Assignment Content

Market demand is a central concept in health care economics. In addition, calculation of projected income is required to determine the impact of organization finances on the marketing plan. This week you will prepare a pro forma income statement for the new or revised existing product or service you recommended in your Marketing Mix Strategy in Week 5 for East Chestnut Regional Health System.

Review the Case Study document. (Attached)

Pro Forma Income Statement for East Chestnut Regional Health: 

Complete the following prior to preparing the pro forma income statement and budget. You will need the following information in order to prepare it.

Part I: Market size calculation: 

Determine the size of the market for the ECRHS product or service you are recommending. Assume East Chestnut Regional Health is located in the market in which you live or work.

Visit the University Library Consumer Demographics page. For Texas (https://data.census.gov/cedsci/all?q=texas)

From this page, visit the United States Census Bureau sites linked under the heading Demographic Data. A rough estimate of need for health care products or services can be made based on the population demographics, using age, gender, and in some cases, race. On these sites, you can gain information on the total U.S. market for health care, as well as the number of U.S. consumers who fit your target market segmentation.

Determine the local market for the product or service you recommend for East Chestnut Regional Health.

Next, multiply the percentage of people likely to purchase your recommended ECRHS product or service by the estimate of market share you believe ECRHS can achieve for the product or service. For example, if there are 6,000 women who might be interested in ECRHS obstetrical services, and ECRHS has a potential 40% market share, this results in 2,400 patients.

Prepare a 150- to 300-word summary of your market determination process.

Part II: Breakeven Analysis: 

A breakeven analysis determines the number of products or amount of service that must be sold to consumers for the organization to break even or cover the costs of production or provision of the product or service.

You will prepare a breakeven analysis for the Case Study client, East Chestnut Regional Health.

Use the Breakeven Analysis Worksheet to prepare your analysis. (Attached)

Prepare a 150- to 300-word summary of your breakeven analysis that includes the following:

• The fixed and variable costs of product production or service provision
• The price and number of units sold at that price
• The number of units of product or service sold to cover the fixed and variable costs at the price level.

Part III: Pro Forma Income Statement: 

A Pro Forma is an income statement that predicts income for your new or revised product or service you are recommending to East Chestnut Regional Health System (ECRHS) after one year. It shows the sales ECRHS expects to achieve during that period of time, along with the costs associated with that level of sales. The organization must cover the costs of products or services it delivers (Cost of Goods Sold) and the expenses we estimate to achieve those sales (salaries for sales reps, advertising, promotion, and office expenses, etc.). This will leave us with a projected profit.

A good Pro Forma Income Statement proves out a strategy by showing the expected revenue minus the expected costs and the resulting profit. Conversely, it shows that you can’t have $100,000 in forecast sales and $3 million in projected advertising, since that would result in a loss.

Use the Pro-forma Income Statement Worksheet to create your Pro Formal Income Statement. (Attached)

Create a pro forma income statement based on the above. Include the following for 1 year:

• Projected sales volume in units and revenue
• Projected costs of goods/services
• Projected marketing expenses
• Projected net income

Prepare a 500-word summary statement of your Pro Forma Income Statement for East Chestnut Regional Health System for the new or revised existing product or service you have recommended. Include the following:

• Summary of Market Size Calculation (150 words)
• Summary of Breakeven Analysis (150 words)
• Summary of Projected Profit (200 words)

Part IV: Marketing Plan Considerations: 

Now that you have a better understanding of your market and the finances of the organization, you must consider how economics and finances can affect your marketing strategy.

Write a 350- to 500-word analysis of how specific economic or financial issues will affect the marketing strategies for ECRHS.

What tools or techniques are available that enable management to scan an organization’s multiple environments? What Saint Leo Core value might apply and why?

2. Provide critical arguments for and against corporate social responsibility. What Saint Leo core values might apply and why?

3. Analyze the benefits and costs of the globalization of business. What Saint Leo core value might apply and why?

4. Provide arguments for and against business participation in the political process. What Saint Leo core value might apply, and why?

