**In the case write up must have the
Table of contents page and page number for each parts.
For the calculations must
have both explanation and shows detail math in FIGURE.
**

**
MODIFIED CASE WRITEUP: For this case, NO NEED for
Background or SWOT. Only need the following:
(1) RECOMMENDATIONS; (2) RATIONALE; (3) EXHIBITS OF YOUR
REQUIRED CALCULATIONS.
**

**
**

**For those 3 things**should be clear that you are
faced with a pricing decision in this case. Check the formula under
the case reading. Change the number(
**e.g: how many seminars, how many salesforce, the price
basic on Markup, ROI…how long need for payback(1-4
years...))**Use those formula and massage different numbers.
**
Try to find the most logic decision!
**and

**shows the Exhibit (graph). Also all of them require explain for calculations.**

Background: You are first on the market with what is literally a
life saving medical breakthrough – although you do know that there
are more breakthroughs to come (e.g., drug eluting stents) within a
relatively short time frame. Your analysis
**must**consider a variety of ways that you might
arrive at a price for the cardiac stent and, then, choose the one
price structure that makes the most sense to you.

While one can consider the above from a philosophical, strategic viewpoint, one must first understand the costs and the various pricing methods that will enable one to arrive at a diverse range of prices from which to choose. That is, which price has the best chance of maximizing profits while satisfying sales growth in the category?

Therefore, in order to proceed, consider the following when making your recommendations and explaining the rationale behind those recommendations.

1. Do you think a separate sales force should be established by Cook to sell its new stent?

If so, how will that effect cost – quantitatively.

**For example: 35 people used by Cook on salesforce for
diagnostic each of them cost $45000 per year. You can chose the
number of salesforce you need to make bring into sales the new
stents. Also in the reading we see 9000 cardiologists in the US,
but required between one to three seminars per month needed for a
year, each seminar cost $8000. However, after 1 year they can do in
service training class. So think about how many salesperson you
need basic on profit and cost. The sales team can be mix with old
diagnostic sales and new training sells. Calculate the cost. See
what is the best decision. How many use from each group?**

2. How many seminars should Cook run to introduce doctors to the new stent?

**Example: More seminars means more cost**

**Note: Questions 1 and 2 pertain to costs. The decisions you
make here will derive some of the cost factors that you will use
when doing your calculations.**

3. What do the following pricing methods indicate the price for Cook’s stent to be?

NOTE: Show the relevant calculations in your analysis of each method.

a. Use a simple
**mark-up on cost**method to arrive at a number of
prices. Be sure to test
**each**price with a
**breakeven analysis**to see if the number of units
needed to breakeven at that price is logical based on the facts in
the case. That is, how long will it take Cook to
**payback**its investment based on each price
tested?

b. What price is suggested by using
**ROI**
**pricing**; that is, stating a ROI percentage to
arrive at a price?

c. Does market
**skimming**(AKA price skimming) make sense here, and,
if so, what price do you arrive at?

d. What prices are suggested by
**demand**and
**value**pricing methods? Does such an approach make
sense for the situation in which Cook finds itself?

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