounding major cities such as Jackson, Memphis, Nashville, etc...

2.4 Competitors2.4.1 Direct

Our direct competitor is Carousel Industries of North America, INC. It is another distributor of Polycom’s healthcare telemedicine systems and is located in Ridgeland, MS and Memphis, TN. Its locations are ideal for the major healthcare facilities located both in the Memphis and Jackson area, however it poses less of a threat to TC Telemedicine since we are focused on small, rural medical facilities that are outside of these locations. 2.4.2 Indirect

Skype, Facetime, and other video conferencing apps are coming out daily. Virtually anyone with a smartphone now has the availability to video conference, through Skype and Facetime, with someone else through multiple platforms (as long as there is an internet connection). Although these apps are cheaper, they do not guarantee the security or the connection that Polycom systems do.

3.0 Marketing Strategy:Mission Statement:To provide next generation technology that aids, inspires, and revolutionizes the way small healthcare providers meet the needs of patients.

3.1 Value PropositionWe help small healthcare providers reduce the cost of transferring patients,

carrying out consultations, and diagnosing problems through the means of telecommunication. With the increasing costs of health care today, this is a critical issue for most hospitals whom are spending more money than they are making. One of our biggest benefits is the ability to save these companies money through the simple means of introducing them to the telemedicine industry.  We strive to cut healthcare costs by 50% through our service.

Market SegmentationThe segmentation of our market can be broken down into three smaller, more

homogeneous groups of customers that we can more efficiently market to. These include specialty physicians, hospitals, and nursing homes, all within rural areas. Each of these areas are all obviously based upon a geographic segmentation.  Our company operates within a 200 mile radius of Tupelo, MS.  Demographically our company covers the type of facilities we serve, which are mentioned above as specialty physicians, hospitals, and

nursing homes.  We also segment based on behavioral status.  While Some healthcare providers may use the products daily, others may use it every few days or just weekly.. Higher-income facilities may have more interest in higher-quality models versus low-cost models. This in turn, prompts our company to target higher-end products and services to one group and more value-oriented offerings to lower-income or budget-conscious consumers.

3.2 Target MarketAccording to http://www.raconline.org/, there are currently 176 rural healthcare

facilities in the state of Mississippi alone.4The purpose of our telemedicine systems will be to provide these rural hospitals with a means of remote communication with other hospital facilities in order to promote its use so that patients are able to be treated more quickly and doctors are able to confer with one another without wasting time, energy, and money to travel from one facility to another.

3.3 Critical IssuesConsidering the fact that our company is merely beginning this year, our critical

issues are currently at a minimum.  While we are new to this service, we want to strive to be one of the top competitors in the industry with regard to rural healthcare facilities in Mississippi. For this possible issue, both Tyler and I will enroll in Polycom’s online system training classes in order to make sure that we fully understand how to set up our systems and can properly maintain them.  Also, the creation of an attractive advertising campaign that encompasses our company’s vision is a critical start up issue, as well as the elimination of budget deficits and breaking even.  Our goal is to eliminate these critical issues within our first few months of operation, ensuring that we are able to focus on the quality of our products guarantee rather than the issues of our budget expenses.  Being a new company in a very new industry, we feel this renders thorough marketing plans a necessity. It is our objective to attack critical issues, even the small ones, such as trouble with our van, from the moment of inception rather than allowing them to grow.  

3.4 Marketing ObjectivesOur main marketing objective is to increase the awareness of our presence to our

target market. We plan to do this through trade promotions and search engine optimization strategies, as well as direct marketing ventures. We also wish to use CRM tactics to ensure that we gain and retain our customers. Through this, we hope to establish value in our brand equity through our reputation by putting the customer first and considering the feedback that we receive from our business with them in order to constantly improve our customer service. This is a very important feature for us because we must retain customers in order for our service to remain sustainable in the future.