HERE ARE SLU CORE VALUE

Core Values

Excellence
Saint Leo University is an educational enterprise. All of us, individually and collectively, work hard to ensure that our students develop the character, learn the skills, and assimilate the knowledge essential to become morally responsible leaders. The success of our University depends upon a conscientious commitment to our mission, vision, and goals.

Community
Saint Leo University develops hospitable Christian learning communities everywhere we serve. We foster a spirit of belonging, unity, and interdependence based on mutual trust and respect to create socially responsible environments that challenge all of us to listen, to learn, to change, and to serve.

Respect
Animated in the spirit of Jesus Christ, we value all individuals’ unique talents, respect their dignity, and strive to foster their commitment to excellence in our work. Our community’s strength depends on the unity and diversity of our people, on the free exchange of ideas, and on learning, living, and working harmoniously.

Personal Development
Saint Leo University stresses the development of every person’s mind, spirit, and body for a balanced life. All members of the Saint Leo University community must demonstrate their commitment to personal development to help strengthen the character of our community.

Responsible Stewardship
Our Creator blesses us with an abundance of resources. We foster a spirit of service to employ our resources for University and community development. We must be resourceful. We must optimize and apply all of the resources of our community to fulfill Saint Leo University’s mission and goals.

Integrity
The commitment of Saint Leo University to excellence demands that its members live its mission and deliver on its promise. The faculty, staff, and students pledge to be honest, just, and consistent in word and deed.

2Q. What do you make of the razor wars, first between Gillette and Schick, and now with online competitors? Does Gillette face a serious threat from competitive inroads? Explain.

3Q. What actions would you recommend over the next five years that could help Gillette maintain its worldwide dominance in the shaving market? What specific marketing program decisions would you recommend? Should Gillette be worried about its pricing strategy? If so, what strategies would you recommend.

2Q. What do you make of the razor wars, first between Gillette and Schick, and now with online competitors? Does Gillette face a serious threat from competitive inroads? Explain.

3Q. What actions would you recommend over the next five years that could help Gillette maintain its worldwide dominance in the shaving market? What specific marketing program decisions would you recommend? Should Gillette be worried about its pricing strategy? If so, what strategies would you recommend.

Question 2:You are visiting one your organization’s plants in a poor nation.  You discover a young girl (under the age of 16) is working the factory floor.  The company has a strict prohibition on child labor.  You remind the plant manager of the policy and insist that she should go back to the local school.  The plant manager tells you the girl is an orphan, has no other means of support, and the country has no social services to provide for her.  As the executive, what should you do?  Explain your answer with a well-constructed and cogent response.

Question 3:When creating trade policy, should the interests of businesses and their employees take precedence or should that of consumers take precedence?  Explain your answer with a well-constructed and cogent response.

Question 4: Compare and contrast internalization theory and the Knickerbocker theory of FDI.  Which theory offers the best explanation of FDI and why?  Explain your answer with a well-constructed and cogent response.

Question 5:Your book describes the increase in the money supply as being analogous to giving people more money. If the output of goods and services is not growing at a similar rate, inflation will eventually occur. According to PPP Theory, what will happen to the U.S. dollar? Why? Explain your answer in a well-constructed and persuasive manner.

Question 2:You are visiting one your organization’s plants in a poor nation.  You discover a young girl (under the age of 16) is working the factory floor.  The company has a strict prohibition on child labor.  You remind the plant manager of the policy and insist that she should go back to the local school.  The plant manager tells you the girl is an orphan, has no other means of support, and the country has no social services to provide for her.  As the executive, what should you do?  Explain your answer with a well-constructed and cogent response.

Question 3:When creating trade policy, should the interests of businesses and their employees take precedence or should that of consumers take precedence?  Explain your answer with a well-constructed and cogent response.

Question 4: Compare and contrast internalization theory and the Knickerbocker theory of FDI.  Which theory offers the best explanation of FDI and why?  Explain your answer with a well-constructed and cogent response.

Question 5:Your book describes the increase in the money supply as being analogous to giving people more money. If the output of goods and services is not growing at a similar rate, inflation will eventually occur. According to PPP Theory, what will happen to the U.S. dollar? Why? Explain your answer in a well-constructed and persuasive manner.