Introduction to Marketing

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Introduction to Marketing

Introduction to Marketing
Introduction to Marketing

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It’s a home health business

In this assignment, you will complete another key section of your marketing plan:

Write a 1 page recommendation for the pricing strategy necessary to successfully market your health care product or service. Be sure to include an estimate of the costs associated with the product or service, and the profits that are expected with the recommended pricing.

You will need to make some (educated estimates) to complete this assignment; please follow a format like this to demonstrate that your recommended pricing will result in profits:


New Product     Per Unit               20,000 units

(1st year sales forecast)

Suggested retail price    $100.00 $2,000,000

Cost to retailer  **           $50.00   $1,000,000

Retailer margin            $50.00   $1,000,000

Cost of Goods Sold

Components/raw materials   $10.00   $200,000

Labor                $10.00   $200,000

Overhead       $5.00     $100,000

Marketing costs                $7.00     $140,000

Manufacturer profit  $18.00   $360,000

** “Cost to retailer” is the same as Manufacturer’s sales revenue



New Service       Per Day 200 days per year

(1st year sales forecast)

Service Charges**           $250.00 $500,000

Cost of Goods Sold

Labor                $100.00 $200,000

Materials        $20.00   $40,000

Overhead       $30.00   $60,000

Marketing costs                $10.00   $20,000

Service provider profit              $90.00   $180,000

** Service Charge is the expected sales revenue from the new service


As a starting point to estimating costs, visit Bplans and search for a sample plan in a similar line of business to the one you are proposing.  Look for the Pro Forma Profit and Loss” chart within the Financial Plan section of the business plan, and make note of the expected costs in relation to forecasted sales. You can also do an Internet search for “income statement (insert your product or service here)” and review the samples that you find.

Within this section draft, please demonstrate your grasp of the marketing terminology and concepts related to pricing strategy. For example, it would be appropriate to identify whether you have chosen a penetration, skimming, or followership price strategy, and why you believe that strategy is appropriate.