4.0 Marketing Mix:  4.1 Product

TC Telemedicine is able to provide rural healthcare facilities with instant communication through our video conferencing systems with other doctors and medical staff in order to eliminate wasted time in travel in order to provider patients with a quicker and more accurate diagnosis. Our company will be installing Polycom video

conferencing systems into these particular health care facilities for the purpose of telemedicine communication. These facilities will have full control over the type and quality of equipment that they would like to purchase, with regard to mobility and purpose, but they will also be required to buy Polycom’s content video management system. Through this software, we will be able to connect with each of our consumer’s telemedicine systems remotely in order to help them with any troubleshooting issues or system updates. In the case of system problems that require on-site help, we will travel to the location of the healthcare facilities to either repair the problem or replace the system. 4.2 Pricing

We will profit in this service through initially selling and installing the video conferencing systems for a 25% mark up on the system’s purchase price, with the addition of installation labor, while also offering a monthly service fee for remote monitoring and system maintenance. We will require that a minimum of an 18 month contract subscription is signed upon installation.  Although it will be necessary for us to first have a consultation meeting with our customer prior to their system order, we will do this free of charge. For the small healthcare facilities we see as our target market, there will only be a need for one system per facility since they do not usually have more than two to three doctors. With this in mind, we will charge $350 a month for our remote monitoring and system maintenance, a highly competitive price compared to similar businesses that charge a monthly fee of $400-$500. In the case of system troubleshooting on location, we will charge the business for labor and mileage only. Our labor costs, both for installation and for on-location maintenance, will be $115 an hour plus a $2,000 customer training fee. Our service systems will have one year warranties in which we will correct any manufacturing or installation malfunctions at no cost to the consumer, or send the system back to Polycom for it to be repaired under their warranty policy. 4.3 Promotion

Although telemedicine is currently a convenience service and is not yet required by law for healthcare providers, we want TC Telemedicine to be a primary innovator in this service industry and focus on promoting the early adoption for telemedicine services by these rural healthcare facilities.

4.3.1 Personal SellingAlthough we will not be able to feasibly visit every single rural health care

facility personally without a guarantee that they will purchase our service, we will visit all of them within a 100 mile radius of Tupelo. We will treat this like a consultation visit if they allow us to sit down with them and discuss the benefits of purchasing telemedicine services through TC Telemedicine, or if they are too busy, we will set up an appointment for a consultation visit if they are interested in our services. 4.3.2 Trade Promotions

We will also partner with telecommunications businesses that do not provide telemedicine services, such as Telpro Communications, in which we will be able to give and receive customer referrals necessary for us to gain our target market’s interest. Telpro Communications is another distributor of Polycom video systems, however they are not a distributor of their telemedicine systems. We hope to use this business connection to our advantage since Telpro Communications is the primary phone system provider to Central Mississippi

Medical Center, a business that could help TC Telemedicine gain a large share of our target market through personal referrals. 4.3.3 Direct Marketing

We want to focus on calling these rural facilities to set up consultation appointments in which we will drive to their business and discuss the benefits of our Telemedicine services. During these appointments we will also discuss which system is right for them, the room we will set the system up in, and how soon we can get the system delivered. 4.3.4 Social Networking

Polycom only specializes in selling telemedicine and other video conferencing systems.  They do not service or install them. This will be a major benefit for our company as we can partner with them and provide the service and installation needed for our customers. Polycom is currently one of the largest video conferencing systems providers in the world, and they rely on their service providers to install and maintain their systems. Because of this, consumers who are interested in purchasing one of Polycom’s telemedicine systems will be redirected by Polycom to one of their service and installation providers within a certain radius of the site.  With a rapid growth in the telemedicine industry, healthcare facilities are showing an increased interest in video conferencing options.  Not to mention, once health care providers decide to take the leap forward and research the benefits of telemedicine, Polycom is one of the first options to come up when people search “video conferencing systems” on Google. This promises that consumers, particularly those looking into telemedicine, will look into their systems and ensure our company’s promotion. Although we will not have a heavy use in social media since we are an industry service provider rather than consumer, we feel that this promotion through Polycom will most feasibly help us through a push strategy in order to gain the interest of our target market.

