Marketing Planning This Marketing Plan Details Itcorp's

Marketing Planning This marketing plan details Itcorp's business model. It addresses the company's mission, policies, strategies and objectives to achieve profitability. Itcorp's integrated software and hardware solutions for healthcare providers are described at length, as well as objectives for the long-term. Our company Itcorp plans to begin operations starting in January 2006. One thing that is unique about Itcorp is how it got its start. In 1988, two partners, Max Renfield and C.L.

Rotwang, decided to start Jetson's, a business offering IT solutions to companies in the small to medium size range; in those days, the market was segmented mainly according to size. In the early 1990s, many of the companies Jetson's had been serving had grown to the point that the company's IT solutions were no longer adequate and so the company had to expand its product line to continue to serve these customers (and prevent them from switching to competitors).

By 1996, it became obvious to both partners that the market was changing; old customers who had been happy with generalized solutions had become more tech-savvy and began to insist upon customized solutions based on the needs of their particular industry. For instance, law firms do not have the same database requirements that grocery stores and hospitals do.

Further, many of the health care facilities who had been Jetson's loyal customer were being bought up by huge medical services management corporations and were no longer free to choose from local vendors for their IT solutions. Ms. Rotwang chose to start a new company dedicated to serving the interests of just hospitals, clinics, and other patient-oriented facilities and sold out to Mr. Renfield, who was certain Jetson's could stay profitable with just some careful "tweaking" of the business model. Flush with cash from selling her interest in Jetson's, Ms.

Rotwang formed a strategic partnership with a minor computer and remote-sensing company called Velocitrex and started her own IT software firm, called "Itcorp." Velocitrex was looking to expand its market share in what appeared to be a nearly saturated market, and were glad when Ms. Rotwang approached them with her offer. The arrangement between Itcorp and Velocitrex is entirely contractual; that is, neither company owns any portion of the other.

Both firms will remain independent but Velocitrex agrees to let Itcorp perform all the marketing functions for the integrated hardware and software solutions it plans to offer the healthcare services segment. All the product specifications are spelled out by Itcorp; Velocitrex only manufactures and delivers the hardware. Itcorp will emerge from its start-up phase in January, 2006, and simultaneously begin manufacturing and selling its integrated IT solutions to hospitals, clinics, nursing homes and so forth in the United States.

Our mission Our mission is to fulfill the information technology needs of the healthcare provider community through maximizing the value healthcare providers enjoy from their integrated information technology systems. When it comes to information technology, Itcorp is It. What We Sell Itcorp markets integrated software and hardware solutions to the healthcare provider community. Keys to Success Our main key to success is our innovativeness in supplying the high value products maximizing each of our clients' budgeted IT dollars.

We have skillfully integrated custom software and hardware with existing software and hardware platforms to achieve a highly marketable synthesis with our products. Macro Environment Itcorp exists in a universe densely populated with IT companies in general, as well as those which specifically serve the needs of the healthcare provider community.

There are a few large IT solutions providers, such as Microsoft, which offer proprietary systems to some healthcare providers, as well as more generalized database solutions such as Microsoft Access, with which healthcare providers can tinker to develop their own IT solutions. There are also more specialized IT solution providers such as Allscripts Healthcare Solutions, Inc., among others.

The universe is also populated with healthcare providers, some of whom outsource their major information technology needs, some of whom develop their own in-house solutions, and still others (the vast majority) who acquire licensed software solutions from specialized IT solution providers. The universe in which we exist is also populated by pharmaceutical companies and their intermediaries who want to provide their goods and services to the healthcare providers. Healthcare customers are, obviously, an important component of the healthcare universe.

Finally, especially in the United States, government agencies represent a continuing presence in the healthcare universe, for good or ill, and some consideration must be made for government involvement in most aspects of healthcare in general. SWOT Analysis Strengths. Among Itcorp's strengths are its managerial and research expertise. When Ms. Rotwang formed Itcorp in 2005, a few key members of Jetson's highly effective software development team as well as some of its more forward-looking managers joined her and assisted in starting up the new company.

Of course, Itcorp is characterized by innovativeness as evidenced by some of our highly-advanced, patented technologies; specifically our patents relating to the Sensorium (described at length below). The fact that some of our technology is proprietary and represents some of the fundamental patents in the healthcare IT venue makes it extremely difficult for competitors to duplicate our integrated IT hardware/software solutions. Another of our strengths is the esprit de corps that exists at our firm. Employees and managers do not have the traditional adversarial relationship facing other firms.

The fact that the employees' labor union is entirely sponsored by management contributes to this, but another, more important, contributing factor is the fact that everyone in the firm is expected to make contributions to the firm's long-range success. For instance, if a package handler in the mailroom thinks up a new way to improve productivity, the fact that he or she ordinarily spends hours each day sorting packages does not in any way discount the value of the idea.

Management is pleased to consider every new idea and embrace those which hold promise for furthering the firm's long-term goals, regardless of the source, and rewards those who come up with bright money-making ideas in proportion to the value of the idea. Essentially even the lowliest employee feels a) valued and b) as if his or her worth to the firm far exceeds the wages paid them; the relationship between management and labor is much more collaborative than at many of our competitor's offices.

Regarding our employees in general, from the custodial staff to the sales force and every level of management, we regard labor as a resource to be maximized, not a cost to be minimized. This distinguishes us from most, if not all, of our competitors. Weaknesses. The story is not all hearts and flowers; we are faced with a few difficulties.

For instance, since so much of our own proprietary software is designed to integrate with others' software and hardware (such as Microsoft's specialized healthcare IT applications packages) it can take some time to respond to sudden changes in either the market's expectations and demands or in the specifications of the 2nd party software/hardware we utilize. Thus, the lag-time in response to sudden environmental changes is an area requiring improvement on our part.

It is partly attributable to the fact that tens of millions of lines of code will be typically utilized in our software applications, and adjusting for sudden changes that affect how well the software integrates with others' software/hardware packages can require thousands of labor-hours. Opportunities. Opportunities abound for Itcorp. Fundamentally, as healthcare providers move to paperless record-keeping, their needs for IT solutions are growing considerably. This is taking place largely in the West; the trend is growing fastest in North America and Europe.

We are also seeing rapid growth in the more industrialized Asian countries such as Japan and Taiwan. China is lagging due to problems with their infrastructure and economy, though in time this will change. The same is true for developing countries in general; as they become more technologically dependent they will need more information technology solutions.

The level of record-keeping detail necessary for diagnosis and treatment of some recently defined medical conditions (such as HIV / AIDS) is huge, and this is a powerful disincentive to continue to use traditional paper-based record-keeping techniques. As the quality of life increases around the world due to the green revolution and rapid industrialization, life spans are also growing around the world. In many countries, the average life expectancy can be expected to double within the next 50 years.

That being the case, the incidence of age-related medical conditions that were relatively unheard-of in these places only a generation ago creates a logistical nightmare for healthcare providers as well as their government regulators. In other words, in many developing countries, life expectancy was less than 40 years due to malnutrition and poor sanitary conditions. As governments remedy these conditions, the people live to be 70 -- 80 years old, and no longer die from poor sanitation or complications of malnutrition, but from cancers and heart disease.

Alzheimer's Disease is not a condition with which healthcare providers need concern themselves if people seldom live to 60 years of age; but when the majority live into their 80s, the picture suddenly changes. The fact that life-expectancy is rising around the world in response to improving economic and even political conditions means that there is an ever-increasing need for healthcare-oriented information technology solutions.

We cannot say for certain the degree to which our competitors have awakened to this realization, but we are well-positioned to take advantage of the situation when these countries come "online," so to speak, with their healthcare IT needs. We will already have our IT solutions set up to serve Swahili and Nahuatl speakers the minute those markets are ready for service. Threats. Threats Itcorp faces are vague and difficult to pin down exactly.

However, we have carefully observed the behavior of other firms faced with changes in volatile environments and are at least aware that there are dangers. We are particularly sensitive to the possibility that a competitor may find some way to leapfrog right over us and make our entire product line obsolete. A precedent can be studied in the case of mechanical adding machines verses electronic calculators. When the first electronic calculators were commercialized, it was not by the brands that made mechanical adding machines, which seems contrary to our expectations.

Nevertheless, very few of the companies that made mechanical adding machines remain in business today, precisely because they missed the electronic calculator boat. In the highly volatile technology-driven environment in which Itcorp operates, something similar could happen. It is difficult to develop a plan for such a contingency, just as the adding machine companies could not hope to foresee the sudden commercialization of transistor-based calculators.