4.4 DistributionWe will be offering our services to smaller health care facilities located in the

Southeast United States, particularly those in rural areas. We will maintain a host of service equipment vans that we will drive out to each rural location. From there we will perform on-site installation of our telemedicine systems. As a service business, we will be buying our systems and equipment from the company Polycom which is well known for their secure and private system options. Polycom is already well known in the telemedicine industry of healthcare, which will aid our company growth quickly through referrals. Once the initial installation has taken place, we will continue to provide system maintenance and remote monitoring on a contract and subscription basis. If a problem arises, or a system needs to be updated, we will provide telesupport through phone calls, remote networking through our computer to our consumer’s system (content video management), or on-site repair.  Only if the problem persists will we troubleshoot on-site at the location of the hospital.  

4.4.1 Website GoalsWe would like our website to be informative, accurate, and easily

accessible. We will do this through constant updates regarding new system

updates and upgrades that are coming out through Polycom that we can offer. We will also put a geotag on our van so that those who are looking at our site are able to tell where our van is located at the moment and see if they want to set up a meeting or a consultation visit if they are nearby. We will also make sure that the website is easily accessible, explaining exactly what we do and the specific systems that we sell in a way that they are able to easily understand the benefits of each system and decide which is right for them. For this, we will also host a quiz on our website in which healthcare providers can take in order to determine the system that would work best for them depending on how mobile, high-resolution, and large they would like there system and video conferencing screen to be.

4.4.2 Website Marketing StrategySearch engine optimization will be the main method that we will use with

regard to our website marketing strategy. We will use Search Engine Optimization because it will ensure that our website will be one of the first ones to pop up when health care providers in our target market search for “telemedicine providers near Mississippi”. We also want other words to be tagged into this search engine optimization, such as “Polycom distributors” and “best telemedicine services” when they are searching on google and located in Mississippi.

4.4.3 Development RequirementsSome of our largest developmental requirements revolve around the

technical side of our company’s foundation.  We will need to hire a website developer to create our business website, and we will also need to hire a marketing agency to create out search engine optimization strategy.  Aside from the website, a parallel database capable of housing customer information, running SQL statements, and maintaining data normalization must also be created.  Lastly, the proper telecommunication software must be acquired from Polycom by our company to ensure that we are able to remotely monitor the systems of our customers.  

4.5 Implementation ScheduleOur implementation schedule includes each of our most vital activities, their costs, possible difficulties and scheduled time-frame required to achieve the objectives of our strategic plans. Many of the following objectives relate to the promotion and function of our company.

One of our main activities of concern is the implementation of a thorough promotional strategy. The priority behind this task is very high on our list. The costs behind this include:

o design and printing costs for all print materials, such as newsletters, brochures and press releases, direct mail costs (Staples price + mail costs = $823.83 per 1000 prints.)

o Web site development (includes the following average costs) Planning / UX (sitemap, wireframes) – $600 – $ 2400

Visual Design – $1200 – $2400 (some visual design elements will need to be modified due to mobile responsive specifications)

Programming – $3800 – $4800 (for smaller websites) Programming – $4800 – $9600 (for larger websites) Content Support/ Migration – $600 – $1200 Client Training / Documentation – $0 – $600 Testing and Launch – $960 – $2,400 Total Cost: $7,160 – $13,800 for smaller websites *and up, depending

on Requirementso public relations (average rates for public relations specialist are $125 per hour)

o any other special events needed ($10,000 for any other promotional efforts such as internet adds, radio broadcasting, etc..)

Possible difficulties for this process could include the possibility of website design complications, exceeding the estimated capital for building the website, and lack of knowledge surrounding public relations.

It is our goal to meet these scheduled requirements prior to our first month of opening our service so that we are a fully functioning company prepared to serve.

Also, our activities list is filled with the requirement to obtain the necessary software needed for our service to function remotely and for our owners to take the required classes in order for us to be certified in using the software. This activity is also high on our priorities list. The costs of these activities include:

o Training classes for both owners ($14,800 through Polycom)o Installation of RealPresence Media Manager Software ($10,000 through

Polycom) Possible difficulties in this field could revolve around the need to eventually upgrade to

larger computer systems through Polycom’s providers. Currently both of our owners have computer systems capable of running the full software manager; however, within the first year of business we expect to see our client list sky rocket which would lead to the need for a larger computer system.