The only possible contingency is to try to leapfrog over oneself, to strive to always be the innovator and never the "also-ran." Another threat relates to the fact that we do not manufacture the hardware used in our system, but Velocitrex manufactures it under license from us. However, Velocitrex itself is only a medium-sized company and can be subject to a hostile takeover at any time.

The history of business is replete with tales of companies that were bought up by competitors not to acquire and utilize the firm's resources but as a strategy to chloroform a smaller competitor with superior growth potential. As a business strategy this does not facilitate the acquirer's growth per se, but when carried out by multiple large competitors it can stifle competitiveness and innovation, making things comfortable for large incumbent firms.

The very fact that our IT solutions are so innovative tends to make us attractive for this kind of acquisition, so this is another real, if as yet unrealized, threat to Itcorp and our alliance partner Velocitrex. Strategies We have a number of strategies to gain market share and keep competitors at bay. First, we utilize the largely misunderstood marketing concept to facilitate growth.

The marketing concept, as we define it, can be operationalized thus: a) figure out what the market wants and b) figure out how to make a profit giving it to them. This differs considerably from many of our competitors' practices.

Typically, our competitors spend a lot of time and effort in researching and developing products and services and then trying to figure out how to get the market to accept the product -- so some combination of the product concept and the selling concept is prevalent in the healthcare IT industry. Many of our competitors' IT solutions contain many features that are hardly, if ever, utilized by the market they claim they serve. This is not the case with Itcorp.

Rather, what we do is conduct market research to determine the needs of the healthcare industry and then design integrated hardware and software solutions to meet these needs. If we do our job right, the process generates profits for us. Other firms concern themselves primarily with taking care of the interests of their owners and/or investors. Taking care of customers' needs is, for our competitors, almost a secondary issue. Our approach differs considerably in that we believe that the whole purpose of business is to acquire and keep customers.

If we excel at acquiring and keeping customers, then the profits come naturally, and all our other stakeholders have their needs taken care of, essentially automatically. Thus, we can spend a lot less time (and do not forget that time is money) worrying about these other things. By staying focused on our customers, and on our potential customers, we feel that we benefit not only by covering our stakeholders' needs, but by obviating the need to concentrate on caring for their needs specifically we derive a considerable savings.

Our strategies can be summarized thus: Do a better job than our competitors at finding out and fulfilling our customers' actual, rather than assumed, needs. Marketing Objectives Our marketing objectives can be expressed very simply: the sky is the limit. Our current product line represents a considerable technological leap over competitors' offerings in that it increases functionality while doing away with unnecessary complexity. That being the case, our target market is the entire healthcare provider industry.

Any provider using a database (or wanting to use one) to manage its healthcare practice is a potential customer. More specifically, we plan to move into the healthcare provider market worldwide in a number of discrete steps. First, we plan to undertake a geographic market penetration strategy in which innovators in a few major cities are targeted with advertising and personal selling to demonstrate how well our product line solves their IT problems.

Just to get them to try the product line we are willing to sell at or below cost. Once we have a few users in a few big cities using our product line, it will not take long for favorable product reviews to appear in the press and other publications serving the healthcare provider market. Shortly thereafter, others will follow, and will do so without as much advertising pressure or personal selling efforts on our part.

We expect word of mouth to contribute significantly to the diffusion of our product line. Patients and doctors who have experienced the added value represented by our product line will be dissatisfied with anything else in the future. Healthcare providers which offer Itcorp's product line will be patients' preferred providers in any geographic region. Clinics and hospitals not incorporating our product line will wonder where their patients went, and it will only be a short time before this push/pull strategy adds momentum to the line's diffusion.

Once we have succeeded in gathering momentum in a few large cities, we plan to systematically move the product line into every major city in the United States with a population over 1 million. We expect to reach the breakeven point within two years of commercializing the product, and this will be our signal to move into overseas markets. We intend to move simultaneously into the European market and Pacific-Asian market (Japan and Taiwan) as these two regional markets represent the most heavily developed and technology-friendly segments.

In these segments we will repeat our advertising/personal selling approach, making certain changes to accommodate cultural differences. Financial Objectives We have planned according to our expectations that the product line will operate at a loss for the first two years of commercialization. With this in mind, Velocitrex has agreed to cover our expenses not covered by Ms. Rotwang's personal investment during this introductory period, with the understanding that repayment begins within the second fiscal quarter after the product line reaches its breakeven point.

The product line represents a considerable investment for clinics and hospitals, and the integrated system averages out to about $7,000 per bed. We expect that only the largest hospitals will be willing to take the financial risk necessary to adopt the product line at first, and even then only on a limited basis. That being the case, we also expect that the first uses for the system will be in critical care areas such as hospitals' Intensive Care Units.

Typically, the Intensive Care Unit of a client hospital represents 20 -- 30 beds, and at $7,000 each this represents $140,000 - $210,000, or roughly 1% of our development and manufacturing costs. For planning purposes, we are assuming two hospitals for each population center of 100,000 citizens. There are 236 cities in the United States with populations in excess of 100,000 people, and in the top ten U.S. cities there are 24,213,727 people. So just in the top ten cities we calculate that there are approximately 485 hospitals. At 20 -- 30 beds in each hospital's ICU, that figures out to $67,900,000 -- $101,850,000.

Of course, these figures represent only ideal revenues. It is actually unlikely that we will be able to achieve such complete diffusion of the product line within the first two years. In the United States, 75.1 million people live in cities with populations exceeding 100,000, and this yields approximately 1502 hospitals. Given our above estimate of 20 -- 30 hospital beds per ICU, this yields ideal potential revenue between $210,372,154 and $315,558,230.

This is just to start, but given that most hospitals contain between 300 and 500 beds, if our product line saturated this segment 100%, we could expect to realize revenues between $3,155,582,304 and $5,259,303,840. If we enjoyed 100% diffusion throughout every hospital in the United States, we could expect between $11,819,720,052 and $19,699,533,420 in product line installations alone; most of our major revenue will come from service to the system.

Of course, while this would be a welcome result of our marketing efforts, it is more reasonable to predict a lower rate of diffusion and we are actually prepared to accept as little as 30% diffusion. This itself may seem unreasonable, but we firmly believe that it is achievable given the superlative way in which our product line solves the healthcare provider industry's problems. Target Markets We characterize our market segments two ways, geographically and functionally.

Our geographic segments include the United States, Europe, and Asia (though ultimately the world), and our intention is to start with the United States and move into the other segments in a timely manner. We plan to introduce specific marketing messages for each geographic segment, with variations-based mostly on cultural differences rather than economic ones. Our functional segments include not only hospitals but critical care facilities, smaller clinics, nursing homes and chronic care facilities.

Our intention is to compose marketing messages specifically for each of these segments, since they are not likely to respond in a similar fashion to a unified message. Positioning. Our strategy in positioning is to seem ultra-modern but approachable and caring. Our product line seems "futuristic" but in a completely benign way. Research Approach. Our research approach throughout has extensively utilized primary and secondary marketing research.

We have used secondary data sources to determine what kind of technology is currently in place throughout the healthcare services industry and have conducted our own primary research with focus groups consisting of healthcare and IT professionals, as well as patients, both current and former. We have based the appearance and functionality of our product line largely on the results of this research, but have not failed to implement some intuitive thinking as well, especially regarding the scalability of the system. Marketing Mix Place.

Considering the segments we serve, place for us consists of healthcare facilities in general, and especially those in which in-patient care is the norm. Product. The product line consists of integrated hardware and software. The hardware consists chiefly of three units. The primary unit is essentially the hospital's own server and it communicates with the other components via LAN. The 2nd component is the Sensorium BioBed.

This actually replaces the traditional hospital bed and is essentially a bed in which the mattress, pillow, and top sheet are wired with biometric sensors. The Sensorium BioBed can monitor pulse rate, respiration, blood pressure, blood oxygen perfusion, temperature, skin acidity, and can even operate as an electrocardiograph, electroencephalograph and PET scanner.

It also measures the degree to which the patient moves (rolls over, fidgets, adjusts covers), is awake or asleep, and can perform periodic sensing of blood chemistry comprising everything from percentages of nutrients, glucose, minerals, and medicines using NRFS (narrow-band radio-frequency spectroscopy - a sensing technique somewhat akin to magnetic resonance imaging). Additionally, the bed's temperature can be adjusted up or down using thin-film Peltier junctions embedded throughout the fabric used in the bed.

Measurements made by the bed are recorded in real-time continuously and the patient's current status can be displayed on a monitor attached to the wall above the head of the bed. The bed communicates with the hospital's server and acts as a node on the local area network. It is able to receive commands from the server such as the timing of NRFS sessions, when to activate or deactivate intravenous medicine pumps, how warm or cold to make the covers, and what thresholds for various parameters to set alarms.