This leads to the next activity on our list which is to go ahead and purchase new computer systems. Our scheduled time frame for realizing and meeting the need of this will be within our first week of operation. This final activity has a current high priority in order for us to start. Costs for this system will include:

o Acer V246HLBD – LED monitor – 24” ($142.99)o ASUS M11AD USO13O – Core i7 4790S – 12GB – 2 TB ($827.99)o CRADLEPOINT CELLULAR BROADBAND ADAPT ($266.99)o NETGEAR GS105 5-Port Gigabit Ethernet Switch ($39.99)o *Each of these items are simply upgrades to the equipment we already acquire

It is possible that we face difficulties in being large enough that we must double or even triple the amount of equipment that we must upgrade. Even growing to the point that we must upgrade sooner than expected is possible.

Lastly, the final activities required for our company to meet are the need for a telephone line, van, and office building. These costs include:

o Van – Short wheel base – cargo van – ($28,000)o Phone Line – ($80 per month)o Building Office Space – Posey Office Building – 4,320 Sq Ft ($226,900)

The scheduled time frame for these activities and their priorities all vary based on time. We are currently implementing our first van and phone line into our schedule as a high priority that we will obtain prior to operation. However, we not be purchasing an office space until we have established a large clientele list most likely post-first year operation.

Possible difficulties include rising rates for phone lines, not having a mobile company phone line, maintenance issues regarding the van, and not being able to buy the office space we are interested in.

5.0 Financials, Budgets, and Forecasts

5.1 Sales ForecastBecause telemedicine is such a new and growing industry, we expect our sales to grow exponentially within our first year of business. While we sell our telemedicine systems for the same price as Polycom, with a 25% market-up, we also require that all healthcare facilities buy the RealPresence Media Manager Software and sign our 18-month contract in order for us to provide them with our services. It is our goal to meet the total unit sales per month in the graph below which is 48 units within our first year of business. This will allow our company to get our foot in the door with 27% of the available market in rural Mississippi. This will bring our total gross sales to $785, 450 and our profit margin to $306, 862 including a $3,000 minimum per installation.

5.2 Break-even analysis:We must provide our services to thirteen rural healthcare facilities in order to

break-even, which we have a goal of reaching within our first year of business. It is $14,800 for both employees to take training classes with Polycom and $10,000 to install the RealPresence media manager software from Polycom to remotely access our consumers’ telemedicine systems,plus the additional money needed to upgrade equipment and buy a van, leaving us with a total fixed cost of $79,837. Our variable price per unit will be around $25, an adjustment price for depreciation of our vehicle that will be transporting the equipment, since we are being paid for labor and gas as part of our installation fee.  While our service contract states that our monthly service fee is $350, we require that our customers sign an 18-month contract, leaving our unit price as $4,950. However, we also need to assess the money that would be made by us through labor and installation fees, which will be around $500 per unit, and the 25% mark-up, increasing our unit price to be $6,300.

Bibliography

1See Bernie Monegain, New research projects swelling telemedicine market, Oct.8, 2009, HealthcareITNews.com, available athttp://www.healthcareitnews.com/news/new-research-projects-swelling-telemedicine-market (citing a recent study by Pike & Fisher)

2See Alexander H. Vo, The Telehealth Promise: Better Healthcare and Cost Savings for the 21st Century, at p. 8, Univ. Texas Medical Branch, available at http://attcenter.utmb.edu/presentations/The%20Telehealth%20PromiseBetter%20Health%20Care%20and%20Cost%20Savings%20for%20the%2021st%20Century.pdf

3See David Pittman, Mississippi emerges as leaders in telemedicine, Feb.24, 2015, Politico.com, available at,http://www.politico.com/story/2015/02/mississippi-telemedicine-115515.html

4See Section, Mississippi Rural Healthcare Facilities, July 7, 2014. Federal Office of Rural Health Policy, Health Resources and Services Administration, U.S. Department of Health and Human Services, available at http://www.raconline.org/states/mississippi

5See Section, Telemedicine, available atwww.broadbandexpanded.com

Appendix