For instance, for some patients anything less than 95% oxygen perfusion is life-threatening due to circulatory impairments, so the bed can be authorized to activate an alarm if it detects that oxygen levels have fallen below this threshold for a particular patient. Similarly for the other variables the bed is able to measure. The bed's monitor can do more than display vital signs; it can also display its particular patient's chart and complete medical history.

The third piece of hardware is the tablet PC each caregiver is authorized to carry, from nurses to doctors. The tablet PC is the caregivers' interface with the Sensorium unit and incorporates a speech recognition system which enables doctors and nurses to record observations regarding a patient's condition, orders concerning their treatment, or other notes ("Patient wants pudding, not pie, for dessert at lunchtime .. ") and save the information either as voice files or converted text files.

In either case, the files generated this way are communicated wirelessly to the Sensorium unit through infra-red transponders. The unit keeps a record of every file it has received and can respond in a limited way to the caregiver's orders, for instance when the doctor orders more or less medicine to be delivered intravenously or raises or lowers alarm thresholds. Caregivers also have the option of using the PC's handwriting recognition software to discretely record observations and orders with the included stylus.

Equipped with the tablet PC, a doctor just beginning a shift can stroll by patients' hospital beds and peruse the previous doctor's orders and observations as well as how each patient is doing while disturbing the patients as little as possible. This may seem a meaningless advancement over the old techniques of using physical clip boards to make observations but it does one thing for caregivers and patients that could not otherwise be achieved; it removes the human element from the measurement process.

Doctors and nurses no longer need to touch patients to take measurements of heart rate, temperature, and blood pressure, among other variables. By minimizing physical contact among the injured, the sick, and their caregivers, the spread of communicable diseases across patients who have been handled by caregivers in common is essentially reduced to a transmission rate of zero.

Further, since blood chemistry can be remotely measured with the Sensorium's own sensors, the need to take blood for measurement in a lab is reduced, obviating the possibility of patients' samples becoming accidentally switched as well as reducing patient discomfort. Apart from special treatment such as physical therapy and special medical tests such as x-rays, CT and MRI scans, there is little need to disturb a patient in an Itcorp Sensorium BioBed. The Sensorium unit does practically everything except feed and bathe its patients.

The continuous, real-time nature of the Sensorium unit's capabilities enables caregivers to record exponentially more information about a particular patient than has hitherto been possible. Thus, it not only allows moment-to-moment monitoring of patients' conditions, it allows caregivers to retroactively study aggregated patient records over time for research purposes. In other words, the unit is more than an exemplary caretaker of its charges; it is also a powerful tool for medical research.

By using infra-red transponders to facilitate communication between the tablets and the Sensorium units information is kept very secure and discrete; there is no chance that the information could be intercepted as with a radio-frequency network. The software Itcorp utilizes for the product line is the main way the line is differentiated.

At a basic level, the software allows for full interconnectedness of the three components, allows the Sensorium units to receive orders either from the hospital's server or the tablet PCs, and allows the tablets to upload and download information to and from the Sensorium units. At the next level, the software permits primary caregivers to limit who can access what levels of a patient's records using the tablets.

For example, if the patient's primary doctor determines that the patient's prior medical history should be kept confidential from the nurses who deliver the patient's medicines, he or she can limit access to the patient's records in this way to only those other doctors and/or specialists who should see it. At the third level, the software allows for automated re-ordering of healthcare consumables from the providers' vendors.

As stockpiles of medicines, syringes, tubing, and other consumables dwindle, the software can be set to re-order when any user-specified stockpile threshold is crossed. If there are episodic (say, seasonal) variations in consumption patterns of consumables, the software can be set to re-order more or less depending on the variations.

For instance, if the rate at which the facility uses up its stockpile of ibuprofen declines in summer and fall, then the user can specify that from June -- October, the threshold is A and the number of units to reorder is B, whereas from November -- May the threshold is A+X and the number of units to reorder is B+Y, and the settings can be tweaked in this way for anything the hospital or clinic uses on a continuing basis, office supplies or marketing collateral materials.

Each level of the software package includes all the other levels, the only difference is whether lower level customers have the initialization codes necessary to engage the added functionality offered by the product's higher levels. In other words, once users have installed the software, they never have to install anything else. If a user chooses to upgrade to a higher level of software functionality, they need only purchase the unique initialization code to activate the higher-level features in the existing product. Software Structure.

The software's functionality is divided up into four functional domains. The first domain relates to patient care and is organized in three levels. The first level includes a database of all the possible medications, supplies, procedures, and personnel that can be used for patients' care. The second level includes a database of all current patients.

The third includes a database combining elements from the first and second levels into records of what medicines, supplies, procedures and personnel have been used in the service of a particular patient, and when they were used. This is also the record to which the Sensorium BioBed reports its continuous feed of vital statistics as well as where caregivers' orders, reports, and notes are filed. The second domain relates to the service provider's suppliers and is divided into three levels.

The first level is reserved solely for interactions between the healthcare provider and Itcorp. The second level consists of the database of other suppliers of goods and services ranging from software to medicines to office supplies to paint for the lines in the parking lot. The third level consists of the database of regulatory agencies that oversee the healthcare provider's activities and to which it is accountable and/or must send reports.

In all cases, reordering supplies as well as filing reports is as automated as possible, with users setting their desired level of automation. For instance, the report-generating function can generate compliance reports for regulatory agencies but can wait to send them until the user has perused them. The software will permit suppliers, with user permission, to measure the user's inventories of their own products on a continuous basis.

This can provide suppliers with valuable usage information when aggregated across thousands of hospitals and clinics and is a powerful incentive for suppliers to recommend our software to healthcare providers. The third domain relates to the healthcare service provider's internal administrative functions, including accounting, marketing, human resources functions such as hiring and scheduling, and generating bills and payments. The fourth domain is specifically reserved for archived patient information, though it is updated continuously with current patient's records.

The domains are all accessible from the administrative domain, but access is otherwise limited depending on which domain is trying to access which information. For instance, suppliers would never be able to view the archived patient information or anything from the first domain. For instance, a supplier could never find out that Dr. A tends to give his patients ibuprofen while Dr. B tends to give hers acetaminophen. Product Security.

To ensure that licensed higher-level users do not share their high-level initialization codes with lower-level users, we implement the following security procedures. First, when a user purchases a higher-level initialization code, the code they receive matches one included in a batch of encrypted codes sequestered somewhere within the software's millions of lines of code. Suppose the initialization code is A491-J152-X9P8-M.

The matching code is encrypted and sequestered in the software running at every site, but once it has been sent from our server to the user who has purchased it, that matching code gets removed from every copy of the software running on all the other healthcare providers' computers. Only the purchaser will have the code which matches A491-J152-X9P8-M.

In other words, each time an initialization code is purchased by a user, the code that matches it is removed from the computers of all the other users. Further, a new code is devised by our server and transmitted to all the copies of the software running elsewhere to replace the purchased/removed matching initialization code. This process occurs continuously in real-time.

As soon as a user purchases initialization code A491-J152-X9P8-M, it takes only a moment to remove the matching A491-J152-X9P8-M from all the other computers running our software and replace it with another code. This ensures that A491-J152-X9P8-M can only be used to initiate higher-level functions once.

Second, an attempt by an additional lower-level user to use A491-J152-X9P8-M to enable higher-level functions will not only fail but will also generate a violation report that the software will instantly send to the Itcorp server and will disable the software's accounting and bill-printing functionality until we send a new initialization code to restart those features. This ensures that the user knows that we know what they tried to do.

Though we are not actually interested in taking legal action against our customers for such violations, we do not mind being perceived as ready and willing to do so. The trivial mayhem that would ensue were a lower-level user to attempt using a higher-level user's initialization code is a sufficiently punitive outcome to deter repeat offenses.

Finally, since the system is designed to report to us instantly when an initialization code is used to activate higher-level functions, if a user tries to get around the violation report procedure when using someone else's high-level initialization code on his low-level licensed software by disconnecting his server from the internet, the initialization code will not take effect until the server is back online.

This is true even in the case of authorized uses of the initialization codes, since the higher level functions will not be enabled until the user's server reports that the code has been installed. Until the software is free to report to our server, the initialization code simply does not enable the higher-level functions but the lower-level functions continue to operate normally.

This is so that those users who are not able to connect to the Internet for some legitimate technical reason (regional communications network failures are common in developing countries) are not unduly penalized for what might otherwise be interpretable as unethical behavior.

In other words, since the matching codes stored on computers 2 -- Infinity are not removed until our server receives the report that initialization code A491-J152-X9P8-M has been installed on computer 1, users of computers 2 -- 10 (for instance) may try to thwart this security feature by getting user 1 to agree to not install his initialization code until they have all gone offline and installed the code on their computers as well.

They may think that by doing this and then logging back on after the code has been installed that they will all enjoy the higher-level functions. What will actually happen is that even though user 1 purchased the initialization code, all ten users' software will generate violation reports with the same consequences as soon as they log back on to the Internet and until they do the software will simply continue to run as if the initialization code had never been used.

Thus, only those users who are authorized to do so can access the software's higher-level functions. Those who try to access higher-level functions with someone else's initialization code are deterred from subsequent attempts by temporarily disabled non-critical software functionality. Those who try to thwart that security measure find that no new functionality is added to their software as long as they are offline, and some of their non-critical functions become disabled when they log back on.

However, authorized users who use their initialization codes when they are offline for legitimate reasons do not suffer any reduced functionality when they manage to get back online; the only inconvenience they face is being unable to use the higher-level functions until their server can communicate with ours. Promotion. Our promotional campaigns comprise elements of both push and pull strategies.

We will have some advertising as part of our push strategy, but will rely more heavily on our presence at healthcare service provider conferences, our marketing collateral materials and detail men to get our promotional messages before key decision makers. We will sponsor a conference and trade show at New York City's Javitts Convention Center and at convention centers in Chicago, Los Angeles, Philadelphia, and Baltimore during the first five years of the product line's commercialization.

Our print advertising campaign will be placed primarily in trade magazines oriented toward healthcare professionals, though we intent to have some advertising presence in publications oriented toward the IT industry in a more general way. We will have a commercial on some cable network channels, such as medical channels. The commercials will show the Sensorium BioBeds in use by attractive, cheerful patients as attractive, cheerful (seasoned) doctors tell them how well they're doing after glancing at their tablet PCs.

Our proprietary research shows that consumers find advanced medical technology impressive and persuasive, especially when it is not physically invasive. The scene with the doctor and patient segues into a page with a bulleted list of some of the Sensorium system's features such as its climate controllability, its ability to continuously monitor patients' vital statistics, and how it reduces the need to perform some medical tests elsewhere.

The commercial concludes by showing the patient wearing his own clothes and shaking hands with his doctor before striding off camera in robust health "with a spring in his step." Our slogan throughout the advertising campaigns will be "Sensorium .. Makes Sense!" However, we typically expect to rely less on advertising and more on word of mouth and good press.

For instance, the top hospital in the United States is Johns Hopkins in Baltimore, Maryland, and if we can get its key decision makers to adopt our product line even in a limited way others will adopt the line just because Johns Hopkins is using it. We are confident that if Johns Hopkins adopts the line their doctors and staff will be pleased with the results and will pass this information along to their associates engaged at other hospitals and clinics who can influence the key decision makers there. Packaging.

The system is not something one purchases off the shelf of some retail store. Apart from the demonstrator systems set up in our offices, key decision makers might never see the components of the system in person unless they visit a facility where the product has been installed and is in use. Once ordered, the physical components arrive fully assembled on trucks according to the purchaser's scheduling requirements; for example, in batches of 100 in two-week increments for six weeks.

The tablet PCs come from one manufacturer (Velocitrex) and their packaging is whatever packaging they ordinarily use, with the addition of an Itcorp Sensorium sticker since the unit is somewhat customized with the built in microphone. The software arrives on three CDs, comprising the application CD, a tutorial CD, and a system administration CD.

This comes in a package that includes a printed user manual as well as other documentation and some promotional materials for some of Itcorp's other products, including an invitation to join Itcorp's Sensorium User Group -- an online community where users can get technical assistance, assist each other, and just talk about whatever interests them. The User Group is actually a valuable way for us to measure users' reaction to the product line, and acts as an informal focus group from which we can get ideas. Price.

There are three price points for the product line, differentiated along level of functionality and keyed to Sensorium unit price. The basic price is $6,500 per Sensorium BioBed and permits access to the first level of software functionality. The next price point is at $7,000 per Sensorium unit and permits access to the second level of software functionality. $7,500 per Sensorium unit gets users access to the topmost level of software functionality.

All of these prices reflect the system-installed price and one tablet PC for every five members of the staff (the relationship is not 1:1 since not all staff members are on-site all the time but rotate.